Australian Broker Call

UBS rates A2M as Buy (1) -

Evidence suggests a2 Milk's China IMF online market share was up strongly year on year in the June quarter, in a market which continues to grow at a mid-single digit pace despite the virus.

This underpins the broker's confidence a2 Milk can produce earnings growth in excess of 15% in FY21.

Margins are unlikely to increase nonetheless, with the broker noting higher wholesale prices, a stronger NZD and stable USD ingredient costs suggesting price increases would be tricky. Buy and NZ$22.00 target retained.

Current Price is $19.28. Target price not assessed.

Current consensus price target is $19.36, suggesting downside of -2.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.1

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

Ord Minnett rates ABC as Hold (3) -

The building materials sector is experiencing lower than usual earnings in the current environment, notes Ord Minnett.

The outlook for apartments in Australia is weak due to the collapse in migration, highlights the broker. On the other hand, sales have been picking up in the residential segment.

New Zealand construction is expected to remain weak while the US housing market has performed better than expected.

Ord Minnett maintains its Hold rating on Adbri with a target price of $2.70.

Target price is $2.70 Current Price is $2.29 Difference: $0.41
If ABC meets the Ord Minnett target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $2.51, suggesting upside of 6.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Citi rates AMP as Sell (5) -

Citi estimates AMP’s true capital surplus to be about $600m rather than $1.6bn. At face value, it appears the company will not pay any dividends for FY20 and the broker also considers it unlikely in the current environment. 

The broker thinks the probability of any capital release from the sale of AMP's life insurance business remains low until FY21.

Citi maintains its Sell rating with the target price increasing to $1.50 from $1.25.

Target price is $1.50 Current Price is $1.74 Difference: minus $0.24 (current price is over target).
If AMP meets the Citi target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.78, suggesting upside of 1.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Macquarie rates BGL as Outperform (1) -

Bellevue Gold has launched an institutional placement and SPP to raise $120m at $1.00, a -10.7% discount to last close.

The proceeds will be used to both grow resources and accelerate development, the broker notes, with economic studies expected to complete in the March quarter next year.

Bellevue’s indicated resources should continue to grow towards the broker's inventory assumption over the coming year. Outperform and $1.30 target retained.

Target price is $1.30 Current Price is $1.05 Difference: $0.25
If BGL meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Ord Minnett rates BLD as Downgrade to Lighten from Hold (4) -

The building materials sector is experiencing lower than usual earnings in the current environment, notes Ord Minnett.

The outlook for apartments in Australia is weak due to the collapse in migration, highlights the broker. On the other hand, sales have been picking up in the residential segment.

New Zealand construction is expected to remain weak while the US housing market has performed better than expected.

Ord Minnett downgrades Boral’s rating to Lighten from Hold with the target price increasing to $3.25 from $2.75.

Target price is $3.25 Current Price is $3.73 Difference: minus $0.48 (current price is over target).
If BLD 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 $3.51, suggesting downside of -8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Macquarie rates CHC as Outperform (1) -

Ahead of Charter Hall's result, the broker suggests FY20 earnings growth should be above guidance, 44% to 40%, before declining -32% in FY21 on the broker's forecast.

FY22 will then see a rebound in growth aided by performance fees. The broker sees multiple opportunities for growth in assets under management.

The broker believes Charter Hall deserves a higher PE multiple to historical levels given proven growth in the business. Outperform retained, target rises to $12.54 from $9.31.

Target price is $12.54 Current Price is $9.82 Difference: $2.72
If CHC meets the Macquarie target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $10.95, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.9

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

Morgans rates CMW as Hold (3) -

With Cromwell Property scheduled to report FY20 financials on 27th August, Morgans reminds shareholders they will receive a 4Q20 distribution of 1.875c which brings FY20 distributions in line with the original guidance of 7.5c.

Overall, porfolio revaluations will cause the Net Tangible Asset (NTA) value to fall slightly, to circa $1.02bn, excluding funds management, on Morgans' assessment.

The broker also reminds investors there is still a proportional takeover offer on the table, at 90c, which might take ARA's equity stake to circa 46% from its present 24%.

