Australian Broker Call

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

After performing a spot price valuation scenario, Ord Minnett notes BHP Group is well ahead of Rio Tinto ((RIO)) on a mark-to-market earnings basis. The group's free cash flow yield of 14% is also ahead of Rio Tinto at 10%.

The broker is under rating restriction for BHP Group so offers no target price or rating.

Current Price is $40.20. Target price not assessed.

Current consensus price target is $43.55, suggesting upside of 9.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.5

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

Ord Minnett rates BSL as Buy (1) -

While retaining its Buy rating for BlueScope Steel, Ord Minnett lowers its target price to $30 from $33 after lowering forecast iron ore prices and reviewing the latest forward curves for steel prices.

Nonetheless, the broker retains a positive view on the company due to its material exposure to the US market, where demand conditions are still strong. Elevated volumes and prices in Australia are considered another reason to be buoyant.

Target price is $30.00 Current Price is $21.47 Difference: $8.53
If BSL meets the Ord Minnett target it will return approximately 40% (excluding dividends, fees and charges).

Current consensus price target is $26.51, suggesting upside of 25.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Citi rates CCX as Neutral (3) -

Consistent with Citi's expectation, moderating growth is the key takeaway from 3Q results for City Chic Collective's peer Torrid. While conditions remain robust in the US, sales growth rates are moderating, explains the analyst.

The broker retains its Neutral rating but is optimistic about the long-term growth possibilties. The $6.75 target price is unchanged.

Target price is $6.75 Current Price is $5.48 Difference: $1.27
If CCX meets the Citi target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $6.90, suggesting upside of 21.3% (ex-dividends)

The company's fiscal year ends in June.

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

Morgans rates COE as Add (1) -

Cooper Energy has downgraded FY22 earnings guidance due to added costs from a spike in domestic spot gas prices when the company had to source additional third party volumes, explains Morgans. The broker's target price slips to $0.34 from $0.35.

Management also highlighted a two month delay in planned Phase 2B works at Orbost. The analyst is unconcerned over the temporary nature of current setbacks and maintains the Add rating.

Target price is $0.34 Current Price is $0.27 Difference: $0.07
If COE meets the Morgans target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $0.28, suggesting downside of -0.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

Macquarie rates DCN as Outperform (1) -

Dacien Gold has completed a $20m institutional placement, issuing an additional 12% of shares, to raise funds to continue works at the Mt Morgans site. Macquarie notes the target is production growth to 115-125,000 ounces per annum between FY24-26 from the site.

Specifically, funds raised will be deployed to complete pre-stripping of the Doublejay open pit project and accelerate exploration of the Jupiter pit. 

The Outperform rating is retained and the target price decreases to $0.23 from $0.25.

Target price is $0.23 Current Price is $0.17 Difference: $0.06
If DCN meets the Macquarie target it will return approximately 35% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Citi rates EBO as Neutral (3) -

Ebos has acquired Life Healthcare for -$1,275m and launched an equity raising of $742m. Citi likes the Australian medical device distribution sector and the scale that will be achieved from the transaction in a $2bn market.

The broker's target price rises to $34.50 from $31.50 and the Neutral rating is unchanged.

Management also gave a trading update for the first four months of FY22, which revealed a profit rise of around 14% year-on-year, a beat versus the analyst's 10% estimate.

Target price is $34.50 Current Price is $34.70 Difference: minus $0.2 (current price is over target).
If EBO meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $37.50, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in June.

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

Credit Suisse rates EBO as Upgrade to Outperform from Neutral (1) -

In a transaction that will substantially accelerate strategy and scale, according to Credit Suisse, Ebos Group has announced the acquisition of LifeHealthcare for -$1.2bn. The broker upgrades its rating to Outperform from Neutral and hikes its target price to $41 from $31.

LifeHealthcare is one of the largest independent distributors of third party medical devices, consumables and capital equipment in Australia and New Zealand, explains the analyst. The company also manufactures allograft material.

There will be a $642m share placement, a $100m retail offer and the balance will be raised by new term loan debt facilities. Credit Suisse estimates the acquisition will be 11% EPS accretive in FY23/24.

Target price is $41.00 Current Price is $34.70 Difference: $6.3
If EBO meets the Credit Suisse target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $37.50, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in June.

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 EBO as No Rating (-1) -

Ebos Group has announced the acquisition of medical device and consumables distributor LifeHealthcare for $1,167. Macquarie notes funding will be raised by a $642m fully underwritten placement, with potential to raise a further $100m from a share purchase plan.

The placement will be offered at $34.50 per share, which the broker notes is an approximate -5.5% discount to last closing price. A further $540m new net debt will provide the transaction balance. 

