Australian Broker Call

Morgan Stanley rates ABC as Downgrade to Equal-weight from Overweight (3) -

Morgan Stanley downgrades its rating for AdBri to Equal-weight from Overweight following unfavourable construction conditions in the March quarter resulting from above-average rainfall across Australia.

The broker highlights competitor Boral ((BLD)) has already downgraded earnings due to the weather and rising energy costs. The target price falls to $3.40 from $3.60 as Morgan Stanley's FY22 earnings (EBIT) forecast falls by -5%. Industry view: In line.

Target price is $3.40 Current Price is $3.02 Difference: $0.38
If ABC meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.58, suggesting upside of 24.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Citi rates ACL as Neutral (3) -

Citi adjusts EPS forecasts for pathology companies to reflect covid-testing windfalls from Omicron, but maintains a negative bias, expecting earnings to fall sharply as covid subsides in FY23 and FY24.

The broker believes it will be difficult for any of the pathology companies to outperform given earnings are expected to more than halve over two years.

EPS forecasts for Australian Clinical Labs rise 9% and 4% in FY22 and FY23.

Neutral rating and $5 target price retained.

Target price is $5.00 Current Price is $5.10 Difference: minus $0.1 (current price is over target).
If ACL meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Morgan Stanley rates AGL as Equal-weight (3) -

Morgan Stanley lifts its AGL Energy EPS estimates by 1% in FY22, 12% in FY23 and 38% in FY24 due to high pool prices in NSW and QLD.

The broker estimates a gross margin uplift of around $350m in FY24 versus FY22, assuming an orderly pass through of pool prices. Should the de-merger proceed, any earnings uplift is allocated to Accel Energy.

The rating is kep at Equal-weight as the analyst cautions against over-capitalising high pool prices beyond the forecast period. The target rises to $8.48 from $7.50. Industry view: Cautious.

Target price is $8.48 Current Price is $8.58 Difference: minus $0.1 (current price is over target).
If AGL meets the Morgan Stanley target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.26, suggesting downside of -3.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Ord Minnett rates AKE as Buy (1) -

After reviewing supply and demand forecasts for the lithium market, Ord Minnett continues to see significant near-term cash flow gains and valuation support for lithium miners.

The analyst notes spodumene prices continue to climb, while Chinese spot prices for hydroxide and carbonate are just slightly off the absolute highs.

The broker maintains its Buy rating and $18.50 target for Allkem

Target price is $18.50 Current Price is $12.77 Difference: $5.73
If AKE meets the Ord Minnett target it will return approximately 45% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Citi rates ALG as Buy (1) -

Citi weighs up Ardent Leisure's decision to sell its holding in Main Event to Dave & Busters.

On the one hand, the broker expects a higher price could have been gained by holding out for two years.

One the other, Citi says it forces the hand of any other interested parties, provides protection should US consumer sentiment deteriorate as inflation and rates rise; and could give Ardent greater control of the sale process given the RedBird option has not been exercised.

Buy rating retained. Target price steady at $1.96.

Target price is $1.96 Current Price is $1.35 Difference: $0.61
If ALG meets the Citi target it will return approximately 45% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates AUB as Outperform (1) -

Macquarie remains positive on AUB Group, the Macquarie AUB Commercial Premium Rate Index showing premium rates rose 6.9% in the March quarter.

This points to premium-rate growth of greater than 5% over three quarters and the broker says FY22 company guidance assumes Australian premium rates will rise between 7% and 9% over the period.

Outperform rating and $25.44 target price retained.

Target price is $25.44 Current Price is $22.47 Difference: $2.97
If AUB meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $25.76, suggesting upside of 15.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Macquarie rates AWC as Neutral (3) -

Alumina Ltd joint-venture partner Alcoa has received US$7.7m from the government to fund a carbon-reduction technology pilot for aluminium refining.

The pilot uses Electric calcination, Mechanical Vapour Recompression and a decarbonised grid, and Alcoa believes it could yield a strong reduction in carbon emissions.

