Australian Broker Call

Morgan Stanley rates ALU as Overweight (1) -

Few investor days bring much in the way of new information, Morgan Stanley notes, but the broker believes Altium might prove an exception on November 16.

The market is looking for guideposts to achieve existing FY26 revenue guidance of US$500m. Morgan Stanley expects it's likely Altium will reveal more on the monetisation strategy for its fast-growing 365 cloud product, which is currently free.

It expects Altium will address existing FY26 revenue guidance and the gap versus consensus, which is currently only around US$430m, and expects to hear more about the product pipeline, including the risks and opportunities AI presents for this stock.

Overweight and $50 target retained. Industry view: Attractive.

Target price is $50.00 Current Price is $40.81 Difference: $9.19
If ALU meets the Morgan Stanley target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $45.45, suggesting upside of 11.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.2

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

Ord Minnett rates AMP as Accumulate (2) -

Ord Minnett has renewed its conviction in the outlook for wealth and asset managers, noting most within its coverage are undervalued as investors remain fixated on mainly cyclical headwinds. 

The broker feels investors are underestimating potential for earnings improvement as conditions normalise, and expects to see ongoing cost-outs as companies aim to keep pace with competition and retain clients. 

The broker expects it is unlikely AMP can improve its competitive position relative to peers, given significant weakening of its competitive advantages since 2018. Ord Minnett retains a preference for Insignia ((IFL)) among wealth management providers. 

The Accumulate rating and target price of $1.35 are retained.

Target price is $1.35 Current Price is $1.05 Difference: $0.305
If AMP meets the Ord Minnett target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $1.18, suggesting upside of 14.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.1

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

Macquarie rates APA as Neutral (3) -

APA Group has completed a refinancing, raising around $2,023m in both debt and hybrid debt.

The debt raising was $1.2bn above Macquarie's forecast and senior debt was 50bps more expensive, while the hybrid debt was both unanticipated and delivered at a high cost, in the analyst's view.

The Neutral rating and $8.94 target are unchanged. The broker's longer-term borrowing assumptions are also unchanged. It's noted cashflow is materially larger than profit.

Target price is $8.94 Current Price is $8.37 Difference: $0.57
If APA meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $9.14, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Morgans rates APA as Hold (3) -

APA Group has announced the raising of $1.25bn of senior debt, with a $750m seven-year tranche at a fixed rate of 6.75% per annum and a $500m 10-year tranche at 7.18% per year.

Should interest rates stabilise at current levels, the group’s cost of debt will still increase significantly over time compared to the 4.4% averaged in FY23, cautions Morgans.

Additionally, per share metrics are also being impacted as the group issues more equity and equity-like funding within its capital structure, explains the analyst.

The company has recently increased its share purchase plan and reactivated the dividend reinvestment plan. The broker lowers its target to $7.56 from $8.79 and maintains a Hold rating.

Target price is $7.56 Current Price is $8.37 Difference: minus $0.81 (current price is over target).
If APA meets the Morgans target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.14, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Ord Minnett rates CAR as Lighten (4) -

Ord Minnett retains a $25 target for CAR Group, formerly known as Carsales.com, and remains constructive on the group's overseas expansions. The name change was effective from November 3 following shareholder approval at the AGM.

The Lighten rating is retained on valuation. 

Target price is $25.00 Current Price is $28.65 Difference: minus $3.65 (current price is over target).
If CAR meets the Ord Minnett target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.61, suggesting upside of 0.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

UBS rates CAR as Buy (1) -

UBS feels the market is underestimating long-term growth opportunities available to Car Group's (formerly Carsales) Trader Interactive (TI) platform. The platform is expected to provide 32% of group earnings in FY25, and deliver 14% and 19% revenue and earnings compound annual growth rates over the coming three years.

Given faster than expected dealer penetration, uptake of premium select packages, and private volume growth, the broker has upgraded its outlook for Car Group  to reflect improved TI forecasts. 

The Buy rating is retained and the target price increases to $32.40 from $29.60.

