Australian Broker Call

Credit Suisse rates ABP as Outperform (1) -

Abacus Property and Charter Hall ((CHC)) have sweetened their offer to acquire Australian Unity Office Fund ((AOF)) to $3.04 from $2.95 per unit. The offer will be reduced by any distribution announced, or paid, in respect of AOF other than the distribution announced on June 21.

Abacus Property's implied consideration of $342m is materially below what Credit Suisse has estimated is available ($500m). Outperform rating and $4 target maintained.

Target price is $4.00 Current Price is $4.27 Difference: minus $0.27 (current price is over target).
If ABP meets the Credit Suisse target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.76, suggesting downside of -12.0% (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

Credit Suisse rates AMC as Neutral (3) -

Credit Suisse extends its review of the company's debt levels, reducing FY19 net debt estimates to US$4.6bn from US$5.1bn. This adds around $0.30 to valuation.

The broker also makes minor downgrades to estimates based on weak revenue momentum being observed in US and European food and US tobacco & beverages. Neutral rating maintained. Target is raised to $15.60 from $14.90.

Target price is $15.60 Current Price is $16.64 Difference: minus $1.04 (current price is over target).
If AMC meets the Credit Suisse target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.85, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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 ATL as Hold (3) -

Ord Minnett updates its numbers to reflect the company's profit downgrade in late May, to statutory net profit of $14-15.5m versus $17.5-19.5m. The broker is disappointed, given previous guidance was only released in early May.

The downgrade appears to have been driven by macro factors in North America and Europe and, to a lesser extent, underperformance in Australasia.

Ord Minnett maintains a Hold rating and reduces the target to $0.35 from $0.66. The broker expects North American markets will recover, as excess production of new recreational vehicles winds its way through the used marketplace.

Target price is $0.35 Current Price is $0.43 Difference: minus $0.08 (current price is over target).
If ATL meets the Ord Minnett target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Morgan Stanley rates BAP as Overweight (1) -

There was no change to FY19 guidance at the company's investor briefing. Morgan Stanley notes a bigger skew to regional stores over the next couple of years. The company is aiming for 10-12 stores per annum in Australia and an additional 4 per annum in New Zealand.

Overweight rating. Target is $7.60. Industry view: In-line.

Target price is $7.60 Current Price is $5.84 Difference: $1.76
If BAP meets the Morgan Stanley target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $6.93, suggesting upside of 18.7% (ex-dividends)

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

Morgans rates BAP as Add (1) -

The company did not provide a trading update at its investor briefing, although Morgans notes it had only recently reiterated FY19 guidance.

Divisional growth targets are largely in line with the broker's forecasts which should enable the company to sustain high single-digit growth in earnings in coming years. Target is steady at $6.31. Add rating maintained.

Target price is $6.31 Current Price is $5.84 Difference: $0.47
If BAP meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $6.93, suggesting upside of 18.7% (ex-dividends)

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

Macquarie rates BPT as Neutral (3) -

Beach Energy's Waitsia JV has entered into an agreement to supply Alinta Energy with 20TJ of gas per day through an expanded processing facility. A potential opening for Waitsia gas will be provided by expected volume declines at the North West Shelf, the broker notes.

The broker sees a risk in the WA domestic gas market remaining relatively well supplied by capacity increases at other projects, limiting Beach's upside on the west coast. The broker is more interested in upcoming reserve updates for the Cooper JV and Western Flank.

Neutral and $2.10 target retained.

Target price is $2.10 Current Price is $1.88 Difference: $0.22
If BPT meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $2.08, suggesting upside of 10.9% (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

Deutsche Bank rates CAR as Reinstate Coverage with Buy (1) -

Deutsche Bank has reinstated coverage with a Buy rating, given the value in the stock. Target $15.40.

Target price is $15.40 Current Price is $14.21 Difference: $1.19
If CAR meets the Deutsche Bank target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $14.21, suggesting upside of 0.0% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.9

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

Ord Minnett rates CSR as Hold (3) -

Ord Minnett increases the value of the company's property business to $580m. The broker also revises earnings estimates to reflect lower aluminium prices.

Management has noted that volumes in April and May have been broadly consistent with the March quarter. Ord Minnett continues to expect a sharp year-on-year decline in FY20 first-half earnings for building products.

The broker maintains a Hold rating and raises the target to $3.90 from $3.45, based on the increased valuation of the property division.

