Australian Broker Call

UBS rates AGL as Sell (5) -

UBS reduces its valuation by -25%, having lowered wholesale electricity price forecasts. The broker expects AGL Energy will continue to underperform, largely because of its inflexible generation assets that are over-exposed to lower average wholesale prices.

The broker also highlights several issues regarding the proposed de-merger, estimating around $600m of additional equity could be required to support an investment grade credit rating for the new entities. Sell rating maintained. Target is reduced to $7.60 from $10.10.

Target price is $7.60 Current Price is $8.04 Difference: minus $0.44 (current price is over target).
If AGL meets the UBS target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.25, suggesting upside of 12.3% (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

Credit Suisse rates ANN as Outperform (1) -

The US Customs and Border Protection (CBP) detained the Malaysian manufacturer Top Glove's disposable gloves in July 2020 after evidence the gloves had been manufactured using forced labour.

Ansell has four manufacturing plants in Malaysia and carried out a risk assessment of operations to try and identify forced labour, child labour, human trafficking and poor working conditions as key risks. 

Credit Suisse noted Ansell procures circa 70% of its exams/single-use gloves from third-party manufacturers. While not having large exposure to any single supplier, Ansell does not have control over the working conditions of its suppliers.

With 47% sales exposure to the US, the broker estimates about 10% of Ansell's earnings could be at risk withhold release orders (WRO) similar to the one imposed by the US.

In the event that the US CBP imposes WRO on Ansell's suppliers, the broker notes the company can shift its products to Europe etc. of course, other countries could also review modern slavery regulations and follow the US in imposing sanctions, adds the broker.

Credit Suisse retains an Outperform rating and $47 target.

Target price is $47.00 Current Price is $40.70 Difference: $6.3
If ANN meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $45.42, suggesting upside of 11.1% (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: 0.6

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

Morgan Stanley rates APE as Overweight (1) -

The AGM trading update supports Morgan Stanley's bullish view of the automotive segment. Eagers Automotive indicated pre-tax profit of $127m over the year to April. The broker calculates the company is tracking towards $381m in pre-tax profit in 2021.

Meanwhile, the sale of Daimler Trucks has been completed. The sale proceeds are being recycled back into the core business which the broker believes makes sense. Overweight maintained. Target is $18. Industry view is In-Line.

Target price is $18.00 Current Price is $14.54 Difference: $3.46
If APE meets the Morgan Stanley target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $16.42, suggesting upside of 6.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Morgans rates APE as Add (1) -

An underlying profit (NPBT) of $127m in the first four months of FY21 implies to Morgans a FY21 total of $380m, on a run-rate basis. While the broker now forecasts $371m, there’s potential for over $400m.

Balance sheet strength has management actively reviewing multiple acquisition opportunities, which Morgans sees as important, given the successful track record in this area. Also, it's considered acquisitions could assist with growth, when margins eventually normalise.

The analyst lifts FY21-23 EPS forecasts by 9%, 2.1% and 2.0%, respectively. The target price is increased to $17.39 from $16.86 and the Hold rating is maintained.

Target price is $17.39 Current Price is $14.54 Difference: $2.85
If APE meets the Morgans target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $16.42, suggesting upside of 6.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

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

After conducting a Buy Now Pay Later (BNPL) survey in the US, Macquarie observes there is limited brand loyalty among BNPL's. It's estimated around 70% of users would prefer to sign up with a different BNPL rather than switch stores.

The broker believes this increases the importance of having a large two-sided network of merchants/users of which Afterpay ranks the highest amongst peers. The broker upgrades to Outperform from Neutral and retains the $120 target price.

In-terms of brand perception, among the brands surveyed, PayPal, Affirm and Afterpay ranked in the top three, in that order.

Target price is $120.00 Current Price is $86.47 Difference: $33.53
If APT meets the Macquarie target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $121.33, suggesting upside of 30.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Ord Minnett rates APX as Buy (1) -

Artificial intelligence data provider Appen delivered a "reassuring" update, says Ord Minnett, with management maintaining operating earnings guidance of US$83-90m for the full year. 

