Australian Broker Call

Macquarie rates ALU as Neutral (3) -

First half operating earnings (EBITDA) were up 22%. Macquarie assesses the business is tracking at the lower end of guidance given the investment being undertaken.

The outlook has softened from the impact of coronavirus and a soft start to the year from Octopart. As a result, the broker suggests guidance warrants caution.

Macquarie retains a Neutral rating and raises the target to $37.50 from $35.50.

Target price is $37.50 Current Price is $39.38 Difference: minus $1.88 (current price is over target).
If ALU meets the Macquarie target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: -0.3

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

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

First half results were solid but the uncertainties surrounding the coronavirus impact in China have clouded the outlook, Ord Minnett observes. The company now expects the lower end of the FY20 guidance range.

While this may be a short-term issue, the broker notes the stock has rallied strongly into the result and the timing for when China can return to business-as-usual is unclear.

Rating is downgraded to Lighten from Hold. Target is raised to $37.76 from $29.59.

Target price is $37.76 Current Price is $39.38 Difference: minus $1.62 (current price is over target).
If ALU meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: -0.3

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

Ord Minnett rates ANN as Hold (3) -

After an initial read-through of today's interim result, Ord Minnett notes that a lower tax rate during the half helped, but Ansell still missed expectations. Weak economic conditions meant organic growth fell short of forecasts.

The analysts note Ansell maintained its FY20 EPS guidance of $1.12-$1.22 FY20 EPS and market consensus, and Ord Minnett, are currently positioned in the middle of that range.

Target price is $28.00 Current Price is $31.42 Difference: minus $3.42 (current price is over target).
If ANN meets the Ord Minnett target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.54, suggesting downside of -6.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.3

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

Ord Minnett rates APA as Hold (3) -

While APA's interim result, upon initial assessment, could be labeled as a slight miss, Ord Minnett is not fussed about it, given the pipeline owner has kept full year guidance intact. That applies to both the bottom line and the dividend.

Target price is $11.40 Current Price is $11.40 Difference: $0
If APA meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $11.09, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Morgans rates ATL as Hold (3) -

First half net profit is now anticipated to be $11.5m, below Morgans' prior estimates. The broker lowers forecasts by -20% for FY20, taking a view that domestic tourism will be significantly affected by the bushfire impact.

The broker also lowers North American forecasts, given management's cautious comments on this market. Morgans maintains a Hold rating and reduces the target to $0.35 from $0.44.

Target price is $0.35 Current Price is $0.28 Difference: $0.07
If ATL meets the Morgans target it will return approximately 25% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Citi rates BEN as Sell (5) -

Bendigo & Adelaide Bank's result was overshadowed by a large software expense impairment, a dividend cut and an announced capital raising. Net interest margin surprised to the upside as the bank positioned itself for falling rates, but will not be sustained, the broker notes, given rates have stopped falling. Citi also expects bad debts to increase from here.

The bank is yet to reveal its transformation plan, but given a weak revenue outlook for the sector the broker foresees pressure on the level of transformation management might be prepared to undertake. Sell rating and $9.25 target retained.

Target price is $9.25 Current Price is $9.97 Difference: minus $0.72 (current price is over target).
If BEN meets the Citi target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.38, suggesting downside of -5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -1.0

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

Credit Suisse rates BEN as Underperform (5) -

First half cash earnings were slightly ahead of estimates yet Credit Suisse highlights the plight of regional banks which do not have the scale to spread the cost burden.

The broker downgrades earnings estimates by -13-14% to reflect the elevated cost base, lower interest margins and the $300m capital raising.

The broker maintains an Underperform rating and reduces the target to $9 from $10.

Target price is $9.00 Current Price is $9.97 Difference: minus $0.97 (current price is over target).
If BEN meets the Credit Suisse target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.38, suggesting downside of -5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -1.0

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

Macquarie rates BEN as Underperform (5) -

First half margin trends were better than Macquarie expected, supported by re-pricing and hedging benefits. The broker expects margin pressures will re-emerge in the second half.

With persistent earnings pressure and the impact from dilution, the broker believes the returns profile is challenged. Target price reduced to $8.75 from $9.50. Underperform rating retained.

