Australian Broker Call

Bell Potter rates APE as Buy (1) -

Eagers Automotive's trading update and 1H guidance was weaker than Bell Potter forecast due to a materially higher cost base, a clearance of excess BYD inventory and inflationary pressures.

The analysts also point to increasing competition and weakness in the New Zealand market.

Management now expects 1H underlying pre-tax profit around $176m, a miss against prior forecasts by the broker and consensus of $210m and $211m, respectively.

The Buy rating is maintained, the target falls to $13.35 from $14.75. Bell Potter doesn't expect many, if any, of the negative factors mentioned above to persist into next year.

Target price is $13.35 Current Price is $10.36 Difference: $2.99
If APE meets the Bell Potter target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $13.24, suggesting upside of 26.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Citi rates APE as Neutral (3) -

The Citi analyst's first take on the 1H24 trading update from Eagers Automotive points to a "very tough" operating environment.

Revenue for the first 4-months of 2024 rose by 18.3% and underlying profit before tax is expected to reach only 85% of the comparable 1H23 result at $176m, well below the broker's $225m forecast and consensus at $211m.

Citi points to cost of living pressures and weakening consumer demand, inflationary cost pressures, increased discounting as inventory stocks grow, a weak NZ market, and the BYD brand not meeting expectations.

Management's guidance infers a profit before tax margin decline of -100bps in the 1H24 versus 1H23. Neutral rating. Target $13.85.

Target price is $13.85 Current Price is $10.36 Difference: $3.49
If APE meets the Citi target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $13.24, suggesting upside of 26.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Macquarie rates APE as Neutral (3) -

Macquarie describes the Eagers Automotive trading update as "broken dreams" with the BYD JV hopes smashed on the rocks of price discounting from excess inventory.

Management flagged 1H24 pre-tax profits to be down -15%, with a 3.3% margin, due to cost-of-living pressures, higher rates, increased competition, and inventory problems.

Revenue is currently tracking above $11bn, and management expects some improvement in margins in the 2H24.

Macquarie is more cautious, predicting FY25 to be a cyclical low for margins around 3.2%.

Earnings estimates for FY24 have been reduced by -4.1%, with no change for FY25 at this stage, notes the analyst.

Neutral rating. Target price lowered to $10.60 from $14.

Target price is $10.60 Current Price is $10.36 Difference: $0.24
If APE meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $13.24, suggesting upside of 26.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Morgan Stanley rates APE as Overweight (1) -

Following Eagers Automotive's 1H trading update, Morgan Stanley believes a 1H reset lower will likely be a trough, but awaits further evidence for a 2H rebound. It's felt the 2H will be a better reflection of earnings power into 2025.

New 1H guidance implies to the broker just $176m of pre-tax profit compared to prior forecasts by consensus and the broker of $211m and $207m, respectively.

The analysts attribute weaker profits largely to the performance of the Retail JV which is experiencing an accelerated ramp-up of new stores and excess inventory.

Overweight rating. Target $16.50. Industry view: In-Line.

Target price is $16.50 Current Price is $10.36 Difference: $6.14
If APE meets the Morgan Stanley target it will return approximately 59% (excluding dividends, fees and charges).

Current consensus price target is $13.24, suggesting upside of 26.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Morgans rates APE as Add (1) -

Morgans lowers FY24-26 EPS forecasts for Eagers Automotive by between -9-10% after management downgraded 1H earnings guidance as both cyclical and temporary negative impacts begin to weigh on margins.

The company cited pockets of geographic weakness (particularly in New Zealand) and materially reduced profitability in the Retail JV due to excess inventory clearance.

A limited profit contribution from recent acquisitions, moderated consumer demand and an increased competitive environment were also mentioned by the analysts.

On the flipside, the broker highlights strong cost control, an expected recovery from the Retail JV in H2, and a material uplift in the Used segment.

The target falls to $14.35 from $15.90 and the Add rating is kept.