The company will undergo a reorganisation and a change in reporting currency to US dollars from August 2021.

In Ord Minnett’s view, these changes will lead to more clarity on the growth in the business and Appen is expected to benefit via some cost savings. The company expects an earnings skew to the second half led by the return of some previously deferred projects.

Buy recommendation with a $24.75 target price.

Target price is $24.75 Current Price is $13.20 Difference: $11.55
If APX meets the Ord Minnett target it will return approximately 88% (excluding dividends, fees and charges).

Current consensus price target is $22.23, suggesting upside of 60.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Macquarie rates BWX as Outperform (1) -

Macquarie assesses the acquisition of vegan and ethical lifestyle eCommerce platform, Flora & Fauna, will accelerate the direct-to-consumer (DTC) online offering. It will be amalgamated with Nourished Life as an individual DTC business unit.

The new company has 300 brands across beauty, personal care, lifestyle, baby & kids, pet, food and health. The broker points out there is minimal consumer product and customer overlap between Nourished Life and Flora & Fauna, with the latter targeting younger customers. 

The acquisition is fully funded via a debt facility, and the broker notes there is remaining balance sheet capacity to assess other investments. The Outperform rating is unchanged and the target rises to $5.40 from $5.30.

Target price is $5.40 Current Price is $4.93 Difference: $0.47
If BWX meets the Macquarie target it will return approximately 10% (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 CLW as Buy (1) -

Citi thinks Charter Hall Long WALE REIT's acquisition announcement is in-line with the REIT's strategy.

While earnings impact from the transaction is expected to be broadly neutral, the REIT upgraded its FY21 guidance by 0.3%, confirming Citi's view that the guidance was conservative.

The REIT's new FY22 guidance is -2.5% below consensus and looks conservative to the broker.

Looking at Charter Hall's low-risk income stream with guidance upside, Citi maintains its Buy rating. Target remains $5.30.

Target price is $5.30 Current Price is $4.66 Difference: $0.64
If CLW meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $5.10, suggesting upside of 7.5% (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

Citi rates COH as Sell (5) -

Results from Cochlear's major listed competitors including Sonova and Demant were largely consistent with Citi's view of the recovery of the cochlear implant market post-pandemic.

Even so, the broker notes many markets remain impacted and are unlikely to return to normal levels in many countries until the end of 2021.

For FY21, Citi's forecast is slightly ahead of Cochlear's net profit guidance of $225-245m at $250m while being in line with consensus for FY22-23. The forecasts for FY22-23 are driven by the view the implant market will return to normal growth by then. 

Sell rating with the target steady at $200.

Target price is $200.00 Current Price is $213.04 Difference: minus $13.04 (current price is over target).
If COH meets the Citi target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $214.87, suggesting downside of -0.8% (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

Macquarie rates CSL as Outperform (1) -

CSL recently announced a collaboration with Terumo Blood and Cell Technologies to develop a new plasma collection platform for use in the company’s US collection centres. Macquarie sees this as supplementing an assumed Ig revenue recovery in FY23.

Assuming plasma yields per donation increase by around 10% (phased over 2 years), the broker calculates gross profit/gross margin upside of 13% and 2% for FY23 and FY24. After various adjustments, overall EPS forecast revisions result in the target moving to $312 from $296.

The Outperform rating is maintained.

Target price is $312.00 Current Price is $274.45 Difference: $37.55
If CSL meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $300.19, suggesting upside of 7.9% (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: 0.7

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

Morgans rates DEL as Initiation of coverage with Hold (3) -

Morgans initiates coverage on Delorean Corporation with a Hold rating and a target price of $0.25. The company is focused on producing biogas from organic waste. 

It comprises a group of four complementary businesses focusing on renewable energy. This industry has seen large growth in Europe and is emerging in Australia, suggests the broker.

The company faces a competitive market in the East Coast with energy prices falling significantly over the last two years, cautions the broker.