Having acquired four medical device businesses in the last two years, LifeHealthcare offers a step-change into the distribution space, as well as in the South East Asia distribution market. Ebos Group is guiding to low double digit earnings per share accretion in 2022.

Given research restrictions Macquarie has not provided a rating or target price. 

Current Price is $34.70. Target price not assessed.

Current consensus price target is $37.50, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in June.

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 EVN as Neutral (3) -

Strategists at UBS expect the gold price to moderate to US$1600/oz by the end of 2022. The broker's long-term real gold price estimate is lifted to US$1,500/oz from $US1,300/oz, due to rising production costs.

A Neutral rating is retained for Evolution Mining. The broker points out the company is embarking on a heavier reinvestment cycle, is more aggressive on M&A and has promised more growth than its global peers, as have Newcrest Mining and Northern Star Resources. The $3.95 target price is unchanged.

Target price is $3.95 Current Price is $3.95 Difference: $0
If EVN meets the UBS target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $4.31, suggesting upside of 8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Macquarie rates IAP as No Rating (-1) -

Irongate Group is acquiring two assets, one office space in Victoria and one industrial business park in Western Australia, at a combined cost of $156m. Macquarie notes the purchase is expected to be accretive to FY22 metrics.

The purchase is funded by a $50m equity raise with remainder debt-funded. The broker notes this brings the company's third-party assets under management to around $1.8bn, up 34% since September.

The broker is advising and thus currently on restriction.

Current Price is $1.66. Target price not assessed.

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

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

Macquarie rates ILU as Outperform (1) -

Macquarie has updated its earnings forecasts for Iluka Resources to account for its latest rare earths pricing outlook. Earnings forecasts increase 1%, 33%, 52%, 41% and 36% for 2021-2025. 

Expected benefits from short and medium-term price rises on zircon, rutile and rare earth have driven the broker's upgrade.

The Outperform rating is retained and the target price increases to $12.00 from $10.80.

Target price is $12.00 Current Price is $8.78 Difference: $3.22
If ILU meets the Macquarie target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $9.62, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in December.

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

Ord Minnett rates NCM as Buy (1) -

After performing a spot price valuation scenario, Ord Minnett notes ongoing copper price strength is benefitting Newcrest Mining, due to its strong by-product credits.

The Buy rating and $30 target price are retained.

Target price is $30.00 Current Price is $23.58 Difference: $6.42
If NCM meets the Ord Minnett target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $28.74, suggesting upside of 24.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.9

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

UBS rates NCM as Buy (1) -

Strategists at UBS expect the gold price to moderate to US$1600/oz by the end of 2022. The long-term real gold price estimate is lifted to US$1,500/oz from $US1,300/oz, due to rising production costs.

A Buy rating is retained for Newcrest Mining. The broker points out the company is embarking on a heavier reinvestment cycle, is more aggressive on M&A and has promised more growth than its global peers as have Evolution Mining and Northern Star Resources. The $27 target price is unchanged.

Target price is $27.00 Current Price is $23.58 Difference: $3.42
If NCM meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $28.74, suggesting upside of 24.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.9

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

UBS rates NST as Buy (1) -

As Northern Star Resources continues to negotiate for a 50% interest in the Windfall Project, UBS has gained further confidence in the current 6moz resource. This comes as current owner, Osisko Mining, has released results from its latest drill program.

Meanwhile, strategists at UBS expect the gold price to moderate to US$1600/oz by the end of 2022. The long-term real gold price estimate is lifted to US$1,500/oz from $US1,300/oz, due to rising production costs.

A Buy rating is retained for Northern Star Resources. The broker points out the company is embarking on a heavier reinvestment cycle, is more aggressive on M&A and has promised more growth than its global peers, as have Evolution Mining and Newcrest Mining. The $11.20 target price is unchanged.

Target price is $11.20 Current Price is $9.23 Difference: $1.97
If NST meets the UBS target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $11.75, suggesting upside of 29.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Macquarie rates ORG as Outperform (1) -

Solar development continues to drive negative pricing events, and Macquarie expects further feed-in tariff decline of -$0.02 per kilowatt-hour in FY23, compounded with -$0.01-0.036 declines in early FY22, to provide a $44m benefit to Origin Energy's underlying earnings.

Combined with continued strong pricing for large-scale renewable energy certificates, the broker increases earnings per share forecasts 3.7%, 20% and 14% for FY22-24.

The Outperform rating is retained and the target price increases to $5.69 from $5.41.

Target price is $5.69 Current Price is $5.03 Difference: $0.66
If ORG meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $5.80, suggesting upside of 15.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Ord Minnett rates PLS as Buy (1) -

After performing a spot price valuation scenario, Ord Minnett notes spodumene prices are at an all-time high of US$2,310/tonne and likes Pilbara Minerals' exposure. 