Target price is $3.90 Current Price is $4.13 Difference: minus $0.23 (current price is over target).
If CSR meets the Ord Minnett target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.62, suggesting downside of -12.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.4

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

Deutsche Bank rates DHG as Reinstate Coverage with Sell (5) -

Deutsche Bank reinstates coverage with a Sell rating, believing the stock is expensive relative to the growth outlook. Target $2.70.

Target price is $2.70 Current Price is $3.18 Difference: minus $0.48 (current price is over target).
If DHG meets the Deutsche Bank target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.70, suggesting downside of -15.1% (ex-dividends)

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 GPT as Reinstate coverage with Neutral (3) -

The broker has returned from research restriction following the completion of GPT's equity raise to buy Darling Park and pay down debt. The raising will prove around -2% dilutive in FY19, leaving earnings growth at 2.5%, but development pipeline visibility is increasing.

A low yield backdrop is a positive for GPT, the broker notes, as is a shift in portfolio towards office & industrial. Neutral with $6.24 target.

Target price is $6.24 Current Price is $6.35 Difference: minus $0.11 (current price is over target).
If GPT meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.95, suggesting downside of -6.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.2

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

Ord Minnett rates GXY as Reinstate Coverage with Accumulate (2) -

Ord Minnett updates commodity price forecasts, skewing its preferences towards bulk commodities and gold. Downgrades of -5-7% occur across base metals.

The broker reinstates coverage with an Accumulate rating and $2.20 target.

Target price is $2.20 Current Price is $1.31 Difference: $0.89
If GXY meets the Ord Minnett target it will return approximately 68% (excluding dividends, fees and charges).

Current consensus price target is $2.14, suggesting upside of 63.5% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

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 HPI as Hold (3) -

The company has declared a second-half distribution of 10.1c per security. Morgans expects FY20 distribution guidance will be provided at the results on August 21.

In the near to medium term, the focus is expected to be on the development opportunities for surplus land as well as expanding the existing on-site accommodation.

Hold rating maintained. Target is raised to $3.30 from $3.15.

Target price is $3.30 Current Price is $3.41 Difference: minus $0.11 (current price is over target).
If HPI meets the Morgans target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.36, suggesting downside of -1.4% (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 IAG as Underperform (5) -

A general sector update, in which Macquarie declares the "top of the Australian premium rate cycle has passed, and premium rate rises will moderate over the coming 12 months", has revealed that Macquarie's price target for Insurance Australia Group has moved to $7.05 from $6.90. Underperform rating retained.

Target price is $7.05 Current Price is $8.47 Difference: minus $1.42 (current price is over target).
If IAG meets the Macquarie target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.74, suggesting downside of -8.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Morgan Stanley rates IAG as Downgrade to Equal-weight from Overweight (3) -

Morgan Stanley believes the investment case is robust, with cost reductions and capital initiatives, but there is a risk of a rising catastrophe budget amid lower yields and elevated compliance costs. This is likely to contribute to softer FY20 guidance.

The broker downgrades to Equal-weight from Overweight. Target is reduced to $8.20 from $8.50. Industry view: In Line.

Target price is $8.20 Current Price is $8.47 Difference: minus $0.27 (current price is over target).
If IAG meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.74, suggesting downside of -8.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Ord Minnett rates IGO as Downgrade to Hold from Accumulate (3) -

Ord Minnett updates commodity price forecasts, skewing its preferences towards bulk commodities and gold. Downgrades of -5-7% occur across base metals.

Rating on Independence Group is downgraded to Hold from Accumulate. Target is steady at $5.30.

Target price is $5.30 Current Price is $4.91 Difference: $0.39
If IGO meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $4.85, suggesting downside of -1.2% (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

Ord Minnett rates ILU as Downgrade to Hold from Accumulate (3) -

Ord Minnett updates commodity price forecasts, skewing its preferences towards bulk commodities and gold. The broker downgrades its rating on Iluka Resources to Hold from Accumulate and raises the target to $10.75 from $10.50.

Target price is $10.75 Current Price is $10.84 Difference: minus $0.09 (current price is over target).
If ILU meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $10.83, suggesting downside of -0.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

UBS rates JHC as Neutral (3) -

UBS updates the main earnings drivers, including average occupancy in the second half, now estimated at 92.2% versus 93.6% in the first half. Second half government revenue per occupied bed is up 7% and second half staff costs per occupied bed are up 2%.