Two businesses, Biogass and Tekpro, specialise in engineering, procurement and construction (EPC) of biogas plants for third party clients as well as for internal projects. 

CleanTech is an energy retailer focusing on commercial and industrial (C&I) customers, while Delorean Energy is a holding company for stakes in biogas projects.

Target price is $0.25 Current Price is $0.24 Difference: $0.01
If DEL meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).

Market Sentiment: 0.0

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

Macquarie rates EML as Outperform (1) -

Concerns raised by the Central Bank of Ireland could potentially result in the Pre-paid Financial Services (PFS) licence being
revoked or in punitive restrictions to business activities.

Given the share price fall and expectations for a more benign long-term earnings impact, Macquarie maintains the Outperform rating. FY21-23 EPS forecasts fall by -2.0%, -9.9% and -7.8%, respectively, from increased costs and slightly lower PFS volumes.

The target price falls to $4.00 from $6.20 incorporating earnings changes and a -30% valuation discount. The discount is based on the approximate valuation impact should the non-UK programs cease, which is not the analyst's belief at this stage.

Target price is $4.00 Current Price is $2.80 Difference: $1.2
If EML meets the Macquarie target it will return approximately 43% (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 FMG as Buy (1) -

Ord Minnett notes Fortescue Metals Group’s first development project (undertaken by its Fortescue Future Industries (FFI) vehicle) is likely to be a 250,000tpa green ammonia plant in Tasmania, with a final investment decision (FID) expected this year.

The broker notes demand growth for green ammonia could be significant for carbon-neutral fertiliser and as a potential carbon-free shipping fuel. Ammonia also holds promise as a means to transport hydrogen, requiring less onerous refrigeration requirements.

Green ammonia production is still in its infancy worldwide, states Ord Minnett while noting the outlook for potential consumption in shipping and green fertiliser has significant potential.

Ord Minnett awaits more information from the miner on potential capital expenditure, costs and price offtakes.

Buy recommendation with a $28 target price.

Target price is $28.00 Current Price is $22.83 Difference: $5.17
If FMG meets the Ord Minnett target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $21.43, suggesting downside of -5.8% (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: 0.3

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

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

While there was no detailed trading update at the AGM, Morgan Stanley notes some useful metrics, such as occupancy of 70.8% being down -3.3% compared with 2019. Centre manager churn improved slightly.

There were eight new leases signed on greenfield centres. There were 13 centres sale/lease surrenders, eliminating -$1.9m in losses.

Equal-weight rating. Target is $1. Industry view: In-line.

Target price is $1.00 Current Price is $0.97 Difference: $0.03
If GEM meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $1.15, suggesting upside of 18.6% (ex-dividends)

The company's fiscal year ends in December.

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

UBS rates GEM as Buy (1) -

UBS observes the occupancy gap compared with 2019 has continued to narrow. The recent additional funding from the federal budget is also considered to be another opportunity.

The broker continues to regard FY21 as the year when the hard yards will be done and the real benefits flow through in FY22-23. If the company can execute effectively, the broker suggests a relatively strong re-rating is warranted. Buy rating and $1.30 target unchanged.

Target price is $1.30 Current Price is $0.97 Difference: $0.33
If GEM meets the UBS target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $1.15, suggesting upside of 18.6% (ex-dividends)

The company's fiscal year ends in December.

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

UBS rates HT1 as Buy (1) -

Shareholders of Soprano, in which HT&E has a 25% stake, have agreed to sell to Link Mobility. The sale will be via a combination of cash and equity and values HT&E's stake at $13 9m.

Soprano will also make a pre-transaction dividend payment of $10m to the company. Buy rating and $2.10 target retained.

Target price is $2.10 Current Price is $1.78 Difference: $0.32
If HT1 meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $1.80, suggesting upside of 0.0% (ex-dividends)

The company's fiscal year ends in December.

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 LFS as Initiation of coverage with Outperform (1) -

Macquarie initiates coverage of Latitude Group Holdings, market leader in the Australian traditional (card-based) instalment
space, with an outperform rating and $3 target price. It's considered to be a highly cash-generative and capital-light lending business. 

