Australian Broker Call

Citi rates ALL as Buy (1) -

Citi analysts welcome the fact Aristocrat Leisure continues to outperform the broader industry when it comes to social casino data. While the broader industry suffered a -3% retreat in September, Citi believes Aristocrat bookings grew by 4% over the month, year-on-year.

On the analysts' assessment, RAID bookings were stable quarter-on-quarter while Mech Arena bookings show no clear trend.

More broadly, it's the land based operations that have the broker excited, as well as the opportunity embedded in real money gaming, shortcut RMG.

Target unchanged at $40.20. Buy.

Target price is $40.20 Current Price is $34.02 Difference: $6.18
If ALL meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $42.71, suggesting upside of 22.3% (ex-dividends)

The company's fiscal year ends in September.

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 APM as Outperform (1) -

Caseloads for the Disability Employment Services Program, which accounts for 20% of APM Human Services International's revenue, declined -8% year-on-year in the September quarter. 

Credit Suisse highlights this marks the seventh consecutive month of year-on-year caseload declines.

The decline will translate to lower service fees for providers, but despite weakening case loads, Credit Suisse expects APM Human Services International can continue to take share through re-allocation. 

The Outperform rating and target price of $4.30 are retained.

Target price is $4.30 Current Price is $3.23 Difference: $1.07
If APM meets the Credit Suisse target it will return approximately 33% (excluding dividends, fees and charges).

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

UBS rates BPT as Buy (1) -

UBS upgrades its 2023-24 EPS forecasts for Australian oil exploration and production companies by 1-16%, largely due to higher
forecast gas prices. Weaker-than-expected Brent crude oil forecasts soften the earnings impact in 2022.

Beach Energy ranks third behind Santos and Origin Energy as the analyst's most preferred under coverage for its exposure to rising domestic gas prices and a net cash position from the 2H of FY23.

The $2.00 target and Buy rating are maintained.

Target price is $2.00 Current Price is $1.52 Difference: $0.48
If BPT meets the UBS target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $1.80, suggesting upside of 11.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

UBS rates COL as Neutral (3) -

UBS lowers its FY23 EPS forecast for Coles Group due to a volume shift away from supermarkets. The target price slips to $17.25 from $17.50. Neutral.

At upcoming 1Q results on October 26, the broker predicts total sales of $10bn, a rise of 3% on the previous corresponding period. The consensus estimate is $9.9bn.

Target price is $17.25 Current Price is $16.23 Difference: $1.02
If COL meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $18.41, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates EDV as Buy (1) -

Ord Minnett forecasts overall first quarter sales growth of 2.2% for Endeavour Group, with retail sales falling -8% year on year, representing a 3% compound annual growth rate versus pre-covid levels, and hotels revenue rebounding 91%, a 5% CAGR versus pre-covid.

The broker has increased its electronic gaming machine revenue forecasts to reflect the strong gaming performance seen across the market, driving a 4% lift in FY23 earnings estimate.

Target nevertheless falls to $8.20 from $8.50 to reflect lower market and industry PE multiples. Buy retained.

Target price is $8.20 Current Price is $6.71 Difference: $1.49
If EDV meets the Ord Minnett target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $7.28, suggesting upside of 5.7% (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 EDV as Sell (5) -

UBS lowers its FY23 EPS forecast for Endeavour Group on lower cash flow forecasts and a decline in trading multiple. The target price slips to $6.60 from $7.10. Sell.

At upcoming 1Q results on October 17, the broker predicts total sales of $3bn, a rise of 2% on the previous corresponding period. The consensus estimate is $3bn.

Target price is $6.60 Current Price is $6.71 Difference: minus $0.11 (current price is over target).
If EDV meets the UBS target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.28, suggesting upside of 5.7% (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

Morgans rates ELT as Speculative Add (1) -

The semiconductor industry remains the largest end-use sector for tin in the form of soldering, representing around 47% of global usage. In Europe, Morgans points out solder, and solder ribbon is also used to join solar cells and in wind turbines.

Morgans visited the Oropesa Project, owned by Elementos, which aims to become Europe’s first new significant tin mine by 2025.

The visit confirmed the project’s near-term production potential, and the broker maintains its Speculative Add rating and $1.02 target price.

Target price is $1.02 Current Price is $0.31 Difference: $0.71
If ELT meets the Morgans target it will return approximately 229% (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 FMG as Neutral (3) -

Following a site visit, Citi analysts have updated their modeling, now incorporating a sooner-than-previously-scheduled coming online of Flying Fox, plus -US$6.2bn decarbonisation spend and reduced operational expenditure.

Bottom line: Citi's DCF valuation hasn't changed; still $17.18.

Target $17. Neutral. Small increases have occurred to EPS and DPS forecasts.

