Australian Broker Call

Credit Suisse rates ABP as Neutral (3) -

Credit Suisse has adjusted estimates for Australian real estate investment trusts (A-REITs) to account for rising costs and interest rates, noting while it cannot be certain where rates will settle it has assumed a 1.5% increase to costs of debt exposure in FY23. 

The broker highlighted those companies with lower gearing and higher hedging were better insulated from the impacts of rising rates. For Abacus Property, the broker downgrades earnings forecasts - 2.8% and -6.0% for FY23 and FY24 respectively. 

The Neutral rating is retained and the target price decreases to $3.20 from $3.51.

Target price is $3.20 Current Price is $2.97 Difference: $0.23
If ABP meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.53, suggesting upside of 19.9% (ex-dividends)

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

Morgans rates AGL as Add (1) -

Rising retail tariffs in FY23, and the prospect for further rises in FY24, provide a strong tailwind for AGL Energy's vertically integrated position, according to Morgans. This comes as electricity futures reach new highs and exert upward pressure on wholesale pricing.

The company's generation assets support stronger margins as consumer prices increase, assesses the analyst. It's felt leadership issues should be resolved in time and the Add rating is retained, while the target price rises to $10.08 from $9.26.

Target price is $10.08 Current Price is $8.72 Difference: $1.36
If AGL meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $9.28, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

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

Suppliers have responded faster than anticipated to spiking lithium prices, and in opposition of previous deficit forecasts, Credit Suisse now expects lithium supply will meet demand in a balanced market in 2023-24, before supply exceeds demand creating surplus in 2025.

With macro conditions, including inflation, war and lockdowns, slowing the demand outlook, the broker notes lithium prices may peak in coming months, and has downgraded its FY23 spot lithium carbonate forecasts -12%. 

Credit Suisse notes while upside may be limited for Allkem if elevated lithium pricing cannot be sustained, it prefers Allkem to Pilbara Minerals ((PLS)), with the company less exposed to margin compression from downstream risk.

The rating is downgraded to Neutral from Outperform and the target price decreases to $14.70 from $16.40.

Target price is $14.70 Current Price is $11.60 Difference: $3.1
If AKE meets the Credit Suisse target it will return approximately 27% (excluding dividends, fees and charges).

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

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

Construction is "the most worrying part of our book' noted National Australia Bank CEO Ross McEwan this week. Morgan Stanley points out history (2009) shows the level of "stressed" exposures could increase by around 5-6x during a downturn.

Construction accounts for around 1.5% (slightly below the 2% at the other majors) of non mortgage exposure at ANZ Bank, assesses the analyst. Morgan Stanley retains its Equal-weight rating and $28.90 target for ANZ Bank. Industry view: Attractive.

Target price is $28.90 Current Price is $25.31 Difference: $3.59
If ANZ meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $29.46, suggesting upside of 18.1% (ex-dividends)

The company's fiscal year ends in September.

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 ARF as Neutral (3) -

Credit Suisse has adjusted estimates for Australian real estate investment trusts (A-REITs) to account for rising costs and interest rates, noting while it cannot be certain where rates will settle it has assumed a 1.5% increase to costs of debt exposure in FY23. 

The broker highlighted those companies with lower gearing and higher hedging were better insulated from the impacts of rising rates.

Given Arena REIT's relatively low gearing of 18.8% and relatively high hedging, the broker downgrades earnings forecasts - 1.8% and -2.3% for FY23 and FY24 respectively. 

The Neutral rating is retained and the target price decreases to $4.36 from $4.50.

Target price is $4.36 Current Price is $4.27 Difference: $0.09
If ARF meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $4.48, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Ord Minnett rates BHP as Hold (3) -

Following a period of research restriction on BHP Group post-July 2021, due to the Petroleum division sale, Ord Minnett resumes coverage with a Hold rating (down from Buy) and a $45.00 target price. 

The broker believes the company is at peak cycle earnings, with headwinds looming from potentially lower prices for iron ore and metallurgical coal. Additionally, its thought the group lacks near-term growth projects.