Target price is $14.35 Current Price is $10.36 Difference: $3.99
If APE meets the Morgans target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $13.24, suggesting upside of 26.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Ord Minnett rates APE as Buy (1) -

Ord Minnett has been unpleasantly surprised by Eagers Automotive's trading update and H1 guidance, which both led to a share price punishment on the day.

Top line growth seems to be performing as expected, but the broker points at below-expectations margins. Inventory cleaning for BYD is one reason for this, but gross margins across the board seem to have disappointed, highlights the broker.

Ord Minnett sticks to its Buy rating but acknowledges it may require time before the market might convince itself there are no more negative surprises forthcoming.

The target price tumbles to $12.80 from $16 in February. Some serious downgrades have been implemented to forecasts.

Target price is $12.80 Current Price is $10.36 Difference: $2.44
If APE meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $13.24, suggesting upside of 26.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

UBS rates APE as Neutral (3) -

The AGM trading update from Eagers Automotive revealed 19% revenue growth in the year-to-date with management guiding to a -15% decline in H1 profit before tax, year-on-year, according to UBS.

The broker highlights margin pressures from higher discounting and inventory challenges, especially in the BYD JV as well as macro headwinds and inflation costs.

Management is guiding to a 2H24 potential recovery in pretax profit margins due to improved returns in Retail JV and the December Toyota volume bonus.

UBS is cautious on margins and the outlook for 2025 from higher inventory and holding costs, pointing to cost conscious consumers.

The broker adjusts EPS forecasts down by -6.1 for FY24 and -10% for FY25. Neutral rating unchanged. Target price is lowered to $11.20 from $14.10.

Target price is $11.20 Current Price is $10.36 Difference: $0.84
If APE meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $13.24, suggesting upside of 26.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Morgan Stanley rates AUB as Overweight (1) -

AUB Group will acquire 70% of Pacific Indemnity, a specialty underwriting agency in financial lines for -$192m, and, to fund the transaction, will be raising $200m via a fully underwritten institutional placement. The allocation for future M&A purposes is $95m.

An additional $25m may be raised via a share purchase plan. The broker expects overall modest EPS dilution given the up-front share
count impact.

Morgan Stanley retains an Overweight rating and lowers the target price to $37 from $37.25. Industry view is In-Line.

Target price is $37.00 Current Price is $29.46 Difference: $7.54
If AUB meets the Morgan Stanley target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $34.76, suggesting upside of 14.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

UBS rates AUB as Buy (1) -

AUB Group is acquiring 70% of Pacific Indemnity, a specialty Australian underwriting agency, for $105m upfront and an additional $35m deferred consideration, subject to the FY25 earnings.

UBS highlights the valuation is full on first inspection but should be markedly lower post the expected earnings growth and integration synergies.

The company conducted a $200m capital raise potentially indicating further M&A activities, boosting its balance sheet capacity to $400m, according to the broker.

UBS' earnings estimates for FY24 remain unchanged, with a -1% decline in FY25 due to the dilution from the capital raise.

Target left intact at $34.50. Buy.

Target price is $34.50 Current Price is $29.46 Difference: $5.04
If AUB meets the UBS target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $34.76, suggesting upside of 14.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Morgan Stanley rates BWP as Underweight (5) -

After a brief hiatus, Morgan Stanley resumes coverage of BWP Trust with an unchanged Underweight rating and $3.80 target, down from $3.47 - as per the January 25 entry in the FNArena database. Industry view: In-Line. 

The broker's Underweight rating owes more to relative valuation, and the trust's substantial volume of expiring leases over the next two-to-three years. The tenant exposure is among the best in Morgan Stanley's coverage universe with circa 75% of rent via Bunnings.

Unfortunately, BWP Trust is also one of the most expensive REITs in the broker's coverage, when measured by price/net tangible assets.

Target price is $3.80 Current Price is $3.76 Difference: $0.04
If BWP meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.65, suggesting downside of -1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

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

Ord Minnett rates CAJ as Buy (1) -

Ord Minnett has yet again reviewed the diagnostic imaging sector post recent Federal Budget which is not seen as a clear positive for the sector.