The broker expects energy and caustic soda prices will remain elevated, further pressuring costs. Macquarie cuts its 2022 EPS forecast -6% after marking to market March-quarter realised prices for aluminium.

Target price eases -5% to 1.90. Neutral rating retained.

Target price is $1.90 Current Price is $1.91 Difference: minus $0.01 (current price is over target).
If AWC meets the Macquarie target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.23, suggesting upside of 18.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.6

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

Citi rates COH as Buy (1) -

Citi reviews the Australian and NZ Healthcare sector to account for covid developments and forecasts.

While upgrading covid-testing pathology companies' FY22 and FY23 EPS forecasts, the broker believes it will be difficult for any of these companies to outperform given earnings are expected to more than halve over two years as covid subsides. 

Similarly, companies whose ICU revenue depends on covid hospitalisations should also suffer.

In contrast, the broker expects Cochlear should start its reopening recovery and outperform over the next year.

Buy rating and $235 target price retained.

Target price is $235.00 Current Price is $222.42 Difference: $12.58
If COH meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $225.70, suggesting upside of 0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Citi rates CSL as Buy (1) -

Citi reviews the Australian and NZ Healthcare sector to account for covid developments and forecasts.

While upgrading covid-testing pathology companies' FY22 and FY23 EPS forecasts, the broker believes it will be difficult for any of these companies to outperform given earnings are expected to more than halve over two years as covid subsides. 

Similarly, companies whose ICU revenue depends on covid hospitalisations should also suffer.

In contrast, the broker expects CSL, which is underperforming the ASX200 by -9%, should start its reopening recovery.

Buy rating and $335 target price retained.

Target price is $335.00 Current Price is $261.97 Difference: $73.03
If CSL meets the Citi target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $317.42, suggesting upside of 20.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.9

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

Morgan Stanley rates CSR as Equal-weight (3) -

Above average rainfall in the March quarter has less of an effect upon the earnings of CSR than domestic peers, according to Morgan Stanley, as the impact can be better smoothed at the building products end of the spectrum.

The broker maintains its Equal-weight rating as near-term upside is largely reflected in the current share price. The $6.60 target price is maintained. Industry view: In line.

Target price is $6.60 Current Price is $6.05 Difference: $0.55
If CSR meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $6.60, suggesting upside of 9.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Citi rates FPH as Neutral (3) -

Citi reviews the Australian and NZ Healthcare sectors to account for covid developments and forecasts.

While upgrading covid-testing pathology companies' FY22 and FY23 EPS forecasts post omicron, the broker believes it will be difficult for any of these companies to outperform given earnings are expected to more than halve over two years as covid subsides. 

Similarly, companies whose ICU revenue depends on covid hospitalisations should also suffer and Citi notes Fisher & Paykel Healthcare, whose covid products are used in ICU, is among this group.

Neutral rating and NZ$28.50 target price retained.

Current Price is $21.03. Target price not assessed.

Current consensus price target is $27.00, suggesting upside of 30.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

This company reports in NZD. 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

UBS rates GEM as Buy (1) -

Operating impacts have remained challenging for G8 Education, with flooding in both Queensland and New South Wales compounding effects of omicron felt earlier in the year. UBS notes occupancy remains lower than expected and enrolments are delayed.

First quarter earnings of $1m compared to $17m in the previous comparable period, but UBS expects recovery ahead. Prices increased 6% in January to offset inflation, centre expansion continues, and G8 Education should benefit from moderating industry supply growth.

The Buy rating is retained and the target price decreases to $1.34 from $1.43.

Target price is $1.34 Current Price is $1.06 Difference: $0.28
If GEM meets the UBS target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $1.32, suggesting upside of 24.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Macquarie rates GUD as Outperform (1) -

Macquarie emerges satisfied from a G.U.D. Holdings investor day, noting the Automotive division remains diversified and is increasingly powertrain agnostic; that Vision X remains complementary and is helping the company open US and European markets; and APG maintains a dominant market position, boasting strong barriers to entry.