Target price is $45.00 Current Price is $45.65 Difference: minus $0.65 (current price is over target).
If BHP 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 $48.05, suggesting upside of 5.6% (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

Macquarie rates BOE as Outperform (1) -

Boss Energy's board has approved the final investment decision for the restart and development of the Honeymoon Uranium Project.

First production is pegged for the December quarter of 2023.

Outperform rating and $3.20 target price retained.

Target price is $3.20 Current Price is $2.28 Difference: $0.92
If BOE meets the Macquarie target it will return approximately 40% (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

Morgan Stanley rates CBA as Underweight (5) -

Construction is "the most worrying part of our book' noted National Australia Bank CEO Ross McEwan this week. Morgan Stanley points out history (2009) shows the level of "stressed" exposures could increase by around 5-6x during a downturn.

Construction accounts for around 2% (broadly the same as the other major banks) of non mortgage exposure at CommBank, assesses the analyst. Morgan Stanley maintains its Underweight rating and $91.00 target price. Industry view: Attractive.

Target price is $91.00 Current Price is $106.71 Difference: minus $15.71 (current price is over target).
If CBA meets the Morgan Stanley target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $92.08, suggesting downside of -12.6% (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 CHC as Outperform (1) -

Credit Suisse has adjusted estimates for Australian real estate investment trusts (A-REITs) to account for rising costs and interest rates, noting while it cannot be certain where rates will settle it has assumed a 1.5% increase to costs of debt exposure in FY23. 

The broker highlighted those companies with lower gearing and higher hedging were better insulated from the impacts of rising rates. With Charter Hall's last stated gearing at 7.2%, the broker downgrades earnings forecasts -0.5% and -0.6% for FY23 and FY24 respectively. 

The Outperform rating is retained and the target price decreases to $16.71 from $19.54.

Target price is $16.71 Current Price is $12.90 Difference: $3.81
If CHC meets the Credit Suisse target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $19.87, suggesting upside of 52.3% (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

Credit Suisse rates CIP as Neutral (3) -

Credit Suisse has adjusted estimates for Australian real estate investment trusts (A-REITs) to account for rising costs and interest rates, noting while it cannot be certain where rates will settle it has assumed a 1.5% increase to costs of debt exposure in FY23. 

The broker highlighted those companies with lower gearing and higher hedging were better insulated from the impacts of rising rates. With Centuria Industrial REIT's last stated gearing at 30.5%, the broker downgrades earnings forecasts - 4.5% and -3.6% for FY23 and FY24 respectively. 

The Neutral rating is retained and the target price decreases to $3.75 from $4.00.

Target price is $3.75 Current Price is $3.42 Difference: $0.33
If CIP meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $4.08, suggesting upside of 19.6% (ex-dividends)

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

Credit Suisse rates COF as Outperform (1) -

Credit Suisse has adjusted estimates for Australian real estate investment trusts (A-REITs) to account for rising costs and interest rates, noting while it cannot be certain where rates will settle it has assumed a 1.5% increase to costs of debt exposure in FY23. 

The broker highlighted those companies with lower gearing and higher hedging were better insulated from the impacts of rising rates. With Centuria Office REIT's last stated gearing at 33.2%, the broker downgrades earnings forecasts -4.1% and -5.7% for FY23 and FY24 respectively. 

The Outperform rating is retained and the target price decreases to $2.27 from $2.42.

Target price is $2.27 Current Price is $2.03 Difference: $0.24
If COF meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $2.36, suggesting upside of 17.8% (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

Credit Suisse rates CQR as Neutral (3) -

Credit Suisse has adjusted estimates for Australian real estate investment trusts (A-REITs) to account for rising costs and interest rates, noting while it cannot be certain where rates will settle it has assumed a 1.5% increase to costs of debt exposure in FY23. 

The broker highlighted those companies with lower gearing and higher hedging were better insulated from the impacts of rising rates. With Charter Hall Retail REIT's last stated gearing at 26%, the broker downgrades earnings forecasts -2.7% and -3.5% for FY23 and FY24 respectively.

The Neutral rating and target price of $4.41 are retained.

