Australian Broker Call

Bell Potter rates AIS as Buy (1) -

Aeris Resources has reported the discovery of a massive new sulphide lens, now identified as the Bacalar lens, within the Bentley deposit at its Jaguar operation. Drilling identified sulphides 60m along strike, 100m down plunge and up to 15m true thickness. 

Bell Potter finds the potential for new discoveries and further resource growth ar Jaguar to be a key opportunity for Aeris Resources. The broker estimates the Bacalar lens could contain between 230,000-280,000 tonnes of ore, and notes grades appear to compare favourably to current resource grades. 

The Buy rating is retained and the target price increases to $0.95 from $0.92.

Target price is $0.95

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgans rates ALL as Add (1) -

During an investor roundtable attended by Morgans, management at Aristocrat Leisure confirmed its expectation for positive profit (NPATA) growth in FY23, weighted to the 2H.

While A&NZ trading is currently 'subdued' the company indicated land-based gaming revenues in the Americas is experiencing strong growth. 

The broker increases its forecasts marginally due to the recent buyback extension and retains its $43 target and Add rating.

Target price is $43.00

Current consensus price target is $42.73, suggesting upside of 16.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.9

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates ALL as Accumulate (2) -

While core electronic gaming machine (EGM) business remains the main driver for Aristocrat Leisure shares, Ord Minnett points our Real Money Gaming (RMG) is gaining traction.

Online RMG includes online casino, slots bingo, poker and sports betting, and the analyst sees significant future growth for Aristocrat in North America.

The broker retains its $43 target and Accumulate rating in its first research update since transitioning to Morningstar from JP Morgan for whitelabeled research.

Previously, the FNArena database had a Buy rating and $40.50 target via the JP Morgan-based research.

Target price is $43.00

Current consensus price target is $42.73, suggesting upside of 16.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.9

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates ALQ as Upgrade to Lighten from Sell (4) -

Ord Minnett increases its forecasts for mid-term revenue growth in ALS Ltd's Mineral segment due to a brighter five-year view for battery minerals growth.

The broker increases its target by 18% to $8.40 and upgrades its rating to Lighten from Sell in its first research update since transitioning to Morningstar from JP Morgan for whitelabeled research.

Previously, the FNArena database had an Accumulate rating and $13.20 target via the JP Morgan-based research.

Target price is $13.20

Current consensus price target is $13.38, suggesting upside of 16.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates BHP as Sell (5) -

BHP Group and Hatch Engineering have agreed to a pilot study for an electric smelting furnace plant in Australia to produce low emission steel. The facility will test and optimise production of iron from ESF using renewable electricity and hydrogen replacing coking coal.

UBS expects decarbonisation of steel to push prices higher in certain regions long-term, a moderation in iron ore and coking coal demand and a growing premium for high-quality raw materials which can materially reduce emissions.

In the neat term, the broker is cautious on iron ore prices on China's recovery being consumption- not construction-led, maintaining a Sell rating and unchanged $39 target.

Target price is $39.00

Current consensus price target is $44.31, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.2

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates BXB as Buy (1) -

Citi feels the macro environment is becoming more favourable for Brambles, noting pallet prices are moderating but remain around 50% higher than rolling contracts. 

Further, the broker expects the moderation of pallet pricing, in combination with the purchasing of fewer pallets, is sufficient to support more robust cash flow for Brambles. Citi expects Brambles can deliver further outperformance looking ahead. 

The Buy rating and target price of $14.55 are retained.

Target price is $14.55

Current consensus price target is $13.89, suggesting upside of 2.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates CAJ as Outperform (1) -

Following the release of Medicare data for February, Macquarie highlights total diagnostic imaging volumes rose by 7.8% on the previous corresponding period, and benefits growth was also strong.

The broker expects the ongoing recovery in face-to-face GP consultations will result in improving imaging volumes. It's felt Capitol Health is well placed in the near-term compared to peers with strong specialist recruitment and overexposure to recovery locations in Victoria.

The Outperform rating and 34c target are retained.

Target price is $0.34

Current consensus price target is $0.35, suggesting upside of 30.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates CCX as Neutral (3) -

While Citi expects conditions will remain challenging for City Chic Collective into early FY24, it continues to find the retailer a good business. It feels the company's North American prospects would be improved by the opening of stores when balance sheet pressure subsides.