On the strategy front, Macquarie notes the company is aiming for leadership in the EV aftermarket and that M&A continues to be the lynchpin of its growth strategy, as its seeks bolt-on businesses.

Outperform rating and $16.85 target price retained.

Target price is $16.85 Current Price is $11.79 Difference: $5.06
If GUD meets the Macquarie target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $15.65, suggesting upside of 32.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Citi rates HLS as Neutral (3) -

Citi adjusts EPS forecasts for pathology companies to reflect covid-testing windfalls from Omicron, but maintains a negative bias, expecting earnings to fall sharply as covid subsides in FY23 and FY24.

The broker believes it will be difficult for any of the pathology companies to outperform given earnings are expected to more than halve over two years.

EPS forecasts for Healius rise 10% in FY22 and 4% in FY23.

Neutral rating retained. Target price inches up to $4.70 from $4.65.

Target price is $4.70 Current Price is $4.37 Difference: $0.33
If HLS meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $5.17, suggesting upside of 17.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Credit Suisse rates IAG as Outperform (1) -

The Insurance sector has suffered a weak March quarter, notes Credit Suisse, with all insurers underperforming.

The broker remains positive on Insurance Australia Group, which is still trading on undemanding multiples and maintains its Outperform rating. The target price rises to $5.95 from $5.50 with a higher ongoing yield considered bullish for future period earnings.

Target price is $5.95 Current Price is $4.29 Difference: $1.66
If IAG meets the Credit Suisse target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $5.03, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Macquarie rates IAG as Outperform (1) -

Macquarie's Online Home Insurance Pricing tool has identified risks for business pricing in the region of -5.7% in the March quarter, with NRMA offering business discounts of $200 in NSW and ACT.

The broker's Commercial pricing data reveals premium rate rises for small to medium enterprises of 12.1% in the quarter.

The broker retains an Outperform rating for Insurance Australia Group and $5 target price.

Target price is $5.00 Current Price is $4.29 Difference: $0.71
If IAG meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $5.03, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Morgan Stanley rates IAG as Underweight (5) -

Morgan Stanley data show March quarter Home & Motor new business pricing increased, after slowing last year.

The broker points out that while Insurance Australia Group pricing was already above peers, its March quarter increases were more modest. Nonetheless, this is expected to slow market share losses.

The Underweight rating and $3.90 target are unchanged. Industry view: In-Line.

Target price is $3.90 Current Price is $4.29 Difference: minus $0.39 (current price is over target).
If IAG meets the Morgan Stanley target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.03, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Citi rates IDX as Buy (1) -

Citi reviews the Australian and NZ Healthcare sector to account for covid developments and forecasts.

While upgrading covid-testing pathology companies' FY22 and FY23 EPS forecasts post omicron, the broker believes it will be difficult for any of these companies to outperform given earnings are expected to more than halve over two years as covid subsides. 

Similarly, companies whose ICU revenue depends on covid hospitalisations should also suffer.

In contrast, the broker expects Integral Diagnostics should start its reopening recovery and outperform over the next year.

Buy rating and $4.85 target price retained.

Target price is $4.85 Current Price is $3.95 Difference: $0.9
If IDX meets the Citi target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $4.41, suggesting upside of 9.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

UBS rates IGO as Sell (5) -

IGO has agreed to a 15% increase to its bid for Western Areas ((WSA)), with the Western Areas board recommending the increased offer. UBS notes the new $1.35bn price is in line with its $1.4bn valuation.

The purchase looks to be immediately earnings and cash flow accretive, and maintained strength in nickel pricing offers potential for further upside. The broker looks to further detail around the capital expenditure and timeline estimates for the Odysseus project.

The Sell rating and target price of $12.65 are retained.

Target price is $12.65 Current Price is $13.53 Difference: minus $0.88 (current price is over target).
If IGO meets the UBS target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.05, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Macquarie rates JHX as Outperform (1) -

Macquarie downgrades EPS forecasts for James Hardie Industries -0.3% in FY22; -3.2% in FY23; and -3.9% in FY24 to reflect a slowing in housing starts (-7%) and repair and remodel spending.