Hold rating retained, while the price target drops to $1.12 from $1.22.

Target price is $1.12 Current Price is $0.89 Difference: $0.23
If CMW meets the Morgans target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $0.93, suggesting upside of 4.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Ord Minnett rates COE as Accumulate (2) -

Cooper Energy will be spending -$55m on upgrading its Minerva gas plant. The company will also be renaming it as Athena gas plant, reports Ord Minnett.

The plant will be used to process gas from the offshore Casino, Henry and Netherby fields.

Capital expenditure on the plant is less than expected and will lead to a material downgrade in its operating costs, points out Ord Minnett.

Ord Minnett reaffirms its Accumulate rating with a target price of $0.61.

Target price is $0.61 Current Price is $0.42 Difference: $0.19
If COE meets the Ord Minnett target it will return approximately 45% (excluding dividends, fees and charges).

Current consensus price target is $0.53, suggesting upside of 26.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Ord Minnett rates CSR as Upgrade to Accumulate from Hold (2) -

The building materials sector is experiencing lower than usual earnings in the current environment, notes Ord Minnett.

The outlook for apartments in Australia is weak due to the collapse in migration, highlights the broker. On the other hand, sales have been picking up in the residential segment.

New Zealand construction is expected to remain weak while the US housing market has performed better than expected.

Ord Minnett believes CSR offers better value and upgrades its rating to Accumulate from Hold with a target price of $4.

Target price is $4.00 Current Price is $3.50 Difference: $0.5
If CSR meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $3.98, suggesting upside of 13.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Macquarie rates DXS as Downgrade to Neutral from Outperform (3) -

While Dexus Property should be more resilient than others in the office space, Macquarie believes it is not immune to lower rents due to weaker demand. The broker expects office rents to decline by -15-25%, noting Sydney CBD vacancy increased 7.5% in the six months to June.

While the balance sheet is okay and earnings will be resilient, cash flow will be poor, the broker notes, and the REIT offers little total shareholder return at current levels. Downgrade to Neutral from Outperform, target falls to $9.23 from $10.26.

Target price is $9.23 Current Price is $9.07 Difference: $0.16
If DXS meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $9.99, suggesting upside of 8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Macquarie rates ECX as Outperform (1) -

Eclipx Group has sold Right2Drive at a price in line with the broker's valuation but below carrying value. All proceeds will be used to reduce debt.

The sale completes the company's shift back to the core fleet and novated lease businesses and should be well received by the market, the broker suggests.

Target rises to $1.52 from $1.35, Outperform retained.

Target price is $1.52 Current Price is $1.40 Difference: $0.12
If ECX meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $1.48, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Morgan Stanley rates ECX as Overweight (1) -

Credit Suisse notes with the sale of Right2Drive (R2D), Eclipx Group has fulfilled its promise to simplify its business and can now shift its focus to value creation.

The broker highlights meaningful growth opportunities for the group like lifting its penetration in novated leasing and SME. The group can achieve or get closer to achieving its gross debt target of $175m by the end of FY20, believes the broker.

Credit Suisse maintains its Overweight rating on Eclipx Group with a target price of $1.70. Industry view: In-line.

Target price is $1.70 Current Price is $1.40 Difference: $0.3
If ECX meets the Morgan Stanley target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $1.48, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

UBS rates ECX as Buy (1) -

Eclipx Group has successfully sold Right2Drive. While the price represents a loss on book value, the broker sees the sale as a significantly positive catalyst in terms of execution of management's simplification strategy and deleveraging of the balance sheet.

The news reaffirms Eclipx as a key pick for the broker, given upside risk to earnings, an attractive valuation and sector consolidation remaining a primary focus. Buy and $1.45 target retained.

Target price is $1.45 Current Price is $1.40 Difference: $0.05
If ECX meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $1.48, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Ord Minnett rates HLO as Upgrade to Buy from Hold (1) -

The second wave of virus outbreak has delayed recovery in both domestic and international travel, reports Ord Minnett

The broker's analysis of Helloworld finds the stock represents value at current levels. It suggests a removal of state border closures and a resumption in domestic travel could lift the company's revenues by $9m per month. 