Competitor Torrid has announced its intention to reduce promotional activity, which the broker points out could see City Chic Collective achieve better sell through over the second half, with discounting allowing for the clearing of excess inventory.

The Neutral rating and target price of $0.56 are retained.

Target price is $0.56

Current consensus price target is $0.59, suggesting upside of 24.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates CHC as Upgrade to Buy from Accumulate (1) -

Ord Minnett does expect Charter Hall will report a drop in performance fees after the massive fees collected between 2019 and 2022, but continues to see meaningful growth ahead for the company. 

The broker sees growing assets under management as underpinning base fee revenue and intermittent performance fees. 

The rating is upgraded to Buy from Accumulate and the target price of $16.20 is retained. 

Target price is $16.20

Current consensus price target is $14.77, suggesting upside of 35.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates CNB as Outperform (1) -

A drilling update by Carnaby Resources for Mount Hope at the Greater Duchess copper gold project was positive and indicates upside potential, according to Macquarie.

Further drilling could help define the footprint of mineralisation at Mount Hope, explains the analyst, with the deposit currently open at
depth and across strike extents.

The Outperform rating and $1.70 target are unchanged.

Target price is $1.70

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates CXO as Sell (5) -

Core Lithium has announced the sale of an additional 18,500 tonnes of offtake to Youha, to be enacted before the 300,000 tonnes contracted in 2019. Citi highlights the additional volume will be comprised of the initial 3,500 tonnes of spodumene concentrate from stockpiles expected in April.

Payment for the remaining 15,000 tonnes is expected to be 80% paid in April, with the remaining 20% paid on delivery. According to the broker, pricing for this additional sale is linked to Fastmarkets, and terms are improved for Core Lithium. 

The Sell rating is retained and the target price decreases to $0.75 from $0.90.

Target price is $0.75

Current consensus price target is $0.92, suggesting upside of 17.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates DDH as Buy (1) -

Bell Potter is anticipating weaker greenfield exploration activity in the near-term, and a subsequent decline in demand for DDH1's drilling services.

The broker points out not only that equity raising activity appears to have weakened for ASX juniors, but that raisings for gold exploration activities, where DDH1 retains its largest commodities exposure, declined -41% year-on-year in the first half. 

With this trend in mind, Bell Potter lowers its earnings per share forecasts -1% and -3% for FY23 and FY24 respectively. 

The Buy rating is retained and the target price decreases to $1.28 from $1.32.

Target price is $1.28

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates DOC as Hold (3) -

Bell Potter points out Doctor Care Anywhere shareholders have faced a turbulent journey in recent months, but that instability in the Doctor Care Anywhere GP platform has been stabilised and the company has been able to provide around 63,000 GP consultations in January. 

The company is now ready to introduce changes to its business model, including the use of Advanced Nurse Practitioners to attend to low acuity patient consultations. It is anticipated this will reduce cost of service, improve margins and increase monthly capacity above 100,000 patients.

The broker expects coming months will be crucial to determining the sustainability of this business model. 

The Hold rating is retained and the target price decreases to $0.06 from $0.12.

Target price is $0.06

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

This company reports in GBP. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates EVT as Buy (1) -

Citi believes intended spend from Apple on theatrical film releases is a positive indicator that the structural issues facing cinemas may not be as significant as previously thought, in what should ultimately prove a positive for EVT Ltd. 

Apple intends on spending US$1bn annually on theatrical film releases, which Citi feels is demonstrative of increased interest and confidence in the cinema business model. The Australian box office is up 8% year-on-year in the second half to date, offering some upside potential to the broker's expectations of flat growth. 

The Buy rating and target price of $17.11 are retained. 

Target price is $17.11

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Shaw and Partners rates HLO as Initiation of coverage with Buy (1) -

Shaw and Partners has initiated coverage of Helloworld Travel with a Buy/High Risk rating alongside a maiden price target of $3.

The broker observes the shares are trading at a significant discount vis a vis sector peers, while offering "robust returns" and double-digit organic earnings growth on the back of a strong recovery for the leisure industry generally.