Target price is $32.40 Current Price is $28.65 Difference: $3.75
If CAR meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $28.61, suggesting upside of 0.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Ord Minnett rates CGF as Accumulate (2) -

Ord Minnett has renewed its conviction in the outlook for wealth and asset managers, noting most within its coverage are undervalued as investors remain fixated on mainly cyclical headwinds. 

The broker feels investors are underestimating potential for earnings improvement as conditions normalise, and expects to see ongoing cost outs as companies aim to keep pace with competition and retain clients. 

Challenger's core annuities business continues to benefit from a growing superannuation system and an ageing demographic. although its remains a high risk business. 

Ord Minnett retains a preference for Pinnacle Investment Management ((PNI)), Perpetual ((PPT)) and Challenger among asset management providers. 

The Accumulate rating and target price of $7.30 are retained.

Target price is $7.30 Current Price is $6.00 Difference: $1.3
If CGF meets the Ord Minnett target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $6.73, suggesting upside of 12.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

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

Macquarie rates CPU as Outperform (1) -

While Computershare is selling its US Mortgage Services division, the rate of unpaid principal balances (UPB) growth still has the capacity to impact the selling price, explains Macquarie. Hence, the relevance of new data from Inside Mortgage Finance.

The data show Computershare's 1Q FY24 UPB grew by 0.1% versus the previous period versus 0.7% system growth. This outcome shows stability for the company over the last three quarters, assesses the broker.

No changes are made to Macquarie's forecasts and the $28 target and Outperform rating are retained.

Target price is $28.00 Current Price is $25.13 Difference: $2.87
If CPU meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $28.79, suggesting upside of 17.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Bell Potter rates CSR as Hold (3) -

Bell Pottern maintains CSR has delivered a strong first half result, despite reported earnings of $168.7m being a miss to the broker's expectations. taking into account an 18% beat from the building products segment and a deferral of property sales. 

A pleasing start to the second half, says Bell Potter, saw the company upgrade its detached backlog guidance, alluding to up to three years of multi-res demand in the pipeline. The broker expects recovery of fixed costs to remain a challenge in FY25, post the peak of the current cycle. 

The Hold rating is retained and the target price increases to $5.70 from $5.40.

Target price is $5.70 Current Price is $5.85 Difference: minus $0.15 (current price is over target).
If CSR meets the Bell Potter target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.94, suggesting upside of 2.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Citi rates GPT as Buy (1) -

GPT Group has reiterated FY23 funds from operations (FFO) guidance and noted improving office occupancy.

Retail and Logistics continue to perform well, according to Citi, with 3Q leasing spreads above 5% and 38%, respectively. A high occupancy, in the broker's view, of 99.3% has also been maintained for Logistics.

The Office leasing environment is still challenging, point out the analysts, with elevated market vacancy and relatively subdued demand.

The Buy rating and $5 target are maintained.

Target price is $5.00 Current Price is $3.89 Difference: $1.11
If GPT meets the Citi target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $4.82, suggesting upside of 25.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Macquarie rates GPT as Outperform (1) -

Macquarie notes sector-leading re-leasing spreads in Retail of 5% for GPT Group in the 3Q, and highlights the target of around 90% Office occupancy by December has nearly been achieved. The Logistics division was strong as expected.

The Outperform rating is unchanged and the broker's target falls to $4.27 from $4.65 on cap rate expansion due to rising real yields and after the analyst utilises recent 3Q Jones Lang LaSalle data as a guide.

Target price is $4.27 Current Price is $3.89 Difference: $0.38
If GPT meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $4.82, suggesting upside of 25.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

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

GPT Group's quarterly update featured a reiteration of 2023 funds from operations guidance. Office occupancy is now at 90.4%, up from 88.5% throughout the first half. Management had targeted 90% by December.

Retail sales remain in positive Territory, Morgan Stanley notes, but the trend is downward. The mild concern for the broker is that retail
occupancy cost has crept up by 20bps to 15.9% in the last quarter, implying rent is now growing faster than sales, which is not sustainable into the medium term.

Equal-weight and $4.25 target retained. Industry view: In-Line.

Target price is $4.25 Current Price is $3.89 Difference: $0.36
If GPT meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $4.82, suggesting upside of 25.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Macquarie rates HLS as Outperform (1) -

Following 1Q results for Healius, Macquarie lowers forecast revenue growth and raises the cost growth assumption. Staff shortages
and cost inflation imply a 1H earnings (EBITDA) margin well below the broker's prior forecast.

