Australian Broker Call

Citi rates ALG as Buy (1) -

Dave & Buster’s in the US, competing with Main Event, has issued its second profit warning, Citi analysts note. They conclude this is yet another signal competition is increasing in the US family entertainment market.

While Main Event is also impacted, Citi analysts maintain the 10% Sum-of-the-Parts valuation premium they apply remains appropriate, citing earnings upside from greater rollout potential, lower exposure to wages pressure and management's ongoing focus on improving revenue per store.

Buy rating maintained. Target $1.55.

Target price is $1.55 Current Price is $1.06 Difference: $0.49
If ALG meets the Citi target it will return approximately 46% (excluding dividends, fees and charges).

Current consensus price target is $1.33, suggesting upside of 25.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Macquarie rates ALL as Outperform (1) -

FY19 growth expectations appear achievable to Macquarie. The broker considers the stock undervalued, given the attractive growth and high-quality cash flow.

Analysis suggests that a 22x PE is reasonable when compared with other ASX industrials and provides for significant upside, given the stock is trading on a 19x 12-months forward basis.

Outperform maintained. Target is raised to $34.50 from $31.50.

Target price is $34.50 Current Price is $30.38 Difference: $4.12
If ALL meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $33.54, suggesting upside of 10.4% (ex-dividends)

The company's fiscal year ends in September.

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

Ord Minnett rates BSL as Downgrade to Hold from Accumulate (3) -

The recent strong performance from BlueScope Steel has been contrary to a deterioration in steel spreads, trade concerns and scrap pricing/demand.

As a result, Ord Minnett, noting the full valuation and falling price momentum, downgrades to Hold from Accumulate. Target is steady at $14.

Target price is $14.00 Current Price is $13.19 Difference: $0.81
If BSL meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $13.55, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Macquarie rates CIM as Neutral (3) -

The company has re-started its buyback, albeit at relatively small volumes, Macquarie observes. The next catalyst is the third quarter result on October 23.

The broker expects guidance to be reiterated but retains a forecast at the low end of the range of $790-840m for net profit.

Trends were relatively weak in the second quarter and delays in the awarding of new infrastructure have been well documented.

Neutral maintained. Target is reduced to $35.65 from $40.00.

Target price is $35.65 Current Price is $32.04 Difference: $3.61
If CIM meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $41.46, suggesting upside of 29.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Credit Suisse rates COE as Neutral (3) -

The start-up of Annie has established the company's exploration credentials, Credit Suisse believes. The broker re-jigs its models for Annie and Elanora, accelerating first gas by a year to FY22.

The start-up of Sole may be slightly delayed because of the readiness of the Orbost plant. Credit Suisse suggests the market may be "getting a little carried away" with Cooper Energy but struggles to find much in the way of negative catalysts.

Neutral maintained. Target is raised to $0.60 from $0.56.

Target price is $0.60 Current Price is $0.62 Difference: minus $0.02 (current price is over target).
If COE meets the Credit Suisse target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.66, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.7

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

Citi rates EVN as Upgrade to Neutral from Sell (3) -

Commodities analysts at Citi this week revised their price forecasts for gold bullion, now predicting US$2000/oz in the medium term should be regarded as a genuine possibility.

In response, analysts in Australia have upgraded their views on domestic gold companies. Evolution Mining is hereby upgraded to Neutral from Sell. Target price lifts to $4.70 from $4.20.

Target price is $4.70 Current Price is $4.72 Difference: minus $0.02 (current price is over target).
If EVN meets the Citi target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.15, suggesting downside of -12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.4

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

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

UBS believes there are enough structural developments to overcome global economic uncertainty. Going forward, the company's portfolio strategy should mean a high level of sustainable performance fees.

In FY19 Goodman Group generated $600m in development profits, expected to drive performance fees later on. UBS estimates development gains will generate roughly one third of performance fees over the medium to long term.

The broker upgrades to Buy from Neutral, maintaining a steady target of $15.60.

