Australian Broker Call

Morgan Stanley rates ABY as Overweight (1) -

The company has upgraded first half revenue forecasts to $95.2m, which Morgan Stanley understands implies 83% growth. Strong growth is attributed to the better performance over November.

The broker awaits further clarity on the gross margin impacts but believes it is sensible to prioritise growth, given the migration online for beauty products is in its infancy.

Overweight rating. Target is $8.35. Industry view: In-line.  

Target price is $8.35 Current Price is $6.33 Difference: $2.02
If ABY meets the Morgan Stanley target it will return approximately 32% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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) -

AUB Group will own circa 54% of the new general commercial underwriting subdivision (GCU), a part of the restructured AUB underwriting agencies division post the 360 Underwriting Solutions acquisition.

Macquarie notes 360 Underwriting Solutions is one of the few key independent underwriting agency groups left and its acquisition adds scale to AUB Group's agency offering.

The group's restructured underwriting agency division will comprise 3 subdivisions - general commercial underwriting, SURA Specialty and Strata Agencies,

Macquarie retains its Outperform rating and raises the target to $18.57 from $17.53.

Target price is $18.57 Current Price is $16.67 Difference: $1.9
If AUB meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $18.94, suggesting upside of 10.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates CKF as Add (1) -

Collins Foods first half result demonstrated to Morgans the strength of the KFC Australia business. This more than offset the performances of Sizzler, Taco Bell and KFC Europe, which were slightly below the broker’s expectations.

Key highlights for the analyst included a rise in group revenue by 11.3%, an increase in earnings (EBITDA) of 10.5% and a profit (NPAT) increase of 15.1%.

Morgans thinks KFC Australia earnings can incrementally grow into FY22, while Sizzler and Taco Bell profitability should improve.

The Add rating is maintained and the target increased to $11.39 from $10.80.

Target price is $11.39 Current Price is $10.37 Difference: $1.02
If CKF meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in May.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

UBS rates CKF as Buy (1) -

Collins Foods first half result shows operating income beat UBS's forecast by 11%. KFC Australia's like for like sales were 12.4% versus the broker's estimated 5.4%.

UBS believes the business continues to be driven by multiple tailwinds including a continued uptake in delivery, rising market share via drive-through and continued store rollouts.

The broker retains its Buy rating. Target is raised to $11.65 from $10.65.

Target price is $11.65 Current Price is $10.37 Difference: $1.28
If CKF meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).

The company's fiscal year ends in May.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates CSL as Neutral (3) -

Macquarie notes CSL's Haegarda has delivered strong revenue growth since launch but Japanese rival Takeda's Takhzyro has also seen its share increase recently.

While delivering strong revenue growth since its launch in 2017, the broker sees many factors that can impact Haegarda's revenue from FY22. Latest results from Garadacimab look promising but the launch is expected post-2023. 

Neutral rating. Target is $296.

Target price is $296.00 Current Price is $299.75 Difference: minus $3.75 (current price is over target).
If CSL 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 $316.81, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

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

Morgan Stanley considers FY22 plasma profits will be challenged and while this may be offset by V451 (covid-19 vaccine candidate)  success/demand and the magnitude of profit remains unclear.

The first phase 2b/3 patient is expected to be dosed in December with recruitment completed by March 2021. Based on competitor timeframes this could translate to a broad vaccine being available during the first half of FY22.

While CSL has prior experience in pandemic response with H1N1 Morgan Stanley does not include V451 in its base case estimates because of the uncertainty.

Equal-weight rating and $294 price target. Industry view: In-line.

Target price is $294.00 Current Price is $299.75 Difference: minus $5.75 (current price is over target).
If CSL meets the Morgan Stanley target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $316.81, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Morgans rates DMP as Upgrade to Add from Hold (1) -

Following recent share price falls and positive momentum across the company, Morgans upgrades the rating to Add from Hold.

It was clear to Morgans after an investor briefing that Japan and Germany are exhibiting strong top-line growth and margin expansion. 

The broker highlights management comments that Germany would likely become the company’s strongest growth market for the short-term and ultimately become the largest market.