The company benefits from strong merchant partnerships, with an established network consisting of over 480 merchants offering instalment products in-store and online, explains the analyst.

The broker highlights BNPL expansion will provide low-cost customer acquisition, with additional valuation upside of around 50 cents, should the big-ticket BNPL product succeed.

While Macquarie acknowledes the barriers to entry are diminishing in the BNPL space, the company's ‘network effect’, scale and product breadth is difficult to replicate.

Target price is $3.00 Current Price is $2.47 Difference: $0.53
If LFS meets the Macquarie target it will return approximately 21% (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

UBS rates LLC as Buy (1) -

UBS observes Lendlease has underperformed over the past year. While investors find earnings potential in the development pipeline confidence is low, the broker points out.

UBS suspects incoming CEO Tony Lombardo will be rebasing FY21 earnings expectations lower while talking positively about the growth potential over the medium term.

FY21 earnings estimates are reduced by -9% to reflect a deferral of the One Sydney Harbour joint venture. UBS maintains a Buy rating and reduces the target to $13.00 from $13.60.

Target price is $13.00 Current Price is $12.00 Difference: $1
If LLC meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $13.84, suggesting upside of 15.8% (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

Citi rates LNK as Buy (1) -

Citi sees Link Administration's valuation appeal and believes the market is under-appreciating the potential for share price upside once the value of PEXA crystallises.

The company confirmed indicative offers for PEXA from trade sale buyers are considerably higher than the circa $1.95bn implied price from the recently withdrawn private equity consortium bid.

If PEXA is sold via a trade sale for $2.5bn, Citi estimates this will leave about $800m of surplus cash post capital gains tax and debt de-leveraging. If the company proceeds via the trade sale route, the broker expects a binding agreement around mid-June.

Buy rating with a $5.70.

Target price is $5.70 Current Price is $5.02 Difference: $0.68
If LNK meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $5.38, suggesting upside of 6.4% (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

Ord Minnett rates MCP as Hold (3) -

McPhersons' targets of reaching $300m in revenues and $50m in operating income by FY26 look lofty to Ord Minnet. The company expects growth will be driven by the six company owned brands - Multix, Lady Jayne, Swisspers, A’kin, Dr.LeWinn’s and Manicare.

Ord Minnett sees elements of the brand investment and operational efficiencies as plausible, but unlikely to provide a material uplift to earnings in FY22-23. Due diligence from the potential acquirer Arrotex continues and the broker expects this to conclude by June end. 

Hold rating with the target dropping to $1.42 from $1.45.

Target price is $1.42 Current Price is $1.43 Difference: minus $0.01 (current price is over target).
If MCP meets the Ord Minnett target it will return approximately minus 1% (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

UBS rates ORG as Buy (1) -

UBS materially reduces wholesale electricity price forecasts. While expecting energy market operating earnings will decline -30%, the broker still envisages value via the interest in APLNG.

UBS assesses that, as coal generation capacity is replaced with intermittent renewable capacity, the market will increasingly attribute more value to dispatchable assets.

This should mean increasing value for Origin Energy's 3.1GW of flexible generation assets. Buy rating retained. Target is reduced to $5.15 from $5.60.

Target price is $5.15 Current Price is $3.90 Difference: $1.25
If ORG meets the UBS target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $5.00, suggesting upside of 25.9% (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

Citi rates S32 as Buy (1) -

Taking a twelce month view, and China tightening money policy and the US easing, Citi's sector analysts express their favour for base metals exposure over iron ore.

One of the prominent changes made is higher forecasts for aluminium prices.

Target price for South32 has increased to $3.50 from $3.30. Buy rating retained.

Target price is $3.50 Current Price is $2.92 Difference: $0.58
If S32 meets the Citi target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $3.30, suggesting upside of 16.2% (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: 0.6

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

Morgans rates S32 as Hold (3) -

Morgans beleives the divestment of South Africa Energy Corporation (SAEC), which is now unconditional, materially improves the company’s ESG profile and quality of earnings.