FY20 earnings forecasts have been revised upwards materially. FY21 and FY22 earnings forecasts have been downgraded due to delays in travel recovery.

Ord Minnett upgrades its rating to Buy from Hold with the target price decreasing to $2.45 from $2.58.

Target price is $2.45 Current Price is $1.96 Difference: $0.49
If HLO meets the Ord Minnett target it will return approximately 25% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Citi rates HUB as Buy (1) -

Hub24 saw June quarter net flows of $1.1bn, up 11% year on year and better than estimated by Citi.

Citi reports 110 new advisors started using the specialist platform in the June quarter which is good considering the uncertainty stemming from covid-19.

The broker is cautious about the outlook and expects revenue margins to decline in FY21 due to lower cash levels and cash margin reduction.

Platform cost growth is forecasted to slow to 16% in FY21 which could lead to margin expansion. There is potential for FY21 flows to beat expectations.

Citi reiterates its Buy rating with a target price of $14.40.

Target price is $14.40 Current Price is $12.76 Difference: $1.64
If HUB meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $13.10, suggesting downside of -0.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Credit Suisse rates HUB as Neutral (3) -

Hub24 reported an increase in funds under administration (FuA) of circa 14% in the June quarter driven by net inflows and positive market movements. The higher inflows indicate a sharper than expected rebound in switching activity, notes Credit Suisse.

The broker reports the specialist platform also signed 34 new distribution agreements with licensees.

Pressure on the revenue margin is expected to ease in the second half. FY21 could be impacted by falling cash allocations, cash fee cuts and competitive front book pricing among other factors, expects the broker.

Hub24 is expected to attract material inflows and win market share despite a challenging environment in the short term, predicts the broker.

Credit Suisse chooses to remain cautious and maintains its Neutral rating with the target price increasing to $12.40 from $12.

Target price is $12.40 Current Price is $12.76 Difference: minus $0.36 (current price is over target).
If HUB meets the Credit Suisse target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.10, suggesting downside of -0.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Macquarie rates HUB as Underperform (5) -

Hub24 reported funds under administration (FuA) of $17.2bn at end-FY20, with the June quarter contributing $1.1bn plus $1.0bn in positive market movement.

The broker forecasts $6.2bn in net flows for FY21, with cash accounts trending lower from virus peaks.

No guidance or outlook was provided so the broker awaits the August result before reconsidering its Underperform rating. Target rises to $8.40 from $7.60.

Target price is $8.40 Current Price is $12.76 Difference: minus $4.36 (current price is over target).
If HUB meets the Macquarie target it will return approximately minus 34% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.10, suggesting downside of -0.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Morgans rates HUB as Add (1) -

Stockbroker Morgans found the quarterly update "strong" given disruption from the virus. Advisers using the platform increased 27% year-on-year to 2,066.

The analysts do expect fund flows to slow down from here, also because market conditions remain uncertain. Nevertheless, Hub24 will still reap the benefits from the lagged impact from adviser growth, as well as the ClearView Wealth ((CVW)) white label transition.

Morgans sticks with its Add rating, despite a strong share price performance. The target price rises to $13.30 from $11.15. All in all, a solid finish to FY20, concludes the broker.

Target price is $13.30 Current Price is $12.76 Difference: $0.54
If HUB meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $13.10, suggesting downside of -0.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Ord Minnett rates HUB as Buy (1) -

Specialist platforms demonstrated resilience throughout the covid-19 led market downturn, reports Ord Minnett. Hub24’s net inflows grew in the fourth quarter, with total funds under administration (FuA) increasing by 9%.

Ord Minnett expects the specialist platform to increase its second-half operating income by circa 50%. The broker prefers Hub24 over Netwealth Group ((NWL)) due to higher growth prospects offered by the former.

Ord Minnett retains its Buy rating with the target price increasing to $17 from $13.71.

Target price is $17.00 Current Price is $12.76 Difference: $4.24
If HUB meets the Ord Minnett target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $13.10, suggesting downside of -0.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Citi rates IPL as Buy (1) -

Incitec Pivot is likely to be impacted by lower coal production by Anglo American, expects Citi. The broker highlights the group’s fertiliser division is well placed to benefit from favourable Australian weather and cropping conditions.