The target price is increased to $82.96 from $81.29.

Target price is $82.96 Current Price is $83.17 Difference: minus $0.21 (current price is over target).
If DMP meets the Morgans target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $72.60, suggesting downside of -11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

UBS rates DMP as Upgrade to Neutral from Sell (3) -

UBS upgrades its rating on Domino's Pizza Enterprises to Neutral from Sell.

UBS found the company's 2020 investor day to be positive with takeaways operating leverage expected to improve and most of the second half covid costs unlikely to repeat in FY21.

Also, the broker highlights strong franchisee profit across the board with Germany scaling up and Japan expected to continue to grow.

Target is unchanged at $72.

Target price is $72.00 Current Price is $83.17 Difference: minus $11.17 (current price is over target).
If DMP meets the UBS target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $72.60, suggesting downside of -11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

UBS rates FBU as Neutral (3) -

UBS observes Fletcher Building's share price is now sitting in line with pre-covid-19 levels, post some significant earnings upgrades with construction activity in New Zealand noting a rebound post-lockdown along with cost-saving initiatives by the company.

The broker expects construction spend in New Zealand to lift by 12% in 2021-22 with stronger residential and infrastructure activity countered by lower non-residential work. Infrastructure expenditure on projects over $100m is expected to increase by 8% by 2022.

The broker believes Fletcher Building will restart its dividend of 15c in FY21.

Neutral rating is under review with the target rising to NZ$6 from NZ$3.50.

Current Price is $5.48. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.2

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

Macquarie rates GNC as Outperform (1) -

ABARES's third East Coast Australia (ECA) crop production pegs winter crop for 2020-21 at 28.6mmt, up 19% versus the second estimate of 24.4mt.

GrainCrop, not seeing any China-related impacts with counterparties and noting good demand for Australian grain, expects the 2020-21 winter crop to be of similar size to FY17. Also, the broker expects a large exportable surplus with higher margins.

FY22 earnings are expected to be supported by a grain carry-in benefit and a solid outlook for the processing business.

Macquarie retains its Outperform rating with the target rising to $5.35 from $5.26.

Target price is $5.35 Current Price is $4.45 Difference: $0.9
If GNC meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $5.08, suggesting upside of 11.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

UBS rates GNC as Buy (1) -

ABARES has upgraded its Australian east-coast winter crop outlook to 28.6mt from 24.4mt, above UBS's forecast of circa 27mt. This is also consistent with GrainCorp's commentary expecting a crop similar to FY17 levels at about 28mt.

UBS believes there may be potential for a further upgrade at ABARES' next quarterly update in February to more than 30mt.

The broker prices in a 28.6mt crop that leads to FY21 operating income forecast lifting by 10%. Also, the broker highlights a strong crop in FY21 would also support earnings in FY22.

Target rises to $5.15 from $4.90, Buy retained.

Target price is $5.15 Current Price is $4.45 Difference: $0.7
If GNC meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $5.08, suggesting upside of 11.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates GPT as Neutral (3) -

GPT Group divested a 25% stake in 1 Farrer Place and acquired three logistics assets. 

While Macquarie believes divesting office assets and reinvesting into logistics is likely to be accretive to free cashflow, the risk profile is different in logistics given the development risk and leasing risk at expiry for assets acquired at tight yields.

Neutral rating is retained with a target of $4.79.

Target price is $4.79 Current Price is $4.67 Difference: $0.12
If GPT meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $4.54, suggesting downside of -3.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Morgan Stanley rates GPT as Underweight (5) -

GPT has sold its 25% stake in One Farrer Place for $584.6m, in line with book value. Morgan Stanley assesses the transaction is mildly dilutive but the ultimate impact will depend on how fast GPT can reinvest the proceeds.

Gearing will drop to around 22% on a pro forma basis, making the company one of the more conservative names under the broker's coverage.

Morgan Stanley does speculate whether listed landlords are preparing for a tough period of leasing in the next 12-18 months.

Underweight rating with a target of $4.00. Industry view is In-Line.

