Australian Broker Call

Citi rates ALU as Neutral (3) -

Citi expects Altium’s new business sales and revenue growth to accelerate in 2021 as covid vaccine gets rolled out and demand improves among SMEs. Even so, the broker prefers to be Neutral and wait for more detail on the path to the company's FY25 targets.

Altium will release its first-half result on 15 February (later today, this was a preview). Citi forecasts net profit to be down -3% versus last year.

Citi increases the target price to $32.80 from $32.20 and maintains its Neutral rating.

Target price is $32.80 Current Price is $30.66 Difference: $2.14
If ALU meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $34.33, suggesting upside of 17.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.3

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

Ord Minnett rates AMP as Hold (3) -

AMP's 2020 net profit of $295m is in line with Ord Minnett’s forecast. While the wealth management business was much weaker, the bank was boosted by provision releases. No dividend was announced for the second half, resulting in a full-year dividend of 10c.

Ord Minnett sees some hidden value in AMP such as China Life AMP Asset Management Company although the broker is unsure when the current tough earnings trajectory will stabilise. The broker has reduced its 2021 earnings forecast for AMP by -25%.

Hold rating is retained with the target price reducing to $1.55 from $1.75.

Target price is $1.55 Current Price is $1.32 Difference: $0.23
If AMP meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $1.48, suggesting upside of 10.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Ord Minnett rates AQZ as Buy (1) -

Alliance Aviation Services' profit before tax of $26.7m was slightly ahead of Ord Minnett's expectations but what has the broker more impressed is the operating cash flows of $47.5m.

In the broker's view, the outlook for Alliance is "rosy" driven by a shift in the domestic aviation market towards charter and contract based services.

Ord Minnett increases its price target to $5.15 from $5 while maintaining its Buy rating.

Target price is $5.15 Current Price is $4.34 Difference: $0.81
If AQZ meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $5.27, suggesting upside of 23.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Credit Suisse rates ARF as Neutral (3) -

Arena REIT's first-half result was in line with Credit Suisse's expectations in terms of operating profit and earnings per share. The REIT's distribution guidance for FY21, maintained at 14.8c, is considered conservative by the broker with market rent providing scope for upside.  

The broker highlights favourable industry dynamics including a resilient childcare sector that has helped Arena maintain 100% portfolio occupancy while increasing its portfolio weighted average lease expiry.

Neutral retained. Target is raised to $3.04 from $2.91.

Target price is $3.04 Current Price is $3.08 Difference: minus $0.04 (current price is over target).
If ARF meets the Credit Suisse target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.14, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Macquarie rates ARF as Outperform (1) -

First half earnings were in line with Macquarie's estimates. The resilience of the tenant base was the key to the result. Arena REIT has reaffirmed its FY21 distribution guidance of 14.8c.

The broker transfers coverage to another analyst and retains an Outperform rating. Continued upside is expected as neither additional balance sheet deployment nor market rent reviews are factored into guidance. Target is reduced to $3.25 from $3.29.

Target price is $3.25 Current Price is $3.08 Difference: $0.17
If ARF meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $3.14, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Morgan Stanley rates ARF as Overweight (1) -

Arena REIT has delivered first half earnings (EPS) of 7.26 cents, in-line with Morgan Stanley's forecast. FY21 DPS guidance for 14.8cps has been reaffirmed.

The broker feels the company is pretty much back on the pre-covid track, with less than -$20k of rent relief arranged for the first half.

The development pipeline has progressed well, with the completion of $45.8m worth of centres at 6.7% yield, explains the analyst. The pipeline now has 13 projects, with -$30m of capex requirements remaining.

Overweight retained. Target is $3.14. Industry view is In-Line.

Target price is $3.14 Current Price is $3.08 Difference: $0.06
If ARF meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.14, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

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

First half net profit was ahead of estimates. UBS believes this demonstrates the diversity in the ASX model. The difficult operating environment was offset by growth elsewhere such as in listings and the cash market.