The broker has become more cautious about the operating outlook. Not only will the company need to navigate multiple headwinds in FY20, it is also scheduled to finish 424 new beds and receive the outcomes of the Royal Commission into the sector.

Neutral rating maintained. Target is reduced to $1.20 from $1.25.

Target price is $1.20 Current Price is $1.12 Difference: $0.08
If JHC meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $1.26, suggesting upside of 12.1% (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

UBS rates JHX as Neutral (3) -

Fibre cement has maintained its 20% market share in the US in 2018. UBS also notes floor sizes for new homes have decreased by -1% over the last three years.

The broker suspects the outlook for primary demand growth is challenged and targets will be increasingly hard and more expensive to achieve.

UBS suspects the market is discounting the current weakness in new housing starts in the US. In Australia, meanwhile, favourable changes to lending standards suggest a floor in approvals is close. Neutral rating and $19.70 target maintained.

Target price is $19.70 Current Price is $18.68 Difference: $1.02
If JHX meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $21.57, suggesting upside of 15.5% (ex-dividends)

The company's fiscal year ends in March.

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: 0.8

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

Ord Minnett rates NCM as No Rating (-1) -

Ord Minnett updates commodity price forecasts, skewing its preferences towards bulk commodities and gold. The broker has no rating or target for Newcrest Mining at present.

Current Price is $32.33. Target price not assessed.

Current consensus price target is $24.43, suggesting downside of -24.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Citi rates NUF as Buy (1) -

Citi observes corporate appeal is emerging, as the shares rallied on press speculation of US private equity interest. The broker believes a strategic long-term operator may overlook the issues of glyphosate concerns and the weather, given depressed valuations and the Omega 3 potential.

Critical to a significant second half is a reversal on working capital while US FDA approval of Omega 3 could be imminent. Citi maintains a Buy rating and $6.20 target.

Target price is $6.20 Current Price is $4.45 Difference: $1.75
If NUF meets the Citi target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $6.33, suggesting upside of 42.2% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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

Deutsche Bank rates NWH as Hold (3) -

Stanmore Coal ((SMR)) will increase production at Isaac Plains and a subsidiary of NRW Holdings, Golding, has agreed to increase the overburden removal capacity, adding a third truck and excavator fleet.

Hold rating and $2.36 target.

Target price is $2.36 Current Price is $2.55 Difference: minus $0.19 (current price is over target).
If NWH meets the Deutsche Bank target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.81, suggesting upside of 10.1% (ex-dividends)

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

Ord Minnett rates PLS as Upgrade to Hold from Lighten (3) -

Ord Minnett updates commodity price forecasts, skewing its preferences towards bulk commodities and gold. Downgrades of -5-7% occur across base metals.

The broker notes iron ore prices hit 2019 peak this week, pushing over US$125/t amid ongoing reductions in China's port stocks and strength in Chinese demand.

Rating is upgraded to Hold from Lighten. Target is reduced to $0.60 from $0.65.

Target price is $0.60 Current Price is $0.50 Difference: $0.1
If PLS meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $0.88, suggesting upside of 76.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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

Morgan Stanley rates QBE as Overweight (1) -

Morgan Stanley continues to like the fundamentals underpinning the company's business, despite low yields. Specifically, attritional losses are improving and there is -US$40m in cost reductions over 2019.

Overweight rating maintained. Target is reduced to $12.70 from $13.00. Industry view is In-Line.

Target price is $12.70 Current Price is $12.03 Difference: $0.67
If QBE meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $12.90, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Deutsche Bank rates REA as Reinstate Coverage with Sell (5) -

Deutsche Bank likes the company's growth opportunities, both domestically and in Asia as well as the high depth penetration. However, despite robust growth projections, the broker struggles to justify the current share price.

Transaction volumes are expected to remain subdued, although a bounce in earnings of around 15% is expected in FY20. To justify the share price, Deutsche Bank calculates REA Group would need to achieve around 14% earnings growth over the long term.

The broker reinstates coverage with a Sell rating and $83 target.

Target price is $83.00 Current Price is $99.01 Difference: minus $16.01 (current price is over target).
If REA meets the Deutsche Bank target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $87.63, suggesting downside of -11.5% (ex-dividends)

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 SDF as Outperform (1) -

Macquarie's in-house data show premium increases continue to be supportive for Steadfast but the rate of growth is now slowing. Increases will still drive performance, along with acquisitions and technology, the broker suggests.