The equity raising has resulted in a stronger balance sheet and should help navigate any short term covid-19 related volatility, believes the broker. 

Weak urea prices pose a downside risk to the broker's earnings forecasts.

Citi maintains its Buy rating with a target price of $2.43.

Target price is $2.43 Current Price is $1.88 Difference: $0.55
If IPL meets the Citi target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $2.48, suggesting upside of 31.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Ord Minnett rates JHX as Buy (1) -

The building materials sector is experiencing lower than usual earnings in the current environment, notes Ord Minnett.

The outlook for apartments in Australia is weak due to the collapse in migration, highlights the broker. On the other hand, sales have been picking up in the residential segment.

New Zealand construction is expected to remain weak while the US housing market has performed better than expected.

The broker considers James Hardie Industries to be the best quality company in the sector with a proven business model.

Ord Minnett maintains its Buy rating with a target price of $30.

Target price is $30.00 Current Price is $27.85 Difference: $2.15
If JHX meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $31.42, suggesting upside of 8.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 1.0

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

Ord Minnett rates MWY as Hold (3) -

Midway has secured a contract with its Japanese customers at a lower export price for 2020, backdated to January 1. The softer pricing does not surprise Ord Minnett given the current covid-19 led global disruption in trading.

Volumes are expected to recover in FY21 due to lower pricing, but the broker tempers its expectations on account of the impact of the pandemic.

Pending further clarity, Ord Minnett maintains its Hold rating with the target price increasing to $1.17 from $1.12.

Target price is $1.17 Current Price is $0.79 Difference: $0.38
If MWY meets the Ord Minnett target it will return approximately 48% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

UBS rates MYX as Neutral (3) -

Script volume trends indicate competitors continue to take share in several of Mayne Pharma's categories, the broker notes, albeit at a slower pace than in FY19.

Based on the contestable market size for NuvaRing, the outcome of Mayne's potential approval versus peers remains a key swing factor in terms of FY21 earnings.

The broker is closely following peers regarding their respective progress, with Amneal looking to build up capacity after its recent first to market launch. Neutral and 44c target retained.

Target price is $0.44 Current Price is $0.43 Difference: $0.01
If MYX meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $0.42, suggesting upside of 0.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Ord Minnett rates NWL as Downgrade to Sell from Hold (5) -

Specialist platforms showed resilience throughout the covid-19 led market downturn, reports Ord Minnett. Netwealth Group’s net inflows grew in the fourth quarter, with total funds under administration (FuA) increasing by 10%.

Ord Minnett expects the specialist platform to increase its second-half operating income by circa 23%. The broker sees the group as overvalued and expects more growth from Hub24 ((HUB)).

Ord Minnett moves to a Sell from Hold with the target price increasing to $9.55 from $7.70.

Target price is $9.55 Current Price is $11.67 Difference: minus $2.12 (current price is over target).
If NWL 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 $8.41, suggesting downside of -27.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Ord Minnett rates PPT as Hold (3) -

Perpetual's June quarter funds under management update revealed negative flows, offset by the recovering markets and the Trillium acquisition worth $5.6bn.

The company also reported positive updates from its other two divisions, in particular Perpetual Corporate Trust, which saw funds under administration rise 20% over the previous quarter.

Ord Minnett retains its Hold recommendation with the target price raised to $33 from $32.50.

Target price is $33.00 Current Price is $32.08 Difference: $0.92
If PPT meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $32.80, suggesting downside of -1.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Ord Minnett rates REH as Hold (3) -

The building materials sector is experiencing lower than usual earnings in the current environment, notes Ord Minnett.

The outlook for apartments in Australia is weak due to the collapse in migration, highlights the broker. On the other hand, sales have been picking up in the residential segment.

New Zealand construction is expected to remain weak while the US housing market has performed better than expected.

The broker considers Reece to be a high-quality company trading at a premium to the sector.

Ord Minnett retains its Hold rating with the target price decreasing to $9.20 from $9.50.