Net profit fell -3.4%, the first decline in eight years. UBS attributes the fall to the drop of -40% in net interest and dividend income.

The broker expects earnings will rebase at this level over FY21 and then gradually recover. Given the underperformance in the share price, the broker upgrades to Neutral from Sell. Target is raised to $68 from $66.

Target price is $68.00 Current Price is $70.42 Difference: minus $2.42 (current price is over target).
If ASX meets the UBS target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $69.68, suggesting downside of -1.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Macquarie rates AZJ as Outperform (1) -

Aurizon Holdings reported 1H21 underlying net profit of $267m, ahead of Macquarie’s expected $234m, (consensus $231m) which was down -0.7% on pcp. 

In its initial coverage of the Aurizon Holdings result, Macquarie notes that while Coal earnings, tainted by ongoing import ban in China, fell to $171m down -17%, the solid cost performance and excellent bulk, which benefited from the strong iron ore environment and recontracting, has addressed fear of a downgrade over weaker coal volumes.

Coal haulage guidance is down -10mt to 200-210mt in FY21, reflecting weak outlook, but operating earnings (EBIT) guidance has been increased to $870-$910m (previously $830-880m, versus Macquarie's forecast of $875m inc WIRP).

The broker expects excellent cash performance, with operating cashflow of $706m ahead of expectations, to possibly result in an extension of the share buyback at year-end.

Outperform and target price of $4.31 are both retained.

Target price is $4.31 Current Price is $3.85 Difference: $0.46
If AZJ meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $5.06, suggesting upside of 26.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Citi rates BBN as Buy (1) -

Citi notes Baby Bunting Group's growth strategies including increasing the number of stores to 110, increasing its bargaining power with suppliers and working on supply chain efficiencies.

The group plans to rollout its first New Zealand store in FY22 and sees a network plan of 10 stores which is lower than the broker's estimated 20 stores. Should Baby Bunting rollout 20 stores, Citi calculates it could represent an additional $13m in operating income. 

Since baby goods are relatively non-discretionary, Citi thinks Baby Bunting has relatively less downside than other listed retailers if conditions were to slow. The Buy rating is unchanged with the target price rising to $6.22 from $5.48.

Target price is $6.22 Current Price is $5.25 Difference: $0.97
If BBN meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $6.24, suggesting upside of 9.9% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates BBN as Outperform (1) -

First half net profit was up 43.5%, although less than Macquarie estimated. The broker believes Baby Bunting is one of the few retailers that can grow earnings sustainably in FY22.

Macquarie assesses the business has been a material beneficiary of the pandemic at the earnings line relative to the broader retail sector.

With an additional store target in New Zealand of more than 10, the business is now more than halfway through its store roll-out. Outperform maintained. Target is raised to $5.80 from $5.30.

Target price is $5.80 Current Price is $5.25 Difference: $0.55
If BBN meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $6.24, suggesting upside of 9.9% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgan Stanley rates BBN as Overweight (1) -

Exceptional comparative sales performance of over 15.7% year-to-date and sustained gross margin strength keep Morgan Stanley bullish on the execution story.

While reinvestment is limiting operating leverage, the broker sees the company beating top-line forecasts and reinvesting hard to exceed $1bn sales by FY30.

Online sales (up 95%) also accelerated versus the second half (up 66%) and overall there was a very strong start to the second half, highlights the analyst.

Overweight rating and target price increases to $6.30 from $5.50, after upgrading the FY21 EPS forecast by 7%. Industry view: In-line.

Target price is $6.30 Current Price is $5.25 Difference: $1.05
If BBN meets the Morgan Stanley target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $6.24, suggesting upside of 9.9% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

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

Morgans upgrades the rating for Baby Bunting to Add from Hold and raises the target price to $6.39 from $4.83.

There was 40% profit (NPAT) growth in the first half, which was -6% short of Morgans forecasts due to less gross margin expansion in the second quarter and continued investment in people/infrastructure.