Target price is $4.41 Current Price is $4.29 Difference: $0.12
If CQR meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $4.32, suggesting upside of 1.6% (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 DEG as Outperform (1) -

UBS believes the upgrade to Hemi's resource estimate is worthy of a 6% production-forecast upgrade for Mallina and that the upgrade considerably de-risks the project.

This triggers a 15% rise in the FY26 EPS forecasts and a 5% rise in the target price to $5.

Outperform rating retained.

Target price is $2.00 Current Price is $1.06 Difference: $0.94
If DEG meets the Macquarie target it will return approximately 89% (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

Morgan Stanley rates FMG as Underweight (5) -

With the aim of reducing the cost of domestic steel production, the Indian government raised export tariffs on new iron ore and concentrates towards the end of May, notes Morgan Stanley.

The duties on pellets were hiked to 45% from 0%. The broker feels low ore grade producers will be beneficiaries, which is positive for the likes of Fortescue Metals.

The Underweight rating and $15.95 target are retained. Industry View: Attractive.

Target price is $15.95 Current Price is $20.76 Difference: minus $4.81 (current price is over target).
If FMG meets the Morgan Stanley target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.22, suggesting downside of -11.6% (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: -0.3

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

Morgans rates GNX as Add (1) -

Despite recent share price underperformance due to uncertainty during construction of the Kidston Hydro project, Genex Power remains Morgans key pick for renewables and storage exposure.

As electricity futures reach new highs and exert upward pressure on wholesale pricing (and retail), the analyst understands the Kidston solar farm can participate in prices above its contract with the QLD government.

The broker increases its earnings forecast for FY22 and FY23 on stronger prices for the solar generation. The Add rating and $0.31 price target are retained.

Target price is $0.31 Current Price is $0.14 Difference: $0.17
If GNX meets the Morgans target it will return approximately 121% (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

Credit Suisse rates GOZ as Neutral (3) -

Credit Suisse has adjusted estimates for Australian real estate investment trusts (A-REITs) to account for rising costs and interest rates, noting while it cannot be certain where rates will settle it has assumed a 1.5% increase to costs of debt exposure in FY23. 

The broker highlighted those companies with lower gearing and higher hedging were better insulated from the impacts of rising rates. With Growthpoint Properties Australia undergoing the acquisition of 165-169 Thomas St, the company has suggested post-settlement gearing of 33.9%, driving the broker to downgrade earnings forecasts -2.0% and -2.3% for FY23 and FY24 respectively. 

The Neutral rating is retained and the target price decreases to $4.27 from $4.46.

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

Current consensus price target is $4.25, suggesting upside of 8.3% (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

Credit Suisse rates GPT as Neutral (3) -

Credit Suisse has adjusted estimates for Australian real estate investment trusts (A-REITs) to account for rising costs and interest rates, noting while it cannot be certain where rates will settle it has assumed a 1.5% increase to costs of debt exposure in FY23. 

The broker highlighted those companies with lower gearing and higher hedging were better insulated from the impacts of rising rates. With GPT Group's last stated gearing at 28.2%, the broker downgrades earnings forecasts -0.4%, -1.1% and -2.0% through to 2024.

The Neutral rating is retained and the target price decreases to $5.24 from $5.33.

Target price is $5.24 Current Price is $4.83 Difference: $0.41
If GPT meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $5.32, suggesting upside of 11.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Credit Suisse rates HMC as Neutral (3) -

Credit Suisse has adjusted estimates for Australian real estate investment trusts (A-REITs) to account for rising costs and interest rates, noting while it cannot be certain where rates will settle it has assumed a 1.5% increase to costs of debt exposure in FY23. 

The broker highlighted those companies with lower gearing and higher hedging were better insulated from the impacts of rising rates. With HomeCo currently debt free, the broker notes rising rates are unlikely to have any material impact. 

The Neutral rating is retained and the target price decreases to $6.16 from $6.74, reflecting a market reluctance to pay a high multiple rather than changes to earnings.

Target price is $6.16 Current Price is $5.48 Difference: $0.68
If HMC meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $6.60, suggesting upside of 21.5% (ex-dividends)

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

Morgan Stanley rates IAG as Underweight (5) -

In a recent report, Morgan Stanley highlighted Australia has around 8x more economic exposure to catastrophe costs than the global average, which should result in earnings volatility.