But the broker believes the company represents a countercyclical growth opportunity in a complex global macro-economic environment; and that the company is priced attractively with absolute price-earnings ratios trading near lows.

Macquarie notes the company is defensively positioned and expects it will maintain growth in the face of rising interest rates.

Outperform rating retained. Target price falls to $57.25 from $61.70.

Target price is $57.25 Current Price is $40.67 Difference: $16.58
If JHX meets the Macquarie target it will return approximately 41% (excluding dividends, fees and charges).

Current consensus price target is $56.21, suggesting upside of 41.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.6

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

Macquarie rates LLC as Outperform (1) -

Macquarie is forecasting house price falls in the region of -10% due to reduced housing affordability, rising interest rates and reduced covid demand, and expects values will compress for the listed property sector.

The broker notes that the fall in developer sales historically outpaces that of dwelling prices and lowers residential settlement assumptions for Lendlease Group, Mirvac Group ((MGR)) and Stockland ((SGP)).

Macquarie appreciates Lendlease's near-term pipeline, thanks to Barangaroo Towers, but highlights cost inflation as a near-term risk.

Outperform rating retained. Target price eases -0.8% to $12.22.

Target price is $12.22 Current Price is $11.05 Difference: $1.17
If LLC meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $12.62, suggesting upside of 13.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Morgans rates LVH as Add (1) -

Following LiveHire's 3Q trading update, Morgans continues to like the large opportunity in the North American Direct Sourcing sector and highlights ongoing momentum. The sector has structural tailwinds, according to the analyst, from a fast-growing contingent workforce.

The domestic software-as-a-service business is also considered to be improving and the broker maintains its Add rating, while the target edges down to $0.51 from $0.54.

Target price is $0.51 Current Price is $0.34 Difference: $0.17
If LVH meets the Morgans target it will return approximately 50% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates LYC as Outperform (1) -

Lynas Rare Earths's March-quarter result proved a mixed bag as sharply lower rare-earths prices offset a strong rise in volumes and production, triggering a -6% miss on Macquarie's revenue forecast.

On the upside, Lynas Rare Earths' Malaysia plant met the company's production target, adding 7.2ktpa to its run-rate in March.

On the downside, Macquarie cuts its near-term commodity price forecasts to reflect the recent -20% fall in rare earth prices.

Outperform rating retained. Target price falls -9% to $12.80.

Target price is $12.80 Current Price is $9.69 Difference: $3.11
If LYC meets the Macquarie target it will return approximately 32% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Macquarie rates MGR as Outperform (1) -

Macquarie is forecasting house price falls in the region of -10% due to reduced housing affordability, rising interest rates and reduced covid demand, and expects values will compress for the listed property sector.

The broker notes that the fall in developer sales historically outpaces that of dwelling prices and lowers residential settlement assumptions for Lendlease Group ((LLC)), Mirvac Group and Stockland ((SGP)).

Macquarie expects Mirvac will still be able to execute on its apartment pipeline given limited supply continues to drive demand, but expects further upside is limited. The broker is eyeing the commercial pipeline for longer-dated growth.

EPS forecasts fall -0.7% in FY22; -1.8% in FY23; and -2% in FY24.

Outperform rating retained. Target price falls -1.7% to $2.92.

Target price is $2.92 Current Price is $2.43 Difference: $0.49
If MGR meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $3.05, suggesting upside of 26.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Citi rates MHJ as Buy (1) -

Michael Hill's March-quarter trading update outpaced Citi's forecasts, thanks to stronger-than-expected margins across all regions, and an acceleration in like-for-like sales as omicron disruption subsided.

Citi admires the balance sheet, and expects the company's strong cash position may be deployed to M&A or online market expansion, the former option appearing the most likely.

EPS forecasts rise 2% to 11% across FY22 to FY24.

Target price rises 3% to $1.61 from $1.56. Buy rating retained.