Target price is $4.00 Current Price is $4.67 Difference: minus $0.67 (current price is over target).
If GPT meets the Morgan Stanley target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.54, suggesting downside of -3.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Ord Minnett rates HLO as Downgrade to Lighten from Buy (4) -

Ord Minnett finds valuation stretched in the travel & tourism sector as stocks have rallied on the back of progress with the coronavirus vaccines and domestic border re-opening.

Nevertheless, the broker suspects a meaningful recovery is at least 12-18 months away.

In such circumstances the focus needs to be on stocks that have strong fundamentals while investors need to be nimble and watch for anomalies in valuation at any point in time, in Ord Minnett's view.

Helloworld Travel's rating is downgraded to Lighten from Buy and the target raised to $2.65 from $2.13.

Target price is $2.65 Current Price is $3.00 Difference: minus $0.35 (current price is over target).
If HLO meets the Ord Minnett target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Citi rates IFL as No Rating (-1) -

IOOF has outlined a clear strategy, in Citi's view, although it will be tough to execute.

The underpinnings of the strategy include lower cost platforms that have an economically viable business model in advice and which also expand the target market.

Furthermore, the MLC transaction should provide further scale to build on the strategy.

Citi is unable to provide a rating and target at present.

Current Price is $3.88. Target price not assessed.

Current consensus price target is $4.58, suggesting upside of 19.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Credit Suisse rates IFL as Outperform (1) -

IOOF expects to generate earnings margins from salaried advisers of around 30% and to break even by FY22 for self-employed advisers. Further upside is envisaged should scale eventuate through adviser acquisition.

Credit Suisse also envisages opportunity to monetise more effectively the 1m non-advised clients. To these ends the company is investing in technology. Outperform rating and $5 target retained.

Target price is $5.00 Current Price is $3.88 Difference: $1.12
If IFL meets the Credit Suisse target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $4.58, suggesting upside of 19.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Ord Minnett rates IFL as Buy (1) -

IOOF Holdings expects growth will now be driven by efficiencies in platforms and planning. The company is pushing for more affordable access to advice and the re-setting of fees by Australian financial services licence holders.

Ord Minnett notes no new financial targets were outlined, although the company appears to be intent on making self-employed adviser dealer groups move to break even by FY21 or FY22, from cost reductions and fee increases.

While there was little discussion about revenue margin trends, the broker suspects most of the heavy lifting has already been done. Buy rating and $4.15 target retained.

Target price is $4.15 Current Price is $3.88 Difference: $0.27
If IFL meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $4.58, suggesting upside of 19.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

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

Ord Minnett remains cautiously optimistic that recent board changes could translate to much-needed change.

The broker continues to question a Trop sale although acknowledges, with the review ongoing, IGO Ltd could still realise a reasonable return on the back of spot gold prices as well as re-rate if converted into a nickel mine.

Despite some "generous assumptions" the broker finds the valuation heavy going, upgrading to Lighten from Sell. Target is raised to $4.30 from $3.40.

Target price is $4.30 Current Price is $4.79 Difference: minus $0.49 (current price is over target).
If IGO meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.88, suggesting upside of 0.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Morgans rates IPD as Add (1) -

ImpediMed announced the publication of a meta-analysis. This demonstrated that the use of L-Dex results in a clinically significant reduction of the chronic breast cancer related lymphoedema (BCRL) rate. This is by comparison with the current standard of care.

The broker believes external validation of the technology and the company’s own longitudinal studies is a catalyst to begin presenting to private payors. It’s also considered it may be a trigger for potential inclusion in national cancer care guidelines.

While making no changes to forecasts, Morgans notes significant upside remains in higher than forecast uptake in the lymphoedema and heart failure products. 

The Speculative Buy rating and $0.20 target price are unchanged.

Target price is $0.20 Current Price is $0.16 Difference: $0.04
If IPD meets the Morgans target it will return approximately 25% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Citi rates LOV as Neutral (3) -

Lovisa has announced the acquisition of 30 beeline stores in France as part of its existing agreement. This increases the estimated FY21 store count by 5%.