Online sales, including click and collect grew by 100% and comprised 19.7% of total sales, while private label/exclusive sales made up 39% of the total.

The broker highlights the move into New Zealand provides further longevity to an already strong growth profile. While valuation is at a premium to retail peers the analyst considers the growth profile is far superior.

Morgans FY21 and FY22 earnings (EBIT) forecasts are unchanged while the FY23 forecast lifts by 8% and more meaningfully beyond due to the NZ rollout inclusion.

Target price is $6.39 Current Price is $5.25 Difference: $1.14
If BBN meets the Morgans target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $6.24, suggesting upside of 9.9% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Ord Minnett rates BBN as Buy (1) -

Baby Bunting Group's first-half result was ahead of Ord Minnett's expectations led by strong sales growth and margin expansion. The near-term outlook appears positive although the broker expects sales to moderate throughout the second half.

The group retains a number of key attractions including organic sales growth opportunities from its existing store network, increased online sales penetration and add-on services.

In the longer term, a strong pipeline of new stores should continue to support double-digit sales and profit growth, suggests Ord Minnett.

Baby Bunting is rated as Buy with a $6.50 price target.

Target price is $6.50 Current Price is $5.25 Difference: $1.25
If BBN meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $6.24, suggesting upside of 9.9% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates BEN as Neutral (3) -

At first glance, at around $220m, "Bendalaide" Bank’s 1H21 cash profit was well above Macquarie’s expected $163m.

The bank’s margins benefited from improved deposit pricing trends, and were also supported by improving funding spreads and reduced revenue share arrangements.

In its initial response to today’s result, Macquarie notes that in the light of better than expected margins, the impact of growing through white label product is not as detrimental (to margins) as some had feared.

In this context, the broker expects the regionals to continue to benefit from an improved revenue outlook as housing growth is getting better, and deposit pricing trends provide offsets to margin pressures, resulting from the lower rate environment.

The Neutral rating and $9 price target both remain unchanged.

Target price is $9.00 Current Price is $9.49 Difference: minus $0.49 (current price is over target).
If BEN meets the Macquarie target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.89, suggesting downside of -15.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Ord Minnett rates BEN as Hold (3) -

In its initial coverage of "Bendalaide" Bank’s 1H21 result, Ord Minnett notes that while cash profit of $219.7m was 20% above its expected $183m, the broker expects continued debate on the validity of the strategy, especially with strong mortgage growth again being driven by the lower margin Third Party channel.

Dividends (28cps, comprising 23.5cps for the interim 1H21 and 4.5cps in a deferred FY20 dividend) were also much higher than the broker expected. But this has been reflected in a fully underwritten DRP to ensure there is enough capital to grow.

Gross impaired assets and loans 90+ days past due (DPD) were down -7% and -21% half on half (hoh) respectively. A 1H21 Net-Interest Margin of 1.97%, increased 4bp (hoh), versus Ord Minnett’s forecast -1bp hoh decline.

Hold recommendation and target price of $9.00 both remain unchanged.

Target price is $9.00 Current Price is $9.49 Difference: minus $0.49 (current price is over target).
If BEN meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.89, suggesting downside of -15.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Macquarie rates BPT as Outperform (1) -

Beach Energy’s 1H FY21 underlying net profit of $129m was in line with Macquarie’s, but around 4% weaker at the operational profit level (EBITDA including exploration expenses) at $442m.

The interim dividend of 1.0cps (fully franked) was in line with the broker’s expectations.

In its initial coverage of Beach Energy’s 1H FY21 result, Macquarie noted that while FY21 operating earnings guidance of $900-950m was in line with its expectations ($940), the mix is likely to be a little weaker.

Beach Energy has incorporated recent Cooper and Bass acquisitions and lowered/narrowed guidance slightly, for an updated 26.5-27.5MMboe. Higher Western Flank decline rates have been factored in, plus Cooper Basin JV connection delays.