The target falls to $2.90 from $3.40 on the broker's forecast earnings downgrades and a higher assumed risk-free rate. The Outperform rating is kept on valuation.

Target price is $2.90 Current Price is $1.90 Difference: $1.005
If HLS meets the Macquarie target it will return approximately 53% (excluding dividends, fees and charges).

Current consensus price target is $2.97, suggesting upside of 60.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

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

Citi rates IDX as Neutral (3) -

Labour cost inflation and shortages weighed on 1Q revenues and margin for Integral Diagnostics, explains Citi, with both measures missing consensus forecasts.

Management now expects the FY24 finance cost will be around -$22m compared to the consensus estimate of -$19.4m, after assuming a 25bps interest rate increase next week. The capex budget range was reduced by around -$5m to -$30-40m.

After allowing for lower margins and assuming a weighted average cost of capital (WACC)) of 9.2%, up from 8.4% (due to the higher interest rate environment), the broker's target falls to $1.95 from $3.40. Neutral.

Target price is $1.95 Current Price is $1.93 Difference: $0.02
If IDX meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $2.65, suggesting upside of 35.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

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

Macquarie rates IDX as Outperform (1) -

While Integral Diagnostics' Australian revenue growth for the 1Q was in line with Macquarie's forecast, New Zealand revenue growth and earnings disappointed. A favourable medium-to longer-term outlook is envisaged, but materially negative EPS revisions are made over FY24-26.

Overall, the impacts of reduced staff availability/cost inflation in the quarter more than offset volume growth/indexation benefits, explains the analyst.

The target falls to $2.55 from $3.55 on the broker's EPS downgrades, revised capex assumptions and updated risk-free rates. Outperform retained.

Target price is $2.55 Current Price is $1.93 Difference: $0.62
If IDX meets the Macquarie target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $2.65, suggesting upside of 35.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

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

Morgan Stanley rates IDX as Underweight (5) -

Integral Diagnostics' quarterly numbers fell short of Morgan Stanley, as staff shortages and cost inflation continue to pressure margins with no improvement on the first half. Management expects improvement on costs in the second half.

The operating environment is more challenging than the broker anticipated and extrapolation of first quarter trading conditions to an FY24 earnings per share of 11.9c would imply some -30% downside risk to forecast, all else equal.

Underweight and $2.75 target retained. Industry view: In-Line.

Target price is $2.75 Current Price is $1.93 Difference: $0.82
If IDX meets the Morgan Stanley target it will return approximately 42% (excluding dividends, fees and charges).

Current consensus price target is $2.65, suggesting upside of 35.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

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

Ord Minnett rates IFL as Buy (1) -

Ord Minnett has renewed its conviction in the outlook for wealth and asset managers, noting most within its coverage are undervalued as investors remain fixated on mainly cyclical headwinds. 

The broker feels investors are underestimating potential for earnings improvement as conditions normalise, and expects to see ongoing cost outs as companies aim to keep pace with competition and retain clients. 

Compared to peer AMP ((AMP)), the broker believes Insignia Financial has better managed reputational risks thanks to its multi brand model. Ord Minnett retains a preference for Insignia among wealth management providers. 

The Buy rating and target price of $3.40 are retained.

Target price is $3.40 Current Price is $2.14 Difference: $1.26
If IFL meets the Ord Minnett target it will return approximately 59% (excluding dividends, fees and charges).

Current consensus price target is $2.59, suggesting upside of 18.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Ord Minnett rates IRE as Buy (1) -

Ord Minnett has renewed its conviction in the outlook for wealth and asset managers, noting most within its coverage are undervalued as investors remain fixated on mainly cyclical headwinds. 

The broker feels investors are underestimating potential for earnings improvement as conditions normalise, and expects to see ongoing cost outs as companies aim to keep pace with competition and retain clients. 

According to the broker, Iress is set to revive earnings growth amid reinvestment in its core business. Ord Minnett retains a preference for Iress among related service providers. 

