Australian Broker Call

Ord Minnett rates ASB as Accumulate (2) -

Over the next couple of years Ord Minnett expects Austal to go through a meaningful cycle of contract awards through its commercial ferry business, while the US business will be operating at capacity until 2023.

Historically, the broker observes, the share price has performed well on the back of contract awards and the initial recognition of earnings.

Ord Minnett maintains an Accumulate rating and raises the target to $2.30 from $2.10.

Target price is $2.30 Current Price is $2.00 Difference: $0.3
If ASB meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

UBS rates BLD as Neutral (3) -

UBS acknowledges the headwinds that face Boral, including a slowing outlook for both US and Australian housing. Concerns will continue to weigh on the share price, although the broker notes the stock appears cheap.

UBS believes a catalyst for change could come with the half year result on February 25. A reiteration of guidance could cause a re-rating.

Neutral rating maintained. Target is $6.94.

Target price is $6.94 Current Price is $5.10 Difference: $1.84
If BLD meets the UBS target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $7.04, suggesting upside of 38.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.6

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

Morgans rates CGC as Hold (3) -

The company's trading update was well below expectations and Morgans makes material downgrades to forecasts. The broker believes the extent of the PE de-rating is justified and now more accurately reflects the risk profile.

In light of the current uncertainty for earnings, the broker awaits a more compelling entry point and retains a Hold rating. Target is reduced to $5.52 from $7.21.

Target price is $5.52 Current Price is $4.99 Difference: $0.53
If CGC meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $5.64, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.6

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

Citi rates HUB as Neutral (3) -

Hub24's quarterly update revealed 8% stronger net inflows than Citi had been expecting. This is warmly received by the analysts who had been concerned about what weaker equity markets might do, as well any impact the Royal Commission might have on the industry as a whole.

The number of advisers using the platform continues to grow strongly (up 40% in Q2) and Citi analysts highlight this acts as a positive signal about future growth. The final report of the Royal Commission is due in early February and Citi analysts expect its recommendations to be positive for specialist platform providers, including Hub24.

On current forecasts, Hub24’s EPS is projected to grow at a 3 year CAGR of 69%. Neutral rating retained. Target price unchanged at $14.25.

Target price is $14.25 Current Price is $12.96 Difference: $1.29
If HUB meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $13.07, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Credit Suisse rates HUB as Neutral (3) -

The company sustained record flows in the December quarter, producing strong growth in funds under administration which offset negative market movements, Credit Suisse notes.

The result was largely in line with the broker's forecasts. FY19 estimates for earnings per share are reduced by -1% while FY20-21 are upgraded by 2-4%.

The broker believes the business is well placed to win additional large transitions, given the quality of its offering. Neutral rating maintained. Target is raised to $13.80 from $13.20.

Target price is $13.80 Current Price is $12.96 Difference: $0.84
If HUB meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $13.07, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Ord Minnett rates HUB as Buy (1) -

A market rout may have been expected to crimp growth but Ord Minnett notes HUB24 still managed to grow funds under administration by 10% over the December quarter.

The broker envisages the business will benefit from the trend towards independent advice amid distaste for vertical alignment and improved third-party technology/services.

Buy rating maintained. Target rises to $14.21 from $14.08.

Target price is $14.21 Current Price is $12.96 Difference: $1.25
If HUB meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $13.07, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Citi rates LVT as Buy (1) -

It appears strong growth achieved in Q2 actually fell a little bit short when held against the pace implied in Citi's forecast, but Citi analysts don't seem too fussed about it, observing signing up larger companies simply requires more time.

Citi analysts continue to believe? the outlook for LiveTiles remains "robust", also pointing out management's targeted $100m in Annualised Recurring Revenue (ARR) by Q2 FY21 is bang in-line with the stockbroker's forecast. Buy rating and 91c price target retained.

Target price is $0.91 Current Price is $0.37 Difference: $0.54
If LVT meets the Citi target it will return approximately 146% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

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

Citi analysts observe the decline in like-for-like sales has stopped and Michael Hill actually achieved positive growth over the Xmas period. They have upgraded to Neutral from Sell in response.

There is potential for new management to actually turn this ship around, the analysts suggest. Estimates have been lifted short term, but reduced for FY21 and FY22. Target falls to 63c from 65c.

Target price is $0.63 Current Price is $0.58 Difference: $0.05
If MHJ meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $0.73, suggesting upside of 25.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Macquarie rates MLX as Outperform (1) -

Production at both Nifty and Renison was slightly below Macquarie's estimates. Nevertheless, the broker is encouraged by the fact the company has opened up mining stopes outside the central zone at Nifty, which has resulted in an improvement in the grade.

Macquarie maintains an Outperform rating and $0.80 target.

Target price is $0.80 Current Price is $0.43 Difference: $0.37
If MLX meets the Macquarie target it will return approximately 86% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Citi rates NVT as Neutral (3) -

The BGH consortium has lifted its (still) non-binding offer to Navitas shareholders, and the company's board is now in favour.

Target price of $5.30 and Neutral rating retained.

Target price is $5.30 Current Price is $5.57 Difference: minus $0.27 (current price is over target).
If NVT meets the Citi target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.65, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Macquarie rates NVT as Neutral (3) -

BGH Consortium has sweetened its offer for Navitas, increasing it to $5.825 per share. The probability a deal will be completed appears high to Macquarie, although due diligence is yet to take place.

