Australian Broker Call

Macquarie rates ALQ as Outperform (1) -

Macquarie expects positive geochemical sample flows when the company reports its FY18 results on May 28. While life sciences has been a problem the outlook is seen improving.

The broker suggests some exuberance is now coming out of the share price but the stock is not for the fainthearted.

Outperform maintained. Target is reduced to $8.20 from $8.25.

Target price is $8.20 Current Price is $7.63 Difference: $0.57
If ALQ meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $7.69, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Ord Minnett rates BLD as Accumulate (2) -

The company's investor briefing acknowledged meaningful inflation in the cost base in Australia but Boral expects to offset this and generate 1-2% in savings per year.

The focus is on price increases, pricing the product on the value created. Ord Minnett observes, with two price increases announced during FY18, it will be interesting to observe if price increases improve in the second half.

Accumulate rating maintained. Target is $7.90.

Target price is $7.90 Current Price is $6.55 Difference: $1.35
If BLD meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $7.78, suggesting upside of 18.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

Credit Suisse rates BSL as Outperform (1) -

BlueScope has called in US$500m of debt ahead of maturity and replaced it with a US$300m issue of a lower coupon bond. The restructure reduces the company's annual debt service cost by some $25m, the broker calculates, and the remaining US$200m will be used to reduce available liquidity.

This, along with the buyback, implies BlueScope's balance sheet is strong but there are no acquisitions being considered, the broker suggests. Outperform and $16.90 target retained.

Target price is $16.90 Current Price is $18.01 Difference: minus $1.11 (current price is over target).
If BSL meets the Credit Suisse target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.51, suggesting upside of 2.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.8

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

Credit Suisse rates CGF as Outperform (1) -

In the wake of the budget, the government has issued a Retirement Income Covenant Position paper setting out a range of details in relation to Comprehensive Income products for Retirement (CIPR) and allowing a short period for feedback.

The upshot is annuities are likely to play a part and the broker calculates that, were annuity flows to grow by 10-30% and Challenger captures 25-50% of the growth, the company's annuity book could experience 60-100% growth from lifetime annuity sales alone.

Outperform and $13.20 target retained.

Target price is $13.20 Current Price is $12.40 Difference: $0.8
If CGF meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $12.20, suggesting downside of -1.6% (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 CPU as Sell (5) -

The company has acquired employee share plan operator Equatex for US$420m. This business has 10% of the European market and $400bn of employee assets under administration.

Deutsche Bank retains a Sell rating and reiterates a view that the margin targets appear overly ambitious. Target is $16.75.

Target price is $16.75 Current Price is $18.38 Difference: minus $1.63 (current price is over target).
If CPU meets the Deutsche Bank target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $17.24, suggesting downside of -6.2% (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: -0.4

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

Ord Minnett rates CPU as Lighten (4) -

The company has announced expansion of its share plans business through the acquisition of Swiss-based Equatex. Ord Minnett believes the deal will boost management EPS by up to 5% if full synergies and debt funding are assumed. Savings, if achieved, are likely to be long dated, the broker acknowledges.

Valuation remains the broker's biggest concern with Computershare. Strategically the acquisition makes sense but the stock's valuation metrics do not appear compelling. Ord Minnett maintains a Lighten rating and $16.20 target.

Target price is $16.20 Current Price is $18.38 Difference: minus $2.18 (current price is over target).
If CPU 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 $17.24, suggesting downside of -6.2% (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: -0.4

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

Citi rates DLX as Sell (5) -

The shares have outperformed the broader market so far in 2018 because of positive conditions in the maintenance and home renovation segment.

Citi suggests headwinds are building, as raw material costs are rising and the leading indicators for construction and housing are softening.

As the headwinds are yet to be reflected in the share price the broker maintains a Sell rating. Target is steady at $7.50.

Target price is $7.50 Current Price is $7.73 Difference: minus $0.23 (current price is over target).
If DLX meets the Citi target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.23, suggesting downside of -6.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.6

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

Credit Suisse rates DLX as Neutral (3) -

It was a solid result from DuluxGroup, the broker suggests, albeit slightly below expectations after tax and one-offs. A flat margin result for Paints & Coatings is a positive given input cost pressure from titanium dioxide and oil.