This was offset by higher gas nominations and Western Flank gas optimisation, which Macquarie suspects is likely to lead to a lower margin mix.

The Outperform rating is retained and the price target has reduced to $2.15 from $2.30.

Target price is $2.15 Current Price is $1.76 Difference: $0.39
If BPT meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $2.08, suggesting upside of 23.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Ord Minnett rates BPT as Buy (1) -

Upon first glance, it appears, due largely to higher than expected exploration expense (-$39m) related to Ironbark, Wherry and Bonaparte assets, Beach Energy’s interim result (NPAT) of $129m was well below Ord Minnett’s expectations of $144.8m.

While management conceded the performance of the Western Flank oil fields was “not as expected”, Beach indicated an increased confidence in achieving its 5-year growth target of 37mmboe by FY2025 with the sanctioning of Waitsia a key component in the outlook.

Buy recommendation on Beach Energy remains as does the target price of $2.25

Target price is $2.25 Current Price is $1.76 Difference: $0.49
If BPT meets the Ord Minnett target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $2.08, suggesting upside of 23.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

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

Domino’s Pizza Enterprises' will report its first-half result on 17 February.

Ord Minnett expects operating earnings to lift by 18.8% versus last year along with an underlying net profit of $95.5m, up 31.9%. An interim dividend of 88c is forecast.

Led by the recent share price performance driven by same-store sales, operating income margin expansion and cash realisation, Ord Minnett downgrades its recommendation to Accumulate from Buy with the target price rising to $100 from $85.

Target price is $100.00 Current Price is $96.12 Difference: $3.88
If DMP meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $78.03, suggesting downside of -21.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Macquarie rates GMA as Outperform (1) -

2020 results were strong, Macquarie observes, and the business continues to build its reserves. Management has indicated reserve releases are not expected until the end of 2021.

Macquarie upgrades estimates for the outer years and raises the target to $3.20 from $2.50. Outperform maintained as, although the housing market outlook is choppy, the broker finds value in the stock.

Target price is $3.20 Current Price is $2.72 Difference: $0.48
If GMA meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Ord Minnett rates HLS as Accumulate (2) -

Ord Minnett highlights Healius has benefited from the pandemic with first-half earnings set to more than double despite the reducing covid test numbers.

With the earnings boost from covid testing likely to dissipate as vaccines are rolled out, Ord Minnett places more value on any evidence the group has started to deliver on its promised cost savings.

Looking at the uncertainty, no guidance is expected and the broker maintains its Accumulate recommendation with a target price of $4.45.

Target price is $4.45 Current Price is $4.05 Difference: $0.4
If HLS meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $4.16, suggesting upside of 2.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Credit Suisse rates ING as Outperform (1) -

Credit Suisse believes supporting wheat crop conditions indicating lower input costs will benefit Inghams Group in late FY21 along with expectations for robust top-line volume growth, in line with the group's positive first-quarter update.

The broker expects 2-3 years of good earnings growth with FY22 reflecting normalised operating conditions.

Outperform retained. Target is steady at $3.95.

Target price is $3.95 Current Price is $3.50 Difference: $0.45
If ING meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.62, suggesting upside of 3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Citi rates JBH as Neutral (3) -

In its initial coverage of JB Hi-Fi’s 1H21 result, Citi highlights the impact of inventory shortages on the January trading, Good Guys gross margin which expanded 167bps, (Citi expected 120bps), and the longevity of strong earnings.

The $1.80 interim dividend was in-line with Citi's forecasts of $1.84 as JB Hi-Fi maintained a 65% payout ratio.

Citi notes that while JB Hi-Fi’s 58% operating earnings (EBIT) growth from 23% sales growth is still impressive, it is lagging The Good Guys' operating leverage (142% EBIT growth from 26% sales growth), due to a lack of gross margin leverage.

Given the uncertainty of trading through covid-19, JB Hi-Fi did not provide sales or earnings guidance.

Consensus 2H21 expectations are for -1.4% YoY sales decline and -18% YoY profit decline, which in Citi’s view is undemanding, given the current demand backdrop.