Target price is $8.75 Current Price is $9.97 Difference: minus $1.22 (current price is over target).
If BEN meets the Macquarie target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.38, suggesting downside of -5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -1.0

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

Morgan Stanley rates BEN as Underweight (5) -

First half cash profit was ahead of Morgan Stanley's forecasts, as better margin and lower loan losses offset weaker non-interest income and higher expenses.

The bank also announced a $300m capital raising and a -11% reduction in the dividend. The broker believes the decision to raise capital and cut the dividend is sensible.

Underweight maintained. Industry view: In-Line. Target is $10.30.

Target price is $10.30 Current Price is $9.97 Difference: $0.33
If BEN meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $9.38, suggesting downside of -5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -1.0

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

Ord Minnett rates BEN as Lighten (4) -

First half net profit was slightly ahead of Ord Minnett's forecast. The broker assesses the second half is much tougher with respect to net interest margin pressures.

Moreover, there is the dilution burden from the $300m capital raising that is being used to fund an accelerated investment program.

The broker reduces cash estimates for earnings per share by -2.1% for FY20 and -8.9% for FY21.

Ord Minnett does not believe valuation metrics sufficiently reward investors for the risk and retains a Lighten rating. Target is reduced to $9.25 from $10.00.

Target price is $9.25 Current Price is $9.97 Difference: minus $0.72 (current price is over target).
If BEN 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 $9.38, suggesting downside of -5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -1.0

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

Ord Minnett rates BHP as Hold (3) -

Slightly disappointing might be the best label to use upon initial assessment of today's release of interim financials by BHP. Ord Minnett singles out the dividend, with its own forecast of US78c clearly missed as the company declared US65c.

No share buyback has been announced and debt was higher too, which reduced the dividend payout. No change to the company's outlook, the analysts highlight.

Target price is $42.00 Current Price is $38.88 Difference: $3.12
If BHP meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $39.58, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.1

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

Ord Minnett rates BSL as Accumulate (2) -

Lower spot steel prices following the coronavirus outbreak have led Ord Minnett to trim forecasts by -5% for FY20 and -21% for FY21.

The broker retains an Accumulate rating but reduces the target to $16.50 from $17.20.

Target price is $16.50 Current Price is $13.64 Difference: $2.86
If BSL meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $14.85, suggesting upside of 8.8% (ex-dividends)

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Citi rates BXB as Buy (1) -

Brambles' result featured US margin improvement, with plenty more to come, the broker believes.CHEP Americas margins are set to expand for the first time since FY16. A strong defensive performance from CHEP Europe/Middle East/Africa in the face of weaker market growth also impressed.

The broker's Buy rating is underpinned by 12% compound earnings growth forecast for the next three years and a substantial on market buyback. Target rises to $14.90 from $13.30.

Target price is $14.90 Current Price is $12.93 Difference: $1.97
If BXB meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $12.89, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.0

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

Credit Suisse rates BXB as Downgrade to Underperform from Neutral (5) -

First half earnings (EBIT) were marginally below estimates. American revenue was strong but the margin was weaker than Credit Suisse expected. In contrast, the EMEA margin was ahead of expectations.

Revenue guidance for FY20 has been slightly upgraded, with mid single-digit sales revenue growth and underlying profit growth now anticipated.

Credit Suisse raises the target to $12.00 from $11.20 but lowers the rating to Underperform from Neutral on valuation.

Target price is $12.00 Current Price is $12.93 Difference: minus $0.93 (current price is over target).
If BXB 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 $12.89, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.0

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

Macquarie rates BXB as Neutral (3) -

First half results were in line with Macquarie's estimates. Macquarie forecasts growth of 5.5% in underlying profit in FY20 but suspects the outlook commentary may be conservative.

The broker envisages valuation support, given the compound growth rate over three years of 7% and ongoing share buybacks. Target is raised to $12.50 from $12.30.

Target price is $12.50 Current Price is $12.93 Difference: minus $0.43 (current price is over target).
If BXB meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.89, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.0

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

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

First half results were slightly weaker than Morgan Stanley expected. The Americas earnings (EBIT) were ahead of estimates, benefiting from efficiency initiatives, better pricing and lower costs.

The broker considers the stock a "good place to hide" in the current environment with the risk/reward finely balanced.

Equal-weight. Target is $12.80. Industry view is In-Line.

Target price is $12.80 Current Price is $12.93 Difference: minus $0.13 (current price is over target).
If BXB 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 $12.89, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.0

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

Morgans rates BXB as Hold (3) -

First half results were slightly weaker than Morgans expected. CHEP Americas and Asia-Pacific stood out, with strong cash flow. The buyback is ongoing, expected to run through to the end of FY21.