Target price is $9.20 Current Price is $9.39 Difference: minus $0.19 (current price is over target).
If REH meets the Ord Minnett target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.02, suggesting downside of -5.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Morgans rates RIO as Add (1) -

Morgans found the first half performance "good", with "solid volumes", against a background of soft metal prices. Pilbara iron ore shipments beat expectations.

Rio Tinto raised capex guidance. The broker sees a solid platform for a good operational result to be delivered in August, accompanied by a "healthy interim (cash) dividend" (forecasts have been lifted).

Add rating retained for Rio Tinto while the price target price loses -$1 to to $110.

Target price is $110.00 Current Price is $105.11 Difference: $4.89
If RIO meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $101.79, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.2

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

Macquarie rates RSG as Underperform (5) -

Resolute Mining's new life-of-mine plan for Mako is in line with the broker's assumptions for inventory and processing metrics. The plan sees lower production in FY21 and higher costs in FY22-23, ahead of production upgrades.

The broker awaits the June quarter production report for more detail on the Syama Sulphides ramp-up, which is key to deleveraging. Target rises to $1.05 from $1.00, Underperform retained.

Target price is $1.05 Current Price is $1.21 Difference: minus $0.16 (current price is over target).
If RSG meets the Macquarie target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Ord Minnett rates RWC as Accumulate (2) -

The building materials sector is experiencing lower than usual earnings in the current environment, notes Ord Minnett.

The outlook for apartments in Australia is weak due to the collapse in migration, highlights the broker. On the other hand, sales have been picking up in the residential segment.

New Zealand construction is expected to remain weak while the US housing market has performed better than expected.

The broker feels Reliance Worldwide Corp offers good value currently and maintains its Accumulate rating with the target price decreasing to $3.40 from $3.50.

Target price is $3.40 Current Price is $2.84 Difference: $0.56
If RWC meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $3.34, suggesting upside of 14.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Citi rates S32 as Buy (1) -

South32’s June quarter was mostly in-line with Citi’s forecasts, with manganese and Cannington surprising to the upside and met coal disappointing.

The broker predicts a pre-tax, non-cash impairment of about -$109m in FY20 results for South32’s manganese alloy smelters.

Citi retains its Buy rating with a target price of $2.60.

Target price is $2.60 Current Price is $2.17 Difference: $0.43
If S32 meets the Citi target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting upside of 12.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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

Credit Suisse rates S32 as Outperform (1) -

FY20 was challenging, marked by immense commodity price pressure on the top line, comments Credit Suisse.

South32 reports annual production at Worsley was a little below guidance and Illawarra’s coal production was softer than expected. 

The sale of South African Energy Coal (SAEC) remains the biggest catalyst but the broker believes the deal is subject to approvals and at risk due to covid-19.

The broker considers the backdrop very uncertain and even as South32 is resilient to further pressure, earnings and capital management are likely to be subdued until the top line picks up.

Credit Suisse retains its Outperform rating with a target price of $2.50.

Target price is $2.50 Current Price is $2.17 Difference: $0.33
If S32 meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting upside of 12.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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

Macquarie rates S32 as Underperform (5) -

South32's June quarter production was better than forecast, leading to FY20 guidance being achieved across the portfolio. Manganese price weakness has nevertheless led to an impairment charge being taken on smelters, and significant reductions in earnings from spot prices.

The broker cuts its own earnings forecast for FY20 by -12%. Underperform and $1.80 target retained.

Target price is $1.80 Current Price is $2.17 Difference: minus $0.37 (current price is over target).
If S32 meets the Macquarie target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.50, suggesting upside of 12.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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

Morgan Stanley rates S32 as Overweight (1) -

South32’s production results for the June quarter were better than expected by Morgan Stanley. This includes the alumina business driven by Worsley and the manganese business, led by ramping up of Australian operations to pre-covid-19 levels.

The only exception was Illawarra met coal production which was -8% lower than expected due to challenging strata conditions. The strong sales result has led to beating the broker’s revenue forecast by 2.5% for the year.

The broker expects a non-cash impairment charge of circa -US$109m in South32’s FY20 results from its manganese alloy smelters.