The analyst estimates a spot 2022 free cash flow yield of 15%. The Buy rating and $2.30 target price are maintained.

Target price is $2.30 Current Price is $2.51 Difference: minus $0.21 (current price is over target).
If PLS meets the Ord Minnett target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.41, suggesting downside of -6.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Citi rates PPT as Upgrade to Buy from Neutral (1) -

Citi sees a potential opportunity after the recent slide in Perpetual's share price and upgrades its rating to Buy from Neutral and retains its $40.40 target. Among other positives, the broker highlights the company's strong ESG tilt and new growth opportunities for Corporate Trust.

Management is confident in achieving growth (and has an ongoing interest in acquisitions) and cites positive momentum in all its businesses.

Target price is $40.40 Current Price is $35.14 Difference: $5.26
If PPT meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $40.80, suggesting upside of 12.9% (ex-dividends)

The company's fiscal year ends in June.

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 RIO as Upgrade to Overweight from Equal-weight (1) -

Morgan Stanley feels most negative news has been factored into the current Rio Tinto share price and upgrades its rating to Overweight from Equal-weight and raises its target price to $110.50 from $101.00. In-Line industry view.

The broker feels risks are skewed to the upside with a positive view for aluminium and an improving economic and housing outlook in China. In addition, Morgan Stanley notes shares have underperformed both rival BHP Group ((BHP)) and the ASX200 Materials Index.

Target price is $110.50 Current Price is $95.80 Difference: $14.7
If RIO meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $107.07, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in December.

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

Ord Minnett rates RIO as Hold (3) -

After performing a spot price valuation scenario, Ord Minnett notes BHP Group ((BHP)) is well ahead of Rio Tinto on a mark-to-market earnings basis. Rio Tinto's free cash flow yield of 10% also trails behind the 14% of BHP Group.

The broker retains its Hold rating and $102 target price.

Target price is $102.00 Current Price is $95.80 Difference: $6.2
If RIO meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $107.07, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in December.

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

UBS rates S32 as Buy (1) -

South32 has a revised and smaller Dendrobium extension project after submitting for approval to the NSW State government. UBS assesses that while planned production is less coal quality will be better than the original scope.

The analyst hopes the changes lead to project approval though a final investment decision is likely a year away at least. Buy rating retained. Target $4.10.

Target price is $4.10 Current Price is $3.80 Difference: $0.3
If S32 meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $4.52, suggesting upside of 18.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 1.0

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

Ord Minnett rates SFR as Hold (3) -

After performing a spot price valuation scenario, Ord Minnett notes ongoing copper price strength has particularly favoured Sandfire Resources on a mark-to-market basis.

The broker retains its Hold rating and $5.70 target price.

Target price is $5.70 Current Price is $6.12 Difference: minus $0.42 (current price is over target).
If SFR meets the Ord Minnett target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.59, suggesting upside of 6.1% (ex-dividends)

The company's fiscal year ends in June.

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 SSR as Buy (1) -

Strategists at UBS expect the gold price to moderate to US$1600/oz by the end of 2022. The long-term real gold price estimate is lifted to US$1,500/oz from $US1,300/oz, due to rising production costs.

A Buy rating is retained for SSR Mining Inc. The broker points out the company is spending less capex and appears more focused on free cash flow, dividends and even buybacks than its peers. The $28 target price is unchanged.

Target price is $28.00 Current Price is $25.28 Difference: $2.72
If SSR meets the UBS target it will return approximately 11% (excluding dividends, fees and charges).

Market Sentiment: 1.0

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

Morgan Stanley rates STO as Overweight (1) -

In line with Morgan Stanley's valuation, Santos will receive around US$300m after agreeing to sell a -12.5% interest in the Barossa project.

The broker believes further divestments will be a key driver of equity performance in 2022. The Overweight rating and $10.20 target price are unchanged. Industry view: Attractive.

Target price is $10.20 Current Price is $6.62 Difference: $3.58
If STO meets the Morgan Stanley target it will return approximately 54% (excluding dividends, fees and charges).

Current consensus price target is $8.59, suggesting upside of 32.7% (ex-dividends)

The company's fiscal year ends in December.

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

Ord Minnett rates TRJ as Accumulate (2) -

Ord Minnett lifts its target price for Trajan Group to $2.85 from $2.70 after the company has made its third acquisition in under six weeks. The latest transaction is for LEAP PAL parts for -$10.8m.

The analyst sees capacity for around $20m in additional acquisitions based upon management commentary around usage of IPO funds. There's considered scope for further earnings upgrades in FY22. 

Target price is $2.85 Current Price is $3.28 Difference: minus $0.43 (current price is over target).
If TRJ meets the Ord Minnett target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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