Given Lovisa already has 24 stores in France the additional stores should provide greater leverage in lease negotiations as well as brand awareness.

Nevertheless, Citi believes the company needs to navigate the reduced shopping centre traffic that is now a feature of the increasing shift towards online shopping.

Sales also need to be pushed along in the largest growth market, the US, where the coronavirus outbreak has had a resurgence.

As a result, the broker retains a Neutral rating and raises the target to $11.90 from $11.60.

Target price is $11.90 Current Price is $10.50 Difference: $1.4
If LOV meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $12.27, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Ord Minnett rates MCP as Buy (1) -

McPherson's has issued a major revision to earnings following a slump in sales in Dr LeWinn's within the Access Brand Management distribution channel in China. Ord Minnett reduces FY21 pre-tax profit forecasts by -24%.

The broker suggests the magnitude of the contraction points to issues within the distribution channel and/or a lack of impact from recent Dr LeWinn's product launches.

Still, five out of the six core fully-owned brands are expected to trade positively during the first half, being well-established. Buy retained. Target is reduced to $1.79 from $3.00.

Target price is $1.79 Current Price is $1.20 Difference: $0.59
If MCP meets the Ord Minnett target it will return approximately 49% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates MVF as Add (1) -

At the AGM, Monash IVF noted a strong rebound from July to October. This was indicated by stimulated cycles growing by 23.1%, international up 16.2% and the Ultrasound business up 10.7%. 

Morgans upgrades FY21-23 EPS forecasts by 11.7%, 7.7% and 1.6%, respectively, after increasing cycle volume growth assumptions.

The broker also increases dividend assumptions to 4 cents from 3 cents for FY21, and then growing by 10% per annum.

The Add rating is unchanged and the target is increased to $0.85 from $0.65.

Target price is $0.85 Current Price is $0.74 Difference: $0.11
If MVF meets the Morgans target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Credit Suisse rates ORA as Neutral (3) -

Credit Suisse reduces estimates on the basis that import tariffs on wine to China will remain in place beyond the interim measures that have been announced. This should be partially offset by improved momentum in Orora's North American packaging distribution.

The company supplies a little over 50% of the Australian wine bottle market and also has exposure through its wine closure business.

Credit Suisse notes the March 2020 vintage was low yield and affected wine production during FY21. A modest rebound is expected in March 2021 although the vintage may be hampered by lack of Chinese demand. Neutral retained. Target is $2.80.

Target price is $2.80 Current Price is $2.67 Difference: $0.13
If ORA meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $2.76, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Macquarie rates PLS as Underperform (5) -

Pilbara Minerals executed a share sale agreement for acquiring the Altura Lithium operations from Altura Mining ((AJM)).

The lithium producer has also proposed to increase its contribution to the Deed of Company Arrangement (DOCA) to $6m from $4m on the basis that the second creditors meeting is held on or before 11 December 2020.

Due to research restrictions, Macquarie cannot advise its valuation on the company at present.

Current Price is $0.75. Target price not assessed.

Current consensus price target is $0.36, suggesting downside of -50.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.5

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

UBS rates QAN as Buy (1) -

UBS assesses the opening of borders by the West Australian government with New South Wales and Victoria on December 8 will take the un-quarantined capacity to 95%, up from 40% two weeks ago. Qantas expects to be flying 60% of pre-covid capacity by Christmas.

The broker notes the airways has enough liquidity and is expected to be back to FY19 levels by FY23, driven by a rebound in working capital and a lack of growth capex.

UBS retains its Buy rating (under review) with a target price of $5.25.

Target price is $5.25 Current Price is $5.47 Difference: minus $0.22 (current price is over target).
If QAN meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.45, suggesting downside of -19.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Macquarie rates SFR as Upgrade to Outperform from Neutral (1) -

Sandfire Resources has approved the development of its T3 Motheo copper-silver project in Botswana, which is expected to deliver around 30ktpa of copper for 10 years.