It also cuts the global workforce by -34% and the required management time. It’s estimated group margins, a former point of weakness relative to large diversified peers, now increase to 32% from 23%.

Management also announced a $200m top-up to the buyback. After all this, the biggest change to broker forecasts came from upgraded metal price forecasts. The target price increases to $3.25 from $2.65.

Target price is $3.25 Current Price is $2.92 Difference: $0.33
If S32 meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $3.30, suggesting upside of 16.2% (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: 0.6

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

Ord Minnett rates SKO as Buy (1) -

Serko's FY21 net loss was at -$29.4m versus -$8.3m last year and more than Ord Minnett's expected -$26.3m. The broker suggests the result highlights a company gearing up for what could be a transformational deal with Booking.com.

The traditional online booking tools (OBT) business continues to be adversely impacted by the decline in corporate travel volumes due to the pandemic, observes Ord Minnett. In the broker's view, investors should focus on the potential earnings upside from the Booking deal.

Buy rating retained. Target rises to $7.38 from $6.55.

Target price is $7.38 Current Price is $5.79 Difference: $1.59
If SKO meets the Ord Minnett target it will return approximately 27% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 1.0

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

Macquarie rates TAH as No Rating (-1) -

Macquarie's in-house data research indicates that lotteries prize pools are tracking up 33% versus the second half FY20, on a year-to-date basis. This results in minor forecast earnings upgrades by the broker.

Offers to acquire the company's Wagering business are being considered and as the broker is advising, research restrictions apply.

Current Price is $4.99. Target price not assessed.

Current consensus price target is $5.08, suggesting upside of 0.7% (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

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

United Malt Group's first half result was solidly ahead of guidance, observes Credit Suisse. The result was driven by a stronger volume recovery than anticipated in March. The result also absorbed -$7m in non-recurring costs.

The broker is positive with respect to market recovery and opportunities for further expansion and sees low risk to demand recovery in North America and the United Kingdom. Lockdowns in Asia may impact exports ex Australia, adds Credit Suisse.

Even with the strong result, Credit Suisse reduces its rating to Neutral from Outperform led by a strong rise in the group's share price since the March lows. The target price rises to $4.58 from $4.21.

Target price is $4.58 Current Price is $4.49 Difference: $0.09
If UMG meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $4.84, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in September.

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

Macquarie rates UMG as Outperform (1) -

First half earnings (EBITDA) of $53m exceeded Macquarie's forecast of $48m, with volumes tracking at around 95% of pre-covid levels since March 2021. There's considered upside from potential pent up demand, restocking and the transformation program.

The program is targeting $30m annualised net benefits by FY24. The ramp-up is expected to be fairly evenly spread between FY22-FY24. The broker highlights the shift to off-premise consumption continued, although there is an early indication of this trend unwinding.

The Outperform rating is retained and the target is increased to $4.90 from $4.31.

Target price is $4.90 Current Price is $4.49 Difference: $0.41
If UMG meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $4.84, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in September.

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

Morgans rates UMG as Hold (3) -

While first half results were better than Morgans had expected, more importantly second half outlook comments were more upbeat. Benefits from the Business Transformation Program of $30m by FY24, were considered materially higher than expected.

Also, the broker expects an improvement in trading should covid restrictions continue to ease. The Hold rating is unchanged as the analyst feels a good portion of the recovery is priced-in. The target is increased to $4.79 from $4.12.

The analyst explains forecast earnings growth in FY23 reflects the annualised earnings from the new Scottish plants and another $10m of Business Transformation benefits (same as FY22).

Target price is $4.79 Current Price is $4.49 Difference: $0.3
If UMG meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $4.84, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in September.

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 UMG as Buy (1) -

Underlying first half operating earnings of $60m beat the top end of guidance. UBS notes management has become more positive.

The broker believes the stock is a recovery trade, supported by potential earnings upside stemming from a strong northern hemisphere summer and achieving targeted benefits from transformation initiatives.