Morgans reduces FY20 underlying estimates for earnings (EBIT) by -2%. Hold rating maintained. Target is raised to $12.56 from $11.45.

Target price is $12.56 Current Price is $12.93 Difference: minus $0.37 (current price is over target).
If BXB 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 $12.89, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.0

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

UBS rates BXB as Neutral (3) -

Underlying profit was in line with forecasts and the highlight for UBS was the increased price realisation of 3% in response to cost inflation incurred over the past two years.

However, underlying margins still fell in the Americas and EMEA. UBS reduces forecasts for EBIT by -4-5% over the next three years to reflect a higher cost to serve in developed markets.

Neutral rating maintained. Target rises to $12.60 from $12.00.

Target price is $12.60 Current Price is $12.93 Difference: minus $0.33 (current price is over target).
If BXB meets the UBS target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.89, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.0

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

Ord Minnett rates COH as Lighten (4) -

Upon initial assessment, Ord Minnett reports Cochlear's interim report performance missed expectations on multiple items.

Management kept the recently reduced profit guidance, with the analysts noting the midpoint of the guidance implies a solid lift in second half profits, despite the drag from the coronavirus impact in China.

Target price is $180.00 Current Price is $226.65 Difference: minus $46.65 (current price is over target).
If COH meets the Ord Minnett target it will return approximately minus 21% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $205.29, suggesting downside of -9.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.6

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

Ord Minnett rates COL as Lighten (4) -

In an initial assessment of today's interim report release, Ord Minnett analysts note the numbers are slightly better-than-expected, including the declared dividend. Liquor came out below the broker's forecast and a review of operations has commenced under new management.

One disappointment seems to be that all cost savings achieved during the half have been reinvested into the business, leading the broker to suggest that shareholders shouldn't count on seeing any direct benefits from management's cost savings program.

Target price is $13.00 Current Price is $16.71 Difference: minus $3.71 (current price is over target).
If COL meets the Ord Minnett target it will return approximately minus 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $15.06, suggesting downside of -9.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.6

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

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

In light of the significant earnings risks to travel companies in the short term, Morgans assesses it is too early to start buying these stocks.

Forecasting the downside risk is almost impossible and will depend on how long the coronavirus lasts. Importantly, travel demand, history has shown, eventually rebounds strongly.

Rating is downgraded to Hold from Add until the outlook becomes clearer. Forecasts are under review pending the first half result of February 19.

The broker suspects FY20 guidance will need to be revised to allow for the impact of coronavirus. Target is reduced to $19.40 from $23.40.

Target price is $19.40 Current Price is $16.19 Difference: $3.21
If CTD meets the Morgans target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $25.67, suggesting upside of 58.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.7

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

Ord Minnett rates ENN as Accumulate (2) -

First half earnings were substantially supported by the gain from the sale of Cradle Mountain and the partial allocation of profit from the sale of Featherdale Wildlife Park.

Ord Minnett notes assets under management continue to grow steadily.

The company has announced the formation of a new fund with a combined value of $123m, which will be anchored by two multi-tenant medical and day surgery centres.

Ord Minnett expects a yield of over 7%. Accumulate rating maintained. Target is reduced to $2.27 from $2.32.

Target price is $2.27 Current Price is $2.17 Difference: $0.1
If ENN meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Citi rates GWA as Neutral (3) -

GWA's result met forecasts and FY20 guidance has been reaffirmed. Management suggested customer de-stocking looks like nearing an end and lead indicators for FY21 are positive, the broker notes.

The virus has not impacted on the supply chain given stockpiling ahead of Chinese New Year.

Were the situation to deteriorate, GWA can source components from Europe. Target rises to $4.00 from $3.60, Neutral retained.

Target price is $4.00 Current Price is $3.96 Difference: $0.04
If GWA meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.81, suggesting downside of -3.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Credit Suisse rates GWA as Neutral (3) -

First half earnings (EBIT) were in line with expectations. Sales were below Credit Suisse estimates, stemming from further deterioration in the market and customer de-stocking.

This was offset by an improvement in Methven, which the broker estimates delivered $49m in sales. The market is expected to improve in FY21.