Target price is $1.61 Current Price is $1.21 Difference: $0.4
If MHJ meets the Citi target it will return approximately 33% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Ord Minnett rates MIN as No Rating (-1) -

After reviewing supply and demand forecasts for the lithium market, Ord Minnett continues to see significant near-term cash flow gains and valuation support for lithium miners.

The analyst notes spodumene prices continue to climb, while Chinese spot prices for hydroxide and carbonate are just slightly off the absolute highs.

The broker is currently research restricted on Mineral Resources and is unable to provide a rating, target price or earnings forecasts.

Current Price is $59.16. Target price not assessed.

Current consensus price target is $64.86, suggesting upside of 4.8% (ex-dividends)

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Credit Suisse rates MPL as Outperform (1) -

The Insurance sector has suffered a weak March quarter, notes Credit Suisse, with all insurers underperforming.

Nonetheless, the broker remains positive on the private health insurance industry due to ongoing tailwinds, and retains its Outperform rating for Medibank Private. It's estimated shares are trading below the five year 11% average premium to the market.

The target price of $3.50 is unchanged.

Target price is $3.50 Current Price is $3.11 Difference: $0.39
If MPL meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.38, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Credit Suisse rates NHF as Neutral (3) -

The Insurance sector has suffered a weak March quarter, notes Credit Suisse, with all insurers underperforming.

Nonetheless, the broker remains positive on the private health insurance industry due to ongoing tailwinds. The Neutral rating for nib Holdings is retained with the shares trading above the long-term average of around a -1% discount to the market. 

The $6.46 target is retained.

Target price is $6.46 Current Price is $6.39 Difference: $0.07
If NHF meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $6.77, suggesting upside of 6.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.1

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

Credit Suisse rates PDL as Outperform (1) -

Following a 2Q update by Pendal Group, Credit Suisse lowers its funds under management (FUM) assumptions and slightly increases its outflow estimates.

The forecast earnings impact from these changes are countered by the announcement of a share buyback of around 5% of shares, explains the analyst.

In further news, the group has rejected the merger offer by Perpetual ((PPT)) though the broker feels the offer has prompted efforts (like the buyback) to realise vale. An attempt to expand operating margins may be next.

Target price is $5.40 Current Price is $5.29 Difference: $0.11
If PDL meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $6.08, suggesting upside of 15.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Macquarie rates PDL as No Rating (-1) -

Pendal Group's board has knocked back Perpetual's offer on the grounds that it is not in the best interests of shareholders, and has announced a $100m buyback after the interim results are published on May 10 (5% of the company's market capitalisation).

Macquarie expects the buyback to be completed by the FY22 result.

Meanwhile, the company's funds-under-management (FUM) continued to deteriorate in the March quarter. Net flows fell -$0.7bn as $0.9bn in cash receipts and a $1bn mandate in Europe and Britain partially offset outflows of -$0.5bn in Australia and -$1.8bn in the US.

A -$3.1bn foreign-exchange loss proved the decider for Macquarie, which cut FY22 EPS forecasts -8.2%; FY23 forecasts -11.3%; and  -10% to -11% thereafter

Macquarie is on rating restriction.

Current Price is $5.29. Target price not assessed.

Current consensus price target is $6.08, suggesting upside of 15.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Morgan Stanley rates PDL as Overweight (1) -

Pendal Group has announced an up to $100m buyback (around 5% of shares).

The fund manager has also rejected Perpetual's ((PPT)) takeover offer (described as significantly undervalued) and Morgan Stanley feels Perpetual has the capacity to increase the cash component.

March quarter outflows for Pendal Group were larger than the analyst had anticipated and it's thought a near-term return to inflows will be a challenge. The Overweight rating and $7.00 target price are retained. Industry view is Attractive.

Target price is $7.00 Current Price is $5.29 Difference: $1.71
If PDL meets the Morgan Stanley target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $6.08, suggesting upside of 15.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Ord Minnett rates PDL as Buy (1) -

The Pendal board has rejected the  takeover offer from Perpetual ((PPT)) believing it significantly undervalues the company. Ord Minnett wasn't surprised the group announced a $100m buyback to support the share price.

The broker notes the possibility of a revised offer from Perpetual.