A competing proposal appears somewhat unlikely, although cannot be entirely ruled out. As a result, Macquarie maintains a Neutral rating and raises the target to $5.825 from $5.50, in line with the increase in the bid price.

Target price is $5.83 Current Price is $5.57 Difference: $0.26
If NVT meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $5.65, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Morgan Stanley rates NVT as No Rating (-1) -

The company has received a non-binding proposal from the BGH Consortium at $5.825 a share, an increase of 6% on the previous proposal.

Directors intend to unanimously recommend the proposal and the consortium will be granted exclusive due diligence.

Morgan Stanley is acting as financial adviser and cannot provide a target or recommendation at this stage. Industry view: In-Line.

Current Price is $5.57. Target price not assessed.

Current consensus price target is $5.65, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

UBS rates NVT as Neutral (3) -

The company has received a revised non-binding proposal from BGH Consortium. The offer is $5.825 per share, representing an increase of 32.5c per share on the prior proposal.

Directors intend to unanimously recommend the revised proposal to shareholders. The consortium will receive exclusive due diligence until no later than February 18.

Neutral rating maintained. Target rises to $5.83 from $5.50.

Target price is $5.83 Current Price is $5.57 Difference: $0.26
If NVT meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $5.65, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Morgans rates PPS as Add (1) -

Market conditions and uncertainty over Brexit have produced a December quarter, described by Morgans as rare, where funds on platform went backwards. Praemium's SMA platform is considered one of the best available.

The broker believes the underlying business is much stronger than it looks on the surface. Still, the company trades on high multiples of earnings and needs to hold a high level of revenue growth in order to sustain the share price.

Morgans maintains an Add rating and reduces the target to $0.87 from $1.07.

Target price is $0.87 Current Price is $0.78 Difference: $0.09
If PPS meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Citi rates PPT as Neutral (3) -

Citi analysts highlight 2Q19 marked Perpetual's seventh consecutive quarter of net funds outflows. A potential positive sign is that the decline moderated in the quarter, they add, against what was admittedly a tough environment overall.

Not making matters any easier, the analysts point out the adoption of new accounting requirements for unrealised gains/losses on certain financial assets will likely introduce greater volatility to earnings. How this might impact on dividends remains uncertain.

Combining all of the above, the analysts do suggest valuation seems "undemanding", and there's a juicy yield attached to it. It's because of the uncertainties the rating remains at Neutral. Target price drops to $34 from $38.70.

Target price is $34.00 Current Price is $32.54 Difference: $1.46
If PPT meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $36.44, suggesting upside of 12.0% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Credit Suisse rates PPT as Neutral (3) -

Funds under management were down -8% as of December 2018 because of negative markets and outflows. Outflows were primary from equities product.

The weaker fund performance, combined with an equity market sell down, has made Credit Suisse pessimistic about a turnaround in flows.

There is also uncertainty around the future strategy and potential downside risk from an incoming CEO re-basing earnings.

Neutral rating retained. Target is steady at $33.

Target price is $33.00 Current Price is $32.54 Difference: $0.46
If PPT meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $36.44, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

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

Perpetual reported outflows of $300m in the December quarter in the investments business, largely within Morgan Stanley's expectations.

Outflows have recently been, in the main, in adviser-led retail business in the intermediary channel. The broker believes exploring new retail channels, such as active ETFs or managed accounts, may be an option.

Equal-weight rating. Target is $36. Industry view: In-line.

Target price is $36.00 Current Price is $32.54 Difference: $3.46
If PPT meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $36.44, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Ord Minnett rates PPT as Hold (3) -

Net outflows in the December quarter were primarily in Australian equities, while total funds under management decreased -$2.5bn versus the prior quarter.

Given market volatility, weak fund performance and outflows, Ord Minnett expects the share price will remain under pressure, despite the support from the dividend yield.

This is likely to continue until markets recover and/or the new management team strategy can be assessed. The broker maintains a Hold rating and reduces the target to $36 from $40.

Target price is $36.00 Current Price is $32.54 Difference: $3.46
If PPT meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $36.44, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Credit Suisse rates SM1 as Underperform (5) -

The stock remains well down on the level it achieved in September 2018 and the size of the valuation gap means Credit Suisse still has an Underperform rating, although the broker acknowledges the potential to "grow into value" with new opportunities.

Credit Suisse believes the margin generated from a meaningful contract for base infant formula to a multinational could provide valuable insight into appropriate longer-term return expectations. Target is raised to NZ$7.66 from NZ$7.65.

Current Price is $9.35. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in July.

Forecast for FY19:

Forecast for FY20:

This company reports in NZD. 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

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

Ord Minnett adjusts oil price forecasts, lowering assumptions to US$60/bbl for 2019-21. The broker's forecasts are now at the lower end of consensus estimates, implying there could be market downgrades.

Ord Minnett upgrades its recommendation for Senex Energy to Buy from Accumulate on valuation. The broker reduces the target to $0.41 from $0.42.

Target price is $0.41 Current Price is $0.32 Difference: $0.09
If SXY meets the Ord Minnett target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $0.46, suggesting upside of 45.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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