The broker commends the cost initiatives, designed to maintain earnings targets. Neutral rating maintained. Target is raised to $3.65 from $2.90.

Target price is $3.65 Current Price is $3.96 Difference: minus $0.31 (current price is over target).
If GWA meets the Credit Suisse target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.81, suggesting downside of -3.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

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

First half earnings (EBIT) were in line with Macquarie's estimates. FY20 guidance has been maintained. Macquarie believes this was a solid result in a tough market.

Recent housing indicators, in the broker's view, support expectations for a market recovery in FY21.

The stock appears fairly valued given forecast growth and the broker downgrades to Neutral from Outperform. Target is raised to $3.90 from $3.60.

Target price is $3.90 Current Price is $3.96 Difference: minus $0.06 (current price is over target).
If GWA meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.81, suggesting downside of -3.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Morgans rates GWA as Hold (3) -

First half results were slightly lower than expected amid challenging market conditions. Improvements are not expected until early FY21 although management has maintained FY20 underlying earnings (EBIT) guidance of $80-85m.

Management has advised that Caroma Smart Command is generating positive engagement in multiple commercial segments and the technology is installed in 36 sites across Australasia.

Morgans is increasingly confident in management's ability to execute on cost reduction targets despite the challenging market. Hold rating maintained. Target is raised to $3.67 from $2.93.

Target price is $3.67 Current Price is $3.96 Difference: minus $0.29 (current price is over target).
If GWA meets the Morgans target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.81, suggesting downside of -3.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

UBS rates IMD as Buy (1) -

Operating earnings (EBITDA) missed UBS estimates in the first half, although after normalising for FX gains, the performance was in line. New product revenues have been slower to materialise, but the broker is not overly surprised.

The company has noted its strongest January revenue and instruments on rent are up considerably, despite softer North American activity. This is consistent with the broker's industry feedback.

Buy rating maintained. Target rises to $1.70 from $1.55.

Target price is $1.70 Current Price is $1.65 Difference: $0.05
If IMD meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Morgan Stanley rates KAR as Overweight (1) -

Karoon Energy's exploration well in Peru was dry. Morgan Stanley carried zero value for this exploration well.

The key catalyst is now the Brazilian producing asset. Overweight rating retained. Industry view is In-Line. Price target $1.60.

Target price is $1.60 Current Price is $1.07 Difference: $0.53
If KAR meets the Morgan Stanley target it will return approximately 50% (excluding dividends, fees and charges).

Current consensus price target is $1.97, suggesting upside of 84.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Morgans rates KAR as Add (1) -

Drill results from Marina-1 exploration well in offshore Peru have encountered no oil. Morgans estimates the company's share of the cost of the dry hole is US$56m.

This is immaterial to the investment view which is focused on the acquisition of the Bauna operations, offshore Brazil. Add rating maintained. Target is reduced to $2.31 from $2.40.

Target price is $2.31 Current Price is $1.07 Difference: $1.24
If KAR meets the Morgans target it will return approximately 116% (excluding dividends, fees and charges).

Current consensus price target is $1.97, suggesting upside of 84.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Ord Minnett rates MND as Lighten (4) -

Ord Minnett, upon initial read-through, suggests Monadelphous' interim report was below expectations when corrected for the change in accountancy (AASB16).

The analysts note operational margins remain under pressure.

In addition, on the analysts calculations guidance for the full year falls short of market consensus.

Target price is $15.00 Current Price is $17.23 Difference: minus $2.23 (current price is over target).
If MND meets the Ord Minnett target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.29, suggesting downside of -5.5% (ex-dividends)

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Macquarie rates NSR as Underperform (5) -

The takeover proposal from Public Storage at $2.40 a share is superior to the Gaw proposal, the company points out. It is also not subject to a funding condition.

Macquarie believes there is limited upside for equity investors, given the valuation on acquisition. The broker assesses the downside risk outweighs the benefit from a potential bidding war.

Underperform retained. Target is raised to $2.29 from $1.54.

Target price is $2.29 Current Price is $2.40 Difference: minus $0.11 (current price is over target).
If NSR meets the Macquarie target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.97, suggesting downside of -17.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Ord Minnett rates NWL as Hold (3) -

Initial read-through of today's released set of interim financials leads Ord Minnett to the observation that revenue margins remain under pressure, but better cost control allowed the operational result (EBITDA) to surprise to the upside.