Meanwhile, a 2Q FY22 flows update revealed an improvement in flows from the previous quarter, partly offset by a weak outcome from markets, explains the analyst. Weak markets were considered to also impact funds under management (FUM).

The Buy rating and $5.75 target price are maintained.

Target price is $5.75 Current Price is $5.29 Difference: $0.46
If PDL meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $6.08, suggesting upside of 15.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

UBS rates PDL as Buy (1) -

Soft March quarter funds under management reported by Pendal Group disappointed UBS' expectations by -7.5%, but the broker felt a weak quarter was already accounted for in the share price and noted outflows of -$0.7bn demonstrated significant improvement on the -$6.8bn reported in the December quarter.

Performance fees at the end of quarter, totaling $6.2m, also missed the broker's forecast $9.4m. Accounting for the miss, lower funds under management and the announced $100m buy back, UBS lowers its earnings per share forecasts -11% and -13% for FY22 and FY23.

The Buy rating is retained and the target price decreases to $6.60 from $7.20.

Target price is $6.60 Current Price is $5.29 Difference: $1.31
If PDL meets the UBS target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $6.08, suggesting upside of 15.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Macquarie rates PLS as Outperform (1) -

Pilbara Minerals March-quarter result missed Macquarie's forecasts due to a delayed shipment and marginally weaker-than-forecast spodumene production, which suggests full-year production will fall at the lower end of guidance, says the broker.

Macquarie expects the company will double spodumene production over the next three years, but for now downgrades FY22 EPS forecast -9% and FY23 forecast -7%.

Outperform rating retained. Target price falls -7% to $4 from $4.30.

Target price is $4.00 Current Price is $2.90 Difference: $1.1
If PLS meets the Macquarie target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $3.91, suggesting upside of 32.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Ord Minnett rates PLS as Buy (1) -

After reviewing supply and demand forecasts for the lithium market, Ord Minnett continues to see significant near-term cash flow gains and valuation support for lithium miners.

The analyst notes spodumene prices continues to climb, while Chinese spot prices for hydroxide and carbonate are just slightly off the absolute highs.

The broker reduces its target price for Pilbara Minerals to $4.25 from $4.50 after incorporating lower sales volumes in the near term. Capital expenditure estimates for the Pilgangoora project and the POSCO joint venture have been raised. Buy.

Target price is $4.25 Current Price is $2.90 Difference: $1.35
If PLS meets the Ord Minnett target it will return approximately 47% (excluding dividends, fees and charges).

Current consensus price target is $3.91, suggesting upside of 32.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Morgans rates PXS as Initiation of coverage with Speculative Buy (1) -

Morgans initiates coverage of commercial stage drug development company Pharmaxis with a Speculative Buy rating and $0.58 target price. Cancers and inflammatory conditions are the target of its clinical pipeline, while a respiratory franchise generates income.

There are two approved respiratory products, Bronchitol and Aridol, with sales forecast of over $10m in FY22 and there's upside from US$15m in milestone payments (linked to sales), explains the analyst.

The lead drug candidate PXS-5505 is targeting the rare cancer Myelofibrosis, which has a market opportunity exceeding US$1bn.

Target price is $0.58 Current Price is $0.09 Difference: $0.49
If PXS meets the Morgans target it will return approximately 544% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Credit Suisse rates QBE as Outperform (1) -

The Insurance sector has suffered a weak March quarter, notes Credit Suisse, with all insurers underperforming.

The broker's preferred exposure remains QBE Insurance with the most earnings momentum and greatest leverage to the hard
rate cycle of all the general insurers. The Outperform rating is maintained.

The broker's target rises to $15.55 from $14.45 as the forecast for fixed income yield in outer years is increased to incorporate rises in risk-free rates since the December quarter.

Target price is $15.55 Current Price is $11.76 Difference: $3.79
If QBE meets the Credit Suisse target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $14.38, suggesting upside of 21.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 1.0

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

Citi rates RHC as Buy (1) -

Citi reviews the Australian and NZ Healthcare sector to account for covid developments and forecasts.