Citi suspects the 65% payout ratio and stable capex levels could be an opportunity for a capital return or acquisition over the medium term.

The broker’s Neutral rating and price target of $53 remain unchanged.

Target price is $53.00 Current Price is $50.89 Difference: $2.11
If JBH meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $52.29, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Macquarie rates KMD as Neutral (3) -

The company's trading update overall was better than Macquarie expected. The online performance was weaker than expected while wholesale business was encouraging.

Macquarie assumes recovery in wholesale in the second half as the outlook commentary for Rip Curl and Oboz remains positive. Online penetration assumptions have been reduced.

Macquarie retains a Neutral rating and increases estimates for FY21 by 3% and FY22 by 2%. Target is $1.25, reduced from $1.35.

Target price is $1.25 Current Price is $1.18 Difference: $0.07
If KMD meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $1.35, suggesting upside of 11.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

This company reports in NZD. 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

Morgans rates KPG as Add (1) -

Morgans attributes a 55% rise in first half profit to group revenue growth of 5.8%, solid cost control at the group level and reduced costs at the headquarters level.

The analyst explains revenue growth of 5.8% was primarily driven by a full half contribution from FY20 acquisitions, with no organic revenue growth recorded as clients were supported during covid-19 (billable time written off).

Management stated the acquisition pipeline remained very strong, with a potential acquisition pipeline of around $15-20m.

Add rating. Target price is increased to $2.35 from $1.88.

Target price is $2.35 Current Price is $2.16 Difference: $0.19
If KPG meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates MCR as Outperform (1) -

The first half loss was less than Macquarie expected because of the profit on the sale of gold tenements.

The broker believes business is more than adequately funded to bring both Cassini and Durkin North into production later this year and maintain a strong focus on exploration.

Macquarie's valuation is based on the mine life of 4.5 years. As a result, any exploration success that generates extensions could translate to material upside.

The Outperform rating and $1.40 target are unchanged.

Target price is $1.40 Current Price is $1.00 Difference: $0.4
If MCR meets the Macquarie target it will return approximately 40% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Citi rates MGR as Neutral (3) -

Mirvac Group reported first-half earnings of 7c, above Citi's estimate of 6.2c.

The group's reinstated earnings guidance implies earnings in the second-half will decline sequentially rather than improve. According to the broker, this has sparked concerns of a slower than expected recovery. Citi notes a lower apartment contribution is likely to be the major headwind.

On the bright side, Citi highlights Mirvac's residential business continues to benefit from stimulus with “green shoots” including signs of investors returning to the market.

Neutral rating with the target falling to $2.51 from $2.73.

Target price is $2.51 Current Price is $2.32 Difference: $0.19
If MGR meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $2.62, suggesting upside of 14.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Credit Suisse rates MGR as Outperform (1) -

Credit Suisse observes Mirvac Group's first-half result was better than expected albeit marred by a weaker second half outlook. Funds from operations at 7c were ahead of the broker's estimated 6.2c.

As expected by Credit Suisse, property net operating income declined versus last year due to covid with development earnings also materially lower due to a lower contribution from apartment sales and commercial developments.

The group has guided to FY21 operating earnings of 13.1-13.5c with dividend guidance of 9.6-9.8c highlighting a first-half earnings skew. 

The build-to-rent strategy remains unclear, notes the broker, but any earnings contribution is expected to be a longer-term proposition. In FY22, Credit Suisse sees investment net operating income grow from a lower covid impact.

Outperform retained. Target falls to $2.63 from $2.69.

Target price is $2.63 Current Price is $2.32 Difference: $0.31
If MGR meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $2.62, suggesting upside of 14.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Macquarie rates MGR as Outperform (1) -

First half operating earnings were ahead of Macquarie's estimates, because of a reduction in covid-19 rent relief. FY21 guidance is 13.1-13.5c per security, in line with Macquarie's expectations.

