Australian Broker Call
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April 01, 2019
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1).
Last Updated: 05:00 PM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
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BIN BINGO INDUSTRIES LIMITED
Industrial Sector Contractors & Engineers
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Overnight Price: $1.53
Morgans rates BIN as Add (1) -
Morgans updates FY19 forecasts to account for the early completion of the DADI acquisition. The broker now allows for around three months of DADI earnings and also the incremental debt costs from earlier funding of the cash component of the acquisition price.
FY19 estimates for operating earnings (EBITDA) lift 17%. FY20 forecasts are unchanged. DADI vendor Ian Malouf now owns 12% of Bingo Industries, escrowed over four equal tranches to March 2021.
Meanwhile, Morgans expects earnings from the existing business to decline -4% in FY19 and underperform guidance. The broker maintains an Add rating and $2.08 target.
Target price is $2.08 Current Price is $1.53 Difference: $0.55
If BIN meets the Morgans target it will return approximately 36% (excluding dividends, fees and charges).
Current consensus price target is $2.03, suggesting upside of 32.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 3.70 cents and EPS of 6.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 7.8, implying annual growth of -22.0%. Current consensus DPS estimate is 3.3, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 19.6. |
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 3.50 cents and EPS of 10.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 10.6, implying annual growth of 35.9%. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 14.4. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates BIN as Buy (1) -
UBS reviews forecasts following the completion of the DADI acquisition. The broker incorporates very conservative forecasts for Bingo Industries, believing the risk should be skewed to the upside from a more moderate housing construction downturn and/or NSW pricing increases.
The broker believes the current valuation is incorporating an overly bearish outcome and maintains a Buy rating. Target is reduced to $2.00 from $2.55.
Target price is $2.00 Current Price is $1.53 Difference: $0.47
If BIN meets the UBS target it will return approximately 31% (excluding dividends, fees and charges).
Current consensus price target is $2.03, suggesting upside of 32.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 3.00 cents and EPS of 9.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 7.8, implying annual growth of -22.0%. Current consensus DPS estimate is 3.3, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 19.6. |
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 3.00 cents and EPS of 9.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 10.6, implying annual growth of 35.9%. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 14.4. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
CSL CSL LIMITED
Pharmaceuticals & Biotech/Lifesciences
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Overnight Price: $197.81
Macquarie rates CSL as Outperform (1) -
Macquarie believes the near-term outlook for immunoglobulin demand is favourable, supported by Hizentra. The broker expects continued momentum in higher-margin products such as Idelvion and Kcentra.
The broker also notes the company's plasma collection centre roll-out is ahead of its peers. Outperform rating maintained. Target is reduced to $225 from $230.
Target price is $225.00 Current Price is $197.81 Difference: $27.19
If CSL meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $203.95, suggesting upside of 3.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 257.54 cents and EPS of 572.23 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 594.5, implying annual growth of N/A. Current consensus DPS estimate is 268.5, implying a prospective dividend yield of 1.4%. Current consensus EPS estimate suggests the PER is 33.3. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 289.89 cents and EPS of 644.05 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 662.4, implying annual growth of 11.4%. Current consensus DPS estimate is 301.2, implying a prospective dividend yield of 1.5%. Current consensus EPS estimate suggests the PER is 29.9. |
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
DLX DULUXGROUP LIMITED
Building Products & Services
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Overnight Price: $7.17
Morgan Stanley rates DLX as Reinstate Coverage with Underweight (5) -
Morgan Stanley envisages a difficult time ahead for domestic housing activity and consumer spending. The broker expects the company's earnings will decline in FY19-20 and struggles to justify the current PE of 20x.
While the company's businesses are generally more defensive than its building materials peers, current consensus expectations for modest growth are not likely to be achieved, in the broker's view.
Morgan Stanley reinstates coverage with an Underweight rating. Cautious sector view maintained. Target is $6.50.
Target price is $6.50 Current Price is $7.17 Difference: minus $0.67 (current price is over target).