As a consequence of this volatility, the broker assesses investors may demand a higher cost of capital and insurers may also need to hold more regulatory capital. For Insurance Australia Group, the Underweight rating and $4.05 target are maintained. Industry view: Attractive.

Target price is $4.05 Current Price is $4.36 Difference: minus $0.31 (current price is over target).
If IAG meets the Morgan Stanley target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.05, suggesting upside of 17.4% (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

Credit Suisse rates IGO as Outperform (1) -

Suppliers have responded faster than anticipated to spiking lithium prices, and in opposition of previous deficit forecasts, Credit Suisse now expects lithium supply will meet demand in a balanced market in 2023-24, before supply exceeds demand creating surplus in 2025.

With macro conditions, including inflation, war and lockdowns, slowing the demand outlook, the broker notes lithium prices may peak in coming months, and has downgraded its FY23 spot lithium carbonate forecasts -12%. 

Credit Suisse likes IGO's tier-1 lithium exposure and its demonstrated sustainable low upstream costs, and believes the company can fund both upstream and downstream growth.

IGO is looking to renegotiate its pricing structure in September to better reflect market prices and Credit Suisse assumes a new pricing structure based on a one quarter lag from 2023. The Outperform rating and target price of $15.60 are retained.

Target price is $15.60 Current Price is $11.16 Difference: $4.44
If IGO meets the Credit Suisse target it will return approximately 40% (excluding dividends, fees and charges).

Current consensus price target is $12.82, suggesting upside of 10.8% (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 LTR as Outperform (1) -

Liontown has postponed the termination date for the binding offtake agreement with Tesla until June 6, and Macquarie expect the deal will then be secured.

The company's share price has fallen sharply - most likely due to mounting bearishness over the lithium price - but the broker suspects the sell-off may be overdone. 

Outperform rating and $2.50 target price retained.

Target price is $2.50 Current Price is $1.15 Difference: $1.35
If LTR meets the Macquarie target it will return approximately 117% (excluding dividends, fees and charges).

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

Credit Suisse rates MGR as Outperform (1) -

Credit Suisse has adjusted estimates for Australian real estate investment trusts (A-REITs) to account for rising costs and interest rates, noting while it cannot be certain where rates will settle it has assumed a 1.5% increase to costs of debt exposure in FY23. 

The broker highlighted those companies with lower gearing and higher hedging were better insulated from the impacts of rising rates. With Mirvac Group's last stated gearing at 22.3%, the broker downgrades earnings forecasts -6.1% and -8.8% for FY23 and FY24 respectively. 

The Outperform rating is retained and the target price decreases to $2.66 from $3.02.

Target price is $2.66 Current Price is $2.23 Difference: $0.43
If MGR meets the Credit Suisse target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $2.76, suggesting upside of 25.8% (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

Credit Suisse rates MIN as Outperform (1) -

Suppliers have responded faster than anticipated to spiking lithium prices, and in opposition of previous deficit forecasts, Credit Suisse now expects lithium supply will meet demand in a balanced market in 2023-24, before supply exceeds demand creating surplus in 2025.

With macro conditions, including inflation, war and lockdowns, slowing the demand outlook, the broker notes lithium prices may peak in coming months, and has downgraded its FY23 spot lithium carbonate forecasts -12%. 

Within its coverage, Credit Suisse notes Mineral Resources has the greatest downstream exposure, which alongside its diversified portfolio should provide resilience to margin compressions according to the broker, with the iron ore division continuing to provide earnings support.

The Outperform rating and target price of $73.00 are retained.

Target price is $73.00 Current Price is $58.70 Difference: $14.3
If MIN meets the Credit Suisse target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $69.75, suggesting upside of 21.2% (ex-dividends)

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

Morgan Stanley rates MIN as Overweight (1) -

With the aim of reducing the cost of domestic steel production, the Indian government raised export tariffs on new iron ore and concentrates towards the end of May, notes Morgan Stanley.

The duties on pellets were hiked to 45% from 0%. The broker feels low ore grade producers will be beneficiaries and this is positive for the likes of Mineral Resources. The Overweight rating and $63.30 target are retained. Industry view: Attractive.

