Australian Broker Call

Citi rates APX as Buy (1) -

The company has announced the acquisition of Leapforce for $105m, 80% in cash and 20% in equity. Citi believes this will add material scale and increase the volume of work.

The broker believes it also diversifies revenues and arguably creates a pre-eminent position for Appen in the industry. Buy rating and $5.88 target maintained.

Target price is $5.88 Current Price is $5.83 Difference: $0.05
If APX meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Macquarie rates BHP as Outperform (1) -

Improved medium-term cost guidance, and incorporating BFX into the Olympic Dam estimates for the first time, drives 8-13% upgrades to Macquarie's estimates for FY20-22.

The broker raises the target to $32 from $31. Outperform retained.

Target price is $32.00 Current Price is $27.64 Difference: $4.36
If BHP meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $29.95, suggesting upside of 8.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Citi rates BKW as Neutral (3) -

The company has announced a $50m investment along with two independent concrete and quarry partners in a Queensland cement facility.

At face value Citi considers this a positive for the company and its partners, and less so for other construction materials companies in the south-east Queensland market.

The broker updates FY18-20 estimates to include the momentum in the first quarter, which has lifted building products sales by 9%. Neutral rating maintained. Target rises to $15.08 from $14.53.

Target price is $15.08 Current Price is $14.00 Difference: $1.08
If BKW meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $14.76, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Macquarie rates BKW as Neutral (3) -

East Coast trading conditions remain solid in the first quarter, aided by benign weather. Macquarie observes the residential pipeline is holding up but there are headwinds for growth in the medium term.

In this context the broker does not envisage any catalysts for a re-rating. Neutral retained.  Target is raised to $14.46 from $14.30.

The company has formally announced a joint venture into the Queensland cement import industry. It is partnering with Neilsen and Neumann to build a 200,000tpa powdered cement facility at a cost of $50m. Commissioning is expected in 18 months.

Target price is $14.46 Current Price is $14.00 Difference: $0.46
If BKW meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $14.76, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Morgan Stanley rates CBA as Underweight (5) -

Morgan Stanley believes an ongoing de-rating of the bank is likely to be driven by the moderation of growth and return profiles. Business mix and balance sheet advantages versus peers continue to narrow.

The bank's consistent strategy and execution have been the reasons for the premium rating but it now faces a period of uncertainty, and the broker suggests customers with a higher level of savings are more inclined to switch banks and less likely to recommend CBA following the AUSTRAC case.

Underweight. Target is reduced to $71 from $72. Industry view is In-Line.

Target price is $71.00 Current Price is $80.98 Difference: minus $9.98 (current price is over target).
If CBA meets the Morgan Stanley target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $78.59, suggesting downside of -2.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.1

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

Ord Minnett rates CHC as Accumulate (2) -

Ord Minnett has reviewed performance fees and lifted forecasts for the next five years. The main driver is the best performing fund, Charter Hall Office Trust, comprising $2.6bn of office assets that are weighted 66% to the Sydney CBD and North Sydney.

The broker believes the recent outperformance has further to run, and forecasts growth in earnings per share of 9% in FY18, 8% in FY19 and 95% in FY20. The cash position should also improve if surplus earnings are retained in FY20.

Ord Minnett retains an Accumulate rating and raises the target to $6.65 from $6.30.

Target price is $6.65 Current Price is $6.28 Difference: $0.37
If CHC meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $5.89, suggesting downside of -6.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Deutsche Bank rates CKF as Hold (3) -

First half operating earnings were -15% below Deutsche Bank's estimates. A weaker performance in Europe was partly related to timing.

Management notes same-store sales trends have improved but Deutsche Bank reduces forecasts in FY18 and FY19 by -10% and -6%, respectively, to reflect the first half weakness and disappointing European momentum..

Hold retained. Target is reduced to $5.50 from $5.70.

Target price is $5.50 Current Price is $5.93 Difference: minus $0.43 (current price is over target).
If CKF meets the Deutsche Bank target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in April.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

UBS rates CKF as Buy (1) -

First half results were in line with UBS estimates, although Europe was behind. The broker envisages solid growth opportunities from the company's expansion strategy.

UBS considers the valuation appealing and maintains a Buy rating. Target is raised to $6.55 from $6.28.

Target price is $6.55 Current Price is $5.93 Difference: $0.62
If CKF meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in April.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

Macquarie rates CYB as Neutral (3) -

FY17 results impress the broker with  the focus on costs. Good levels of investment in the platform have also been noted, while digitisation should also provide positives in the longer term.

The broker believes, although it's too early to be sure, current technological advantages in the bank's banking platform will act as a defensive measure when it comes to customer attrition, as they face competing digital offerings.

Neutral retained. Target is raised to $5.27 from $4.88.