If DLX meets the Morgan Stanley target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $7.07, suggesting downside of -1.4% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 28.00 cents and EPS of 36.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 38.5, implying annual growth of -2.3%. Current consensus DPS estimate is 28.3, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 18.6. |
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 28.00 cents and EPS of 35.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 39.8, implying annual growth of 3.4%. Current consensus DPS estimate is 29.3, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 18.0. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
ECX ECLIPX GROUP LIMITED
Vehicle Leasing & Salary Packaging
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Overnight Price: $0.75
UBS rates ECX as Resume Coverage with Buy (1) -
UBS resumes coverage after a period of restriction. The company has announced net profit for the first five months of FY19 was down -42.4% and has removed its FY19 guidance. The main drivers of the underperformance are Grays and Right2Drive.
These are currently progressing through a sales process, with management confirming potential interest from a number of parties. UBS believes there is material upside potential from current valuation but stresses on the balance sheet need to be addressed.
Addressing these through the sale of the non-core businesses would likely be the most favourable outcome. UBS does not believe the company will breach corporate debt covenants at its first half result.
UBS has a Buy rating with a new target of $1.00, from $4.25 previously.
Target price is $1.00 Current Price is $0.75 Difference: $0.25
If ECX meets the UBS target it will return approximately 33% (excluding dividends, fees and charges).
Current consensus price target is $1.05, suggesting upside of 39.5% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 0.00 cents and EPS of 14.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.5, implying annual growth of -26.8%. Current consensus DPS estimate is 1.0, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 5.2. |
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 0.00 cents and EPS of 16.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 16.5, implying annual growth of 13.8%. Current consensus DPS estimate is 8.9, implying a prospective dividend yield of 11.9%. Current consensus EPS estimate suggests the PER is 4.5. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates MLX as Outperform (1) -
The share price has fallen more than -40% in 2019, which Macquarie attributes to a number of operating issues and production downgrades at Nifty.
The stock is now trading in line with the broker's base case valuation, implying the share price is valuing the asset at zero. Macquarie is confident improved production rates over the course of 2019 are achievable.
This should enable a stabilising of the shipping schedule and generate cash flow. Outperform rating and 60c target maintained.
Target price is $0.60 Current Price is $0.25 Difference: $0.35
If MLX meets the Macquarie target it will return approximately 140% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 1.00 cents. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 0.00 cents and EPS of 6.30 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
PPT PERPETUAL LIMITED
Wealth Management & Investments
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Overnight Price: $39.16
Credit Suisse rates PPT as Neutral (3) -
While there has been media speculation Perpetual may consider selling its Corporate Trust business, Credit Suisse notes this business provides earnings diversity and a more stable earnings stream than some of the company's other market-linked businesses.
Perpetual has not responded to the speculation. The division accounts for around 25-30% of earnings and has been a major contributor to growth since FY16.
The broker believes the company will only sell Corporate Trust in the event of a major M&A transaction for Perpetual Investments. Credit Suisse maintains a Neutral rating and $35 target.
Target price is $35.00 Current Price is $39.16 Difference: minus $4.16 (current price is over target).
If PPT meets the Credit Suisse target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $36.16, suggesting downside of -7.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 240.00 cents and EPS of 254.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 261.2, implying annual growth of -14.4%. Current consensus DPS estimate is 245.0, implying a prospective dividend yield of 6.3%. Current consensus EPS estimate suggests the PER is 15.0. |
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 250.00 cents and EPS of 275.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 271.5, implying annual growth of 3.9%. Current consensus DPS estimate is 247.4, implying a prospective dividend yield of 6.3%. Current consensus EPS estimate suggests the PER is 14.4. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $1.01
Credit Suisse rates SYR as Outperform (1) -
The company has updated its reserves and resources statement, to account for mining depletion, drilling and the improved understanding of the orebody. There is a 14% increase in contained graphite at a reduced 10% TGC grade.
The reserve is largely unchanged at 18.5mtpa at 16.36%. The company has also made a structural downgrade to Balama's recovery expectations, now guiding to 87% from the original 92.5%.
Credit Suisse revises down its Balama recovery profile and reduces the target to $3.30 from $3.50. Outperform rating maintained.