After incorporating the expanded production scenario, Macquarie's FY21 earnings forecast rise by 1%. Earnings forecasts for FY25-28 rise by 7-28% and by 100% for FY29.

Rating is upgraded to Outperform from Neutral with the target rising to $5.40 from $4.20.

Target price is $5.40 Current Price is $4.81 Difference: $0.59
If SFR meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $5.41, suggesting upside of 0.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Morgan Stanley rates SFR as Overweight (1) -

The company is progressing T3 in a somewhat better fashion than Morgan Stanley had expected. The A4 appears increasingly likely to have a life of around 3.25 years at an expanded throughput rate of 5.2mtpa.

Average annual production of around 30,000tpa is higher than Morgan Stanley expected but so are costs.

The A4 dome has a maiden resource of 6.5mt at 1.5% copper and 24g/t silver. The broker notes grades may change as material is upgraded to reserve.

Overweight maintained. Industry view: Attractive. Target is $6.60.

Target price is $6.60 Current Price is $4.81 Difference: $1.79
If SFR meets the Morgan Stanley target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $5.41, suggesting upside of 0.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

UBS rates SSR as Buy (1) -

SSR Mining's Copler technical report has the mine plan that pegs production of circa 300kozpa for the next 10 years at Copler and a mine life beyond 20 years.

While confirming Copler is a large scale and low-cost operation, the report's production outlook falls at the lower end of the vision targeted by management when it outlined a 300-400kozpa profile for the next 10 years. 

Nevertheless, UBS considers its forecasts are now better calibrated and carry lower risk.

Considering the company is at an inflection point with the company's major assets entering a cash harvest mode, UBS retains its Buy rating with the target trimmed to $32 from $33 target. 

Target price is $32.00 Current Price is $25.39 Difference: $6.61
If SSR meets the UBS target it will return approximately 26% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Citi rates STO as Buy (1) -

Citi believes Santos is the best positioned to execute on growth, with a consistent track record and a balance sheet that is supported by CPI-indexed production.

The broker also finds the commitment to Barossa a positive and the further details provided in the market briefing should put to rest any fears.

Citi retains a Buy rating and raises the target to $7.34 from $6.76.

Target price is $7.34 Current Price is $6.21 Difference: $1.13
If STO meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $6.67, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.7

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

Credit Suisse rates STO as Downgrade to Neutral from Outperform (3) -

The company provided positive production and operating expenditure guidance at its investor briefing. New investments have experienced strong 20-60% margins. The company's 26-30% carbon emission reduction target by 2030 appears plausible to the broker.

While the view on fundamentals has not changed and Santos remains the preferred pick for oil, having a number of catalysts over the next 18 months, the equity has rallied ahead of industry sentiment.

Hence, Credit Suisse would need to witness price assumptions increase beyond the macro view to justify further upside. Rating is downgraded to Neutral from Outperform and the target is raised to $6.40 from $6.33.

Target price is $6.40 Current Price is $6.21 Difference: $0.19
If STO meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $6.67, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.7

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

Macquarie rates STO as Neutral (3) -

With free cash flow more than US$650m in 2020, Macquarie notes Santos's base business did well during the pandemic.

Also, the company's midstream business has been legally separated with management targeting a further -30% reduction in processing costs.

Given relative sector movements, Macquarie considers Santos to be relatively more appealing than Oil Search ((OSH)). 

Macquarie holds onto its Neutral rating with the target price rising to $6.25 from $5.40. 

Target price is $6.25 Current Price is $6.21 Difference: $0.04
If STO meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $6.67, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.7

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

Morgan Stanley rates STO as Overweight (1) -

Morgan Stanley assesses Santos continues to have a range of realistic growth opportunities for the short term. 2020 production guidance has been upgraded to 87-89 mmboe while costs guidance has been lowered to US$8-8.5/boe.

Synergies for the ConocoPhillips acquisition were raised to US$90-105m. FID on Barossa is delayed by six months, which the broker suspects is a best case scenario although LNG prices are rising.

The broker concludes that execution on growth plans is pivotal for the future valuation of the stock at appropriate commodity prices. Overweight retained. Target is $6.30. Industry view: Cautious.