Updated guidance for the offshore businesses is below the broker's forecast but the long term potential remains. The broker has trimmed earnings forecasts but lifted its target to $8.00 from $7.50 to reflect a lower level of cyclicality in the business and a solid track record compared to peers. Neutral retained.

Target price is $8.00 Current Price is $7.73 Difference: $0.27
If DLX meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $7.23, suggesting downside of -6.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.6

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

Deutsche Bank rates DLX as Sell (5) -

Deutsche Bank analysts have held a negative view on DuluxGroup for quite a while, as illustrated by their Sell rating and $5.70 price target. Both remain in place as the analysts label the release of interim results a negative event for the company.

At face value, the result appeared above expectations, but this was including several one-offs, explain the analysts. Underlying, it represented a "miss" in the order of -5%.

The company has maintained FY guidance, but this too is supported by a $10m one-off, points out the broker.

Target price is $5.70 Current Price is $7.73 Difference: minus $2.03 (current price is over target).
If DLX meets the Deutsche Bank target it will return approximately minus 26% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.23, suggesting downside of -6.5% (ex-dividends)

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.6

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

Macquarie rates DLX as Neutral (3) -

The company's Australasian business performed strongly in the first half, Macquarie notes. The broker considers the balance sheet pristine and small M&A growth is an option.

Valuation is rich, in Macquarie's view, as the stock trades at a 28% premium to the ASX 200 industrials, above a five-year average premium of 20%.

The broker believes it would take a transformational event that alters the growth trajectory to justify further re-rating. Neutral maintained. Target rises to $8.50 from $8.00.

Target price is $8.50 Current Price is $7.73 Difference: $0.77
If DLX meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $7.23, suggesting downside of -6.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.6

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

Morgans rates DLX as Hold (3) -

First half results were slightly ahead of Morgans. All operating divisions contributed positively to earnings growth. Morgans considers the business a consistent performer with long-term growth opportunities in overseas markets.

This is reflected in the current share price and the broker maintains a Hold rating. Morgans would look to reconsider its view on any share price weakness. Target rises to $7.69 from $7.47.

Target price is $7.69 Current Price is $7.73 Difference: minus $0.04 (current price is over target).
If DLX meets the Morgans target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.23, suggesting downside of -6.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.6

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

Ord Minnett rates DLX as Lighten (4) -

First half net profit was ahead of Ord Minnett's estimates. While at first glance this appears to be a solid result, a number of one-off items contributed.

The broker suggests macro support is fading in the domestic market and input costs are continuing to rise. Hence, management is searching offshore for earnings. Growth is expected to be modest and carry more risk in the future. Lighten retained. Target rises to $6.90 from $6.20.

Target price is $6.90 Current Price is $7.73 Difference: minus $0.83 (current price is over target).
If DLX 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 $7.23, suggesting downside of -6.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.6

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

UBS rates DLX as Sell (5) -

First half results were in line with UBS estimates and FY18 guidance for net profit growth is maintained. The broker believes the market should be pleased with the result, given the solid outcome for the Australasian business despite input cost pressures.

Sell rating retained. Target is $6.30.

Target price is $6.30 Current Price is $7.73 Difference: minus $1.43 (current price is over target).
If DLX meets the UBS target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.23, suggesting downside of -6.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.6

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

Ord Minnett rates KDR as Buy (1) -

The company has signed a binding offtake agreement with Tesla Motors. The three-year fixed-price contract has take-or-pay conditions and two 3-year options to extend the agreement. The contract will cover around 5000t per annum of lithium hydroxide, less than 25% of the company's attributable production.

The fixed price is close to the current contract price of around US$15,000/t. Ord Minnett considers this a strong endorsement of the Mt Holland mine and refinery project and highlights the strategic value of ex-China supply of battery-grade lithium products.

Speculative Buy rating maintained and the target is lifted to $3.20 from $2.80.

Target price is $3.20 Current Price is $2.29 Difference: $0.91
If KDR meets the Ord Minnett target it will return approximately 40% (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 LLC as Overweight (1) -

Morgan Stanley has gained a better appreciation of the market dynamics after the investor tour of five European urban regeneration projects. The broker is more confident that the company can deliver its $15bn of recently secured projects.

The accelerating of development and origination improves visibility on medium-term development earnings and could lead to more strategic partnerships, the broker suggests.