Capitol Health retains its Buy rating with a price target of $32, up from $31. The FY24 EPS forecast has been upgraded.

Target price is $0.32 Current Price is $0.25 Difference: $0.07
If CAJ meets the Ord Minnett target it will return approximately 28% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Ord Minnett rates COS as Buy (1) -

Cosol has announced two multi-year contracts and Ord Minnett comments these fresh wins add credence and are positive for shareholders.

It is the broker's view Cosol is demonstrating its ability to convert project-based work into multi-year recurring services. At this stage, the announcement only has a minor impact on forecasts.

Target rises by 6c to $1.33, Buy retained.

Target price is $1.33 Current Price is $1.14 Difference: $0.195
If COS 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 FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Morgans rates DBI as Add (1) -

At Dalrymple Bay Infrastructure's AGM yesterday, management announced its Terminal Infrastructure Charge (TIC) and distribution guidance for the 12 months from July 1 this year.

First-time DPS guidance of 22.5cps meets management's objective of growing the DPS by 3-7% pa for the foreseeable future, and was a slight beat against Morgans' forecast.

The TIC will be around $3.59 per contracted tonne with the growth rate principally driven by the March year-on-year CPI of 3.6%, applied to the base charge of the TIC, explains the broker.

The Add rating is maintained and the target sneaks up to $3.05 from $3.03.

Target price is $3.05 Current Price is $2.95 Difference: $0.1
If DBI meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

UBS rates DMP as Neutral (3) -

Domino's Pizza Enterprises is presenting to investors in Hamburg on May 27 and Paris on May 28, with the UBS analyst not anticipating any trading updates from management.

The broker highlights near-term slower store growth and challenges in key markets, but points to significant same-store sales growth (SSSg) potential, especially in A&NZ and Germany.

UBS stresses the European markets are critical for long-term store expansion, with Germany performing well, and France in recovery.

The broker will be seeking feedback on franchisee profitability, market competition, and cost management, with an emphasis on product innovation and media optimisation.

No change to financial forecasts. Neutral rating and $40 target price unchanged.

Target price is $40.00 Current Price is $36.70 Difference: $3.3
If DMP meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $49.92, suggesting upside of 33.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Morgans rates DXI as Add (1) -

Thanks to leasing outcomes at Jandakot Airport, Perth and Brisbane Technology Park (occupancy now at 97.5%) as well as lower interest costs, FY24 funds from operations guidance (FFO) has been upgraded by Dexus Industria REIT.

FFO guidance moves to 17.4cpu from 17.1cpu and DPS guidance is unchanged.

While the broker expects cap rates to expand further in the near-term, the REIT's industrial portfolio remains robust with the outlook positive for rental growth.

The Add rating is maintained and the target price rises to $3.20 from $3.18.

Target price is $3.20 Current Price is $3.04 Difference: $0.16
If DXI meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $3.00, suggesting downside of -2.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Ord Minnett rates IDX as Buy (1) -

Ord Minnett has yet again reviewed the diagnostic imaging sector post recent Federal Budget which is not seen as a clear positive for the sector.

Buy rating retained for Integral Diagnostics with a slightly higher price target of $2.70 (up 10c). Only minuscule adjustments have been made to forecasts.

Target price is $2.70 Current Price is $2.47 Difference: $0.23
If IDX meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.35, suggesting downside of -4.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Macquarie rates ING as Outperform (1) -

Macquarie views the share price decline in Inghams Group as a result of the recent detection of bird flu in Victoria as an over-reaction.

The broker points to the strict biosecurity measures and historical resilience to such outbreaks, and expects the company's operations to remain unaffected.

Chicken feed prices have recently risen, but remain below the previous corresponding period and the analyst highlights the benefit of management's hedging strategy.

No changes were made to earnings estimates. The Outperform rating and $4.20 target are maintained.