The broker suggests that, even with development profits rolling off, earnings can still grow by 7% in FY23, stemming from apartments and additional development.

The company will launch around three or four new apartment projects in 2021. Macquarie retains an Outperform rating and reduces the target to $2.84 from $2.91.

Target price is $2.84 Current Price is $2.32 Difference: $0.52
If MGR meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $2.62, suggesting upside of 14.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

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

Mirvac Group's half-year earnings (EPS) of 7.0 cents proved above Morgan Stanley's 6.5c estimate, with the beat due to a strong retail result, whereby only -$18m of rent was waived/ provisioned (versus -$35m factored into the broker's assumptions).

The analyst finds it increasingly hard to attain a line-of-sight to future active profits, as the Office segment development profits cease with 80 Ann St next year and no new commitments are imminent.

In addition, the average duration of new leases of 3.5 years and the apparent strong tenant inquiries for 2026/27 do not excite the analyst for now.

Morgan Stanley maintains its Equal Weight rating and lowers the target price to $2.50 from $2.55, reflecting the softer outlook for Residential/Office. Industry view is In-Line.

Target price is $2.50 Current Price is $2.32 Difference: $0.18
If MGR meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $2.62, suggesting upside of 14.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Ord Minnett rates MGR as Hold (3) -

Mirvac Group reported first-half FY21 funds from operations of 7c, down -22% versus last year but up 10% on the second half of FY20.

The result is 4% ahead of Ord Minnett’s forecast led by stronger trust collections. An interim distribution of 4.8c was declared, in line with the broker's estimate.

The broker expects some negative valuation pressure in the retail and office segments with development earnings from residential and commercial rebasing in FY21 from a high level.

Hold recommendation with the target price trimmed to $2.50 from $2.60.

Target price is $2.50 Current Price is $2.32 Difference: $0.18
If MGR meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $2.62, suggesting upside of 14.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

UBS rates MGR as Buy (1) -

First half results were ahead of expectations, largely from the JobKeeper supplement which was not included in UBS estimates. The broker is underwhelmed by the guidance of 13.1-13.5c per security.

Nevertheless, UBS notes Mirvac has a track record of conservative guidance and is setting expectations low.

Earnings estimates are reduced by -5-8% from FY22-24 to reflect more conservative retail/office income, higher corporate costs and the sale of the Travelodge hotels. Buy rating retained. Target is reduced to $2.76 from $2.95.

Target price is $2.76 Current Price is $2.32 Difference: $0.44
If MGR meets the UBS target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $2.62, suggesting upside of 14.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Morgan Stanley rates MIN as Underweight (5) -

Despite Mineral Resources reporting revenue in-line, Morgan Stanley assesses higher costs at the iron ore operations led to group underlying earnings (EBITBA) and underlying Profit (NPAT) coming in  around -7% and -8% weaker, respectively.

The broker adjusts the FY21 EPS estimate up by 1.2%, though FY22 and FY23 EPS estimates fall -6.4% and -5.7%, respectively, due to the delayed ramp up at Wodgina.

Underweight rating retained with the target rising to $32.60 from $32. Industry view: Attractive.

Target price is $32.60 Current Price is $35.97 Difference: minus $3.37 (current price is over target).
If MIN 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 $40.23, suggesting upside of 8.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgan Stanley rates NEA as Overweight (1) -

In its 1H21 result, Nearmap delivered 16% growth in annual contract value (ACV) to $112.2m, marginally lower than Morgan Stanley’s $114.9m estimate.

Free cash flow (FCF) was well ahead of expectations, even with wage reductions factored in with US ACV coming in at US$35.1m versus Morgan Stanley’s US$33.3m, plus US$6.5m.

Record 1H21 sales efficiency of 110% beat the broker’s expected 50%. ANZ ACV at $66.6m was slightly under Morgan Stanley’s $67.4m estimates, at sales efficiency of 52% versus the broker’s estimated 65%.