Earnings visibility is improving and the broker retains a Buy rating. Target rises to $5.10 from $5.00.

Target price is $5.10 Current Price is $4.49 Difference: $0.61
If UMG meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $4.84, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in September.

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

Credit Suisse rates WEB as Outperform (1) -

Credit Suisse notes Webjet's FY21 result showed Americas to potentially be the leading indicator in B2B. The broker notes North America's B2B total transaction value in April was 83% of pre-covid levels, significantly above market performance.

No guidance was provided and there was limited new information. The broker's FY22 earnings forecasts reduce materially due to change in year-end and delay in B2C international travel.

Even then, the core thesis remains unchanged with Credit Suisse believing earnings potential for FY23 and beyond remains high led by a strong top-line from pent-up demand and high profitability due to cost containment and efficiency gains.

Outperform rating with the target price dropping to $5.20 from $5.40.

Target price is $5.20 Current Price is $4.70 Difference: $0.5
If WEB meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $5.44, suggesting upside of 16.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

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

Morgan Stanley notes optimism pervaded the Webjet result although supportive evidence was lacking. The broker suspects the aim to acquire a leadership position in B2B while expanding margins is optimistic as cash burn accelerated in the March quarter.

The company has changed its end of year to March. Sales beat while earnings missed Morgan Stanley's estimates. The broker acknowledges industry sentiment is improving and that Webjet should benefit.

Equal-weight retained. Target is reduced to $4.30 from $4.50. Industry view: In-Line.

Target price is $4.30 Current Price is $4.70 Difference: minus $0.4 (current price is over target).
If WEB meets the Morgan Stanley target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.44, suggesting upside of 16.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Ord Minnett rates WEB as Buy (1) -

Ord Minnett observes Webjet's FY21 result with a net loss of -$73.7m for the nine months ended 31 March is a classic case of backing one’s industry work in the face of a messy set of numbers.

Noting the challenging short-term earnings outlook, Ord Minnett continues to assume travel will take some time to return to normal.  Even so, the broker thinks the company remains well placed to deliver at least $250m in operating earnings in FY25.

Earnings estimates have been downgraded for FY22-23 largely to higher depreciation assumptions.

In the broker's view, the company looks set to survive the most difficult period in its history due to a series of earnings dilutive capital raisings which could be more than offset by higher earnings.

Buy rating retained. Target drops to $7.02 from $7.15.

Target price is $7.02 Current Price is $4.70 Difference: $2.32
If WEB meets the Ord Minnett target it will return approximately 49% (excluding dividends, fees and charges).

Current consensus price target is $5.44, suggesting upside of 16.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

UBS rates WEB as Buy (1) -

UBS observes the past three months have been challenging but retains a positive outlook for the business, given exit run rates and progress on vaccinations.

Revenue over the nine months to March was $38.5m, compared with UBS estimates of $41.7m. Operating earnings (EBITDA) were slightly ahead of expectations.

No guidance was provided but the company remains optimistic about the roll-out of vaccines across the US and UK. All businesses increased bookings and profitability month on month in 2021. Buy rating and $5.75 target maintained.

Target price is $5.75 Current Price is $4.70 Difference: $1.05
If WEB meets the UBS target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $5.44, suggesting upside of 16.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Macquarie rates WOW as Outperform (1) -

In an exploration of Endeavour Group’s Pinnacle Drinks business, Macquarie observes it is the largest supplier to Endeavour Group with more than 75 private-label brands across beer and cider, wine and spirits.

Pinnacle Drinks exclusively supplies these brands to BWS, Dan Murphy’s and Endeavour’s hotels and pubs. It also engages in vertical
integration, holding a portfolio of wineries and services assets.

The analyst believes an expansion of the private label remains a key growth opportunity, offering higher margins and supply chain flexibility. The Woolworth's Outperform rating and $44.5 target are unchanged.

Target price is $44.50 Current Price is $40.41 Difference: $4.09
If WOW meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $42.54, suggesting upside of 4.5% (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