Target price is $4.20 Current Price is $3.60 Difference: $0.6
If ING meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $4.26, suggesting upside of 15.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Citi rates JHX as Downgrade to Neutral from Buy (3) -

James Hardie Industries revised down the outlook for the addressable market on the back of falling existing home sales and permit declines by -200bps. Citi refers to the failure for the repair and remodel market to pick up.

The broker points to the substantial increase in SG&A expenses, projected to rise significantly with limited returns expected in FY25, post the 4Q24 40% increase year-on-year which weighed on the earnings result. 

Management guided to lower EBIT forecasts of -12% for FY25/26, resulting in expected EBIT of US$926m and US$1,055m, respectively. No other updates were provided.

The broker adjusts estimates with a -15.9% decline in FY25 EPS forecasts and -16.1% for FY26. The stock is downgraded to Neutral from Buy, the target cut to $53.40 from $63.

Target price is $53.40 Current Price is $47.17 Difference: $6.23
If JHX meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $55.48, suggesting upside of 14.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

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

Market Sentiment: 0.6

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

Bell Potter rates MDR as Buy (1) -

Ongoing growth for MedAdvisor in the US and Australian business units has continued into Q4, according to management. FY24 EBITDA guidance is for a range between $6.8-7.6m compared to a loss of -$3m in the previous corresponding period.

Bell Potter believes the highlight of the trading update is this potential achievement of an inaugural full-year profit at both the EBITDA and NPAT line.

A key reason for stronger profits, explain the analysts, appears to be increased adoption of THRiV in the US. This is a newer offering that results in higher margins on average, and a better return on investment (ROI) for customers, according to Bell Potter.

Target rises to 49c from 47c. Buy retained.

Target price is $0.49 Current Price is $0.37 Difference: $0.125
If MDR meets the Bell Potter target it will return approximately 34% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Macquarie rates MVF as Outperform (1) -

Macquarie assesses Monash IVF in light of the total IVF cycles increase of 1.1% in April 2024 compared to the previous corresponding period on a days-adjusted basis. On an absolute basis total cycles rose 18.8% in April 2024 on the previous year.

The result was driven by a 5.9% rise in frozen cycles, despite a -2.2% decline in fresh cycles, notes the analyst.

The addition of carrier screening to the Medicare Benefits Schedule (MBS) in November 2023, with 41,500 tests conducted to date, is expected to significantly boost incremental IVF volume and Macquarie believes Monash IVF is in a strong position to gain market share.

No changes were made to earnings forecasts. The Outperform rating and target price of $1.55 are retained.

Target price is $1.55 Current Price is $1.46 Difference: $0.09
If MVF meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $1.56, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.9

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

Citi rates NUF as Buy (1) -

Having returned from a conference call with management, Citi analysts state they are now less cautious. Earlier they responded as follows:

Judging from Citi's early response, Nufarm's interim report has surprised to the downside, even though expectations already were for a weak performance.

The broker cites the extent of today's miss, combined with a weak EBITDA guidance provided for FY24 as the negative stand-outs.

Management did reiterate revenues aspirations for FY26, but the broker suspects investors will be skeptical about it. 

Target $5.80. Buy.

Target price is $5.80 Current Price is $5.09 Difference: $0.71
If NUF meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $6.13, suggesting upside of 29.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

UBS rates NUF as Buy (1) -

UBS's first take on the 1H24 results from Nufarm, released earlier today, highlights a big miss on consensus EBITDA forecast and a -64% decline in net profit, with operating cash flow at $207m against $559m in the previous corresponding period.

The broker notes mixed regional performances with Europe and North America down -44%, while Seeds rose 23%.

Management set FY24 EBITDA guidance at $350-390m, implying a -15% consensus downgrade.

The broker notes high leverage at 3.6x, with an expectation of improvement by year-end. Buy. Target $7.