Target price is $3.30 Current Price is $1.01 Difference: $2.29
If SYR meets the Credit Suisse target it will return approximately 227% (excluding dividends, fees and charges).
Current consensus price target is $2.48, suggesting upside of 145.5% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 6.89 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -3.4, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 0.00 cents and EPS of 11.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.6, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 6.9. |
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
Macquarie rates SYR as Outperform (1) -
The 2018 loss was larger than Macquarie expected. Total resources are up 14% while reserves are flat. The broker notes lowering the cut-off grade had little impact on the reserve grade.
Product mix remains key to Balama's realised pricing in cash flows. Balama makes up 67% of Macquarie's valuation. Outperform rating maintained. Target is $2.70.
Target price is $2.70 Current Price is $1.01 Difference: $1.69
If SYR meets the Macquarie target it will return approximately 167% (excluding dividends, fees and charges).
Current consensus price target is $2.48, suggesting upside of 145.5% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 0.00 cents and EPS of 7.26 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -3.4, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 0.00 cents and EPS of 24.53 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.6, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 6.9. |
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
Overnight Price: $34.84
Macquarie rates WPL as Neutral (3) -
Macquarie makes changes to its modelling of FX and long-term bond rates. This results in an increase to targets and long-term earnings estimates for the major oil producers, although Woodside's target is lowered to $34.20 from $35.00 as the modelling changes are more than offset by the increased risks surrounding the development of Scarborough. Neutral rating maintained.
Target price is $34.20 Current Price is $34.84 Difference: minus $0.64 (current price is over target).
If WPL 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 $35.66, suggesting upside of 2.3% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 149.40 cents and EPS of 206.83 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 235.4, implying annual growth of N/A. Current consensus DPS estimate is 180.0, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 14.8. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 163.10 cents and EPS of 186.13 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 247.1, implying annual growth of 5.0%. Current consensus DPS estimate is 190.6, implying a prospective dividend yield of 5.5%. Current consensus EPS estimate suggests the PER is 14.1. |
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
Today's Price Target Changes
| Company | Broker | New Target | Prev Target | Change | |
| BIN | BINGO INDUSTRIES | UBS | 2.00 | 2.55 | -21.57% |
| BPT | BEACH ENERGY | Macquarie | 2.05 | 1.90 | 7.89% |
| CSL | CSL | Macquarie | 225.00 | 230.00 | -2.17% |
| DLX | DULUXGROUP | Morgan Stanley | 6.50 | 5.84 | 11.30% |
| ECX | ECLIPX GROUP | UBS | 1.00 | N/A | - |
| OSH | OIL SEARCH | Macquarie | 9.40 | 9.10 | 3.30% |
| STO | SANTOS | Macquarie | 7.50 | 7.20 | 4.17% |
| SYR | SYRAH RESOURCES | Credit Suisse | 3.30 | 3.50 | -5.71% |
| WPL | WOODSIDE PETROLEUM | Macquarie | 34.20 | 35.00 | -2.29% |
Summaries
| BIN | BINGO INDUSTRIES | Add - Morgans | Overnight Price $1.53 |
| Buy - UBS | Overnight Price $1.53 | ||
| CSL | CSL | Outperform - Macquarie | Overnight Price $197.81 |
| DLX | DULUXGROUP | Reinstate Coverage with Underweight - Morgan Stanley | Overnight Price $7.17 |
| ECX | ECLIPX GROUP | Resume Coverage with Buy - UBS | Overnight Price $0.75 |
| MLX | METALS X | Outperform - Macquarie | Overnight Price $0.25 |
| PPT | PERPETUAL | Neutral - Credit Suisse | Overnight Price $39.16 |
| SYR | SYRAH RESOURCES | Outperform - Credit Suisse | Overnight Price $1.01 |
| Outperform - Macquarie | Overnight Price $1.01 | ||
| WPL | WOODSIDE PETROLEUM | Neutral - Macquarie | Overnight Price $34.84 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 7 |
| 3. Hold | 2 |
| 5. Sell | 1 |
Monday 01 April 2019
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