The Buy rating and target price of $9.20 are retained.

Target price is $9.20 Current Price is $5.21 Difference: $3.99
If IRE meets the Ord Minnett target it will return approximately 77% (excluding dividends, fees and charges).

Current consensus price target is $7.96, suggesting upside of 41.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Macquarie rates JHX as Outperform (1) -

Prior to 2Q results due on November 8 for James Hardie Industries, Macquarie lowers is EPS forecasts after delaying the anticipated recovery in R&R activity and re-assessing cost inputs. The target falls to $49.90 from $52.20. Outperform.

The broker forecasts James Hardie will deliver US$173.7 profit for the 2Q, at the low end of US$170-190m guidance.

Target price is $49.90 Current Price is $41.10 Difference: $8.8
If JHX meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $50.28, suggesting upside of 21.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

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

Macquarie rates JLG as Outperform (1) -

Johns Lyng's most comparable listed peer, according to Macquarie, is US-based FirstService Corp which has just released 3Q results.

This company expects 4Q restoration revenues will be down on the previous corresponding period, due to significant storm-related work in that period, though still anticipates solid day-to-day restoration work.

By comparison, Johns Lyng is not cycling material storm related revenue in the previous corresponding period, notes the analyst.

The Outperform rating and $7.80 target are unchanged.

Target price is $7.80 Current Price is $6.41 Difference: $1.39
If JLG meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $7.18, suggesting upside of 11.6% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates LAU as Buy (1) -

Ord Minnett assesses a positive trading update by Lindsay Australia for the first four months of FY24, with guidance implying organic earnings (EBITDA) growth of 7%-14%, excluding the recently acquired WB Hunter rural business. The latter is performing to expectations.

In an interesting aside, the broker highlights the company's revenue sensitivity to food and fresh products provides defensive characteristics compared to the greater exposure of peers to general and discretionary freight.

The Buy rating is maintained and the target eases to $1.53 from $1.55.

Target price is $1.53 Current Price is $1.01 Difference: $0.52
If LAU meets the Ord Minnett target it will return approximately 51% (excluding dividends, fees and charges).

Current consensus price target is $1.54, suggesting upside of 44.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Shaw and Partners rates LAU as Buy (1) -

Based on management commentary at Lindsay Australia's AGM, Shaw and Partners believes FY24 is tracking broadly in line with expectations.

Within Transport, customer enquiries remain strong and tender conversion is positive, notes the analyst, and the integration of the
WB Hunter business is progressing well, according to the company.

Management expects to deliver FY24 earnings (EBITDA) of between $102-$108m, compared to the broker's $108.8m forecast.

The Buy rating and $1.60 target are maintained.

Target price is $1.60 Current Price is $1.01 Difference: $0.59
If LAU meets the Shaw and Partners target it will return approximately 58% (excluding dividends, fees and charges).

Current consensus price target is $1.54, suggesting upside of 44.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Citi rates LLC as Buy (1) -

Google and Lendlease Group have mutually agreed to end the Development Services Agreements of the four master-planned districts, also referred to as the San Francisco Bay Project.

As the project was slated to commence in FY26, there is no near-term earnings impact, notes Citi. While a smaller pipeline is a negative, it's felt the share price impact will be neutral as little upside is currently being ascribed by investors for the development pipeline.

The $9.50 target and Buy rating are unchanged.

Target price is $9.50 Current Price is $6.38 Difference: $3.12
If LLC meets the Citi target it will return approximately 49% (excluding dividends, fees and charges).

Current consensus price target is $9.94, suggesting upside of 53.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Ord Minnett rates LNK as Accumulate (2) -

Ord Minnett has renewed its conviction in the outlook for wealth and asset managers, noting most within its coverage are undervalued as investors remain fixated on mainly cyclical headwinds. 

The broker feels investors are underestimating potential for earnings improvement as conditions normalise, and expects to see ongoing cost outs as companies aim to keep pace with competition and retain clients. 

Ord Minnett is expecting Link Administration to refocus on higher-returning core business, noting the business is capital light and generates high recurring revenue. Ord Minnett retains a preference for Iress among related service providers. 

The Accumulate rating and target price of $1.50 are retained.