Target price is $5.27 Current Price is $5.58 Difference: minus $0.31 (current price is over target).
If CYB meets the Macquarie target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.26, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

This company reports in GBP. 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

Citi rates GXY as Neutral (3) -

The company has binding agreements with several Asian customers for the sale of a minimum of 200,000t of spodumene concentrate from Mount Cattlin for five years. The company is also looking at a number of potential upgrades to improve the performance of the Mount Cattlin plant.

The announcements are positive but largely expected and Citi will continue to focus on the progress of the projects. The company is looking for a funding partner to develop the Sal de Vida brine project and also working on the James Bay feasibility study.

Neutral/High Risk. Target is $3.70.

Target price is $3.70 Current Price is $3.90 Difference: minus $0.2 (current price is over target).
If GXY meets the Citi target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.58, suggesting downside of -8.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Morgans rates HSO as Add (1) -

Morgans is slightly more optimistic after the briefing on the Northern Beaches Hospital project. Importantly, the hospital is on time and on budget and a strong ramp up in patients is expected.

Still, there is a lot of work to be done and successful execution is the unknown factor, in the broker's opinion, particularly given an out-of-industry CEO who is only six months into the job.

Add rating. Target falls to $2.44 from $2.53.

Target price is $2.44 Current Price is $1.97 Difference: $0.47
If HSO meets the Morgans target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $2.09, suggesting upside of 6.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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

Morgans rates LVH as Add (1) -

The company has signed up its first Australian financial institution as a client. Morgans believes this underscores the importance of the partnership model with global recruitment processing organisations.

The broker believes, should the company be successful in implementing its strategy, the rewards for shareholders could be substantial.

Morgans retains an Add rating and $1.10 target.

Target price is $1.10 Current Price is $1.04 Difference: $0.06
If LVH meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Morgan Stanley rates NXT as Initiation of coverage with Overweight (1) -

Morgan Stanley initiates coverage with an Overweight rating and $6.50 target. Industry view is In-Line.

The broker considers the company has established its service along with barriers to entry but still remains in the early stages of building its profile.

The broker forecasts FY17-20 revenue and operating earnings growth of 24% and 27%, respectively, driven by long-term structural trends.

Target price is $6.50 Current Price is $5.90 Difference: $0.6
If NXT meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $5.70, suggesting downside of -3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Macquarie rates RCR as Outperform (1) -

The company has been awarded a $33m contract to design and manufacturer a conveyor system for Fortescue Metals ((FMG)). This is the first project under an MOU between the two companies targeted at identifying improvements to productivity and efficiency.

Macquarie observes the company has strong momentum across its infrastructure division, with a large amount of solar farm work in hand and solid prospects elsewhere. The stock is also trading at a significant discount to its peer group.

Outperform rating and $4.64 target maintained.

Target price is $4.64 Current Price is $4.17 Difference: $0.47
If RCR meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $4.94, suggesting upside of 18.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Citi rates SEK as Sell (5) -

The company has upgraded FY18 guidance for earnings growth to around 13% from 10%. Net profit guidance is unchanged at $220-230m.

Given there is no change to revenue guidance, Citi suspects the company has scaled back its cost growth in order to offset headwinds.

Citi upgrades FY19-20 forecasts for earnings per share by 1-2% and raises the target to $14.25 from $13.80. Sell rating maintained.

Target price is $14.25 Current Price is $18.70 Difference: minus $4.45 (current price is over target).
If SEK meets the Citi target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $17.39, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.1

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

Deutsche Bank rates SEK as Hold (3) -

The company has lifted FY18 guidance to 13% growth in operating earnings, primarily because of a better performance in the domestic online business. The company is also encouraged by the results in Asia and in online education services.

FY18 net profit guidance is unchanged at $220-230m. Deutsche Bank upgrades estimates to reflect strong domestic volumes.

Hold rating retained. Target is raised to $17.90 from $16.00.

Target price is $17.90 Current Price is $18.70 Difference: minus $0.8 (current price is over target).
If SEK 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 $17.39, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.1

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

Macquarie rates SEK as Outperform (1) -

The company has increased guidance for operating earnings growth, to 13% from 10%, but maintained net profit estimates because of higher-than-expected net interest expenses.

Macquarie is a little disappointed with the lack of an upgrade to net profit estimates, given the stronger operations. Still, the company is considered well-positioned for growth across both the short and long-term horizons.

Outperform. Target is $18.70.

Target price is $18.70 Current Price is $18.70 Difference: $0
If SEK meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $17.39, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.1

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

UBS rates SEK as Sell (5) -

The company has reiterated FY18 net profit guidance, although UBS suspects the outcome will be at the top of the $220-230m range.

Volumes in Australasia and Asia have been stronger. UBS believes the company's investments are bearing fruit but retains a Sell rating on valuation grounds. Target rises to $16.00 from $15.50.

Target price is $16.00 Current Price is $18.70 Difference: minus $2.7 (current price is over target).
If SEK meets the UBS target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $17.39, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.1

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