Target price is $63.30 Current Price is $58.70 Difference: $4.6
If MIN meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $69.75, suggesting upside of 21.2% (ex-dividends)

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

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

Construction is "the most worrying part of our book' noted National Australia Bank CEO Ross McEwan this week. Morgan Stanley points out history (2009) shows the level of "stressed" exposures could increase by around 5-6x during a downturn.

Construction accounts for around 2% (broadly the same as the other major banks) of non mortgage exposure at the bank, assesses the analyst. Morgan Stanley retains its Equal-weight rating and $31.80 target price. Industry View: Attractive.

Target price is $31.80 Current Price is $31.55 Difference: $0.25
If NAB meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $33.42, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in September.

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

Citi rates NAN as Sell (5) -

Nanosonics announced at its March-quarter trading update that co-chairman Steve Sargent will replace chairman Maurie Stang from July 1, and the latter will retire from the board in November.

Management also expects the majority of GE customers will be transitioned to Nanosonics by the end of June, and that FY22 revenue will meet consensus forecasts.

No profit or operating expenditure guidance was provided, but the broker expects operating expenditure will rise after the GE transition.

EPS forecasts are steady in FY22; and fall -94% in FY23; and -64% in FY24. Sell rating retained. Target price falls to $3.65 from $4.

Target price is $3.65 Current Price is $3.70 Difference: minus $0.05 (current price is over target).
If NAN 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 $4.23, suggesting upside of 20.8% (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

Credit Suisse rates ORG as Neutral (3) -

Origin Energy has withdrawn its FY23 Energy Markets guidance, confirming risk to guidance in the coming year and implying earnings would miss guidance according to Credit Suisse.

The broker highlights Origin Energy had locked in volume and pricing for electricity sales before it had locked in the necessary supply and now faces an estimated -$600m hedging loss, but the broker expects this to unwind in FY24 as electricity prices offset coal costs. 

FY22 guidance was retained. The Neutral rating is retained and the target price decreases to $6.10 from $6.30.

Target price is $6.10 Current Price is $5.91 Difference: $0.19
If ORG meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $6.54, suggesting upside of 7.8% (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

Macquarie rates ORG as Outperform (1) -

Origin Energy has downgraded FY22 guidance and withdrawn FY23 guidance given supply disruption at Eraring and uncertainty around future coal supply (Macquarie estimates the company will be -1TWh short of electricity over winter at a cost of -$110m-$180m.)

Fortunately for Origin, it can still rely on inflated domestic gas prices to prop up the share price, and the company raises guidance regarding APLNG prices.

EPS forecasts fall -2.2% in FY22; and -20.3% in FY23. The broker expects stressors to unwind by FY24.

Outperform rating retained on an asset valuation basis and the broker appreciates the restoration of the balance sheet. Target price eases to $7.08 from $7.32.

Target price is $7.08 Current Price is $5.91 Difference: $1.17
If ORG meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $6.54, suggesting upside of 7.8% (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

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

Morgan Stanley attributes yesterday's -14% share price decline for Origin Energy to the twin impacts of coal supply disruption (Mandalong and/or rail deliveries) and overall energy market volatility. More volatility and increased risk of policy intervention is anticipated.

The analyst points out the company is short electricity in a very tight market. Nonetheless, the Equal-weight rating and $6.06 target are maintained. Industry view: Cautious.

Target price is $6.06 Current Price is $5.91 Difference: $0.15
If ORG meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $6.54, suggesting upside of 7.8% (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

Morgans rates ORG as Hold (3) -

As electricity futures reach new highs and exert upward pressure on wholesale pricing, Morgans points out Origin Energy needs to hedge using financial contracts.

It’s not clear to the analyst how much of a hedging shortfall the company might have during FY24, which could raise the cost of supply considerably. Given the uncertainty, the expectation for special dividends has been reduced.

There could be further downside to Morgans forecasts should spot prices not ease during the 1H of FY23, or become sharply tighter as winter intensifies. The Hold rating is retained, while the target price falls by -8% to $6.17.