Current operating conditions and the prospect of consensus upgrades support the broker's Outperform rating and $3.90 target.

Target price is $3.90 Current Price is $3.52 Difference: $0.38
If SDF meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $3.35, suggesting downside of -4.8% (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

Deutsche Bank rates SEK as Reinstate Coverage with Hold (3) -

Deutsche Bank reinstates coverage with a Hold rating. Target $21.30.

Target price is $21.30 Current Price is $21.76 Difference: minus $0.46 (current price is over target).
If SEK meets the Deutsche Bank target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $19.76, suggesting downside of -9.2% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Macquarie rates SUN as Underperform (5) -

A general sector update, in which Macquarie declares the "top of the Australian premium rate cycle has passed, and premium rate rises will moderate over the coming 12 months", has revealed that Macquarie's price target for Suncorp Group has shifted to $12.90 from $13.35. Underperform rating retained.

Target price is $12.90 Current Price is $13.47 Difference: minus $0.57 (current price is over target).
If SUN meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.86, suggesting upside of 2.9% (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

Morgan Stanley rates SUN as Downgrade to Underweight from Equal-weight (5) -

Morgan Stanley expects the second half will show the company is struggling to maintain volumes in personal lines.

Guidance is expected to disappoint, as Suncorp balances growth campaigns alongside the need to price for a higher FY20 catastrophe budgets, amid the impact of lower yields

Rating is downgraded to Underweight from Equal-weight. Target is reduced to $11.90 from $12.50. In-Line sector view.

Target price is $11.90 Current Price is $13.47 Difference: minus $1.57 (current price is over target).
If SUN meets the Morgan Stanley target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.86, suggesting upside of 2.9% (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

Credit Suisse rates VOC as Neutral (3) -

FY20 guidance for operating earnings (EBITDA) of $350-370m is below Credit Suisse estimates, largely because of weakness in the newly-defined retail business. Management has guided for declines in retail operating earnings to effectively offset growth in network services.

Capital expenditure is expected to lift until FY22 as the company pursues its technology program. The broker also finds, while growth in network services is intact, execution is not straightforward. Neutral rating maintained. Target is reduced to $3.40 from $3.75.

Target price is $3.40 Current Price is $3.15 Difference: $0.25
If VOC meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.67, suggesting upside of 16.4% (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 VOC as Neutral (3) -

Vocus' three-year turnaround program is still very much in its early stages, management pointed out at yesterday's investor day. Vocus Network Services is expected to be the core driver, while the Retail and NZ businesses are now standalone and autonomous.

The broker sees Vocus as hitting the top end of its guidance range on the assumption history has taught management to be more conservative. Price deflation will remain a headwind, but the hope is market share gains will offset. Neutral retained, target rises to $3.40 from $3.25.

Target price is $3.40 Current Price is $3.15 Difference: $0.25
If VOC meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.67, suggesting upside of 16.4% (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

Morgan Stanley rates VOC as Overweight (1) -

The company has provided FY20 guidance for operating earnings (EBITDA) of $350-370m and capital expenditure of $200-210m. FY19 guidance was confirmed at $350-370m.

Morgan Stanley observes network services continue to perform well but the headwinds in retail are larger than expected.

Overweight call. Target is $4.00. Industry view is In-Line.

Target price is $4.00 Current Price is $3.15 Difference: $0.85
If VOC meets the Morgan Stanley target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $3.67, suggesting upside of 16.4% (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

Morgans rates VOC as Hold (3) -

The company has reiterated its turnaround story in more detail. Morgans considers the plans are sensible but will take three years to execute. FY20 guidance suggests earnings will be flat. The broker reduces FY20 operating earnings forecasts by -2.7%.

The broker retains a Hold rating, but notes the opportunity cost in staying invested in Vocus Group. More upside is envisaged in other stocks over the next 12 months.

On a positive note, the broker considers there is meaningful upside when the company can deliver on the turnaround. Target is reduced to $3.23 from $3.59.

Target price is $3.23 Current Price is $3.15 Difference: $0.08
If VOC meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $3.67, suggesting upside of 16.4% (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

UBS rates VOC as Buy (1) -

The company has downgraded FY20 operating earnings (EBITDA) expectations. Additionally, capital expenditure is expected to be elevated over FY20-21. As a result, UBS reduces near-term estimates for earnings per share by -15-20%.