Overweight. Target is $18.65. Industry view is Cautious.

Target price is $18.65 Current Price is $18.37 Difference: $0.28
If LLC meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $18.35, suggesting downside of -0.1% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates LNK as Upgrade to Buy from Neutral (1) -

The company has suggested that, offsetting market concerns about the outlook from regulatory changes, smaller funds would become less competitive and the increasing regulatory complexity makes its offering more compelling.

The company will be arguing in its submission to the government on the proposed regulatory changes that the 13-month period of inactivity is too short.

While there is some concern regarding recent developments, Citi suggests current prices offer enough upside to compensate investors for the uncertainties. The broker upgrades to Buy from Neutral. Target is raised to $8.50 from $8.10.

Target price is $8.50 Current Price is $7.14 Difference: $1.36
If LNK meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $7.97, suggesting upside of 11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

Credit Suisse rates LNK as Outperform (1) -

Link's AGM did not focus on the financials but rather opportunities for the recently acquired LAS division and mitigation strategies to reduce the impact of the proposed super changes in the budget.

While concerns over the latter are unlikely to be addressed in the near term, the broker suggests, the share price pullback has more than priced this in while earnings risk is skewed to the upside on LAS growth and synergy potential. Outperform and $8.10 target retained.

Target price is $8.10 Current Price is $7.14 Difference: $0.96
If LNK meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $7.97, suggesting upside of 11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

Macquarie rates LNK as Outperform (1) -

The company's investor briefing has focused on growth opportunities. Macquarie believes the company needs to demonstrate an ability to grow the top line and Link Asset Services appears to be the key source of upside.

The broker also expects acquisitions to underpin growth but envisages limited scope for another transformative acquisition in the near term. The broker maintains a Outperform rating. Target is reduced to $8.10 from $9.20.

Macquarie reduces revenue forecasts for funds administration by -14% in FY21 to reflect the proposed changes to inactive accounts and the loss of the CareSuper contract.

Target price is $8.10 Current Price is $7.14 Difference: $0.96
If LNK meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $7.97, suggesting upside of 11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

Ord Minnett rates LNK as Hold (3) -

The company's investor briefing provided an assessment of the impact from the changes mooted in the federal budget and how it would deal with the loss of CareSuper. A potential maximum revenue loss has been guided of -$55m as a result of the budget proposals.

Ord Minnett believes there is still considerable uncertainty around the changes and the ability to retain contracts. The broker remains positive on the long-term outlook. Hold rating maintained. Target is reduced to $7.50 from $7.57.

Target price is $7.50 Current Price is $7.14 Difference: $0.36
If LNK meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $7.97, suggesting upside of 11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

UBS rates LNK as Neutral (3) -

The company's investor briefing highlighted the longer-term foundations for growth. In particular, the company has pointed to the European expansion of its Link Asset Services business.

UBS suggests, as budget-related impacts and recent mandate losses dominate the near-term outlook, investors will need to witness some revenue on the board to justify paying a premium to the FY20 market multiple.

Neutral and a $7.65 target.

Target price is $7.65 Current Price is $7.14 Difference: $0.51
If LNK meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $7.97, suggesting upside of 11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

Macquarie rates MPL as Neutral (3) -

Macquarie's forecasts now include 2% average premium rises in April 2019 and April 2020, regardless of a change in government. The broker accelerates its forecast long-term margin decline to 6%, consistent with the long-term average profitability of the industry.

The potential for prices to be capped creates significant margin risks for the industry and, while Macquarie does not believe this is completely priced into consensus estimates, current valuations appear supportive.

Neutral rating maintained. Target is reduced to $3.00 from $3.41.

Target price is $3.00 Current Price is $3.06 Difference: minus $0.06 (current price is over target).
If MPL 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 $2.96, suggesting downside of -3.4% (ex-dividends)

The company's fiscal year ends in June.

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 NHF as Neutral (3) -

Industry profitability was at an all-time high in the March quarter and Macquarie's forecasts now include 2% average premium rises in April 2019 and April 2020, regardless of a change of government.

Nevertheless, APRA data confirms there are levers to control costs growth which could be used to moderate the margin declines. The broker decreases net margin estimates by around -100 basis points in FY20 and FY21.