Target price is $6.17 Current Price is $5.91 Difference: $0.26
If ORG meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $6.54, suggesting upside of 7.8% (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

Ord Minnett rates ORG as Hold (3) -

Ord Minnett assesses a lack of coal procurement contracts for Origin Energy means increased realised prices have been wholly offset by higher fuel costs.

Despite record electricity prices, the broker estimates the Eraring power station is operating at a loss. As fuel costs are the primary driver of electricity prices, any improvement in profitability is considered limited.

Management has downgraded its FY22 Energy Markets operating earnings (EBITDA) guidance to the lowest contribution level in the company’s history, points out the analyst. The target price falls to $6.10 from $6.30 and the Hold rating is maintained.

Target price is $6.10 Current Price is $5.91 Difference: $0.19
If ORG meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $6.54, suggesting upside of 7.8% (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

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

Suppliers have responded faster than anticipated to spiking lithium prices, and in opposition of previous deficit forecasts, Credit Suisse now expects lithium supply will meet demand in a balanced market in 2023-24, before supply exceeds demand creating surplus in 2025.

With macro conditions, including inflation, war and lockdowns, slowing the demand outlook, the broker notes lithium prices may peak in coming months, and has downgraded its FY23 spot lithium carbonate forecasts -12%. 

Within its coverage, Credit Suisse notes Pilbara Minerals is most exposed to macro weakness, and limited vertical integration leaves the company at greater risk of margin compression.

The rating is downgraded to Neutral from Outperform and the target price decreases to $3.00 from $3.70.

Target price is $3.00 Current Price is $2.30 Difference: $0.7
If PLS meets the Credit Suisse target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $3.71, suggesting upside of 62.1% (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 PLS as Outperform (1) -

Pilbara Minerals has appointed Chief Operations Officer Dale Henderson as Chief Executive Officer and Managing Director. He replaces Ken Brinsden.

Macquarie reports the company has advanced the mid-stream joint venture to an updated binding memorandum of understanding to build a demonstration plant at Pilgangoora.

Outperform rating and $4 target price have been retained.

Target price is $4.00 Current Price is $2.30 Difference: $1.7
If PLS meets the Macquarie target it will return approximately 74% (excluding dividends, fees and charges).

Current consensus price target is $3.71, suggesting upside of 62.1% (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

UBS rates QAN as Buy (1) -

UBS says that, despite challenges, its hypothesis remains intact for a post-covid recovery and that a favourable shift in estimated capitalised reduction has led to a small increase in valuation.

UBS notes the company has returned to positive free cash flow and estimates the airline will surpass pre-covid earnings in FY24.

Buy rating retained. Target price edges up to $6.75 from $6.65.

Target price is $6.75 Current Price is $5.53 Difference: $1.22
If QAN meets the UBS target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $6.24, suggesting upside of 15.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Morgan Stanley rates QBE as Overweight (1) -

In a recent report, Morgan Stanley highlighted Australia has around 8x more economic exposure to catastrophe costs than the global average, which should result in earnings volatility.

As a consequence of this volatility, the broker assesses investors may demand a higher cost of capital and insurers may also need to hold more regulatory capital. For QBE Insurance, the Overweight rating and $15.70 target are unchanged. Industry view: In-Line.

Target price is $15.70 Current Price is $12.19 Difference: $3.51
If QBE meets the Morgan Stanley target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $15.54, suggesting upside of 29.1% (ex-dividends)

The company's fiscal year ends in December.

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

Credit Suisse rates REP as Outperform (1) -

Credit Suisse has adjusted estimates for Australian real estate investment trusts (A-REITs) to account for rising costs and interest rates, noting while it cannot be certain where rates will settle it has assumed a 1.5% increase to costs of debt exposure in FY23. 

The broker highlighted those companies with lower gearing and higher hedging were better insulated from the impacts of rising rates. With RAM Essential Services Property Fund's last stated gearing at 28.6%, the broker downgrades earnings forecasts -3.8% and -4.1% for FY23 and FY24 respectively. 

The Neutral rating is retained and the target price decreases to $1.01 from $1.05.