Target price is $7.00 Current Price is $5.09 Difference: $1.91
If NUF meets the UBS target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $6.13, suggesting upside of 29.5% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Macquarie rates PMT as Outperform (1) -

Patriot Battery Metals has announced a CA$75m flow-through financing placement at a 51% premium to its last traded price (CA$14.54), which is expected to fund exploration at the Corvette lithium project, notes Macquarie.

The broker estimates the cash balance at the end of the June quarter to be CA$110m post placement and highlights Corvette as a potential M&A target due to its status as a top 10 global spodumene resource in a quality locale, Quebec.

The analyst's earnings estimates have been adjusted, with the FY24 EPS forecast up 1% and FY25 EPS forecast down -76%.

Outperform rating and the target is lowered by -5% to $1.90.

Target price is $1.90 Current Price is $0.90 Difference: $1
If PMT meets the Macquarie target it will return approximately 111% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 1.0

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

UBS rates RIC as Buy (1) -

UBS downgrades the FY24 EBITDA forecast by -4% to $92m post the weaker trading update from Ridley Corp management.

The broker highlights softness in the poultry market from genetic breeding issues and the impact on protein meals & oils in the rendering division from vegetable/grain based protein competition.

On a positive note, UBS points to a recent improvement in poultry volumes and the OMC acquisition is performing better than expected in April.

Buy rating and the target price is lowered -5% to $2.65.

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

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Macquarie rates SKC as Outperform (1) -

Macquarie revises down the outlook for SkyCity Entertainment with FY24 EBITDA estimated to come in at the low end of the NZ$290-NZ$310m guidance range due to higher costs from AML/host responsibility measures and a delay in the Horizon Hotel opening until 1Q2025.

Talk of M&A interest are being sparked by what the broker considers as the low valuation which could provide medium-term upside.

Near term, Macquarie is cautious on the ongoing  regulatory headwinds and potential monetary penalties, as well as the more challenging macro economic environment.

EBITDA forecasts are revised by -2% and -5% for FY24 and FY25.

Outperform rating maintained,  the target price moves to NZ$2.45 from NZ$2.75 and the valuation is viewed as attractive.

Current Price is $1.68. Target price not assessed.

Current consensus price target is $3.10, suggesting upside of 91.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 1.0

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

Ord Minnett rates SNL as Downgrade to Accumulate from Buy (2) -

Ord Minnett comments Supply Network's trading update modestly surprised to the upside, which triggered an 2-4% upgrade to the broker's forecasts.

However, in response to the positive share price response, the broker's rating has been pulled back to Accumulate from Buy.

Ord Minnett makes a point in highlighting the difference with peers such as Maxiparts ((MXI)) and Bapcor ((BAP)), with both having released weak performance updates recently.

Ord Minnett believes the outlook for Supply Network remains positive. Target price has increased to $22.50 from $19.20.

Target price is $22.50 Current Price is $22.09 Difference: $0.41
If SNL meets the Ord Minnett target it will return approximately 2% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

UBS rates SVW as No Rating (-1) -

Seven Group reiterated its FY24 guidance for Group EBIT growth in the mid to high teens reflecting strong results to date and increased confidence in delivering on this forecast, according to the UBS analyst who attended the Perth Investor Day.

The broker views management guidance as conservative and forecasts 24% EBIT growth in 2H24.

Robust demand in the mining sector underpins earnings at WesTrac, says the broker, while Coates/Boral operations are underpinned by a 7-year $1.7trn pipeline of infrastructure development.

The acquisition of Boral ((BLD)) is expected to be completed by mid-year, notes the analyst.

UBS highlights the potential for further earnings growth, supported by ongoing fleet electrification and infrastructure investment.

No rating or price target as UBS is currently under research restriction.

Current Price is $39.14. Target price not assessed.

Current consensus price target is $39.13, suggesting downside of -1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

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

While the 1H result and FY24 guidance were in line with forecasts, Morgans upgrades its rating for TechnologyOne to Add from Hold and lifts the target by $4.00 to $20.50.