Target price is $1.50 Current Price is $1.25 Difference: $0.255
If LNK meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $1.45, suggesting upside of 17.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Ord Minnett rates MFG as Accumulate (2) -

Ord Minnett has renewed its conviction in the outlook for wealth and asset managers, noting most within its coverage are undervalued as investors remain fixated on mainly cyclical headwinds. 

The broker feels investors are underestimating potential for earnings improvement as conditions normalise, and expects to see ongoing cost outs as companies aim to keep pace with competition and retain clients.

Subpar strategic performance and management performance in recent years have materially damaged Magellan Financial's brand, says Ord Minnett, and diminished its distinction to peers, and it will be difficult to restore competitive strengths. 

Ord Minnett retains a preference for Pinnacle Investment Management ((PNI)), Perpetual ((PPT)) and Challenger ((CGF)) among asset management providers. 

The Accumulate rating and target price of $9.60 are retained.

Target price is $9.60 Current Price is $6.95 Difference: $2.65
If MFG meets the Ord Minnett target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $8.52, suggesting upside of 23.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

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

Citi rates MQG as Neutral (3) -

Cash earnings for Macquarie Group in the 1H came in -20% adrift of the consensus forecast and -12% shy of Citi's estimate. A positive share price reaction surprised the broker, though suggests the market was allowing for a miss against expectations.

In retaining a Neutral recommendation, the broker highlights the company's material surplus capital, the announced buyback and the probability of normalisation for the currently weak environment for asset realisations.

The analysts now forecast a 2H profit of around $2.3bn after management commentary around a slower revenue outlook, along with higher costs and tax.

The target falls to $161 from $175.

Target price is $161.00 Current Price is $163.24 Difference: minus $2.24 (current price is over target).
If MQG 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 $181.16, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Morgan Stanley rates MQG as Overweight (1) -

Macquarie Group's first half profit missed Morgan Stanley by -17% due to higher costs and tax. The dividend was better than expected and a buyback was announced.

At around a forecast 13.5x FY25E PE, the broker suggests some of the miss is already in the price and strong capital management is supportive.

There were few changes to the FY24 outlook and management continues to expect stronger Macquarie Asset Management investment gains in the 2H. Looking into FY25, Morgan Stanley expects a global capital markets recovery and structural growth in Infra & Green Energy.

Overweight retained, target falls to $202 from $215. Industry view: In-Line.

Target price is $202.00 Current Price is $163.24 Difference: $38.76
If MQG meets the Morgan Stanley target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $181.16, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Morgans rates MQG as Add (1) -

Macquarie Group's 1H results were soft, according to Morgans, largely due to a normalising operating environment and lower green energy investment income in the Macquarie Asset Management (MAM) division. Profit missed the consensus forecast by around -20%.

Management attributed a 6% rise in 1H expense growth (despite an -8% fall in revenue growth) to a combination of rising employment costs, along with an increased regulatory and non-salary technology spend.

The company expects to realise longer-term benefits from some of these expenses.

While the $2.55 per share interim dividend beat the $2.50 per share consensus forecast, the company paid the top of their targeted payout ratio range of between 50-70%, observe the analysts. A $2bn on-market share buyback was also announced.

The broker’s target falls to $182.80 from $194.41 and the Add rating is maintained.

Target price is $182.80 Current Price is $163.24 Difference: $19.56
If MQG meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $181.16, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Ord Minnett rates MQG as Hold (3) -

Ord Minnett lowers its FY24 profit forecast by -5% following 1H results by Macquarie Group and FY24 guidance, though still expects an improvement to average return on investment of 13.5% over the next five years.

The broker lowers its full year dividend forecast by -10% to $6.90/share after the 40% franked interim dividend fell to $2.55/share, down from $3.00, due to the fall in earnings during the half. Otherwise, the analyst's $175 target and Hold rating are unchanged.

Target price is $175.00 Current Price is $163.24 Difference: $11.76
If MQG meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $181.16, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

UBS rates MQG as Buy (1) -

A lighter than expected first half result from Macquarie Group, says UBS, was weighed on by disappointing performance from the company's asset management business. The segment contributed profits before tax of $407m, down -57% half-on-half and -71% year-on-year.