Target price is $1.01 Current Price is $0.90 Difference: $0.11
If REP meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $1.08, suggesting upside of 20.0% (ex-dividends)

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

Macquarie rates S32 as Outperform (1) -

South32 has finalised the purchase of an extra 16.6% stake in Mozal Aluminium - a green aluminium producer.

Macquarie says the company is trading at attractive multiples to peers and suspects a return to shareholders may be on the cards.

The broker says South32 is experiencing an acceleration in earnings growth as high spot prices flow into the coffers.

Macquarie spies material valuation upside. Outperform rating and $6.90 target price retained.

Target price is $6.90 Current Price is $4.96 Difference: $1.94
If S32 meets the Macquarie target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $6.05, suggesting upside of 22.0% (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: 1.0

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

Credit Suisse rates SCG as Outperform (1) -

Credit Suisse has adjusted estimates for Australian real estate investment trusts (A-REITs) to account for rising costs and interest rates, noting while it cannot be certain where rates will settle it has assumed a 1.5% increase to costs of debt exposure in FY23. 

The broker highlighted those companies with lower gearing and higher hedging were better insulated from the impacts of rising rates.

While Scentre Group's last stated gearing was 27.5%, the broker notes this does not include $4.1bn in subordinated notes at gearing of 50%. The broker downgrades earnings forecasts -6.1%, -6.4% and -8.1% through to 2024.

The Outperform rating is retained and the target price decreases to $3.20 from $3.31

Target price is $3.20 Current Price is $2.84 Difference: $0.36
If SCG meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.00, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Credit Suisse rates SCP as Neutral (3) -

Credit Suisse has adjusted estimates for Australian real estate investment trusts (A-REITs) to account for rising costs and interest rates, noting while it cannot be certain where rates will settle it has assumed a 1.5% increase to costs of debt exposure in FY23. 

The broker highlighted those companies with lower gearing and higher hedging were better insulated from the impacts of rising rates.

With Shopping Centres Australasia Property's last stated gearing at 29%, the broker downgrades earnings forecasts -2.1% and -3.8% for FY23 and FY24 respectively. 

The Neutral rating is retained and the target price increases to $3.00 from $2.94.

Target price is $3.00 Current Price is $2.98 Difference: $0.02
If SCP meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.04, suggesting upside of 2.2% (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

Credit Suisse rates SGP as Outperform (1) -

Credit Suisse has adjusted estimates for Australian real estate investment trusts (A-REITs) to account for rising costs and interest rates, noting while it cannot be certain where rates will settle it has assumed a 1.5% increase to costs of debt exposure in FY23. 

The broker highlighted those companies with lower gearing and higher hedging were better insulated from the impacts of rising rates.

With Stockland's last stated gearing at 23.3%, the broker downgrades earnings forecasts -0.4% and -3.6% for FY23 and FY24 respectively, noting gearing is expected to decline -7% following previously announced capital initiatives. 

The Outperform rating is retained and the target price decreases to $4.39 from $4.56.

Target price is $4.39 Current Price is $3.96 Difference: $0.43
If SGP meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $4.76, suggesting upside of 21.4% (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 SLR as Upgrade to Outperform from Neutral (1) -

Macquarie incorporates Silver Lake Resources' Sugar Zone mine into its base case after the latter's strong and steady turnaround.

EPS forecasts rise 2% in FY23; 4% in FY24, 14% in FY25 and 19% in FY26. Rating upgraded to Outperform from Neutral. Target price rises to $2.10 from $2.

Target price is $2.10 Current Price is $1.51 Difference: $0.59
If SLR meets the Macquarie target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $2.18, suggesting upside of 41.2% (ex-dividends)

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

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

In a recent report, Morgan Stanley highlighted Australia has around 8x more economic exposure to catastrophe costs than the global average, which should result in earnings volatility.

As a consequence of this volatility, the broker assesses investors may demand a higher cost of capital and insurers may also need to hold more regulatory capital. For Suncorp Group, the Equal-weight rating and $12.50 target are unchanged. Industry view: In-Line.