Target price is $17.00 Current Price is $16.99 Difference: $0.01
If FMG meets the Citi target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $15.49, suggesting downside of -9.5% (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: -0.6

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

UBS rates IEL as Buy (1) -

After reviewing multiple sources of data, UBS reiterates the currently attractive buying opportunity for shares of IDP Education. 

The broker highlights more than 1.35m visas for international students, temporary skilled workers and visitors had been processed by the Department of Home Affairs since June 1.

No changes are made to forecasts and UBS maintains its Buy rating and $35.50 target.

Target price is $35.50 Current Price is $27.92 Difference: $7.58
If IEL meets the UBS target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $33.06, suggesting upside of 17.0% (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

Citi rates MIN as Buy (1) -

Citi analysts returned from Mineral Resources' presentation of lithium assets with the message that the media has incorrectly assumed that a restructure of the group means the company is looking to demerge the lithium assets.

The analysts don't seem too fussed about it.

They like the restructure, the assets, the plans and management's ability to execute. Lithium currently represents some 65% of the broker's operational Net Asset Value (NAV) calculation, responsible for 80%-plus of the forecast FY23 EBITDA.

Citi retains a Buy rating, while the price target lifts to $86 from $76. Earnings estimates received a boost on longer mine lives and a general update on lithium price forecasts.

Target price is $86.00 Current Price is $69.10 Difference: $16.9
If MIN meets the Citi target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $84.24, suggesting upside of 18.8% (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

Credit Suisse rates NWL as Outperform (1) -

Positive inflows in the first quarter saw Netwealth Group report a 4% quarter-on-quarter increase to funds under administration, now totaling $58.1bn. The group reported flows of $2.94bn, ahead of Credit Suisse's expectations and offsetting negative market movements.

With no update on full year flow guidance provided, Credit Suisse assumes guidance of $11-13bn is retained. The  broker's view is that first quarter flows will support Netwealth Group in achieving the upper end of guidance range. 

The Outperform rating is retained and the target price decreases to $15.20 from $15.50.

Target price is $15.20 Current Price is $11.99 Difference: $3.21
If NWL meets the Credit Suisse target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $14.86, suggesting upside of 20.8% (ex-dividends)

The company's fiscal year ends in June.

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

Macquarie rates NWL as Outperform (1) -

First quarter net inflows for Netwealth Group were in line with Macquarie expectations though the quality was lowered by $570m of lower-margin institutional inflows.

Management's funds under administration (FUA) guidance of $11bn-13bn was unchanged.

The broker lowers its target price to $15.20 from $16.20. The attractive growth profile of the business was restated and the Outperform rating maintained.

Target price is $15.20 Current Price is $11.99 Difference: $3.21
If NWL meets the Macquarie target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $14.86, suggesting upside of 20.8% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates NWL as Accumulate (2) -

Netwealth Group delivered better than expected net inflows of $2.9bn in the September quarter, aided by a large client win, Ord Minnett notes. Management is confident in the outlook, suggesting new business opportunities are re-emerging after a more muted second half FY22.

The broker has not changed its earnings forecasts given positive net flows were offset by market weakness. Ord Minnett sees the net flow and market share growth opportunity for Netwealth and the other independent platforms as being very much intact.

Accumulate and $14.40 target retained.

Target price is $14.40 Current Price is $11.99 Difference: $2.41
If NWL meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $14.86, suggesting upside of 20.8% (ex-dividends)

The company's fiscal year ends in June.

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 ORG as Buy (1) -

UBS upgrades its 2023-24 EPS forecasts for Australian oil exploration and production companies by 1-16%, largely due to higher
forecast gas prices. Weaker-than-expected Brent crude oil forecasts soften the earnings impact in 2022.

Origin Energy ranks second behind Santos as the analyst's most preferred exposure under its coverage. It's expected Australia Pacific LNG (APLNG) will distribute more than $1.9bn per year in free cash flow to the company over FY23-24.

The target rises to $7.40 from $7.35 and the Buy rating is maintained.

Target price is $7.40 Current Price is $5.47 Difference: $1.93
If ORG meets the UBS target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $6.49, suggesting upside of 13.3% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates QAN as Upgrade to Neutral from Sell (3) -

It was only a month ago, Citi analysts point out, Qantas guided to a profit before tax result of $1.3bn for FY23. Yesterday, the expectation shifted in that this number will be achieved over the first six months of the financial year.

Citi assumes yields were the driver of the circa 100% upgrade in guidance. Clearly, concludes the broker, travelers had no qualms with picking up the bill.

Citi has lifted core EBIT forecasts by 89%/16% for FY23/24 respectively and raised its target price to $5.78 from $4.72. Upgrade to Neutral from Sell.

