Australian Broker Call
September 21, 2017
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)
Last Updated: 05:44 PM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Deutsche Bank rates BSL as Hold (3) -
Deutsche Bank updates forecasts for steel and raw material prices, reducing first half estimates for operating earnings by -13%. Weaker US steel spreads offset a modest increase in the East Asian steel spreads.
The broker believes the company is unlikely to upgrade first half earnings guidance at the AGM. Hold rating retained. Target is $11.00.
Target price is $11.00 Current Price is $11.50 Difference: minus $0.5 (current price is over target).
If BSL meets the Deutsche Bank target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $13.03, suggesting upside of 19.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 22.00 cents and EPS of 109.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.9, implying annual growth of -22.7%. Current consensus DPS estimate is 11.9, implying a prospective dividend yield of 1.1%. Current consensus EPS estimate suggests the PER is 11.3. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 21.00 cents and EPS of 104.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 100.7, implying annual growth of 3.9%. Current consensus DPS estimate is 14.4, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 10.9. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates GMA as Outperform (1) -
The company has extended its supply and service contract with National Australia Bank ((NAB)) for the provision of lenders mortgage insurance.
Macquarie expects earnings to deliver a 10% dividend yield per annum for FY17-19 and forecasts capital requirements to support a capital return of around $2.05 a share over the same period. Contract wins or losses could affect the timing of capital returns.
Outperform rating retained. Target is $3.66.
Target price is $3.66 Current Price is $2.90 Difference: $0.76
If GMA meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).
The company's fiscal year ends in December.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 21.10 cents and EPS of 33.50 cents. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 24.20 cents and EPS of 30.30 cents. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates MGC as Neutral (3) -
Macquarie observes ongoing speculation regarding the sales process for Murray Goulburn. A range of bidders are reportedly interested and the proposals are likely to be a mix of individual asset or whole business.
While there could be considerable upside from the sale process, the broker believes there are significant hurdles to completion. If it is not sold, the business needs to work hard to improve competitiveness and stabilise intake, Macquarie suggests.
Neutral retained. Target is $0.71.
Target price is $0.71 Current Price is $0.78 Difference: minus $0.065 (current price is over target).
If MGC meets the Macquarie target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of 5.40 cents. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 3.70 cents and EPS of 7.40 cents. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates NHF as Sell (5) -
Citi assesses the acquisition of GU Health adds 10% to the top line and doubles the company's presence in the corporate health insurance segment, diversifying the revenue base.
The broker considers upgraded guidance is still conservative, and the shares still expensive. Sell retained.
Target price is raised to $5.25 from $4.95.
Target price is $5.25 Current Price is $5.77 Difference: minus $0.52 (current price is over target).
If NHF meets the Citi target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $5.71, suggesting upside of 0.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 19.00 cents and EPS of 27.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 26.4, implying annual growth of -2.9%. Current consensus DPS estimate is 20.3, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 21.6. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 20.50 cents and EPS of 30.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.7, implying annual growth of 8.7%. Current consensus DPS estimate is 22.1, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 19.8. |
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates NHF as Underperform (5) -
The company will acquire specialist corporate health insurer, GU Health, for $155.5m. Up to $75m in equity will be issued with the remainder funded from a new debt facility.
Credit Suisse supports the strategy of diversifying away from mainstream private health insurance, which has an increasingly uncertain outlook. That said, the broker notes acquisitions are not without risk, as demonstrated by the recent acquisition in travel insurance.
Underperform retained. Target is $5.50.
Target price is $5.50 Current Price is $5.77 Difference: minus $0.27 (current price is over target).
If NHF meets the Credit Suisse target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $5.71, suggesting upside of 0.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 18.00 cents and EPS of 27.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 26.4, implying annual growth of -2.9%. Current consensus DPS estimate is 20.3, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 21.6. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 18.00 cents and EPS of 28.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.7, implying annual growth of 8.7%. Current consensus DPS estimate is 22.1, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 19.8. |
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates NHF as Hold (3) -
Deutsche Bank believes the company's acquisition of GU Health is one of the best M&A transactions seen in years.
The broker believes the company has paid a fair multiple and the extra $80m of debt keeps the balance sheet gearing manageable. Furthermore, the $155.5m transaction size is large enough to be meaningful, increasing net profit by 8%, without being too big to overwhelm management.
Hold rating retained. Target is raised to $6.00 from $5.75.
Target price is $6.00 Current Price is $5.77 Difference: $0.23
If NHF meets the Deutsche Bank target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $5.71, suggesting upside of 0.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 19.00 cents and EPS of 28.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 26.4, implying annual growth of -2.9%. Current consensus DPS estimate is 20.3, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 21.6. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 21.00 cents and EPS of 31.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.7, implying annual growth of 8.7%. Current consensus DPS estimate is 22.1, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 19.8. |
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates NHF as Outperform (1) -
The company will acquire specialist corporate health insurer, Grand United Corporate Health for $155.5m. The transaction will be funded by a $60m fully underwritten institutional equity placement, a $50m non-underwritten share purchase plan and new debt facility.
Macquarie suggests the company continues to deliver an operating performance that supports an Outperform rating, balancing growth, investment and risks. Target is raised to $6.50 from $6.40.
Target price is $6.50 Current Price is $5.77 Difference: $0.73
If NHF meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $5.71, suggesting upside of 0.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 21.10 cents and EPS of 28.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 26.4, implying annual growth of -2.9%. Current consensus DPS estimate is 20.3, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 21.6. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 23.70 cents and EPS of 31.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.7, implying annual growth of 8.7%. Current consensus DPS estimate is 22.1, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 19.8. |
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates NHF as Underweight (5) -
Morgan Stanley believes the acquisition of GU Health for $155.5m is attractive and provides a platform to expand in the corporate segment. The lack of competition for the asset surprised the broker, supporting a view that the market is overvaluing health insurers.
The broker's recent downgrade was based on elevated trading multiples against a backdrop of peak margins and declining growth. The acquisition does not change this thesis.
In a structurally challenged market, the broker retains an Underweight rating. Target is $4.95. In-Line industry view.
Target price is $4.95 Current Price is $5.77 Difference: minus $0.82 (current price is over target).
If NHF meets the Morgan Stanley target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $5.71, suggesting upside of 0.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 18.80 cents and EPS of 26.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 26.4, implying annual growth of -2.9%. Current consensus DPS estimate is 20.3, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 21.6. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 19.95 cents and EPS of 28.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.7, implying annual growth of 8.7%. Current consensus DPS estimate is 22.1, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 19.8. |
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates NHF as Hold (3) -
The company will acquire corporate health insurer, GU Health, which services over 34,000 policy holders across 260 corporate clients.
Morgans believes the acquisition makes sense strategically. Earnings per share estimates are upgraded by 1-4% for FY18 and FY19.
The upgrades are slightly offset by some minor changes to investment income forecasts. The acquisition appears around 4.5% accretive after synergies. Target is raised to $5.82 from $5.58. Hold rating retained.
Target price is $5.82 Current Price is $5.77 Difference: $0.05
If NHF meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $5.71, suggesting upside of 0.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 16.90 cents and EPS of 27.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 26.4, implying annual growth of -2.9%. Current consensus DPS estimate is 20.3, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 21.6. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 19.60 cents and EPS of 30.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.7, implying annual growth of 8.7%. Current consensus DPS estimate is 22.1, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 19.8. |
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates PMV as Buy (1) -
Citi suspects a poor winter fashion season, high levels of discounting and lower hedge rates will have affected core brands in the second half, when the company reports on September 25. Strong underlying earnings growth is expected at Peter Alexander and Smiggle.
The broker retains a Buy rating and $13.80 target.
Target price is $13.80 Current Price is $13.72 Difference: $0.08
If PMV meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $15.17, suggesting upside of 11.1% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 51.00 cents and EPS of 65.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 69.3, implying annual growth of 4.6%. Current consensus DPS estimate is 52.6, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 19.7. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 57.00 cents and EPS of 72.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 78.1, implying annual growth of 12.7%. Current consensus DPS estimate is 58.6, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 17.5. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates SVW as Hold (3) -
The sale of Westrac China and consolidation of Coates increases the company's exposure to Australian industrial and resources services, at what Deutsche Bank observes is the early stages of a cyclical upswing.
Coates exposure to east coast infrastructure should also deliver strong growth over the medium term. Deutsche Bank envisages upside risks to near-term earnings.
Hold retained. Target rises to $12.60 from $12.50.
Target price is $12.60 Current Price is $12.28 Difference: $0.32
If SVW meets the Deutsche Bank target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $11.03, suggesting downside of -10.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 42.00 cents and EPS of 75.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 71.8, implying annual growth of 925.7%. Current consensus DPS estimate is 41.0, implying a prospective dividend yield of 3.3%. Current consensus EPS estimate suggests the PER is 17.1. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 44.00 cents and EPS of 82.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 82.0, implying annual growth of 14.2%. Current consensus DPS estimate is 44.0, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 15.0. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates SYR as Buy (1) -
The company will undertake an equity raising of $110m through a placement and accelerated non-renounceable entitlement offer.
Deutsche Bank calculates a -15% decline to valuation as a result. Funds will be useful working capital for Balama.
Buy retained. Target is reduced to $4.90 from $5.70.
Target price is $4.90 Current Price is $3.80 Difference: $1.1
If SYR meets the Deutsche Bank target it will return approximately 29% (excluding dividends, fees and charges).
Current consensus price target is $4.55, suggesting upside of 29.6% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 11.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -9.0, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 0.00 cents and EPS of 8.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.8, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 39.9. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates TAH as Sell (5) -
The proposed merger with Tatts ((TTS)) has hit a bump, with the Federal Court upholding the ACCC appeal against the Australian Competition Tribunals decision in favour of the merger.
The case will be handed back to the tribunal, potentially adding weeks or even months to the timeframe for merging, Citi observes.
Sell rating retained. Target is $3.95.
Target price is $3.95 Current Price is $4.30 Difference: minus $0.345 (current price is over target).
If TAH meets the Citi target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $4.51, suggesting upside of 6.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 23.50 cents and EPS of 20.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.2, implying annual growth of N/A. Current consensus DPS estimate is 25.4, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 19.1. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 26.00 cents and EPS of 21.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.1, implying annual growth of 8.6%. Current consensus DPS estimate is 26.9, implying a prospective dividend yield of 6.3%. Current consensus EPS estimate suggests the PER is 17.6. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates TAH as Buy (1) -
Deutsche Bank considers the Federal Court's decision to set aside the decision of the Competition Tribunal to grant authorisation to acquire Tatts ((TTS)) and referring it back for further consideration to be a minor negative.
The reasons for the decision have been embargoed for five days and the broker is unsure how long it will take for the tribunal to reconvene or reconsider its decision.
Buy rating retained. Target is $5.20.
Target price is $5.20 Current Price is $4.30 Difference: $0.905
If TAH meets the Deutsche Bank target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $4.51, suggesting upside of 6.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 26.00 cents and EPS of 22.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.2, implying annual growth of N/A. Current consensus DPS estimate is 25.4, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 19.1. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 30.00 cents and EPS of 26.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.1, implying annual growth of 8.6%. Current consensus DPS estimate is 26.9, implying a prospective dividend yield of 6.3%. Current consensus EPS estimate suggests the PER is 17.6. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates TAH as Lighten (4) -
The Federal Court has upheld the ACCC appeal against the Australian Competition Tribunal's approval of the merger with Tatts ((TTS)), referring it back for further consideration.
Ord Minnett believes the performance of the companies is being held back by the merger distractions and this is a key negative. Lighten rating and $4.10 target retained.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $4.10 Current Price is $4.30 Difference: minus $0.195 (current price is over target).
If TAH meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $4.51, suggesting upside of 6.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 25.00 cents and EPS of 22.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.2, implying annual growth of N/A. Current consensus DPS estimate is 25.4, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 19.1. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 27.00 cents and EPS of 25.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.1, implying annual growth of 8.6%. Current consensus DPS estimate is 26.9, implying a prospective dividend yield of 6.3%. Current consensus EPS estimate suggests the PER is 17.6. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates TCL as Hold (3) -
Morgans is seeking a more attractive entry point to this stock. This may arise if the company raises capital, as expected, or if there is an uptick in government bond rates.
The broker makes adjustments to forecasts for development capital expenditure, a reduced take-up of the distribution reinvestment plan being replaced with an assumed $740m capital raising, as well as factoring in the 395 Express Lanes.
This reduces the target to $11.68 from $11.77. Hold retained.
Target price is $11.68 Current Price is $12.00 Difference: minus $0.32 (current price is over target).
If TCL meets the Morgans target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $12.70, suggesting upside of 8.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 56.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.3, implying annual growth of 107.7%. Current consensus DPS estimate is 56.1, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 48.4. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 60.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.0, implying annual growth of 27.6%. Current consensus DPS estimate is 61.9, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 37.9. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates TPM as Neutral (3) -
FY17 results were slightly ahead of forecasts. FY18 guidance provides more detail about the acceleration of the NBN roll-out and the impact on earnings. From this UBS expects headwinds to accelerate in the consumer division, partly offset by a higher contribution from the Vodafone fibre contract.
Adding the company's mobile expansion into the mix, the broker envisages significant uncertainty over the medium term. Nevertheless, at current levels the valuation appears reasonable.
UBS retains a Neutral rating and lowers the target to $5.50 from $5.75.
Target price is $5.50 Current Price is $5.12 Difference: $0.38
If TPM meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $5.59, suggesting upside of 10.9% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 6.00 cents and EPS of 40.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 39.6, implying annual growth of N/A. Current consensus DPS estimate is 5.5, implying a prospective dividend yield of 1.1%. Current consensus EPS estimate suggests the PER is 12.7. |
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 5.00 cents and EPS of 26.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 27.3, implying annual growth of -31.1%. Current consensus DPS estimate is 4.4, implying a prospective dividend yield of 0.9%. Current consensus EPS estimate suggests the PER is 18.5. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates XRO as Hold (3) -
Deutsche Bank observes, to date, the company has had to drive almost all revenue growth from the volume of accounting software subscriptions.
At the AGM in July the company pointed to opportunities to improve returns and margins and has now launched two new products that will be charged on a per employer basis and, the broker notes, could drive faster growth.
Hold. Target rises to NZ$27.20 from NZ$24.10.
Current Price is $26.38. Target price not assessed.
Current consensus price target is N/A
The company's fiscal year ends in March.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 11.26 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -15.7, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 0.00 cents and EPS of 25.34 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 12.5, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 208.1. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| BSL - | BLUESCOPE STEEL | Hold - Deutsche Bank | Overnight Price $11.50 |
| GMA - | GENWORTH MORTGAGE INSUR | Outperform - Macquarie | Overnight Price $2.90 |
| MGC - | MURRAY GOULBURN | Neutral - Macquarie | Overnight Price $0.78 |
| NHF - | NIB HOLDINGS | Sell - Citi | Overnight Price $5.77 |
| Underperform - Credit Suisse | Overnight Price $5.77 | ||
| Hold - Deutsche Bank | Overnight Price $5.77 | ||
| Outperform - Macquarie | Overnight Price $5.77 | ||
| Underweight - Morgan Stanley | Overnight Price $5.77 | ||
| Hold - Morgans | Overnight Price $5.77 | ||
| PMV - | PREMIER INVESTMENTS | Buy - Citi | Overnight Price $13.72 |
| SVW - | SEVEN GROUP | Hold - Deutsche Bank | Overnight Price $12.28 |
| SYR - | SYRAH RESOURCES | Buy - Deutsche Bank | Overnight Price $3.80 |
| TAH - | TABCORP HOLDINGS | Sell - Citi | Overnight Price $4.30 |
| Buy - Deutsche Bank | Overnight Price $4.30 | ||
| Lighten - Ord Minnett | Overnight Price $4.30 | ||
| TCL - | TRANSURBAN GROUP | Hold - Morgans | Overnight Price $12.00 |
| TPM - | TPG TELECOM | Neutral - UBS | Overnight Price $5.12 |
| XRO - | XERO | Hold - Deutsche Bank | Overnight Price $26.38 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 5 |
| 3. Hold | 8 |
| 4. Reduce | 1 |
| 5. Sell | 4 |
Thursday 21 September 2017
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This document is provided for informational purposes only. It does not
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