Morgan Stanley retains its Overweight rating with a target price of $2.35. Industry view: Attractive.

Target price is $2.35 Current Price is $2.17 Difference: $0.18
If S32 meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting upside of 12.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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

Ord Minnett rates S32 as Accumulate (2) -

South32 released its June quarter production numbers showing mixed volumes. Where Cannington surpassed its FY20 guidance and manganese operations had a strong year, Illawarra fell short of its guidance, reports Ord Minnett.

The broker reports the South Africa Energy Coal (SAEC) transaction remains on track for completion in the December half.

Ord Minnett maintains its Accumulate rating with a target price of $2.80.

Target price is $2.80 Current Price is $2.17 Difference: $0.63
If S32 meets the Ord Minnett target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting upside of 12.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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

UBS rates S32 as Buy (1) -

FY20 finished better for South32 than the broker had expected, particularly in virus-impacted coal and manganese.

Production records were broken at some sites in alumina/aluminium and manganese, with Cannington solidly beating guidance. Inventory drawdowns meant sales were ahead of production.

Revenue was nonetheless impacted by lower realised prices and higher costs. Additional cash helped the balance sheet but the broker has pulled back its dividend assumptions given ongoing virus uncertainty. Buy and $2.60 target retained.

Target price is $2.60 Current Price is $2.17 Difference: $0.43
If S32 meets the UBS target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting upside of 12.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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

Morgan Stanley rates SGR as Upgrade to Equal-weight from Underweight (3) -

Morgan Stanley reduces FY20-22 earnings forecasts for Star Entertainment Group due to continued restrictions in Sydney.

Headwinds exist in the form of competition from Crown Sydney in FY21 and risk pertaining to its Queensland projects.

Morgan Stanley upgrades its rating to Equal-weight from Under-weight with a target price of $3.30. Industry view: Cautious.

Target price is $3.30 Current Price is $2.64 Difference: $0.66
If SGR meets the Morgan Stanley target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $3.38, suggesting upside of 20.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Macquarie rates SYD as Outperform (1) -

Minimal passenger numbers in the June quarter had Sydney Airport domestic lower than both Brisbane and Perth, the broker notes. Recent developments mean a recovery will be delayed, and volumes will not yet justify the reopening of retail services.

There are opportunities, the broker suggests, in the reuse of Jetbase and the acquisition of Juhi. Long term valuation is unchanged but a return to normal may take four years. Outperform and $6.57 target retained.

Target price is $6.57 Current Price is $5.40 Difference: $1.17
If SYD meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $6.26, suggesting upside of 13.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Ord Minnett rates SYD as Lighten (4) -

Sydney Airport’s total passenger numbers (PAX) fell -95% in June, broadly consistent with April and May numbers, notes Ord Minnett.

These passenger numbers, when seen for the first half, show a fall of -56% in domestic and -57% in international (year on year).

The broker expects PAX to remain weak in the second half. Since international traffic generates three times the revenue of domestic traffic, the subdued international traffic numbers will hit the airport hard.

The broker comments that Sydney Airport is a high-quality infrastructure asset that will recover but is currently facing severe headwinds from travel restrictions.

Ord Minnett maintains its Lighten rating with a target price of $5.10.

Target price is $5.10 Current Price is $5.40 Difference: minus $0.3 (current price is over target).
If SYD meets the Ord Minnett target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.26, suggesting upside of 13.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

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

Morgan Stanley notes uncertainty on wagering competition remains and Tabcorp Holdings’ balance sheet continues to look stretched.

The broker has reduced earnings forecasts for FY20-22 to adjust for higher depreciation charges.

Morgan Stanley maintains its Equal-weight rating with the target price increasing to $3.40 from $2.60. Industry view: Cautious.

Target price is $3.40 Current Price is $3.27 Difference: $0.13
If TAH meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $3.41, suggesting upside of 0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

UBS rates TLS as Buy (1) -

When Telstra increased its post-paid mobile prices last month, the broker awaited a response from the competition.

Yesterday, Optus suggested it was unlikely to increase prices at this time but did not preclude the possibility at a later stage. The broker sees the move as tactical rather than structural, with price increases not a good idea with the virus still uncontrolled.