Target price is $5.78 Current Price is $5.62 Difference: $0.16
If QAN meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $6.94, suggesting upside of 19.6% (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

Credit Suisse rates QAN as Outperform (1) -

Qantas Airways is guiding to record profitability in the first half, with its profit before tax guidance of $1.2-1.3bn more than double Credit Suisse's previous assumption.

Strong demand coupled with capacity constraints has supported higher ticket pricing, with the airline suggesting current demand is twice that of pre-covid. 

The company expects demand could remain elevated for up to eighteen months. Credit Suisse has lifted its profit before tax forecasts 60% and 28% for FY23 and FY24 respectively, now anticipating record profits of $2.2bn in the current fiscal year.

The Outperform rating is retained and the target price increases to $6.60 from $5.65.

Target price is $6.60 Current Price is $5.62 Difference: $0.98
If QAN meets the Credit Suisse target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $6.94, suggesting upside of 19.6% (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

Morgan Stanley rates QAN as Overweight (1) -

Even though Morgan Stanley's forecast for Qantas Airways' 1H  FY23 profit (PBT) was above the consensus estimate, the broker's original full-year FY23 profit expectation has now been achieved. It's thought revenue and yield were the main drivers of outperformance.

The analyst expects a strong and positive reaction to these results. The broker retains its Overweight rating and $7.50 target price. Industry view: In-Line.

Management noted International yields are expected to moderate as industry capacity comes back online.

Target price is $7.50 Current Price is $5.62 Difference: $1.88
If QAN meets the Morgan Stanley target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $6.94, suggesting upside of 19.6% (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

Ord Minnett rates QAN as Buy (1) -

Qantas Airways provided a strong trading update for the first half of FY23 year to date, providing Ord Minnett with increased confidence in both domestic and international travel demand recovery. First half profit guidance is well ahead of forecast.

Ord Minnett highlights a prevailing "rational" domestic market in which Qantas operates, a repaired balance sheet, continuing growth in the loyalty business and increased "variabilisation" of the cost base.

Buy retained, target rises to $7.50 from $7.40.

Target price is $7.50 Current Price is $5.62 Difference: $1.88
If QAN meets the Ord Minnett target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $6.94, suggesting upside of 19.6% (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

UBS rates QAN as Buy (1) -

The 1H trading update by Qantas Airways suggests to UBS a strong performance for both earnings and cash flow, continuing the
momentum from the FY22 results. An even better FY24 is expected.

Management's guidance for 1H FY23 underlying profit (PBT) of $1.2-1.3bn far exceeded the forecasts of the broker ($463m) and consensus.

The guidance reflects stronger RASK (ticketed passenger revenue per available seat kms) through higher fares and loads, believes UBS.

The analyst expects a positive share price performance post-announcement and maintains a Buy rating and raises the target to $7.20 from $6.80.

Target price is $7.20 Current Price is $5.62 Difference: $1.58
If QAN meets the UBS target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $6.94, suggesting upside of 19.6% (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

UBS rates STO as Buy (1) -

UBS upgrades its 2023-24 EPS forecasts for Australian oil exploration and production companies by 1-16%, largely due to higher
forecast gas prices. Weaker-than-expected Brent crude oil forecasts soften the earnings impact in 2022.

Santos remains the analyst's most preferred exposure under coverage, currently trading at a -20% discount to valuation and also trading at an implied oil price of US$61/bbl versus Woodside Energy Group at US$71/bbl.

The broker's target price rises to $9.45 from $9.20. Buy. It's felt shares will re-rate on the back of continued capital management,
following the completion of the PNG LNG sell-down.

Target price is $9.45 Current Price is $7.47 Difference: $1.98
If STO meets the UBS target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $9.49, suggesting upside of 21.7% (ex-dividends)

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

UBS rates WDS as Neutral (3) -

UBS upgrades its 2023-24 EPS forecasts for Australian oil exploration and production companies by 1-16%, largely due to higher
forecast gas prices. Weaker-than-expected Brent crude oil forecasts soften the earnings impact in 2022.

Woodside Energy is the broker's least preferred under coverage largely on valuation. It's also noted the group has considerably higher (relative) capital demands on the business than its peers.

The target price rises to $34.10 from $34. Neutral.

Target price is $34.10 Current Price is $32.65 Difference: $1.45
If WDS meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $35.36, suggesting upside of 4.0% (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: 0.4

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

UBS rates WOW as Neutral (3) -

UBS lowers its FY23 EPS forecast for Woolworths Group by -1.5% on lower forecast lower Australian Food sales due to a volume shift away from supermarkets. The target price slips to $35.50 from $37.00. Neutral.

At upcoming 1Q results on November 3, the broker predicts total sales of $16.6bn, a rise of 3% on the previous corresponding period. The consensus estimate is $16.3bn.

Target price is $35.50 Current Price is $32.91 Difference: $2.59
If WOW meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $35.99, suggesting upside of 6.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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