Target price is $12.50 Current Price is $11.29 Difference: $1.21
If SUN meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $13.81, suggesting upside of 22.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Ord Minnett rates TLS as Buy (1) -

Ord Minnett expects Telstra to achieve its FY25 target of growing mobile service revenue and group operating earnings (EBITDA) by mid-single digits. This comes as customers have been notified that FY23 mobile prices are set to increase by $3-4/month.

The broker lifts its postpaid average revenue per user (ARPU) forecasts to $51/month for FY23, representing an $2.70/month increase on December 2021. The Buy rating and $4.85 target price are maintained.

Target price is $4.85 Current Price is $4.00 Difference: $0.85
If TLS meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $4.50, suggesting upside of 14.3% (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

Credit Suisse rates VCX as Neutral (3) -

Credit Suisse has adjusted estimates for Australian real estate investment trusts (A-REITs) to account for rising costs and interest rates, noting while it cannot be certain where rates will settle it has assumed a 1.5% increase to costs of debt exposure in FY23. 

The broker highlighted those companies with lower gearing and higher hedging were better insulated from the impacts of rising rates.

With Vicinity Centres's last stated gearing at 26.6%, the broker downgrades earnings forecasts -1.7% and -2.5% for FY23 and FY24 respectively, noting the company may look to reduce a $1.8bn undrawn bank debt to lower cost of debt.

The Neutral rating and target price of $1.97 are retained.

Target price is $1.97 Current Price is $1.90 Difference: $0.07
If VCX meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $1.91, suggesting upside of 1.2% (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

Morgan Stanley rates WBC as Overweight (1) -

Construction is "the most worrying part of our book' noted National Australia Bank CEO Ross McEwan this week. Morgan Stanley points out history (2009) shows the level of "stressed" exposures could increase by around 5-6x during a downturn.

Construction accounts for around 2% (broadly the same as the other major banks) of non mortgage exposure at Westpac, assesses the analyst. Morgan Stanley retains its Overweight rating and $25.70 target are retained. Industry view: Attractive.

Target price is $25.70 Current Price is $24.10 Difference: $1.6
If WBC meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $25.49, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Macquarie rates WDS as Neutral (3) -

Macquarie says Woodside Energy's stronger balance sheet post the merger with BHP Petroleum will allow it to unlock accelerated growth in brown and green markets.

EPS forecasts rise 4% for FY22 to reflect higher commodity prices; and fall -1% in FY23 and -2% in FY24.

Target price falls -3% to $29 from $30 due to a lower valuation placed on the company's Trion project. Neutral rating retained.

Target price is $29.00 Current Price is $30.19 Difference: minus $1.19 (current price is over target).
If WDS 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 $31.48, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in December.

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: 0.4

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

Ord Minnett rates WOR as Lighten (4) -

Worley highlighted positive growth in most key metrics at its investor day and Ord Minnett lifts its target price to $12.00 from $10.80 in reaction, while also noting the stock is trading on high multiples. The Lighten rating is maintained.

Management pointed to strong momentum for contract wins in the energy transition space and from sustainability projects.

Nonetheless, the analyst feels Worley’s traditional hydrocarbons business may be impacted by the aversion of global investors toward exploration and production companies committing to large-scale growth projects.

Target price is $12.00 Current Price is $14.65 Difference: minus $2.65 (current price is over target).
If WOR meets the Ord Minnett target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.69, suggesting downside of -7.4% (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

UBS rates WOR as Buy (1) -

Worley revealed growing momentum in its traditional and transitional projects at its investor day, observes UBS: the headcount and factored sales pipeline are up 7%; and the backlog of projects has risen 8% to $15.4bn.

UBS speculates that much of this growth relates to the green transition and oil and gas markets as geopolitical tensions rise. The broker estimates sustainability-based projects now represent roughly 32% of Worley's revenues, which Worley hopes to lift to 75% in five years.

Management reiterated revenue, earnings and margins guidance for the June half. EPS forecasts rise 3% in FY23 and FY24.

Buy rating retained, UBS pegging Worley as an energy transition winner offering a 10-year EPS compound annual growth rate of 10%. Target price rises to $16.40 from $14.40.

Target price is $16.40 Current Price is $14.65 Difference: $1.75
If WOR meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $13.69, suggesting downside of -7.4% (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