Neutral and target reduced to $6.05 from $6.90.

Target price is $6.05 Current Price is $5.68 Difference: $0.37
If NHF meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $6.09, suggesting upside of 7.2% (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

Citi rates NWH as Initiation of coverage with Buy (1) -

Citi last covered this company back in 2013 and has now returned with an "initiation" of coverage featuring a Buy rating and $1.65 price target. The last price target we found in the FNArena archive was... $1.60. Some things in life one simply cannot make up.

Citi's investment case is based upon the view that NRW Holdings is well positioned to capitalise on the $3bn revenue opportunity from the proposed greenfield iron ore projects in the Pilbara. Citi analysts highlight the company has a strong track record in this regard.

Some of the risks around contract renewals have already been priced in, on the analysts' assessment.

Target price is $1.65 Current Price is $1.32 Difference: $0.33
If NWH meets the Citi target it will return approximately 25% (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 ORG as Overweight (1) -

Morgan Stanley's commodities team is raising oil price forecasts to US$90/bbl by 2020.

This is based on strong global demand, US shale production being dominated by products that cannot be easily processed for diesel/jet fuel, as well as the new regulations by the International Maritime Organisation which are anticipated to lift demand for crude by 2020.

The broker considers the outlook for the company's energy markets division is competitive but manageable. Origin Energy remains the broker's top pick in Australian utilities.

Overweight rating reiterated. Target is $10.88. Industry view: Cautious.

Target price is $10.88 Current Price is $10.08 Difference: $0.8
If ORG meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $9.84, suggesting downside of -2.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

Ord Minnett rates PPH as Buy (1) -

The company's FY18 results showed strong revenue growth but Ord Minnett observes the composition was a little softer than expected.

Nevertheless, the broker suggests the opportunity has not diminished and the company is refining strategies that will realise its considerable potential.

The broker considers the business increasingly likely to achieve break even in the second half of FY19. Buy rating retained. Target is reduced to $4.38 from $4.53.

Target price is $4.38 Current Price is $3.65 Difference: $0.73
If PPH meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Macquarie rates STO as Neutral (3) -

Harbour Energy has returned with an offer of US$4.98 a share, identical to its original non-binding offer several weeks ago. Macquarie expects the board to reject the offer but does not envisage this will be the end.

The broker expects Harbour Energy to work on an offer that will result in board approval. The broker suggests, using the metrics of peer/oil price movements since the pre-offer market in November, that the new offer could be in the range of $6.80-7.20 a share.

Neutral and $6.30 target retained.

Target price is $6.30 Current Price is $6.24 Difference: $0.06
If STO meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $6.01, suggesting downside of -3.6% (ex-dividends)

The company's fiscal year ends in December.

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: 0.2

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

UBS rates STO as Neutral (3) -

The company has received a binding, conditional proposal from Harbour Energy to acquire the stock for US$4.90 a share. The revised proposal is unchanged from the prior indicative offer but there are a number changes to the transaction structure.

UBS suggests the most notable is that Santos shareholders will now bear the full FX risk associated with the transaction. UBS maintains a Neutral rating and raises the target to $6.40 from $6.00.

Target price is $6.40 Current Price is $6.24 Difference: $0.16
If STO meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $6.01, suggesting downside of -3.6% (ex-dividends)

The company's fiscal year ends in December.

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: 0.2

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

Credit Suisse rates TCL as Outperform (1) -

The ACCC has raised concerns with regard to Transurban bidding for the Sydney WestConnex project, citing issues over competition for toll road concessions and competition between toll roads. In reality, the regulator is asking the NSW government if it wants Transurban involved, the broker suggests.

In the first case, the broker believes the government will simply be happy to sell to the highest bidder and not worry about competition concerns. In the second case, the broker sees it highly unlikely this would stop the company bidding.

Outperform and $12.80 target retained.

Target price is $12.80 Current Price is $11.35 Difference: $1.45
If TCL meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $13.15, suggesting upside of 15.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.9

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

Ord Minnett rates TCL as Buy (1) -

Ord Minnett was not surprised at the ACCC's Statement Of Issues, given the regulator has been indicating it has some concerns for several months. The broker struggles to see any concerns that will prevent the company from participating in a successful bid for a 51% interest in WestConnex.