Target price is $15.60 Current Price is $13.69 Difference: $1.91
If GMG meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $15.44, suggesting upside of 12.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

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

Credit Suisse reiterates a positive view on the quality of the company's office portfolio, expecting that operating income growth will be healthy and derived from rent reviews and the rolling out/completion of the commercial development pipeline.

The sustainability of distribution growth is also well supported by recurring revenue streams and a low pay-out ratio. Rating is upgraded to Neutral from Underperform. Target is steady at $3.04.

Target price is $3.04 Current Price is $3.04 Difference: $0
If MGR meets the Credit Suisse target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $3.20, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Citi rates NCM as Upgrade to Neutral from Sell (3) -

Commodities analysts at Citi this week revised their price forecasts for gold bullion, now predicting US$2000/oz in the medium term should be regarded as a genuine possibility.

In response, analysts in Australia have upgraded their views on domestic gold companies. Newcrest Mining is hereby upgraded to Neutral from Sell. Target price increases to $36.90 from $31.05.

Target price is $36.90 Current Price is $34.39 Difference: $2.51
If NCM meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $28.82, suggesting downside of -16.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: -0.7

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

UBS rates NCM as Sell (5) -

While Newcrest trades at a premium rating because of its sector-leading mine life and asset quality, UBS notes production and earnings are set to peak in FY20 because of grade decline at Cadia.

Cash flow is being redeployed at Golpu and, potentially, at Red Chris and this is expected to lift asset quality. Still, UBS maintains a Sell rating, lifting the target to $32 from $26.

Target price is $32.00 Current Price is $34.39 Difference: minus $2.39 (current price is over target).
If NCM meets the UBS target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.82, suggesting downside of -16.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: -0.7

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

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

Commodities analysts at Citi this week revised their price forecasts for gold bullion, now predicting US$2000/oz in the medium term should be regarded as a genuine possibility.

In response, analysts in Australia have upgraded their views on domestic gold companies. Northern Star is hereby upgraded to Buy from Neutral. Target price lifts to $13.30 from $11.50.

Target price is $13.30 Current Price is $10.67 Difference: $2.63
If NST meets the Citi target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $10.43, suggesting downside of -2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

UBS rates NST as Upgrade to Neutral from Sell (3) -

Northern Star has the most near-term production and earnings momentum of the gold stocks under coverage, UBS assesses. Production is expected to grow to 884,000 ounces in FY20 and towards an aspirational target of over 1m ounces per annum.

The main component in the turnaround will be Pogo. Pogo has declared a maiden reserve of 1.5mt and 7.5g/t.

UBS upgrades to Neutral from Sell and raises the target to $11.50 from $10.00.

Target price is $11.50 Current Price is $10.67 Difference: $0.83
If NST meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $10.43, suggesting downside of -2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

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

Commodities analysts at Citi this week revised their price forecasts for gold bullion, now predicting US$2000/oz in the medium term should be regarded as a genuine possibility.

In response, analysts in Australia have upgraded their views on domestic gold companies. OceanaGold is hereby upgraded to Buy from Neutral. Target price climbs to $4.85 from $4.45.

Target price is $4.85 Current Price is $3.55 Difference: $1.3
If OGC meets the Citi target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $4.66, suggesting upside of 31.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.7

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

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

The business is highly leveraged to the gold price yet the shares have not rallied with the sector because of recent operating and regulatory issues. UBS notes the share price has declined -29% in 2019 to date.

A cessation of mining at Didipio in the Philippines remains the biggest headache for the company, although lower-grade stockpiles are still being processed.

UBS does not believe the share price is factoring in much value for Didipio but upgrades to Buy from Neutral as the stock is considered fair value based on the value of the NZ and US assets. Target is reduced to $4.00 from $4.40.

Target price is $4.00 Current Price is $3.55 Difference: $0.45
If OGC meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $4.66, suggesting upside of 31.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.7

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

Citi rates RRL as Upgrade to Neutral from Sell (3) -

Commodities analysts at Citi this week revised their price forecasts for gold bullion, now predicting US$2000/oz in the medium term should be regarded as a genuine possibility.