Top line growth slightly disappointed too, but the declared dividend was well above forecast. Ord Minnett reminds investors management has a history for issuing rather conservative guidance.

Target price is $8.14 Current Price is $7.79 Difference: $0.35
If NWL meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $7.82, suggesting upside of 0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Morgans rates PAR as Reduce (5) -

First half results were largely in line with expectations. Morgans remains cautious, believing the current valuation is pricing in significantly higher expectations of potential licensing deal value and market share versus what is considered reasonable.

The company posted a first half net loss of -$5.1m. There was a 35% increase in R&D and employee expenses along with a 25% increase in general and administrative costs.

The broker remains wary of the company's change in strategy mid 2019 and what are considered interesting but inconclusive results in the Ph2b osteoarthritis trial.

Reduce rating maintained. Target is raised to $2.16 from $1.71.

Target price is $2.16 Current Price is $3.97 Difference: minus $1.81 (current price is over target).
If PAR meets the Morgans target it will return approximately minus 46% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -1.0

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

Citi rates QBE as Buy (1) -

Citi has increased its already above-consensus earnings forecasts for QBE Insurance post result. Average premium rate rises were 9.2% in the December quarter, up from 7.5% in September. With the company's efficiency program seemingly also delivering and with further to run, the broker believes prospects are good for both top line growth and margin expansion.

The broker concedes it is hard to predict with precision, but suggests the prospects are good for further rate momentum in the short term given a number of supportive factors. Buy retained, target rises to $16.70 from $15.20.

Target price is $16.70 Current Price is $15.06 Difference: $1.64
If QBE meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $15.63, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.8

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

Credit Suisse rates QBE as Outperform (1) -

2019 results were ahead of estimates. Credit Suisse calculates the recovery in the underlying insurance margin has slowed, particularly in the second half.

However, 2020 guidance assumptions are less conservative than Credit Suisse expected. Guidance is achievable, the broker acknowledges, although investment yields are unknown and the risk of large catastrophe claims remains to the downside.

The broker maintains an Outperform rating and raises the target to $16 from $15. While earnings volatility remains, the broker assesses the growth expectations assumed for QBE over the last decade can be achieved.

Target price is $16.00 Current Price is $15.06 Difference: $0.94
If QBE meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $15.63, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.8

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

Macquarie rates QBE as Neutral (3) -

2019 results disappointed Macquarie, amid further reserve strengthening in North America and the buyback being put on hold.

However, current momentum is focused on premium rate rises which the broker believes will accelerate for at least the next six months.

Neutral rating maintained. Target is raised to $14.10 from $12.70.

Target price is $14.10 Current Price is $15.06 Difference: minus $0.96 (current price is over target).
If QBE 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 $15.63, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.8

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

Morgan Stanley rates QBE as Overweight (1) -

Morgan Stanley has more confidence in the company's ability to meet or beat its guidance, which did not change at the first half result. The combined operating ratio is guided at 93.5-95.5%.

Premium rate increases appear to be accelerating well ahead of claims inflation and there are better prospects for lenders mortgage insurance.

Morgan Stanley lifts FY20-21 estimates for cash earnings by 4%. Overweight rating maintained. Target is raised to $15.50 from $14.10. Industry view is In-Line.

Target price is $15.50 Current Price is $15.06 Difference: $0.44
If QBE meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $15.63, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.8

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

Morgans rates QBE as Upgrade to Add from Hold (1) -

2019 results were largely in line with expectations although, arguably, Morgans notes the combined operating ratio was a little worse than the December commentary.

2020 guidance is unchanged and reflects a combined operating ratio of 93.5-95.5% and net investment return of 2.5-3%.

Positive trends in the result, particularly premium rate rises, point to an upgrade cycle which has further to run and Morgans returns the rating to Add from Hold. Target is raised to $16.23 from $13.02.

Target price is $16.23 Current Price is $15.06 Difference: $1.17
If QBE meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $15.63, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.8

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

Ord Minnett rates QBE as Accumulate (2) -

2019 results missed Ord Minnett's forecasts, blamed on large losses from the Australian bushfires as well as reserve increases. The main positive was the containment of expenses and premium rate increases.

Given the strength of rate increases, Ord Minnett is willing to give the company the benefit of the doubt about improvement to the underlying claims ratio. Accumulate maintained. Target rises to $15.00 from $14.54.

