Australian Broker Call
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December 20, 2019
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1).
Last Updated: 05:00 PM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Overnight Price: $15.74
Ord Minnett rates AMC as Accumulate (2) -
Anti-plastic sentiment has intensified recently among consumers and at first glance this appears to be a headwind for Amcor volumes. The two threats observed are the switching to alternative materials for plastic and reduction in the overall consumption of packaging.
However, Ord Minnett believes the company is relatively insulated from the threats and well-positioned to help customers achieve sustainability goals. Accumulate rating and $16 target maintained.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $16.00 Current Price is $15.74 Difference: $0.26
If AMC meets the Ord Minnett target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $16.00, suggesting upside of 1.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Ord Minnett forecasts a full year FY20 EPS of 88.53 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 88.6, implying annual growth of N/A. Current consensus DPS estimate is 68.0, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 17.8. |
Forecast for FY21:
Ord Minnett forecasts a full year FY21 EPS of 97.74 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 101.3, implying annual growth of 14.3%. Current consensus DPS estimate is 71.8, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 15.5. |
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
Overnight Price: $0.22
Morgans rates GNX as Add (1) -
The company has reached financial close on the 50MW Jemalong solar project, expected to be brought online in the second quarter of FY21.
Finance from the existing Kidston Solar stage 1 project is being refinanced into a new facility that will also fund Jemalong.
The broker retains Speculative Buy (Add). Target is steady at $0.25.
Target price is $0.25 Current Price is $0.22 Difference: $0.03
If GNX meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 0.70 cents. |
Forecast for FY21:
Morgans forecasts a full year FY21 dividend of 0.00 cents and EPS of 0.80 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $17.98
Citi rates LLC as Buy (1) -
Lendlease has an agreement with Acciona for the purchase of its engineering business for $180m, less selling costs and working capital adjustments.
Two of the three projects which led to provisions being made in late 2018, NorthConnex and Kingsford Smith Drive, are excluded from the deal. Melbourne metro is currently excluded but subject to negotiation.
Citi assesses this reflects the first step in the process of exiting the engineering business.
The broker is confident there is potential for a multi-year re-rating as the business model evolves to a global real estate developer and fund manager. Buy rating and $24.72 target maintained.
Target price is $24.72 Current Price is $17.98 Difference: $6.74
If LLC meets the Citi target it will return approximately 37% (excluding dividends, fees and charges).
Current consensus price target is $21.27, suggesting upside of 18.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 62.30 cents and EPS of 124.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 132.0, implying annual growth of 59.2%. Current consensus DPS estimate is 64.7, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 13.6. |
Forecast for FY21:
Citi forecasts a full year FY21 dividend of 67.60 cents and EPS of 135.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 133.5, implying annual growth of 1.1%. Current consensus DPS estimate is 68.3, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 13.5. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates LLC as Buy (1) -
Lendlease has agreed to sell its engineering business to Acciona for $180m and will recognise a negative balance sheet adjustment of -$450m. The costs of transactions are in line with what Ord Minnett considers is an orderly wind-down.
The broker considers the sale an acceptable result although notes the purchaser has extracted maximum value. Buy rating and $22.50 target maintained.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $22.50 Current Price is $17.98 Difference: $4.52
If LLC meets the Ord Minnett target it will return approximately 25% (excluding dividends, fees and charges).
Current consensus price target is $21.27, suggesting upside of 18.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Ord Minnett forecasts a full year FY20 EPS of 141.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 132.0, implying annual growth of 59.2%. Current consensus DPS estimate is 64.7, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 13.6. |
Forecast for FY21:
Ord Minnett forecasts a full year FY21 EPS of 121.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 133.5, implying annual growth of 1.1%. Current consensus DPS estimate is 68.3, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 13.5. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates LLC as Neutral (3) -
Lendlease has sold its engineering business to Acciona for $180m, excluding the NorthConnex, Kingsford Smith Drive and Melbourne metro projects. The price is below UBS estimates and, importantly, excludes certain known problem projects.
The sale of the remaining services segment is not likely to present a major risk, in the broker's view, with a sale expected to achieve a reasonable price. Neutral rating and $17.50 target maintained.