The broker expects the medium-term profit growth rate should accelerate to around 15-20% from 10-15%. SaaS can be used to remove the implementation bottleneck so TechnologyOne can sell more software solutions than previously, explain the analysts.

Implementation is a large pain point for ERP implementations, notes Morgans, and SaaS (Software as a Service) is great for customers, is unique to the company's business model, and is value accretive.

Target price is $20.50 Current Price is $17.86 Difference: $2.64
If TNE meets the Morgans target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $17.04, suggesting downside of -4.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Shaw and Partners rates TNE as Hold (3) -

TechnologyOne's FY24 15-20% annual recurring revenue (ARR) growth guidance suggests to Shaw and Partners positive trends as shown in the H1 report will continue. In a positive also for margins, cost growth looks to be moderating in the 2H, note the analysts.

Management reiterated its $500m ARR target to FY25, which is expected to double in size every five years. Pre-tax profit margins are expected to expand to 35% over time.

The Hold rating is maintained, partly because Shaw and Partners would like to see more evidence of net revenue retention (NRR) sustaining at 115-120%, as well as an acceleration in UK growth. The $17.30 target is unchanged.

Target price is $17.30 Current Price is $17.86 Difference: minus $0.56 (current price is over target).
If TNE meets the Shaw and Partners target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $17.04, suggesting downside of -4.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Citi rates WEB as Buy (1) -

Citi assesses the Webjet FY24 earnings as a strong performance noting the market share gains, with  35% year-over-year growth in bookings, suggesting an acceleration from the 2H growth rate of 19%.

FY24 group NPAT of $128m was up 84% year-over-year and in line with consensus, according to Citi, with EBITDA for both B2B ($162m) and OTA ($54m) divisions meeting expectations.

The broker remains upbeat on the favourable macro environment, including international travel overtaking domestic and rising hotel revenue per rooms (RevPARs), supporting momentum, as well as lower air-fares and major international events like the Olympics and Euros (football).

The potential separation of the B2B and B2C businesses is viewed by the analyst as offering more potential value creation.

The broker increases net profit forecasts by 2% for FY25 and FY26. Buy rating retained and the target raised to $10.70 from $9.90.

Target price is $10.70 Current Price is $9.09 Difference: $1.61
If WEB meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $10.27, suggesting upside of 15.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.7

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

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

Webjet reported FY24 earnings (EBITDA) of $188.3m, in line with the $188.1m forecast by consensus. Morgan Stanley highlights ongoing B2B top-line growth.

Bookings and total transaction value (TTV) growth of 35% was well ahead of expectations, and the analysts upgrade forecasts as a result of momentum tracking around 10% higher than initial guidance.

Having outlined challenges for B2C in a prior research piece, the broker is not surprised management is exploring a separation of WebBeds (B2B) from Webjet OTA and other B2C assets.

Equal-weight rating. The target rises to $9.30 from $8.50. Industry View: In-line.

Target price is $9.30 Current Price is $9.09 Difference: $0.21
If WEB meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $10.27, suggesting upside of 15.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.7

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

Morgans rates WEB as Add (1) -

Morgans assesses a "strong" FY24 result by Webjet which came in at the upper end of management's guidance range.

The performance of WebBeds was a stand out, in the broker's view, particularly the segment's industry leading margins and strong operating cashflow. So far in FY25, growth for WebBeds has accelerated, while the Webjet OTA has slowed.

The analysts believe the key to unlocking the true value of WebBeds is management's current investigation around a potential demerger of B2B and B2C. It's felt WebBeds would then trade on a (higher) global B2B marketplace multiple.

The demerger option has paused capital management, explains Morgans., and no FY25 EBITDA guidance was provided.

The Add rating is maintained and the target rises to $11.20 from $10.33.

Target price is $11.20 Current Price is $9.09 Difference: $2.11
If WEB meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $10.27, suggesting upside of 15.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.7

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

Ord Minnett rates WEB as Buy (1) -

Ord Minnett's commentary suggests the broker is in awe post yet another strong market update by Webjet. The broker is talking about a "remarkable turnaround in fortunes" in comparison to when covid hit and the company was effectively on its knees.