Target price is $15.00 Current Price is $15.06 Difference: minus $0.06 (current price is over target).
If QBE meets the Ord Minnett target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $15.63, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.8

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

UBS rates QBE as Buy (1) -

UBS believes accelerating rises in real premiums should support underwriting margin expansion into FY21. Cash net profit in 2019 was short of the broker's estimates, reflecting reserve top ups and lower investment income.

With attritional accident year profitability tracking better than expected, UBS believes QBE is on track to deliver an FY20 combined operating ratio around the mid point of its guidance range. Buy rating maintained. Target rises to $15.85 from $14.70.

Target price is $15.85 Current Price is $15.06 Difference: $0.79
If QBE meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $15.63, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.8

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

Ord Minnett rates RHP as Accumulate (2) -

At first glance, it appears the interim performance was slightly better-than-expected. Ord Minnett points towards a stronger contribution from the higher margin cloud solutions business plus lower investment in Japan as the reasons why.

The company's outlook has triggered a rather mixed response. Dividend declared of 1.2c was higher than the 1c forecast.

Target price is $3.00 Current Price is $2.19 Difference: $0.81
If RHP meets the Ord Minnett target it will return approximately 37% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

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

Rio Tinto has downgraded its 2020 Pilbara shipment guidance to 324-334mt from 330-343mt as a result of infrastructure damage from Cyclone Damien.

Morgan Stanley believes it is too early to assess the financial impact as this could keep iron ore markets tighter for longer and push prices above its base case.

The broker also seeks more clarity on the spare capacity the company has in the Pilbara. Equal-weight rating retained. Industry view is In-Line. Target is $96.

Target price is $96.00 Current Price is $98.46 Difference: minus $2.46 (current price is over target).
If RIO meets the Morgan Stanley target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $100.34, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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 RRL as Neutral (3) -

First half underlying net profit was below forecasts. This was caused by an increase in depreciation & amortisation. There is no change to FY20 guidance or operating estimates.

While the cash earnings missed estimates, Credit Suisse considers the results straightforward, with no change to guidance altering the outlook. Neutral rating maintained. Target is $4.75.

Target price is $4.75 Current Price is $4.33 Difference: $0.42
If RRL meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $4.79, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Macquarie rates RRL as Underperform (5) -

First half results were below Macquarie's estimates despite being a record for the company. The spot price scenario implies a solid earnings upgrade and Macquarie envisages potential for a larger final dividend.

The broker believes the near-term upside is outweighed by uncertainties around the medium-term growth options. Underperformed maintained. Target is steady at $4.20.

Target price is $4.20 Current Price is $4.33 Difference: minus $0.13 (current price is over target).
If RRL meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.79, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

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

First half results were slightly weaker than Morgan Stanley expected. Free cash flow generation was better.

Equal-weight. Target is $4.70. Industry view is In-Line.

Target price is $4.70 Current Price is $4.33 Difference: $0.37
If RRL meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $4.79, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

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

First half net profit was in line with forecasts. The main value drivers, Ord Minnett believes, are mine life extensions at Duketon and progress at McPhillamys.

The hedge book remains the most out-of-the-money of the company's peer group and the broker believes, given its debt-free position, this is a focus point.

The broker downgrades to Lighten from Hold and reduces the target to $3.90 from $4.20.

Target price is $3.90 Current Price is $4.33 Difference: minus $0.43 (current price is over target).
If RRL meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.79, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

UBS rates RRL as Buy (1) -

UBS believes the first half is best characterised as a period of investment. Lower realised revenue from capitalising early underground ore from Rosemont and higher depreciation charges were the main reasons net profit was -11% below estimates.

The broker assesses the stock is attractive, offering strong free cash flow, much of which is paid out to shareholders. Buy rating maintained. Target is raised to $5.40 from $5.30.

Target price is $5.40 Current Price is $4.33 Difference: $1.07
If RRL meets the UBS target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $4.79, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Macquarie rates S32 as Underperform (5) -

Management is confident the sale of South Africa Energy Coal will proceed as planned. The ferro manganese plants are under review with all options being considered

Macquarie observes the earnings outlook is weak and material declines in the company's key commodities are likely to maintain pressure until FY21.

Underperform and $2.20 target retained.