The broker points out the result marks the first time in two years when attention has shifted from the company's commodity division to asset management. 

UBS expects disappointing results may persist, as higher inflation and the interest rate back drop continue to present challenges. The Buy rating is retained and the target price decreases to $185.00 from $196.00.

Target price is $185.00 Current Price is $163.24 Difference: $21.76
If MQG meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $181.16, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Ord Minnett rates PPT as Accumulate (2) -

Ord Minnett has renewed its conviction in the outlook for wealth and asset managers, noting most within its coverage are undervalued as investors remain fixated on mainly cyclical headwinds. 

The broker feels investors are underestimating potential for earnings improvement as conditions normalise, and expects to see ongoing cost outs as companies aim to keep pace with competition and retain clients. 

Ord Minnett points out Perpetual has diversified its business to generate more earnings from acquired fund management business, and expects the private wealth and corporate trust segments will be better suited to withstand the threat of competition. 

Ord Minnett retains a preference for Pinnacle Investment Management ((PNI)), Perpetual and Challenger ((CGF)) among asset management providers. 

The Accumulate rating and target price of $27.50 are retained.

Target price is $27.50 Current Price is $20.22 Difference: $7.28
If PPT meets the Ord Minnett target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $25.95, suggesting upside of 26.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Ord Minnett rates PTM as Accumulate (2) -

Ord Minnett has renewed its conviction in the outlook for wealth and asset managers, noting most within its coverage are undervalued as investors remain fixated on mainly cyclical headwinds. 

The broker feels investors are underestimating potential for earnings improvement as conditions normalise, and expects to see ongoing cost outs as companies aim to keep pace with competition and retain clients. 

Platinum Asset Management benefits from a growing superannuation pool, but has struggled to consistently grow funds under management in recent years. Ord Minnett warns investors should brace for period of uneven performance and earnings.

Ord Minnett retains a preference for Pinnacle Investment Management ((PNI)), Perpetual ((PPT)) and Challenger ((CGF)) among asset management providers. 

The Accumulate rating and target price of $1.90 are retained.

Target price is $1.90 Current Price is $1.19 Difference: $0.71
If PTM meets the Ord Minnett target it will return approximately 60% (excluding dividends, fees and charges).

Current consensus price target is $1.35, suggesting upside of 13.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.4

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

Bell Potter rates RPL as Buy (1) -

Regal Partners' funds under management remained stable over the third quarter at $5.8bn, reporting net outflows of just -$3m. Despite a bearish market in the quarter, Bell Potter points out a virtually flat investment performance from the company. 

The company did announce its 50% acquisition of Taurus in the period, which the broker expects to add to funds under management and enhance earnings per share. Taurus manages $2.3bn of committed and drawn capital, earning management fees of $25m in FY23. 

The Buy rating is retained and the target price increases to $3.40 from $3.35.

Target price is $3.40 Current Price is $1.92 Difference: $1.48
If RPL meets the Bell Potter target it will return approximately 77% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Macquarie rates SCG as Underperform (5) -

Scentre Group has begun a cash tender offer for up to US$300m aggregate principal amount of its outstanding subordinated notes.

While this transaction will be initially accretive to annual funds from operations (FFO), Macquarie notes management is yet to source capital to redeem the subordinated notes in the long-term.

The target falls to $2.33 from $2.56 due to an incremental 25bps of cap rate expansion, consistent with rising real yields, explains the analyst.

The current capital structure still magnifies downside risks from a slowing consumer and leasing outcomes, and the broker retains an Underperform rating.

Target price is $2.33 Current Price is $2.58 Difference: minus $0.25 (current price is over target).
If SCG meets the Macquarie target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.92, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Morgan Stanley rates SCG as Overweight (1) -

Scentre Group has commenced a process to repurchase US$300m (of US$3bn on issue) of hybrids securities. Morgan Stanley notes Scentre has the right to repurchase up to 10% of the debt each year without losing equity treatment by rating agencies.

The transaction is a complex one, and is expected to be finalised by the end of November, at which point the hybrids will be replaced by traditional debt. The broker estimates it would deliver 1.3% accretion to funds from operations.

