Australian Broker Call

Macquarie rates A4N as Initiation of coverage with Outperform (1) -

Macquarie is very upbeat on Alpha HPA, describing the company as a "disruptor" and a "technology company". While small at this stage, demand for high purity alumina demand is expected to reach around 40kt per annum.

Alpha HPA is developing a low-cost process for high purity alumina with the first project in Qld which will be the lowest cost plant globally, the broker highlights, set to challenge industry incumbents, Orica ((ORI)), BASF and Sumitomo.

The company started construction in August 2024 with the plant expected to make its first production in 4Q2024.

Macquarie rates the stock Outperform with a $1.40 target price.

Target price is $1.40 Current Price is $1.12 Difference: $0.285
If A4N meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Morgans rates AMA as Initiation of coverage with Add (1) -

Morgans initiates coverage on collision repair operator AMA Group with an Add rating due to abating industry headwinds, an improved balance sheet, and rectified governance issues. Also, management is targeting material cost-out benefits over the medium-term.

These factors combine to present a "compelling" organic growth recovery at current share price levels, according to the analyst. An 8 cent target is set.

Sector consolidation is rising as insurers partner with scale operators such as AMA Group, explains Morgans. The smash repair industry is highly fragmented, with a heavy reliance on the insurance industry for repair claims (around 94% of AMA's FY24 revenue).

While the group has spoken of some early defensive initiatives, the broker cautions investors around potential industry disruption due to improvements in vehicle safety systems (short-term) and autonomous driving (long-term).

Target price is $0.08 Current Price is $0.06 Difference: $0.02
If AMA meets the Morgans target it will return approximately 33% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

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

After a period of share price underperformance since the FY24 results, Citi upgrades Cochlear to Neutral from Sell, highlighting the stock's valuation has retreated to historical average levels of around 39x FY26 earnings.

The analyst expects the company will generate revenue and earnings growth of 10% going forward equal to the record achieved over the last 10-years.

From a macro perspective, Citi points to the circa 6m person total addressable market in developed countries, largely adults and seniors, as well as the opportunities in emerging markets for children and adults with awareness campaigns and ongoing R&D spend.

Due to a change in the cost of capital, the target price rises to $305 from $255. Neutral.

Target price is $305.00 Current Price is $287.70 Difference: $17.3
If COH meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $293.20, suggesting downside of -0.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.4

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

Bell Potter rates CWP as Buy (1) -

Bell Potter suggests Cedar Woods Properties' attractive position in the cycle is not currently reflected in the share price. It's also felt management can continue to scale the business and maintain earnings growth in future years.

Noting a history of conservative guidance, the broker believes management's FY25 expectation for 10% NPAT growth is more than achievable.

Buy. The broker's target rises to $7.15 from $6.50 on a lower assumed weighted average cost of capital (WACC) and after raising EPS forecasts for key projects.

Target price is $7.15 Current Price is $5.60 Difference: $1.55
If CWP meets the Bell Potter target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $6.88, suggesting upside of 19.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Macquarie rates FSF as Outperform (1) -

Macquarie observes Fonterra Shareholders Fund has restated the commitment on foodservice and ingredients channels with around 5% growth per annum in volumes to FY27.

Management also raised the return on capital aim to 10%-12% for FY24 to FY30 from 9%-10%. The analyst interprets this as an indication of more "sustainable earnings" from the 8.6% average from FY18-FY23.

The fund has raised the payout ratio to 60%-80% from 40%-60% due to the more robust balance sheet. Divestment of the consumer business in part or full was also flagged.

Outperform rating with a NZ$5.74 target price.

Current Price is $4.14. Target price not assessed.

The company's fiscal year ends in July.

Forecast for FY25:

Forecast for FY26:

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

Market Sentiment: 1.0

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

Ord Minnett rates GYG as Hold (3) -

Ord Minnett raises its target for Guzman y Gomez to $41.00 from $27.70 though maintains a Hold rating given a "very stretched" valuation after an around 45% rally since the June 30 IPO.

The rising share price has been largely driven by the company’s inclusion in the ASX200 Index and because FY24 results beat 
prospectus forecasts, in the analyst's opinion.

The broker suggests the company's positioning as the ‘healthier’ fast food choice largely compensates for being more expense relative to peers, and sees upside via expansion into 24/7 operations. The latter is to serve the breakfast and late-night markets.

Target price is $41.00 Current Price is $38.50 Difference: $2.5
If GYG meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $38.05, suggesting downside of -0.8% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

Bell Potter rates HUB as Buy (1) -

Bell Potter raises its market movements for Hub24's Platform funds under administration (FUA) by 3.8 percentage points to $4.2bn following outsized global equity market returns over Q1 of FY25.

The broker's net flow forecasts for the September quarter are broadly unchanged at $3.5bn.

The Buy rating is reiterated. Target price rises to $66.50 from $59.

Bell Potter highlights key catalysts including the recent addition to the ASX100 Index and the upcoming 1Q market update on October 15.

Target price is $66.50 Current Price is $59.58 Difference: $6.92
If HUB meets the Bell Potter target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $55.30, suggesting downside of -7.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.4

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

Macquarie rates LTM as Outperform (1) -

Macquarie attended Arcadium Lithium's strategy day which offered more "clarity" on the earnings/operational outlook for the company.

The analyst highlights production is expected to bottom in 2026 with the withdrawal of Mt Cattlin, leading to the forecast of 118kt of production in 2028, to a flattening out at 183kt in 2032. The company's installed capacity will be 295kt over the longer-term.

Arcadium Lithium is believed to be in an intense capex stage and a partner for Galaxy is being sought by management.

Macquarie lowers 2025 EPS forecasts by -39% and raises 2026 EPS estimates by 27%.

The company is Outperform rated with a $5.30 target price, a lift of 4%.

Target price is $5.30 Current Price is $4.07 Difference: $1.23
If LTM meets the Macquarie target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $5.60, suggesting upside of 33.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Citi rates TLC as Buy (1) -

In anticipation of Lottery Corp's Investor Day on Oct 10, Citi observes its lottery tracker indicates Powerball revenue has fallen -18% in the 1H25 year-to-date, on an annual basis.

While some acceleration in jackpots is expected in the pre-Christmas period, there have not been any major jackpots since the $100m in August.

Citi highlights OZ Lotto revenues have risen 28% over the same period, year-on-year, despite a miss on reaching a $50m jackpot in the 1H25.

The investor day should provide more details on change to Saturday Lotto, app and retail membership changes, charitable games products and capital management, the analyst explains.

Buy and $5.60 target retained. No change to earnings forecasts which are around 5% above consensus estimates.

Target price is $5.60 Current Price is $5.01 Difference: $0.59
If TLC meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $5.53, suggesting upside of 10.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.8

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