Target price is $17.50 Current Price is $17.98 Difference: minus $0.48 (current price is over target).
If LLC meets the UBS target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $21.27, suggesting upside of 18.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 63.70 cents and EPS of 127.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 132.0, implying annual growth of 59.2%. Current consensus DPS estimate is 64.7, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 13.6. |
Forecast for FY21:
UBS forecasts a full year FY21 dividend of 66.20 cents and EPS of 132.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 133.5, implying annual growth of 1.1%. Current consensus DPS estimate is 68.3, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 13.5. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.20
Morgans rates MX1 as Add (1) -
The company has completed a $16.5m capital raising that will fund the commercialisation of the Nano into the healthcare market. The $10m Thales convertible loan has also been varied, whereby conversion will require shareholder approval.
Catalysts, Morgans notes, include growing sales of the Nano into the hospital market and approval in the US of the first-generation version of the Rover for military use.
Speculative Buy (Add) maintained. Target is reduced to $0.41 from $0.45.
Target price is $0.41 Current Price is $0.20 Difference: $0.21
If MX1 meets the Morgans target it will return approximately 105% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 5.00 cents. |
Forecast for FY21:
Morgans forecasts a full year FY21 EPS of minus 3.00 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $3.92
UBS rates PPH as Buy (1) -
UBS observes the company has outperformed the market by 20% over the last month because of improved operating leverage, double-digit back book growth and the acquisition of Church Community Builder.
Forecasts are upgraded to reflect higher payment margins and revenue synergies. FY21 and FY22 operating earnings estimates are increased by 30% and 31% respectively.
UBS maintains a Buy rating and raises the target to NZ$4.60 from NZ$3.75.
Current Price is $3.92. Target price not assessed.
Current consensus price target is $2.72, suggesting downside of -30.6% (ex-dividends)
The company's fiscal year ends in March.
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 0.00 cents and EPS of 7.19 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.1, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 48.4. |
Forecast for FY21:
UBS forecasts a full year FY21 dividend of 0.00 cents and EPS of 14.37 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 13.5, implying annual growth of 66.7%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 29.0. |
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
Overnight Price: $13.10
Morgan Stanley rates QBE as Overweight (1) -
Morgan Stanley reviews its assessment of the risk/reward after the company's operating update. Cash net profit estimates are reduced by -14% and -5% for 2019 and 2020 respectively.
The broker assumes a 96.5% underlying Combined Operating Ratio for 2019 and 93.5% for 2020. Overweight rating maintained. Target is reduced to $13.90 from $14.00. Industry view is In-Line.
Target price is $13.90 Current Price is $13.10 Difference: $0.8
If QBE meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $13.14, suggesting upside of 0.3% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 79.06 cents and EPS of 84.81 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 82.3, implying annual growth of N/A. Current consensus DPS estimate is 64.8, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 15.9. |
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 91.99 cents and EPS of 94.87 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 91.3, implying annual growth of 10.9%. Current consensus DPS estimate is 80.6, implying a prospective dividend yield of 6.2%. Current consensus EPS estimate suggests the PER is 14.3. |
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
Today's Price Target Changes
| Company | Last Price | Broker | New Target | Prev Target | Change | |
| MX1 | MICRO-X | $0.20 | Morgans | 0.41 | 0.45 | -8.89% |
| QBE | QBE INSURANCE | $13.10 | Morgan Stanley | 13.90 | 14.00 | -0.71% |
Summaries
| AMC | AMCOR | Accumulate - Ord Minnett | Overnight Price $15.74 |
| GNX | GENEX POWER | Add - Morgans | Overnight Price $0.22 |
| LLC | LENDLEASE | Buy - Citi | Overnight Price $17.98 |
| Buy - Ord Minnett | Overnight Price $17.98 | ||
| Neutral - UBS | Overnight Price $17.98 | ||
| MX1 | MICRO-X | Add - Morgans | Overnight Price $0.20 |
| PPH | PUSHPAY HOLDINGS | Buy - UBS | Overnight Price $3.92 |
| QBE | QBE INSURANCE | Overweight - Morgan Stanley | Overnight Price $13.10 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 6 |
| 2. Accumulate | 1 |
| 3. Hold | 1 |
Friday 20 December 2019
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