While upgrading covid-testing pathology companies' FY22 and FY23 EPS forecasts post omicron, the broker believes it will be difficult for any of these companies to outperform given earnings are expected to more than halve over two years as covid subsides. 

Similarly, companies whose ICU revenue depends on covid hospitalisations should also suffer.

In contrast, the broker expects Ramsay Health Care should start its reopening recovery and outperform over the next year.

Buy rating and $74 target price retained.

Target price is $74.00 Current Price is $64.31 Difference: $9.69
If RHC meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $69.52, suggesting upside of 8.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

Macquarie rates RMC as Outperform (1) -

Macquarie believes Resimac Group's recent residential mortgage-back securitisation should support lower funding costs and partly offset competitive pressure on net interest margins (NIM).

The broker expects pressure on NIMs will continue towards pre-pandemic averages, and revises down NIM forecasts.

EPS forecasts fall -3.4% in FY23; and -7.9% in FY24.

Target price falls to $1.91. This compares to the last entry in the FNArena database on February 28 of $2.67.

Target price is $1.91 Current Price is $1.62 Difference: $0.29
If RMC meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Citi rates RMD as Buy (1) -

Citi reviews the Australian and NZ Healthcare sector to account for covid developments and forecasts.

While upgrading covid-testing pathology companies' FY22 and FY23 EPS forecasts, the broker believes it will be difficult for any of these companies to outperform given earnings are expected to more than halve over two years as covid subsides. 

Similarly, companies whose ICU revenue depends on covid hospitalisations should also suffer.

In contrast, the broker expects ResMed's business should benefit from fewer covid cases and hospitalisations, although management has said supply-chain disruption may prevent the company from reaching its additional-device targets. 

Citi expects extra sales in FY22 but suspects sales may slip in FY23. The Philips recall is expected to be finalised by the end of 2022.

Buy rating and $38 target price retained.

Target price is $38.00 Current Price is $32.05 Difference: $5.95
If RMD meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $37.84, suggesting upside of 19.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.8

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

Citi rates RWC as Sell (5) -

Citi is concerned that Reliance Worldwide's manufacturing and sourcing may again be caught up in China's zero covid policy as lockdowns continue. Ningbo, which produces about 70% of EZ-FLO's products has already imposed some restrictions. 

The broker expects lockdowns could impact freight costs as freight is diverted from Shanghai; supply security; and manufacturing efficiency (from stop-starts) - forcing management to diversify supply chains in the longer term and forfeit acquisition synergies.

Sell rating and $4 target price retained.

Target price is $4.00 Current Price is $3.83 Difference: $0.17
If RWC meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $5.78, suggesting upside of 50.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.4

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

Macquarie rates SFR as Outperform (1) -

Sandfire Resources' US legal challenge to the Montana Department of Environmental Quality's ruling on the Black Butte approval has succeeded.

A final decision is expected in 45 days, which Macquarie says will clarify the impact.

Meanwhile, Macquarie notes strong copper and zinc prices are pointing towards 21% and 118% higher earnings than the broker's base cases for FY23 and FY24.

Outperform rating retained. Target price steady at $9.50.

Target price is $9.50 Current Price is $5.54 Difference: $3.96
If SFR meets the Macquarie target it will return approximately 71% (excluding dividends, fees and charges).

Current consensus price target is $7.32, suggesting upside of 32.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.6

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

Macquarie rates SGP as Neutral (3) -

Macquarie is forecasting house price falls in the region of -10% due to reduced housing affordability, rising interest rates and reduced covid demand, and expects values will compress for the listed property sector.

The broker notes that the fall in developer sales historically outpaces that of dwelling prices and lowers residential settlement assumptions for Lendlease Group ((LLC)), Mirvac Group ((MGR)) and Stockland.

Of the three, Macquarie is most pessimistic towards Stockland, which it considers to be particularly exposed to the residential cycle. The broker expects pressure on settlement volumes in FY23 and FY24 and potential downside risk to consensus residential forecasts.