While earnings appear to be flat in FY20, UBS points out it is the lowest multiple business (retail) which is declining, while Vocus Group expects the highest multiple business (network services) to grow. Buy rating and $3.85 target maintained.

Target price is $3.85 Current Price is $3.15 Difference: $0.7
If VOC meets the UBS target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $3.67, suggesting upside of 16.4% (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

Credit Suisse rates WOW as Neutral (3) -

Woolworths has taken first steps towards de-merging its drinks and hotels businesses, announcing an agreement to combine these two into a single entity, Endeavour Group. Endeavour Group will then be separated through a de-merger or other value-accretive alternative.

Credit Suisse notes management is of the view that this will simplify the running of the businesses and accelerate the necessary investment in digital and products. Credit Suisse maintains a Neutral rating and $29.51 target.

Target price is $29.51 Current Price is $34.11 Difference: minus $4.6 (current price is over target).
If WOW meets the Credit Suisse target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.96, suggesting downside of -12.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

Deutsche Bank rates WOW as Hold (3) -

Separating the food & drinks business will not be that simple, Deutsche Bank asserts, given the interdependence around property, loyalty, marketing and the supply chain.

A de-merger will add additional costs and the broker believes cost savings and growth initiatives that are planned to mitigate these costs could have been pursued even without a de-merger.

However, the complexities around ownership will be simplified. The main benefit, in the broker's opinion, is the isolation of the gambling exposure.

Hold rating and $31 target maintained.

Target price is $31.00 Current Price is $34.11 Difference: minus $3.11 (current price is over target).
If WOW meets the Deutsche Bank target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.96, suggesting downside of -12.2% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

Macquarie rates WOW as Underperform (5) -

Woolworths plans to first merge its ALH pubs business with its Endeavour liquor business and then next year demerge the combined entity, subject to shareholder approval.

While increased simplicity and a removal of ESG concerns -- which the broker assumes is the reason for the demerger -- are positives, the broker does see a slight transfer of value to the Bruce Mathieson Group on the Endeavour share split.

Otherwise, the broker remains cautious on Woolworths' ability to derive the operating leverage required to justify its current PE multiple. Underperform and $26.84 target retained.

Target price is $26.84 Current Price is $34.11 Difference: minus $7.27 (current price is over target).
If WOW meets the Macquarie target it will return approximately minus 21% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.96, suggesting downside of -12.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

Morgan Stanley rates WOW as Underweight (5) -

Woolworths will separate its drinks and hotels businesses via a de-merger. Morgan Stanley notes the rationale is to create a simpler more agile business, with Woolworths focusing on food.

The broker also believes the separation of the gambling operations from the food business will allay some investor concerns, although Woolworths will retain up to a 15% minority stake.

The broker expects management to focus on generating sales/earnings momentum ahead of the de-merger. Underweight rating and $28 target maintained. Industry view: Cautious.

Target price is $28.00 Current Price is $34.11 Difference: minus $6.11 (current price is over target).
If WOW meets the Morgan Stanley target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.96, suggesting downside of -12.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

Morgans rates WOW as Hold (3) -

Woolworths will combine its drinks and hotels business, to be called Endeavour Group, ahead of a possible de-merger in 2020. Morgans values Endeavour Group at $10.5-11.5bn, noting the potential for Woolworths to exit gambling activities entirely in the future.

The combined Endeavour Group will be 85.4% owned by Woolworths and 14.6% owned by the Bruce Mathieson Group. Morgans maintains a Hold rating, continuing to believe the stock is fully valued. Target is raised to $32.75 from $31.24.

Target price is $32.75 Current Price is $34.11 Difference: minus $1.36 (current price is over target).
If WOW meets the Morgans target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.96, suggesting downside of -12.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

Ord Minnett rates WOW as No Rating (-1) -

Woolworths has announced the formation of Endeavour Group, to separate its drinks and hotels business from the food business.

Ord Minnett observes the company continues to unwind the conglomerate, with hotels and liquor now being addressed following home improvement in 2016 and petrol in 2019. Big W remains the last non-food division.

Woolworths remains confident that stranded costs can be offset by charging for ongoing services and the separation will simplify its cost position. Ord Minnett does not provide a rating or target at present.

Current Price is $34.11. Target price not assessed.

Current consensus price target is $29.96, suggesting downside of -12.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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