Target price is $2.20 Current Price is $2.60 Difference: minus $0.4 (current price is over target).
If S32 meets the Macquarie target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.91, suggesting upside of 11.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.5

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

Macquarie rates SAR as Outperform (1) -

First half results were in line with estimates. No dividend was declared. There is a strong production growth trajectory in the Super Pit, Macquarie notes, supported by growth from existing operations.

The broker lifts FY20 estimates for earnings per share by 9%. Outperform maintained. Target is raised to $4.50 from $4.20.

Target price is $4.50 Current Price is $4.14 Difference: $0.36
If SAR meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $4.55, suggesting upside of 9.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.9

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

UBS rates SAR as Buy (1) -

The first half result does not reflect the step change that has occurred to the investment case, UBS believes. This stems from the acquisition of the Super Pit.

The broker already assesses a step change in the earnings contribution and free cash flow coming from both the Super Pit and the rest of the business following a number of years of heavy investment.

The company offers higher production growth to FY25 compared with its peers and UBS maintains a Buy rating. Target is raised to $4.70 from $4.40.

Target price is $4.70 Current Price is $4.14 Difference: $0.56
If SAR meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $4.55, suggesting upside of 9.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.9

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

Ord Minnett rates SCG as Accumulate (2) -

After initial assessment, Ord Minnett reports Scentre Group's H2 performance came out largely in-line. The dividend declared somewhat disappointed in the light of several supportive factors.

All in all, Ord Minnett remains of the view Scentre Group offers a defensive 6% DPS yield with modest growth, which looks attractive relative to an expensive looking domestic equity market.

Target price is $4.30 Current Price is $3.72 Difference: $0.58
If SCG meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $3.83, suggesting upside of 3.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

Ord Minnett rates SGM as Lighten (4) -

Ord Minnett , upon initial assessment, suggests released operational update proved in-line with forecasts, as well as with management's guidance.

In a surprise move, the company announced a dividend, with management commenting this was done to express its confidence in the company's future.

Guidance for H2 has been maintained, and sits well above Ord Minnett's forecast, with the analysts explaining multiple risks remain.

Target price is $9.50 Current Price is $10.76 Difference: minus $1.26 (current price is over target).
If SGM meets the Ord Minnett target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $10.09, suggesting downside of -6.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

UBS rates SM1 as Upgrade to Buy from Neutral (1) -

Capacity expansion has proven harder than the company expected, because of lower infant milk formula (IMF) sales along with margin pressure in lactoferrin and basic ingredients.

UBS believes the company's profit warning addresses the issues and is comfortable that a substantial uplift in earnings per share in FY21 can occur.

The broker assesses the drop in the share price creates an attractive opportunity and upgrades to Buy from Neutral.

UBS lowers estimates for earnings per share by -10% and -8% in FY20 and FY21. Target is reduced to NZ$8.00 from NZ$9.20.

Current Price is $6.25. Target price not assessed.

Current consensus price target is $6.95, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.3

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

Ord Minnett rates SWM as Buy (1) -

At first glance, Ord Minnett concludes today's interim report release revealed a rather weak performance by the company.

Not making things any better, FY20 guidance was lowered to underlying EBIT of $165-175m, down from $190-200m previously.

Trading conditions seem consistent with the first half of 2019, note the analysts. Revenue growth is ok, but operationally disappointment is the word.

Target price is $0.65 Current Price is $0.21 Difference: $0.44
If SWM meets the Ord Minnett target it will return approximately 210% (excluding dividends, fees and charges).

Current consensus price target is $0.41, suggesting upside of 97.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Ord Minnett rates UWL as Initiation of coverage with Buy (1) -

Uniti Group owns telecommunication assets within three segments including infrastructure, specialty telephony and wireless enablement.

The company has made seven acquisitions since listing in 2019 which have been financially and operationally integrated during the first half of FY20.

Ord Minnett expects underlying operating earnings (EBITDA) of $22.7m in FY20. The broker initiates coverage with a Buy rating and $2.02 target.

Target price is $2.02 Current Price is $1.72 Difference: $0.3
If UWL meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Macquarie rates WPL as Neutral (3) -

Despite delays for Scarborough/Pluto and Browse/North West Shelf, Macquarie notes management is confident both projects will proceed to a final investment decision.

The 80% dividend payout ratio is considered key to supporting the share price at current levels. Neutral retained. Target is $35.

Target price is $35.00 Current Price is $32.84 Difference: $2.16
If WPL meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $35.98, suggesting upside of 9.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.4

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