Shaw lauds the "massive transformation" that has reshaped the business post covid. Its forecasts indicate EPS growth of 126%, 134% and 43% for FY23, FY24 and FY25, respectively.

Target price is $3.00

Current consensus price target is $2.74, suggesting upside of 16.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates IMD as Buy (1) -

Bell Potter is anticipating weaker greenfield exploration activity in the near-term, and a subsequent decline in demand for Imdex's drilling services.

The broker points out not only that equity raising activity appear to have weakened for ASX juniors, but that raisings for gold exploration activities, where Imdex retains its largest commodities exposure, declined -41% year-on-year in the first half. 

With this trend in mind, Bell Potter lowers its earnings per share forecasts -3% and -5% for FY23 and FY24 respectively. 

The Buy rating is retained and the target price decreases to $2.85 from $3.00.

Target price is $2.85

Current consensus price target is $2.86, suggesting upside of 40.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates MVF as Outperform (1) -

Following February Medicare data, Macquarie highlights total cycles rose by 12.5% compared to the previous corresponding period, driven by fresh cycle growth of 14.3% and frozen cycle growth of 10.2%.

The broker retains its Outperform rating for Monash IVF and suggests strong specialists recruitment and recent acquisitions will
drive growth in the 2H.

The $1.30 target is unchanged.

Target price is $1.30

Current consensus price target is $1.36, suggesting upside of 31.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates NSR as Lighten (4) -

National Storage REIT announced the completion of a $300m equity raising through the issuance of an additional 124m stapled securities, equating to an increase in securities on issue of around 10%. 

Ord Minnett notes securities were issued at a price of $2.41, which combined with a small contribution from marginally higher earnings estimates it feels justifies it's target price increase. 

The Lighten rating is retained and the target price increases to $2.20 from $2.10.

Target price is $2.20

Current consensus price target is $2.27, suggesting downside of -8.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.8

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates RNU as Initiation of coverage with Outperform (1) -

Electric vehicle demand is driving the graphite price and Macquarie forecasts a lift of 25-50% out to 2030 from current levels.

Graphite is currently used in all lithium-ion battery chemistry, explains the broker, though there are risks of substitution and new technology on longer term demand.

Macquarie initiates coverage on Renascor Resources, a graphite and battery anode precursor material developer, with an Outperform rating and 30c target price. 

The company 100% owns the vertically integrated Siviour graphite project in South Australia, and is in the first stage of developing a mine to produce around 105ktpa graphite concentrate for sale to third parties.

The mine will also feed the downstream Purified Spherical Graphite plant, which is targeting 28ktpa of production.

The analyst forecasts construction will begin in FY24, followed by first production in FY25 and first sales from the plant in FY26.

One of the company's key advantages and point of differentiation, according to the broker, is the vertical integration to battery anode material via the plant.

Target price is $0.30

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates SIG as Hold (3) -

Ord Minnett is expecting Sigma Healthcare to emerge a leaner organisation after some significant restructuring.

Following the partial loss of its Chemist Warehouse contract, which contributed 25% of revenue in 2019, Sigma has been able to leverage existing investment in new distribution centres and subsequent excess capacity, with the sale and leaseback of two of its distribution centres brought in $172m.

Looking ahead, Ord Minnett expects recent investments to drive operating efficiencies and for the company to be in a net cash position from FY24.

The Hold rating and target price of $0.63 are retained.

Target price is $0.63

Current consensus price target is $0.56, suggesting downside of -14.2% (ex-dividends)

The company's fiscal year ends in January.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgans rates SOL as Add (1) -

Following 1H results for WH Soul Pattinson, Morgans highlights the resilient performance of the investment portfolio, with net cash from investments rising by 35% on the previous corresponding period to around $247m.

A fully franked interim dividend of 36cps was a 24% rise on the previous corresponding period and stronger than the analyst expected. 

Robust dividend contributions derived from core strategic investment holdings, explains the broker, mainly New Hope ((NHC)) and Brickworks ((BKW)).

The target rises to $30.65 from $29.60. Add.

Target price is $30.65

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates SQ2 as Buy (1) -

Hindenburg Research has published a short report on Block that made a number of claims ranging from the company overstating its
Cash App user metrics to widespread fraudulent and criminal activity on the platform.