FY23 EPS forecast falls -3.2% and FY24 EPS forecast falls -5.9%. Neutral rating retained. Target price fall -4.1% to $4.02.

Target price is $4.02 Current Price is $4.18 Difference: minus $0.16 (current price is over target).
If SGP meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.86, suggesting upside of 16.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Citi rates SHL as Neutral (3) -

Citi adjusts EPS forecasts for pathology companies to reflect covid-testing windfalls from Omicron, but maintains a negative bias, expecting earnings to fall sharply as covid subsides in FY23 and FY24.

The broker believes it will be difficult for any of the pathology companies to outperform given earnings are expected to more than halve over two years.

EPS forecasts for Sonic Healthcare rise 15% for FY22 but are steady for FY23.

Neutral rating and $39 target price retained.

Target price is $39.00 Current Price is $35.02 Difference: $3.98
If SHL meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $39.11, suggesting upside of 9.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Citi rates SIG as Neutral (3) -

Citi reviews the Australian and NZ Healthcare sector to account for covid developments and forecasts.

While upgrading covid-testing pathology companies' FY22 and FY23 EPS forecasts post omicron, the broker believes it will be difficult for any of these companies to outperform given earnings are expected to more than halve over two years as covid subsides. 

Similarly, companies whose ICU revenue depends on covid hospitalisations should also suffer.

In contrast, the broker expects Sigma Healthcare should start its reopening recovery and outperform over the next year as lockdowns end.

Buy rating and 52c target price retained.

Target price is $0.52 Current Price is $0.47 Difference: $0.05
If SIG meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $0.51, suggesting upside of 8.0% (ex-dividends)

The company's fiscal year ends in January.

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

Credit Suisse rates SUN as Outperform (1) -

The Insurance sector has suffered a weak March quarter, notes Credit Suisse, with all insurers underperforming.

The broker believes recent weakness in the Suncorp Group share price could present an opportunity. The recent spike in fixed income yields are expected to provide a strong tailwind for earnings from insurance and banking.

The Outperform rating is maintained and the target price rises to $15.10 from $13.90.

Target price is $15.10 Current Price is $11.00 Difference: $4.1
If SUN meets the Credit Suisse target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $13.72, suggesting upside of 23.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Macquarie rates SUN as Outperform (1) -

Macquarie's Online Home Insurance Pricing tool has identified falls for business pricing in the region of -5.7% in the March quarter, with NRMA offering business discounts of $200 in NSW and ACT.

The broker's Commercial pricing data reveals premium rate rises for small to medium enterprises of 12.1% in the quarter.

Outperform rating retained. Target price eases to $15 from $15.10.

Target price is $15.00 Current Price is $11.00 Difference: $4
If SUN meets the Macquarie target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $13.72, suggesting upside of 23.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Morgan Stanley rates SUN as Equal-weight (3) -

Morgan Stanley data show March quarter Home & Motor new business pricing increased, after slowing last year.

The broker points out Suncorp Group had the highest Motor increases in its survey and moderate increases in Home. It's thought the insurer is pitching its pricing to reach the underlying margin target of greater than 10%.

The Equal-weight rating and $11.90 target are unchanged. Industry view: In-Line.

Target price is $11.90 Current Price is $11.00 Difference: $0.9
If SUN meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $13.72, suggesting upside of 23.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Citi rates WEB as Upgrade to Buy from Neutral (1) -

Citi expects Webjet should lead re-opening earnings thanks to its exposure to volumes from its user-pay business model and low fixed costs.

The broker also expects B2B trade should recover with a vengeance thanks to lower costs, an American growth leg, and improved industry position; and that the company may capture B2C market share from bricks-and-mortar monopolist Flight Centre ((FLT)) as online trade grows.

Earnings forecasts fall -32% to reflect omicron disruption, but the broker expects the market will look through this to the re-opening play.

Rating upgraded to Buy from Neutral. Target price inches up to $6.50 from $6.46.

Target price is $6.50 Current Price is $5.31 Difference: $1.19
If WEB meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $6.14, suggesting upside of 12.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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