At that time, when smaller competitors were equally struggling to survive, the broker says Webjet made the all-important decision to invest in improving and consolidating its various IT platforms.

Today, Webjet has the strongest growth outlook in its history, posits the broker. Hats off!

Target improves to $10.50 from $10.18. Buy.

Target price is $10.50 Current Price is $9.09 Difference: $1.41
If WEB meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $10.27, suggesting upside of 15.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.7

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

Shaw and Partners rates WEB as Buy (1) -

Following FY24 results in line with previously flagged targets for earnings and B2B total transaction value (TTV), Shaw and Partners commends the proactive approach by Webjet to unlocking shareholder value within B2B.

Management is exploring a potential demerger of the B2B and B2C businesses.

FY25 year-to-date trading indicates TTV and Bookings are up by 35% year-on-year, comfortably ahead of TTV guidance for 25%, explains the broker.

Shaw and Partners raises its target for Webjet to $10.70 from $9.30 after applying a higher multiple to mid-cycle WebBeds earnings, and increasing the long-term growth rate to 3% from 2.5%. Buy.

Target price is $10.70 Current Price is $9.09 Difference: $1.61
If WEB meets the Shaw and Partners target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $10.27, suggesting upside of 15.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.7

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

UBS rates WEB as Buy (1) -

UBS views Webjet as going from "strength to strength" post the FY24 results which reported 29% growth in revenue and a 40% lift in EBITDA from the B2B segment.

WebBeds' TTV growth accelerated from 30% year-over-year to 35% in the first seven weeks of FY25, with EBITDA margins nearing the 50% target, the analyst highlighted.

Softer domestic demand in the B2C segment was offset by higher international margins and contributions from TripNinja. 

UBS adjusts EPS forecasts by 4% in FY25 and 5% in FY26 and notes the potential demerger of the B2C division via an ASX listing in FY25.

Buy rating with a $10.60 target, up from $10.

Target price is $10.60 Current Price is $9.09 Difference: $1.51
If WEB meets the UBS target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $10.27, suggesting upside of 15.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.7

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

Citi rates XRO as Buy (1) -

Citi analyst's first take on Xero is positive with the company's H1 beating forecasts.

Xero's underlying EBITDA rose by 75% year-over-year above Citi and consensus estimates by 7% and 12%, respectively, due to lower costs and 1% higher revenue driven by international markets.

The broker points to strong annualised monthly recurring revenue (AMRR) growth of 22% year-over-year in constant currency, suggesting upside to FY25 revenue forecasts, and better-than-expected EBITDA margins at 30.7%.

However, subscriber growth was weaker than expected in A&NZ, and churn rates increased slightly.

The guidance for FY25 operating expenses is higher than expected at around 73% of revenue, compared to the broker's forecast of 70%.

The analyst is seeking more colour on the investment outlook for FY25. Buy. Target $144.75.

Target price is $144.75 Current Price is $124.00 Difference: $20.75
If XRO meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $124.88, suggesting downside of -7.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. 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

UBS rates XRO as Buy (1) -

UBS highlights another strong result from Xero in a first response to today's release of 2H24 results.

The broker points to free cash flow exceeding expectations by 133% compared to consensus. Revenue for 2H24 was NZ$914m, slightly above the analyst's estimate and consensus, driven by higher average revenue per user.

EBITDA of NZ$291m also surpassed expectations.

Australia and the UK markets reported revenues up 24% and 25% year-over-year, respectively. However, net subscriber additions were slightly below consensus for the UK, notes UBS.

Guidance for FY25 indicates total operating expenses as a percentage of revenue to be around 73%, in line with expectations.

Buy. Target $141.90.

Target price is $141.90 Current Price is $124.00 Difference: $17.9
If XRO meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $124.88, suggesting downside of -7.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. 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