Guidance was upgraded to the upper end of $120-128m on a constant currency basis (A$/US$ = 0.6863).

Given recent skepticism around US sales effort, Morgan Stanley expects strong growth in key verticals of government, insurance and roofing will be well received, and mid-20% compound organic sales growth with scope for 40%-plus cash operating earnings (EBIT) margins longer-term.

In its initial response to today's market release, the broker’s Overweight recommendation on the stock and target price of $3.10 remain unchanged. Industry view is In-Line.

Target price is $3.10 Current Price is $2.16 Difference: $0.94
If NEA meets the Morgan Stanley target it will return approximately 44% (excluding dividends, fees and charges).

Current consensus price target is $2.83, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Morgan Stanley rates NWS as Upgrade to Overweight from Underweight (1) -

Morgan Stanley lifts the rating for News Corp to Overweight from Underweight and raises the target price to US$30 from US$15.

Morgan Stanley raises the enterprise value estimate for News Corp's 80%-owned US real estate portal Move Inc to US$5-7bn versus consensus by other brokers of around US$2bn. This makes the company's share of Move Inc worth between US$7-10 per share.

The  analyst explains, at the time of acquisition in 2014 Move was the number three player in the US and not profitable. The turning point was in 2018 when Move Inc acquired Opcity, a software platform business model which matches home buyers and sellers with brokers.

Industry view: Attractive.

Current Price is $29.42. Target price not assessed.

Current consensus price target is $33.60, suggesting upside of 12.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

This company reports in USD. 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 RHC as Neutral (3) -

UBS expects operating earnings in the first half of $971m, down -8%. With elective surgery returning to pre-pandemic levels in Australia the outlook for earnings appears more favourable.

Yet this is contingent on the containment of the pandemic and a tempering of the costs associated with delivering care.

The broker notes recent increases in coronavirus cases in the UK/France signal a longer time period to return to normal levels in those locations. The broker retains a Neutral rating and reduces the target to $69.90 from $71.20.

Target price is $69.90 Current Price is $64.52 Difference: $5.38
If RHC meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $68.28, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Ord Minnett rates S32 as Buy (1) -

South32 will release its first-half result on 18 February. Ord Minnett forecasts operating earnings of US$484m along with a net profit of US$72m and a US1c interim dividend.

South32's proposed Dendrobium Next Domain project at Illawarra Coal was not given approval and the market will be looking for an update from the company on this, suggests the broker, along with any progress around the Hermosa project in Arizona and the South Africa Energy Coal (SAEC) sale.

Ord Minnett has raised its second-half operating income by almost 75% given improved prices and a net cash position of US$750m that is expected by the end of FY21.

Buy rating and $3.30 target maintained.

Target price is $3.30 Current Price is $2.59 Difference: $0.71
If S32 meets the Ord Minnett target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $2.93, suggesting upside of 12.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Credit Suisse rates SVW as Outperform (1) -

With 3 months of Boral included in its forecasts, Credit Suisse expects first half operating income of $365m, down circa -9% versus last year. The broker expects media contribution to be down by circa -35%.

WesTrac's operating income is expected to grow by 9% reflecting strong deliveries and continued growth in the aftermarket.

Seven Group Holdings will report its interim result on 18 February.

Credit Suisse retains its Outperform rating and raises the target to $26 from $24.

Target price is $26.00 Current Price is $22.64 Difference: $3.36
If SVW meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $25.10, suggesting upside of 9.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

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

After first half earnings Morgan Stanley believes Transurban Group's near-term growth prospects and portfolio diversity provide investor appeal, offsetting traffic uncertainty.

The company's proportional average daily traffic (ADT) was down -19% in the December quarter versus the pcp though showing sequential improvement versus -33% in the September 2020 quarter. 

The analyst notes rising bond yields are a valuation headwind, albeit the reflationary outlook favours the company relative to other bond proxy stocks in Morgan Stanley's coverage.

Equal-weight and target of $14.50 retained. Industry view: Cautious.