The broker believes Telstra would defend market share in any price war but does not see one breaking out. Buy and $3.70 target retained.

Target price is $3.70 Current Price is $3.40 Difference: $0.3
If TLS meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.81, suggesting upside of 12.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Credit Suisse rates TPG as Reinitiating coverage with Underperform (5) -

Credit Suisse re-initiates coverage of the new TPG Telecom with an Underperform rating.

The new telecom incorporates the operations of the merged TPG/Vodafone Australia Group and the broker thinks the economic substance of the new telecom is consistent with the way TPG was valued.

Although the telecom has not provided any guidance, it expects a decline in sales of mobile services (both prepaid and postpaid) and lower roaming services.

There will likely be a step down in the company’s FY20 operating income, believes the broker, along with an increase in capital expenditure requirement.

The target price is $7.35.

Target price is $7.35 Current Price is $8.09 Difference: minus $0.74 (current price is over target).
If TPG meets the Credit Suisse target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.62, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Macquarie rates TYR as Underperform (5) -

Ahead of the result release, the broker reviews total transaction value expectations and payment trends for Tyro Payments. The less pronounced lockdown since Easter drove a total transaction value (TTV) recovery, but second wave risk remains.

Cash-to-card is  helping TTVs, the broker notes, but coming via low margin debit cards. The broker remains cautious on the outlook and retains Underperform. Target rises to $2.65 from $2.50.

Target price is $2.65 Current Price is $3.63 Difference: minus $0.98 (current price is over target).
If TYR meets the Macquarie target it will return approximately minus 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.60, suggesting downside of -6.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Ord Minnett rates TYR as Accumulate (2) -

Tyro Payments indicated a deceleration in its transaction value growth to 9% (year on year) for the week ending July 17. Ord Minnett believes this was driven by Melbourne’s return to lockdown.

On the bright side, July month to date comparables increased by 17% (year on year). Also, the broker points out app downloads and utilisation seem to be tracking well.

Ord Minnett reiterates its Accumulate rating with a target price of $4.15.

Target price is $4.15 Current Price is $3.63 Difference: $0.52
If TYR meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $3.60, suggesting downside of -6.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Macquarie rates URW as Neutral (3) -

The broker has reviewed UR Westfield ahead of its result, forecasting just 75% of cash collection over the June quarter and a -25% decline in asset value, which would take gearing to 49% against a preferred 35%.

Cutting the dividend would not be enough to resolve the issue, so the broker believes large asset sales and/or a significant capital raising are needed. With rent fundamentals still offering downside, the broker cuts its target to $4.19 from $7.94. Neutral retained.

Target price is $4.19 Current Price is $4.10 Difference: $0.09
If URW meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $4.50, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

This company reports in EUR. 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

Ord Minnett rates WHC as Downgrade to Sell from Hold (5) -

Amidst an oversupplied thermal coal market with coal prices falling -45% year to date, Ord Minnett struggles to find a reason to own Whitehaven Coal.

The broker points out the miner is incurring losses at current prices, has operational issues and is expensive in comparison to global peers.

The company will report its second-half results on August 26^th. The broker does not expect any final dividend.

Ord Minnett downgrades its rating to Sell from Hold with the target price decreasing to $1.30 from $2.70.

Target price is $1.30 Current Price is $1.54 Difference: minus $0.24 (current price is over target).
If WHC meets the Ord Minnett target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.00, suggesting upside of 29.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Ord Minnett rates Z1P as Accumulate (2) -

Zip Co’s most recent update is a tale of two halves with the ANZ business performing in-line with Ord Minnett’s expectations. 

The Quadpay business was weaker than anticipated even with customers reaching 1.8m. The broker notes the weaker result was driven by greater conservatism in terms of credit criteria. 

Upcoming catalysts include the financial result in August and the completion of the Quadpay transaction.

Ord Minnett retains its Accumulate rating with the target price reducing to $6.45 from $6.75.

Target price is $6.45 Current Price is $6.04 Difference: $0.41
If Z1P meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $6.45, suggesting downside of -1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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