In response, analysts in Australia have upgraded their views on domestic gold companies. Regis Resources is hereby upgraded to Neutral from Sell. Target price increases to $5 from $4.70.

Target price is $5.00 Current Price is $4.61 Difference: $0.39
If RRL meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $4.88, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

UBS rates RRL as Upgrade to Buy from Sell (1) -

UBS upgrades to Buy from Sell, taking a new valuation approach and given the -5% decline in the share price over 2019. The company has not shared in the rally from the 20% increase in the Australian dollar gold price.

The business generates cash and has relatively low operating risk. While economics at Duketon are becoming more challenging and there is risk of a delay at McPhillamys, UBS believes this is more than fully captured in the share price. Target is raised $5.30 from $4.85.

Target price is $5.30 Current Price is $4.61 Difference: $0.69
If RRL meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $4.88, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Citi rates SAR as Upgrade to Neutral from Sell (3) -

Commodities analysts at Citi this week revised their price forecasts for gold bullion, now predicting US$2000/oz in the medium term should be regarded as a genuine possibility.

In response, analysts in Australia have upgraded their views on domestic gold companies. Saracen Mineral is hereby upgraded to Neutral from Sell. Target price has gained 10c to $3.65.

Target price is $3.65 Current Price is $3.38 Difference: $0.27
If SAR meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.5

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

Citi rates SBM as Upgrade to Neutral from Sell (3) -

Commodities analysts at Citi this week revised their price forecasts for gold bullion, now predicting US$2000/oz in the medium term should be regarded as a genuine possibility.

In response, analysts in Australia have upgraded their views on domestic gold companies. St Barbara is hereby upgraded to Neutral from Sell. Target price remains unchanged at $3.00 despite increased forecasts.

Target price is $3.00 Current Price is $2.86 Difference: $0.14
If SBM meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $3.37, suggesting upside of 17.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.4

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

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

The recent strong performance from Sims Metal has been contrary to a deterioration in steel spreads, trade concerns and scrap pricing/demand.

As a result, and amid heightened macro economic risks, Ord Minnett downgrades to Lighten from Hold, reducing the target to $10.50 from $11.00.

The broker believes the recent appreciation in the share price is unjustified. Non-ferrous automobile shred, called twitch, is now priced at multi-year lows of US$0.39/lb.

Target price is $10.50 Current Price is $12.63 Difference: minus $2.13 (current price is over target).
If SGM meets the Ord Minnett target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.33, suggesting downside of -10.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Macquarie rates STO as Outperform (1) -

Macquarie assesses the share transfer proposal from ENN Energy to ENN Ecological Holdings is unlikely to have an impact on the current strategic partnership with Santos.

The transfer of the shares within the group should not change the holdings of ENN from "above 15%", as required in the strategic partnership agreement which includes a board seat.

Macquarie maintains an Outperform rating and $8.20 target.

Target price is $8.20 Current Price is $7.39 Difference: $0.81
If STO meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $7.64, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.6

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

UBS rates SYR as Neutral (3) -

The company will cut production because of a sudden decrease in the spot price of natural flake graphite in China. Inventory levels have also built up and affected price negotiations and contract renewals.

UBS notes a sudden and unexpected deterioration across a number of commodities as the US/China trade war continues, creating challenges for the short term.

The broker will be watching the October 19 update for signs that production cuts are benefiting the graphite price. Neutral maintained. Target is reduced to $0.59 from $0.90.

Target price is $0.59 Current Price is $0.55 Difference: $0.04
If SYR meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $1.16, suggesting upside of 110.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.0

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

Ord Minnett rates TCL as Buy (1) -

To reflect a more subdued economic outlook for the near term, Ord Minnett has reduced earnings estimates for transport infrastructure stocks.

The broker maintains a Buy rating for Transurban, envisaging revenue growth prospects are favourable versus peers. The target is lowered to $16.00 from $16.75.

Target price is $16.00 Current Price is $14.25 Difference: $1.75
If TCL meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $14.39, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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