Target price is $6.30 Current Price is $6.21 Difference: $0.09
If STO meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $6.67, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.7

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

Ord Minnett rates STO as Buy (1) -

Ord Minnett found the investor briefing upbeat, as management outlined the potential value creation from infrastructure.

Ongoing capital costs for the base business are substantially higher than the broker has estimated, with sustaining capital likely to be US$900m annually.

Incorporating this, the target price is lowered to $6.80 from $7.35. Ord Minnett retains a Buy rating and the stock is its preferred pick in the sector.

Target price is $6.80 Current Price is $6.21 Difference: $0.59
If STO meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $6.67, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.7

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

UBS rates STO as Buy (1) -

UBS has increased its base business valuation to $4.84 per share which helps offset delays to its growth projects.

Final investment decision for Santos' growth projects is now staggered over three years with decision on Barossa and Moomba CCS expected in 2021 while decisions on Dorado and Narrabri are expected by 2022-23.

With challenging market conditions, Santos stated it won't make a decision on Barossa without at least some of its 1.5-1.8mtpa equity share of Barossa gas contracted.

Target is $6.60. Buy retained.

Target price is $6.60 Current Price is $6.21 Difference: $0.39
If STO meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $6.67, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.7

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

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

Syrah Resources has the bankable feasibility study for active anode material at Vidalia. The plan is to continue with FEED for the initial 10,000tpa facility, intended for completion in the first quarter of 2021.

Morgan Stanley notes the cash balance is US$44m, significantly below the capital expenditure required for this plant.

The broker calculates, even if Balama were to produce an economic run rate of 15,000t per month the graphite price would need to be US$1000/t - compared with the current US$400-500/t - in order for the cash to be ready before construction starts.

Equal-weight. Target is $0.45. Industry view: Attractive.

Target price is $0.45 Current Price is $0.95 Difference: minus $0.5 (current price is over target).
If SYR meets the Morgan Stanley target it will return approximately minus 53% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.77, suggesting downside of -27.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.7

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

Ord Minnett rates VVA as Buy (1) -

Viva Leisure has secured an increased debt facility and the equity required to grow to 400 clubs by FY25. Ord Minnett assesses acquisitions and buybacks offer more meaningful opportunities for deploying capital at returns on investment of up to 30%.

The broker observes the pandemic has provided a number of willing sellers at cheap multiples.

Near-term forecasts are reduced because of the dilution of the capital raising while long-term estimates are raised by around 10% to account for an increased club network. Buy retained. Target is raised to $4.60 from $4.25.

Target price is $4.60 Current Price is $3.25 Difference: $1.35
If VVA meets the Ord Minnett target it will return approximately 42% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Ord Minnett rates WBC as Hold (3) -

Westpac Banking Corp has announced two developments including an enforceable undertaking over risk governance remediation and measures related to an historical breach of liquidity requirements involving the New Zealand subsidiary.

Ord Minnett suggests these further measures are a sign that remediation has not gone far enough or has not achieved a desired outcome in a timely fashion.

The broker considers execution risk is elevated, given the significant churn in senior management recently. Hold rating retained. Target is $20.20.

Target price is $20.20 Current Price is $20.28 Difference: minus $0.08 (current price is over target).
If WBC meets the Ord Minnett target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $21.17, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Ord Minnett rates WEB as Downgrade to Hold from Buy (3) -

Ord Minnett finds valuation stretched in the travel & tourism sector as stocks have rallied on the back of progress with the coronavirus vaccines and domestic border re-opening.

Nevertheless, the broker suspects a meaningful recovery is at least 12-18 months away.

In such circumstances the focus needs to be on stocks that have strong fundamentals while investors need to be nimble and watch for anomalies in valuation at any point in time, in Ord Minnett's view.

The broker downgrades Webjet to Hold from Buy and the target is raised to $5.52 from $4.58.

Target price is $5.52 Current Price is $5.79 Difference: minus $0.27 (current price is over target).
If WEB meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.17, suggesting downside of -27.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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