Target price is $14.50 Current Price is $13.05 Difference: $1.45
If TCL meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $14.31, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Citi rates TWE as Sell (5) -

Treasury Wine Estates will release its first-half result on 17 February and Citi believes the focus will be on when and how the company will reallocate the wines sold in China given the recently announced tariffs.

Citi finds its operating income estimate of $252m to be 9% ahead of market consensus on account of better performance in Australia and the US. On the flip side, Citi's second-half operating income forecast is -10% below consensus suspecting it will cost more to reallocate the wine.

Sell rating with a target of $8.20.

Target price is $8.20 Current Price is $10.15 Difference: minus $1.95 (current price is over target).
If TWE meets the Citi target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.43, suggesting downside of -7.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Ord Minnett rates TWE as Lighten (4) -

Treasury Wine Estates will report its first-half result on 17 February.

Ord Minnett forecasts the net profit (pre significant items) to be down -26.6% with earnings before interest, tax down -27.3% versus last year.

By division, the broker expects declines for Australia and New Zealand, Asia and Europe, Middle East and Africa while modest growth is forecast for the Americas led by the weak previous corresponding period and cost savings.

Lighten recommendation with a target price of $8.

Target price is $8.00 Current Price is $10.15 Difference: minus $2.15 (current price is over target).
If TWE meets the Ord Minnett target it will return approximately minus 21% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.43, suggesting downside of -7.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Citi rates URW as Sell (5) -

Straight up: Citi analysts remain concerned about the risk of significant further portfolio value decline which is one key reason as to why they rate this stock a Sell.

Released 2020 financials, in their eyes, were "weak" and once again highlighted the "very challenging" environment for shopping centres. As also illustrated by the decision to scrap all dividends for 2021 and 2022.

Citi also points out the recurring EPS went down by -41% while the Net Asset Value (NAV) declined by -27.1%. Management has made deleveraging the balance sheet a key priority, but the pandemic is not making things easier, suggest the analysts.

Price target EUR21.20.

Current Price is $4.48. Target price not assessed.

Current consensus price target is $4.66, suggesting upside of 5.2% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

This company reports in EUR. 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

Ord Minnett rates URW as Hold (3) -

Unibail-Rodamco-Westfield's 2020 result proved to be worse than Ord Minnett expected with recurring earnings per share lower than the broker's forecast along with the suspension of dividend for three years.

Going into 2021, Ord Minnett highlights headwinds remain and the magnitude of the deleveraging task ahead is significant. The deleveraging outlook in the broker's view hinges on disposals and is fraught with execution risk.

Hold rating with a target price of $4.50.

Target price is $4.50 Current Price is $4.48 Difference: $0.02
If URW meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $4.66, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

This company reports in EUR. 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

Credit Suisse rates WES as Downgrade to Neutral from Outperform (3) -

Credit Suisse does not see many downside risks for Wesfarmers in the first half result and expects a strong result from its retail businesses.

Accelerating housing activity and the work from home thematic also set the scene for a solid second half, suggests the broker. The broker does not expect a large scale acquisition looking at the inflated asset prices and thus a capital return is likely in 2021.

Wesfarmers will report its result on February 18.

Led by the recent share price strength, the rating is downgraded to Neutral from Outperform. Target is raised to $56.79 from $55.83.

Target price is $56.79 Current Price is $55.00 Difference: $1.79
If WES meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $50.64, suggesting downside of -8.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Ord Minnett rates WES as Lighten (4) -

Wesfarmers will report its first-half FY20 result on February 18.

Ord Minnett expects a net profit of $1.27bn, up 12.8%, with operating earnings growth led by Bunnings, Kmart and Officeworks. An interim dividend of 85c is forecast versus 75c versus last year.

The Lighten recommendation is unchanged with a target price of $45.

Target price is $45.00 Current Price is $55.00 Difference: minus $10 (current price is over target).
If WES meets the Ord Minnett target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $50.64, suggesting downside of -8.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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