The ACCC's final decision is due on July 19 and final bids are due by July 31. A New South Wales government decision on the acquirer is likely to be announced in August.

Buy rating. Target is $14.50.

Target price is $14.50 Current Price is $11.35 Difference: $3.15
If TCL meets the Ord Minnett target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $13.15, suggesting upside of 15.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.9

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

UBS rates TCL as Buy (1) -

The ACCC has some concerns about the company's interest in WestConnex, a potentially negative development, UBS suggests. The broker considers the Statement Of Issues from the ACCC is significant in the context of this being the first acquisition that has triggered an SOI since the Sydney Roads Group acquisition in 2007.

The main point is how the ACCC defines the market. The basis for the ACCC concerns is a reason why the broker regards Transurban's success in the WestConnex sale project as being important for the value of the concession pipeline. Buy rating and $13.35 target maintained.

Target price is $13.35 Current Price is $11.35 Difference: $2
If TCL meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $13.15, suggesting upside of 15.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.9

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

Citi rates TWE as Sell (5) -

The company has responded to speculation regarding excess inventory in China, reaffirming its audit of wine sales indicates the build up in inventory is not widespread.

Citi believes the issues the company has in China consist of sustaining the pace of volume growth and extending this beyond Penfolds. Success in sustaining a healthy price per case will be the best evidence, the broker adds.

Citi maintains a Sell rating as it does not believe the pace of growth justifies the PE ratio. The company has been mostly reliant on margin expansion and the broker observes little organic volume or pricing growth. Target is $13.30.

Target price is $13.30 Current Price is $17.11 Difference: minus $3.81 (current price is over target).
If TWE meets the Citi target it will return approximately minus 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $17.13, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.2

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

Credit Suisse rates TWE as Upgrade to Neutral from Underperform (3) -

Credit Suisse had already identified issues in China with regard the Rawson's Retreat brand as early as July last year. Treasury Wine acknowledged the problem at the time and began taking steps to rectify it. Hence the press reports sparking the sell-off in the stock yesterday are old news and, as far as the broker is concerned, exaggerated.

Credit Suisse still believes FY19 guidance of 25% earnings growth is achievable, but the broker also believes consensus forecasts for FY20 are too high. Hence an upgrade to Neutral from Underperform on the stock price fall, with an unchanged $15.65 target.

Target price is $15.65 Current Price is $17.11 Difference: minus $1.46 (current price is over target).
If TWE meets the Credit Suisse target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $17.13, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.2

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

Deutsche Bank rates TWE as Hold (3) -

Deutsche Bank suggests, after the conference call, that the company has done a good job of addressing concerns about excess TWE inventory in the channel in China and delays in getting some of the Australian wine imports cleared by customs in that country.

Hold rating and $16 target maintained.

Target price is $16.00 Current Price is $17.11 Difference: minus $1.11 (current price is over target).
If TWE meets the Deutsche Bank target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $17.13, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.2

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

Morgan Stanley rates TWE as Overweight (1) -

After the company's conference call regarding the inventory build up in China Morgan Stanley is more comfortable with the long-term outlook, which suggests the sell-off is overdone. The company has reiterated guidance for EBITS of $524m in FY18.

The broker considers it unlikely there is a system-wide inventory build up in China as Treasury Wines shipments are strong and customer sales are higher. While the Chinese government has cracked down on TWE exporting to China-based distribution centres the company can continue to export directly to wholesalers and retailers.

The broker retains an Overweight rating and $20 target. Industry view: Cautious.

Target price is $20.00 Current Price is $17.11 Difference: $2.89
If TWE meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $17.13, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.2

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

Ord Minnett rates TWE as Accumulate (2) -

Treasury Wine has responded to speculation regarding a build up of inventory in China, stating that it was totally happy with its position and all brands are growing. The company remains committed to its broader model of bundling wine rather than an unsustainable focus on a single brand.

Export data is expected to be subdued in coming months because of customs issues. Ord Minnett suggests the company is executing extremely well and optimising the route to market. Moreover, there is a disciplined approach to capital and strong cash flow.

Ord Minnett maintains an Accumulate rating and raises the target to $20.00 from $18.50.

Target price is $20.00 Current Price is $17.11 Difference: $2.89
If TWE meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $17.13, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.2

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