UBS believes most of these allegations are unsubstantiated and that the stock decline provides an opportunity to buy what it views as one of the most innovative companies in Payments.

Over the next 3 years, at a minimum, UBS expects Block to generate a low-20s gross profit compound annual growth rate.

Buy and US$102 target retained.

Current Price is $0.00. Target price not assessed.

Current consensus price target is $149.00, suggesting upside of 63.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.7

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates SYR as Initiate Coverage With An Outperform Rating (1) -

Electric vehicle demand is driving the graphite price and Macquarie forecasts a lift of 25-50% out to 2030 from current levels.

Graphite is currently used in all lithium-ion battery chemistry, explains the broker, though there are risks of substitution and new technology on longer term demand.

The broker initiates coverage on Syrah Resources with an Outperform rating and $2.30 target. The company is the only vertically integrated natural graphite active anode material supplier and producer outside of China.

The Balama mine in Mozambique has been operating since 2017, is significant on a global scale, notes the analyst, with a 350ktpa nameplate capacity.

The downstream Vidalia plant is targeting production of 11.25ktpa of Active Anode Material (AAM), with a study underway to lift volumes to 45ktpa.

Target price is $2.30

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates TLG as Initiation of coverage with Outperform (1) -

Electric vehicle demand is driving the graphite price and Macquarie forecasts a lift of 25-50% out to 2030 from current levels.

Graphite is currently used in all lithium-ion battery chemistry, explains the broker, though there are risks of substitution and new technology on longer term demand.

Macquarie initiates coverage on graphite and battery anode developer Talga Group with an Outperform rating and $2.00 target price.

The company is in the first stages of developing a 100ktpa mine at the 100%-owned vertically integrated Vittangi anode project in Sweden. The mine will feed the Lulea anode refinery and produce circa 19.5ktpa of active anode (Talnode-C) for 24 years.

Apart from its location in Europe, the key advantage and point of differentiation for Talga Group is vertical integration all the way to
a battery anode product, explains the analyst.

Target price is $2.00

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates UMG as Accumulate (2) -

Finding United Malt undervalued at its current share price, Ord Minnett expects headwinds for the company to be short lived with an improved crop and normalising demand for craft beer in sight. 

The broker expects an improved barley crop in 2023 will be sufficient to support earnings recovery in FY24, with forecasts predicting both 2023 and 2024 crops to be around 11% above the five-year average. This should see downward pressure impact prices, and likely remove import costs in FY23. 

The Accumulate rating and target price of $4.00 are retained.

Target price is $4.00

Current consensus price target is $3.90, suggesting upside of 13.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates WDS as Neutral (3) -

Macquarie retains its $35 target for Woodside Energy despite lowering its earnings outlook slightly to better reflect a more rapid decline in Bass Strait fields.       

This change to forecasts follows a presentation by joint venture partner Esso Australia highlighting the removal of one gas train at
Longford once the Snapper field reaches end of life.

The Neutral rating is maintained.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

Target price is $35.00

Current consensus price target is $37.83, suggesting upside of 19.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates WES as Lighten (4) -

Ord Minnett maintains its Lighten rating for Wesfarmers and believes a general retail slowdown will hit the company's department stores the hardest.

The long-term fair value for the company is anchored by the broker's long-term lithium forecast, with the Mt Holland project accounting for around 7% of the $42 target price.

The analyst forecasts will moderate from current levels to around the long-term US$15,000/t estimate. Should the price remain at around US$50,000pmt, fair value is estimated to be around 30% higher for Wesfarmers.

Target price is $42.00

Current consensus price target is $50.54, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates WES as Buy (1) -

The existing Wesfarmers Chemical, Energy & Fertilisers business has been a source of earnings surprise over the last 18 months, UBS notes, led by higher Saudi and South East Asian ammonia prices, ammonium nitrate demand and fertiliser demand.

While these thematics are moderating somewhat, earnings remain elevated, and WesCEF has outlined several multi-year growth initiatives.

Meanwhile, WesCEF's lithium growth remains attractive, the broker suggests, offering long term optionality. Buy and $55.50 target retained.

Target price is $55.50

Current consensus price target is $50.54, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources