Australian Broker Call

Citi rates ACL as Initiation of coverage with Neutral (3) -

Citi initiates coverage on Australian Clinical Labs with a Neutral/High Risk rating and $3.80 target price.

Australian Clinical Labs is the third largest pathology services provider in Australia.

While Citi assumes earnings margins can be maintained at 25%, the broker notes the key risk to this forecast is whether the company can optimise its revenue and operating costs to a level where it can maintain its margins in-line with industry peers.

Target price is $3.80 Current Price is $3.48 Difference: $0.32
If ACL meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Macquarie rates AFG as Outperform (1) -

Australian Finance Group saw total lodgements up 34% year on year in the June quarter and 10% from March. Home loan product lodgements were up 95% and 12% respectively.

The broker expects earnings growth ahead, with upside risk to forecasts, supported by lodgement activity and a mix-shift to higher margin products. Outperform and $3.06 target retained.

Target price is $3.06 Current Price is $2.66 Difference: $0.4
If AFG meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $3.12, suggesting upside of 19.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Citi rates AMP as Neutral (3) -

Citi sees AMP’s sale of its global equities and fixed income (“GEFI”) business to Macquarie for an initial $110m plus earn outs as mildly earnings per share dilutive and capital neutral before stranded costs.

The broker still sees AMP as a value trap for now with greater clarity over strategy and more certainty over the value of AMP Private Markets the likely key to opening the trap door.

Citi maintains its $1.25 target price with a Neutral rating.

Target price is $1.25 Current Price is $1.12 Difference: $0.13
If AMP meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $1.24, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Ord Minnett rates AMP as Hold (3) -

AMP has agreed to sell its AMP Capital’s global equities and fixed income (GEFI) business for up to a maximum consideration of $185m. This will comprise a base payment of $110m, with up to $75m payable after two years from completion of the transaction. 

Ord Minnett notes this is consistent with a stated strategy to pursue partnerships or a sale to achieve scale for the GEFI business and focus on its private markets business. The analyst maintains the Hold rating and $1.35 target price.

Target price is $1.35 Current Price is $1.12 Difference: $0.23
If AMP meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $1.24, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Morgans rates AQR as Add (1) -

Unaudited revaluations for June have resulted in a 7.9% increase versus December 2020. Including acquisitions and developments the portfolio has increased by $117m or 22.3% since December 2020. Morgans estimates gearing currently sits at 31%.

Portfolio metrics remain solid with 100% occupancy and a weighted average lease expiry of around 12 years, highlights the broker. The next trading update is expected at the August FY21 result. The analyst's Add rating and $4.15 target are retained.

Target price is $4.15 Current Price is $3.74 Difference: $0.41
If AQR meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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 's resource has grown 11% since the April estimate and 24% since the November estimate that informed Stage 1 feasibility, the broker notes. Another estimate will be made in early 2022 and this will form the basis for a Stage 2 feasibility study.

The broker suspects any additional mining inventory outlined in the Stage 2 study will likely be at a low level of capital intensity due to
development of these areas already being costed in the Stage 1 study. Outperform and $1.30 target retained.

Target price is $1.30 Current Price is $1.00 Difference: $0.3
If BGL meets the Macquarie target it will return approximately 30% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Credit Suisse rates BHP as Neutral (3) -

Into 2022, Credit Suisse believes the global iron ore market will remain reasonably tight, and upgrades forecasts to US$179/t from US$149/t in 2021, and to US$144/t from US$120/t in 2022.

However, the broker maintains a downward forecast price trajectory, as record-high iron ore price incentivises more supply, especially from China, This could lead to more pricing pressure in the medium to long term. Hence, iron ore price forecasts from 2024 are lowered.

For BHP Group, the valuation upside from better earnings in 2021/22 is offset by lower medium-to-long-term iron ore prices, and a lower carrying value of Cerrejon post the divestment announcement. The Neutral rating and $46 target are retained.

Target price is $46.00 Current Price is $49.66 Difference: minus $3.66 (current price is over target).
If BHP meets the Credit Suisse target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $50.54, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

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: 0.4

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

Morgans rates COF as Downgrade to Hold from Add (3) -

There were upward revaluations as at June 2021 14 of 22 properties, due to a mix of leasing outcomes and cap rate compression, explains Morgans.The portfolio is now valued at $2bn, with a weighted average cap rate of 5.81%.

The REIT announced $405m in debt refinancing, increasing the weighted average debt expiry to 4.3 years.

Given recent share price strength, the broker moves to a Hold rating from Add, with a revised price target of $2.49 from $2.33. The REIT is considered to offer an attractive distribution yield for income focused investors.

Target price is $2.49 Current Price is $2.47 Difference: $0.02
If COF meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $2.21, suggesting downside of -9.1% (ex-dividends)

The company's fiscal year ends in June.

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

Credit Suisse rates CRN as Outperform (1) -

Credit Suisse has provided an update to its coal sector outlooks as prices rally to decade highs. Despite decarbonisation efforts, fossil fuels continue to be in high demand at least in the short- to mid-term, with the broker predicting coal to lose market share to renewables beyond 2022.

While recent high thermal prices have been driven by a tight market given China's embargo on Australian coal, Credit Suisse expects prices will continue to benefit from a lack of investment in new mines. Australian exporters have been able to fill global gaps left by China resorting to importing coal from Indonesia and Russia. 

Met coal has been supported by the recent thermal rally, and prices reaching US$200 per tonne since May suggest a demand surge. Credit Suisse raises its met coal forecasts to US$159-165 per tonne from US$121-145 per tonne as global trade readjusts to the embargo on Australian coal by China, but does expect prices to moderate to sustainable levels in 2022.

Credit Suisse notes Coronado Global Resources' Curragh operation is generally subject to a three-month pricing lag, and expects the met coal pricing rally from May to take effect in the June half, with significant free cash flow growth likely to be reflected beyond the December half. 

While Coronado Global's US$100m equity raising should see the company's net debt decrease in the June half, the broker notes it may be debt free by year end on the back of continued strong pricing. Further, Credit Suisse estimates contract prices to increase by around US$40 per tonne in FY22, equating to an additional US$100m in free cash flow. 

Credit Suisse has updated underlying earnings forecasts for Coronado Global by 254% for FY21 and 82% for FY22 

The Outperform rating is retained and the target price increases to $1.60 from $1.35.

Target price is $1.60 Current Price is $0.92 Difference: $0.68
If CRN meets the Credit Suisse target it will return approximately 74% (excluding dividends, fees and charges).

Current consensus price target is $1.22, suggesting upside of 29.3% (ex-dividends)

The company's fiscal year ends in December.

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: 0.8

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

Ord Minnett rates CSR as Hold (3) -

Ord Minnett lowers the building products division earnings (EBIT) estimates for FY22–23 and also the EPS forecast for FY22 falls by -7%. Its considered a key constraint for the industry is the availability of structural timber.

The broker highlights that management flagged, at the recent AGM, delays in the homebuilding industry, in the form of an extended time from approval to commencement, due to labour and product shortages.

The analyst maintains the Hold rating and lowers the target price to $5.80 from $6.

Target price is $5.80 Current Price is $5.60 Difference: $0.2
If CSR meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $6.36, suggesting upside of 21.6% (ex-dividends)

The company's fiscal year ends in March.

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 FMG as Outperform (1) -

Into 2022, Credit Suisse believes the global iron ore market will remain reasonably tight, and upgrades forecasts to US$179/t from US$149/t in 2021, and to US$144/t from US$120/t in 2022.

However, the broker maintains a downward forecast price trajectory, as record-high iron ore price incentivises more supply, especially from China, This could lead to more pricing pressure in the medium to long term. Hence, iron ore price forecasts from 2024 are lowered.

These changes, along with other modelling adjustments, sees the analyst's forecast earnings lift for Fortescue Metals Group in FY21-23 by 6%, 57% and 27%, respectively. The analyst makes no change to the $23 target price or Outperform rating.

Target price is $23.00 Current Price is $23.71 Difference: minus $0.71 (current price is over target).
If FMG 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 $22.35, suggesting downside of -6.1% (ex-dividends)

The company's fiscal year ends in June.

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: 0.1

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

Credit Suisse rates IAG as Outperform (1) -

In anticipation of August results, Credit Suisse reviews earnings and valuations for the general insurance sector, which is still lagging the market versus pre-covid levels.

The broker points out that over 12 months, Insurance Australia Group has underperformed the wider sharemarket by over -35%. It's thought this has been purely multiple driven, while earnings forecasts have increased.

The group remains Credit Suisse's top pick for the sector, given its large discount to market versus historical levels, and its earnings growth potential from an improving commercial lines market. Outperform rating and the target price increases to $5.60 from $5.30.

Target price is $5.60 Current Price is $4.98 Difference: $0.62
If IAG meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $5.48, suggesting upside of 12.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

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

In a comparison of Insurance Australia Group to Suncorp Group ((SUN)), Morgan Stanley believes the latter is better placed to provide a capital return in the near term via a special dividend or on-market buyback. 

While Insurance Australia Group has more potential excess capital, there is less clarity on size and timing, explains the broker. Also the group lagged Suncorp Group in dealing with catastrophe and reinsurance issues.

The analyst's Equal-weight rating is unchanged and the target price increases to $4.85 from $4.80. Industry view: In-line.

Target price is $4.85 Current Price is $4.98 Difference: minus $0.13 (current price is over target).
If IAG meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.48, suggesting upside of 12.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Ord Minnett rates MP1 as Hold (3) -

While Megaport's FY21 revenue was slightly below consensus and Ord Minnett’s forecast, the company posted record customer, port and services additions in the fourth quarter.

The broker likes the structural growth story, although near-term valuation remains challenging. The Hold recommendation is unchanged and the target price increases to $15.50 from $13.50.

The analyst incorporates Megaport Virtual Edge as a new product into forecasts. It's thought this product could add between 2% and 14% incremental monthly recurring revenue (MRR) to FY23 revenue, based on conservative estimates

Target price is $15.50 Current Price is $16.61 Difference: minus $1.11 (current price is over target).
If MP1 meets the Ord Minnett target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.69, suggesting upside of 2.4% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates MP1 as Buy (1) -

UBS attributes Megaport's new record for ports added to a strong performance within the direct sales team.

The broker expects third-party initiatives to gain increasing traction/momentum over the course of first quarter FY22 and more so in second quarter FY22.

UBS suspects if Megaport can demonstrate that circa 650 ports added for the quarter is a new base with further upside momentum from the third-party initiatives, consensus will have to upgrade revenue forecasts.

Buy rating retained and target price increases to $18.75 from $17.10.

Target price is $18.75 Current Price is $16.61 Difference: $2.14
If MP1 meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $16.69, suggesting upside of 2.4% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates MQG as Sell (5) -

Citi believes Macquarie’s acquisition of AMP Capital’s global equities and fixed income business (GEFI) signals clear intent to build global scale in public markets.

This bolt-on opportunity adds a further $60bn of funds under management (FUM), lifting Macquarie Asset Management's (MAM) total FUM to $720bn.

Citi expects no earnings contribution in FY22 with a minor benefit in FY23/24. The broker believes Macquarie's slow deployment of excess capital remains an attractive story with structural longer-term opportunities and competitive advantages in real assets and green energy

However, the broker notes the valuation and earnings expectations appear stretched near-term given earnings movement as well as risks around interest and tax rates.

Sell rating and $140 target price both retained.

Target price is $140.00 Current Price is $157.17 Difference: minus $17.17 (current price is over target).
If MQG meets the Citi target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $161.20, suggesting upside of 4.7% (ex-dividends)

The company's fiscal year ends in March.

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 MQG as Overweight (1) -

Macquarie Group considers the acquisition of AMPCI’s Global Equities and Fixed Income (GEFI) business from AMP Ltd ((AMP)) for $185m is consistent with the strategy of bolt-on deals to add scale.

The transaction should add further diversity, scale and relationships in the A&NZ market, suggests the broker. The Overweight rating and $175 target price are maintained. Industry view in-line.

Target price is $175.00 Current Price is $157.17 Difference: $17.83
If MQG meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $161.20, suggesting upside of 4.7% (ex-dividends)

The company's fiscal year ends in March.

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 MQG as Accumulate (2) -

Ord Minnett assesses the acquisition of the global equity and fixed income (GEFI) business from AMP Ltd ((AMP)) is strategically sound. It's considered the transaction will push the group further in the direction of capital-light asset management.

The broker notes it will increase pro-forma assets under management (AUM) by $60bn to $720bn though it is relatively immaterial in the scheme of the group. The analyst forecasts less than 1% EPS accretion in FY24.

The Accumulate rating and $170 target price are unchanged.

Target price is $170.00 Current Price is $157.17 Difference: $12.83
If MQG meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $161.20, suggesting upside of 4.7% (ex-dividends)

The company's fiscal year ends in March.

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 NHC as Outperform (1) -

Credit Suisse has provided an update to its coal sector outlooks as prices rally to decade highs. Despite decarbonisation efforts, fossil fuels continue to be in high demand at least in the short- to mid-term,with the broker predicting coal to lose market share to renewables beyond 2022. 

While recent high thermal prices have been driven by a tight market given China's embargo on Australian coal, Credit Suisse expects prices will continue to benefit from a lack of investment in new mines. Australian exporters have been able to fill global gaps left by China resorting to importing coal from Indonesia and Russia. 

Met coal has been supported by the recent thermal rally, and prices reaching US$200 per tonne since May suggest a demand surge. Credit Suisse raises its met coal forecasts to US$159-165 per tonne from US$121-145 per tonne as global trade readjusts to the embargo on Australian coal by China, but does expect prices to moderate to sustainable levels in 2022.

Credit Suisse is guiding to a free cash flow yield for New Hope Corporation of around 16% in FY21 and 24% in FY22 based on revised coal pricing estimates. 

The broker also notes the company is accelerating its search for merger and acquisition opportunities. Credit Suisse notes New Hope may benefit from poor investment sentiment around fossil fuels while providing an opportunity for others to unload thermal coal assets at low prices. 

The broker also expects additional capital expenditure for expansion at both the New Linton and Bengalla mines in FY22 and FY23. 

The Outperform rating is retained and the target price increases to $2.40 from $1.95.

Target price is $2.40 Current Price is $1.85 Difference: $0.55
If NHC meets the Credit Suisse target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $2.12, suggesting upside of 14.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Citi rates NWL as Buy (1) -

Having concluded that the risk-reward is not compelling at current levels, Citi has downgraded Netwealth Group to Neutral from Buy, while the target price increases to $16.60 from $16.10 inline with earnings changes.

Given the improving rate outlook, Citi has upgraded cash margin forecasts and now expects Netwealth to get 70bps over RBA, which is 15bps higher than previously forecast. The broker also expects Netwealth to benefit from an increase in the cash rate in FY24.

As a result, Citi has upgraded FY21-FY22 core net profit by 1% to 3%.

The broker forecasts net flows of $10bn, up 3% year-on-year, and continues to expect Netwealth to benefit from the ongoing fragmentation in the advice landscape and consolidation in the Platform market.

The broker also sees the transition of the back book from recently added advisers as the key driver of flows.

Target price is $16.60 Current Price is $16.30 Difference: $0.3
If NWL meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $17.02, suggesting upside of 6.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Credit Suisse rates NWL as Underperform (5) -

Netwealth Group reported fourth quarter funds under administration (FUA) of $47.1bn, up 13% quarter-on-quarter, 2% ahead of Credit Suisse's estimate. It was driven one-third by a flows beat and two-thirds by a beat on market movements, estimates the broker.

Meanwhile, fourth quarter flows of $3.1bn were well ahead of the analyst's estimate of $2.5bn. The quarter is considered to demonstrate the group is capitalising on recent wins and its investment in distribution.

However, consensus expects flows to remain at similar levels to FY22 and the analyst has already factored-in upside from a recovery in deposit spreads in outer years and a rise in cash rates. The Underperform rating is unchanged and the target rises to $16.50 from $16.

Target price is $16.50 Current Price is $16.30 Difference: $0.2
If NWL meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $17.02, suggesting upside of 6.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Macquarie rates NWL as Outperform (1) -

Netwealth's June quarter inflows took FY21 inflows to $9.8bn, beating guidance of $9.0bn. Cash balances remained stable, but the broker expects the rate paid on cash balances to roughly halve come March next year.

The broker expects the competitive landscape to remain relatively benign in the near term and strong inflows support an Outperform rating for Netwealth. Total funds under management has also benefitted from market strength. Target rises to $18.25 from $16.50.

Target price is $18.25 Current Price is $16.30 Difference: $1.95
If NWL meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $17.02, suggesting upside of 6.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Morgans rates NWL as Hold (3) -

Netwealth Group's fourth quarter net inflows beat guidance, and flows momentum picked up to around 10% above Morgans' expectations. Further growth in net inflows guidance for FY22 is now expected, and the analyst now forecasts net inflows of $10.5bn for FY22.

The group reported funds under administration (FUA) of $47.1bn, up 12.7% for the quarter and 49.6% on the pcp. Net FUA inflows were $3.1bn, up 36% for the quarter and 102% on the pcp.

Morgans highlights the ability to deliver consistently strong long-term earnings growth remains intact. The Hold rating is unchanged and the target price is moved to $17.75 from $15.40.

Target price is $17.75 Current Price is $16.30 Difference: $1.45
If NWL meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $17.02, suggesting upside of 6.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Ord Minnett rates NWL as Hold (3) -

Ord Minnett assesses Netwealth Group's fourth quarter update was "a very good one". Funds under administration (FUA) were up 12.7% over the quarter, and net flows of $3.1bn were considered well up on the prior quarter and the pcp.

The broker expects net flow momentum to continue, given the substantial market opportunity, and notes the current modest but growing market share. 

The analyst upgrades EPS forecasts by 6-12% over the forecast period, given the stronger than expected net flows and FUA. The Hold rating is maintained and the target increased to $16 from $13.30.

Target price is $16.00 Current Price is $16.30 Difference: minus $0.3 (current price is over target).
If NWL 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 $17.02, suggesting upside of 6.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Credit Suisse rates QBE as Outperform (1) -

In anticipation of August results, Credit Suisse reviews earnings and valuations for the general insurance sector, which is still lagging the market, versus pre-covid levels.

The broker is very positive on QBE Insurance Group, as overseas comparisons continue to confirm ongoing rate momentum. The analyst highlights the group is currently trading at a -35% discount to the market, well below its five-year average discount of around -20%.

The Outperform rating and $13.30 target are retained.

Target price is $13.30 Current Price is $10.68 Difference: $2.62
If QBE meets the Credit Suisse target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $11.82, suggesting upside of 12.6% (ex-dividends)

The company's fiscal year ends in December.

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: 0.8

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

UBS rates RFF as Neutral (3) -

Rural Funds Group is raising $100m to acquire water entitlements and reduce debt to provide balance sheet capacity to fund the first phase of macadamia conversion projects and $100m of cattle acquisitions with the backing of a lessee.

UBS believes the water entitlements acquisition and $100m of renewed debt capacity for cattle properties was a surprise but highlights the company's increased appetite from corporate lessees for cattle properties.

While not reflected in guidance, the $100m of cattle property acquisition is expected to be 7% accretive.

FY22 guidance is down 14% versus FY20 reflecting the sale of high yielding low growth assets, acquisitions of low yielding macadamia conversion and de-gearing.

Adjusted for market value of water rights net tangible assets (NTA) is $2.05.

Neutral rating remains with the target price increasing to $2.65 from $2.43.

Target price is $2.65 Current Price is $2.60 Difference: $0.05
If RFF meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Credit Suisse rates RIO as Outperform (1) -

Into 2022, Credit Suisse believes the global iron ore market will remain reasonably tight, and upgrades forecasts to US$179/t from US$149/t in 2021, and to US$144/t from US$120/t in 2022.

However, the broker maintains a downward forecast price trajectory, as record-high iron ore price incentivises more supply, especially from China, This could lead to more pricing pressure in the medium to long term. Hence, iron ore price forecasts from 2024 are lowered.

For Rio Tinto, the analyst lifts the target to $133 from $131 and maintains the Outperform rating. With the spot prices for the company’s major revenue drivers still ahead of consensus, a consensus earnings upgrade is expected to remain a potential positive catalyst. 

Target price is $133.00 Current Price is $126.22 Difference: $6.78
If RIO meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $135.79, suggesting upside of 8.5% (ex-dividends)

The company's fiscal year ends in December.

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: 0.4

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

Credit Suisse rates S32 as Outperform (1) -

Credit Suisse has provided an update to its coal outlooks as prices rally to decade highs. Despite decarbonisation efforts, fossil fuels continue to be in high demand at least in the short- to mid-term,with the broker predicting coal to lose market share to renewables beyond 2022. 

While recent high thermal prices have been driven by a tight market given China's embargo on Australian coal, Credit Suisse expects prices will continue to benefit from a lack of investment in new mines. Australian exporters have been able to fill global gaps left by China resorting to importing coal from Indonesia and Russia. 

Met coal has been supported by the recent thermal rally, and prices reaching US$200 per tonne since May suggest a demand surge. Credit Suisse raises its met coal forecasts to US$159-165 per tonne from US$121-145 per tonne as global trade readjusts to the embargo on Australian coal by China, but does expect prices to moderate to sustainable levels in 2022.

South32 remains Credit Suisse's top pick for the sector driven largely by it's strong aluminum portfolio. The broker estimates aluminum will account for around 34% of the company's pre-tax free cash flow in FY22 and around 45% by FY25 given the company is well-placed to benefit from market shortages in coming years. 

The Illawarra met coal mine is also seen as a strong driver of free cash flow, and the broker expects profitability to increase in line with revised coal pricing. 

The Outperform rating is retained and the target price increases to $3.80 from $3.60.

Target price is $3.80 Current Price is $2.94 Difference: $0.86
If S32 meets the Credit Suisse target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $3.53, suggesting upside of 20.4% (ex-dividends)

The company's fiscal year ends in June.

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: 0.9

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

Macquarie rates SGR as Outperform (1) -

Star Entertainment Group has underperformed the ASX100 index by -9% since the beginning of June, the broker notes, likely due to concerns over an AUSTRAC investigation and possible regulatory changes stemming from rival Crown Resorts' ((CWN)) issues.

The Sydney lockdown has led to a trimming of forecasts but in the wider scheme, the broker believes the above is priced in and the stock is attractive on current multiples. Outperform retained, target falls to $4.40 from $4.65.

Target price is $4.40 Current Price is $3.78 Difference: $0.62
If SGR meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $4.22, suggesting upside of 13.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Credit Suisse rates SUN as Neutral (3) -

In anticipation of August results, Credit Suisse reviews earnings and valuations for the general insurance sector, which is still lagging the market versus pre-covid levels.

The analyst highlights positives for Suncorp Group including likely capital management, potential unwinding of covid-bad debt provisions and exposure to positive banking tailwinds. 

While the group's shares has performed far better than its peers, they consequently present less value appeal, in the broker's view. The Neutral rating is maintained and the target price lifts to $11.95 from $11.25.

Target price is $11.95 Current Price is $11.36 Difference: $0.59
If SUN meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $11.97, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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 comparison of Suncorp Group to Insurance Australia Group ((IAG)), Morgan Stanley believes the former is better placed to provide a capital return in the near term via a special dividend or on-market buyback.

The broker prefers Suncorp Group as it also dealt with catastrophe and reinsurance issues ahead of Insurance Australia Group. Currently, the analyst is at the top of consensus in terms of a DPS forecast of 64cps (versus 57cps).

Equal-weight rating. Morgan Stanley's price target increases to $11.25 from $11. Industry view: In-line.

Target price is $11.25 Current Price is $11.36 Difference: minus $0.11 (current price is over target).
If SUN meets the Morgan Stanley target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.97, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

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

Senex Energy's share price has risen 123% since May 2020. Macquarie continues to see coal seam gas production expansion ahead but delivery will take time, so suggests for now investors may find better returns available elsewhere.

The broker will contiue to monitor valuation upside but on the re-rating has pulled back to Neutral from Outperform. Target unchanged at $3.85.

Target price is $3.85 Current Price is $3.48 Difference: $0.37
If SXY meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $3.85, suggesting upside of 10.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Macquarie rates SYD as Neutral (3) -

The broker does not see any foreign ownership issues with the consortium offer for Sydney Airport, but there may be an issue over airport cross-ownership. At this stage the consortium structure is vague.

A lower discount rate, potential re-gearing, growth upside and long-term optionality may justify an increased offer (currently $8.25), the broker suggests, but there is uncertainty regarding pending aero pricing agreements and slot reforms.

Neutral and $8.50 target retained.

Target price is $8.50 Current Price is $7.83 Difference: $0.67
If SYD meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $7.93, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Morgans rates WBC as Add (1) -

Morgans updates forecasts, expecting the provision to be raised relating to fraud (legal proceedings with Forum Finance) and the sale of the New Zealand life insurance business. The FY21 EPS estimate is reduced by -2%, and no material changes are made to outer years.

The Add rating and $29.50 target are retained.

Target price is $29.50 Current Price is $25.53 Difference: $3.97
If WBC meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $28.49, suggesting upside of 12.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

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

Morgan Stanley expects the European summer to be severely affected by covid in FY22, pushing recovery to FY23. It's felt lost earnings will affect Webjet's balance sheet,  that has already experienced several rounds of repair at the expense of significant dilution.

The company is also affected by lockdowns and border closures in several Australian states in the first half, which will limit the upside in the domestic A&NZ business to consumer (B2C) business, explains the analyst.

The Equal-weight rating and $4.30 target are retained. Industry view: In-Line.

Target price is $4.30 Current Price is $5.25 Difference: minus $0.95 (current price is over target).
If WEB meets the Morgan Stanley target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.53, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in March.

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 WHC as Outperform (1) -

Credit Suisse has provided an update to its coal outlooks as prices rally to decade highs. Despite decarbonisation efforts, fossil fuels continue to be in high demand at least in the short- to mid-term,with the broker predicting coal to lose market share to renewables beyond 2022. 

While recent high thermal prices have been driven by a tight market given China's embargo on Australian coal, Credit Suisse expects prices will continue to benefit from a lack of investment in new mines. Australian exporters have been able to fill global gaps left by China resorting to importing coal from Indonesia and Russia. 

Met coal has been supported by the recent thermal rally, and prices reaching US$200 per tonne since May suggest a demand surge. Credit Suisse raises its met coal forecasts to US$159-165 per tonne from US$121-145 per tonne as global trade readjusts to the embargo on Australian coal by China, but does expect prices to moderate to sustainable levels in 2022.

Despite Whitehaven facing a number of issues through FY21, Credit Suisse is confident high pricing will still drive the company to a free cash flow yield of more than 20%. 

Operational issues at the Narrabri mine has seen the company lose out on current high prices, but the mine is expected to deliver higher volume moving into the September quarter as the company completes work on the problematic panel. 

The Maules mine has continued to deliver, and with Credit Suisse forecasting thermal coal pricing strength to continue Whitehaven is should reap benefits. The broker is forecasting a 26% free cash flow yield in FY22 and an 18% yield in FY23, which should help Whitehaven extinguish net debt in FY23. 

The Outperform rating is retained and the target price increases to $2.65 from $2.05.

Target price is $2.65 Current Price is $2.00 Difference: $0.65
If WHC meets the Credit Suisse target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $2.52, suggesting upside of 24.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

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

Western Areas posted a mixed June quarter production report, with nickel production 7% higher than Maquarie forecast but shipments -5% lower. Given Flying Fox continues to underform expactations, the ability to deliver a replacement source is now a key catalyst.

The broker has cut forecasts on the June quarter trend and now expects the miner to report a small loss at its FY21 result release. Target falls to $2.60 from $2.70, downgrade to Neutral from Outperform.

Target price is $2.60 Current Price is $2.46 Difference: $0.14
If WSA meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $2.59, suggesting upside of 12.5% (ex-dividends)

The company's fiscal year ends in June.

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