Overweight and $3.10 target retained. Industry view: In-Line.

Target price is $3.10 Current Price is $2.58 Difference: $0.52
If SCG meets the Morgan Stanley target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $2.92, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Ord Minnett rates SQ2 as Accumulate (2) -

Ord Minnett described Block's third quarter results as solid, but not overly impressive. What was more encouraging, says the broker, was willingness from the company to lay out longer-term targets.

The company reported 12% year-on-year revenue growth in the period, and Ord Minnett remains encouraged by a shift towards larger merchants and international markets which it believes will better allow the company to improve scale over time. 

The broker does consider Block's shares materially undervalued, but stresses a high uncertainty rating. The Accumulate rating and target price of $128.00 are retained.

Target price is $128.00 Current Price is $81.18 Difference: $46.82
If SQ2 meets the Ord Minnett target it will return approximately 58% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

Citi rates WBC as Neutral (3) -

On Citi's initial assessment, Westpac's FY23 report narrowly missed market consensus (by between -0.5%-1.5%) but slightly beat its own forecasts.

The "surprise" seems to find its origin in Citi making a more downbeat call on operational costs, which has proved to be too bearish, on the analysts' own admission.

Bad debts of $648m were well below the estimated $900m, with asset quality continuing to be benign, the analysts highlight. They predict the post release conference call will focus on the outlook for costs.

Target $21.80. Neutral.

Target price is $21.80 Current Price is $21.50 Difference: $0.3
If WBC meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $22.00, suggesting upside of 0.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Ord Minnett rates WBC as Accumulate (2) -

Ord Minnet's initial commentary suggests Westpac's FY23 release ever so slightly missed the broker's forecasts (by circa -2%) but the dividend matched and there's a $1.5bn share buyback to please loyal shareholders.

The broker notes group net interest margin (NIM) was up 2 basis points to 1.95% from FY22. Core NIM (excluding Notable Items, Treasury and Markets) expanded by 12 basis points to 1.87% from higher return on capital balances and increased deposit spreads.

The positive NIM drivers were partially offset by tighter loan spreads due to "intense competition" as well as an increase in low returning liquid assets, the broker qualifies.

Also, the Common Equity Tier 1 (CET1) capital ratio rose by 109 basis points to 12.4%, above the target operating range of 11.0% to 11.5%.

Management at the bank sees the more challenging environment for banks generally continuing into 2024. Target $28. Accumulate.

Target price is $28.00 Current Price is $21.50 Difference: $6.5
If WBC meets the Ord Minnett target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $22.00, suggesting upside of 0.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

UBS rates WBC as Sell (5) -

UBS is broadly neutral on Westpac's release of FY23 financials earlier this morning. Upon first read, the broker observes costs remain elevated, higher-than-forecast, and a key impediment for the struggling bank.

Technology expenses went up by 15% half-on-half, ex notables. And while the $1.5bn share buyback can only be supportive of the share price, the broker does point out expectations by some were for $2bn.

The shares are trading at multiples below historical averages, UBS acknowledges. Sell. Target $20 with the broker suggesting cost pressures are likely to remain sticky.

Target price is $20.00 Current Price is $21.50 Difference: minus $1.5 (current price is over target).
If WBC meets the UBS target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $22.00, suggesting upside of 0.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

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

Citi upgrades its rating for Woodside Energy to Neutral from Sell after a recent share price retreat and potential for yield support, with 80% of profit being paid out as dividends.

The broker does, however, caution investors over management's past record around poor execution of major growth projects, a mixed track record on M&A and unsuccessful exploration efforts. 

The $32 target price is unchanged.

Target price is $32.00 Current Price is $34.01 Difference: minus $2.01 (current price is over target).
If WDS 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 $36.48, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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 XRO as Overweight (1) -

Morgan Stanley warns of volatility in the response to Xero's first half result on Wednesday. It will be the first set of numbers since the significant -15% headcount cuts earlier this year.

Critical is how these cuts have impacted revenue growth.

Overweight and $125 target retained. Industry view: Attractive

Target price is $125.00 Current Price is $112.29 Difference: $12.71
If XRO meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $117.57, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. 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