Australian Broker Call
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September 17, 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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Today's Upgrades and Downgrades
NUF - | NUFARM | Downgrade to Neutral from Outperform | Macquarie |
OGC - | OCEANAGOLD | Upgrade to Outperform from Neutral | Credit Suisse |
SGM - | SIMS METAL MANAGEMENT | Downgrade to Neutral from Buy | Citi |
Downgrade to Underperform from Neutral | Macquarie |
Overnight Price: $12.97
Morgan Stanley rates BAL as No Rating (-1) -
Bellamy's Australia has entered into a scheme implementation deed with China Mengniu Dairy. The acquisition offer price is $13.25 a share, comprising $12.65 cash and a $0.60 fully franked dividend. This is a 59% premium to the last closing price.
Implementation is subject to conditions, including shareholder approval, Foreign Investment Review Board approval and an independent expert's report. Morgan Stanley is advising and cannot provide a rating and target at present. Cautious industry view.
Current Price is $12.97. Target price not assessed.
Current consensus price target is $11.50, suggesting downside of -11.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 0.00 cents and EPS of 30.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.1, implying annual growth of 49.2%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 44.6. |
Forecast for FY21:
Morgan Stanley forecasts a full year FY21 EPS of 42.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 38.4, implying annual growth of 32.0%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 33.8. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates BAL as Hold (3) -
The company has entered the scheme of arrangement with one of China's dairy product manufacturers, China Mengniu Dairy.
Morgans considers the timing of the offer of $13.25 a share opportunistic and notes it remains subject to a number of conditions, namely court, FIRB and shareholder approvals.
Shareholders are expected to receive a cash consideration of $13.25, consisting of $12.65 cash from Mengniu Dairy and a $0.60 fully franked special dividend. Mengniu Dairy currently owns 2.9% of the company.
Morgans retains a Hold rating and raises the target to the offer price of $13.25, from $7.65.
Target price is $13.25 Current Price is $12.97 Difference: $0.28
If BAL meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $11.50, suggesting downside of -11.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 0.00 cents and EPS of 28.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.1, implying annual growth of 49.2%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 44.6. |
Forecast for FY21:
Morgans forecasts a full year FY21 EPS of 35.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 38.4, implying annual growth of 32.0%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 33.8. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates BAL as Hold (3) -
The company has received a proposal from China Mengniu Dairy at $13.25 a share. Ord Minnett considers the proposal a positive for other Australasian-listed companies exposed to the Chinese consumer because of potential corporate appeal.
A competing bid is not likely, because of significant 59% premium to the current share price and, while official approval from the FIRB is required Ord Minnett suggests it is likely to be granted. Hold rating maintained. Target is raised to $13.25 from $8.00.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $13.25 Current Price is $12.97 Difference: $0.28
If BAL meets the Ord Minnett target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $11.50, suggesting downside of -11.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Ord Minnett forecasts a full year FY20 EPS of 29.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.1, implying annual growth of 49.2%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 44.6. |
Forecast for FY21:
Ord Minnett forecasts a full year FY21 EPS of 38.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 38.4, implying annual growth of 32.0%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 33.8. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates BHP as Outperform (1) -
The drone attacks on the Saudi Arabian oilfield could affect up to 6% of global production. Supply shocks in 2019 have meant iron ore and nickel have rallied, which Macquarie suggests could provide a template for oil markets.
The broker's commodity team has included a 5% risk premium for oil prices going forward, believing the attack will require the oil market to change its view that Saudi Arabia's oil infrastructure is resistant to sabotage or military attack.
The rise in the spot oil price has erased the FY20 downside risk to earnings, the broker suggests, which continues to deliver 40-50% upside to FY21 base case estimates. Outperform rating retained.
Target price is $41.00 Current Price is $37.76 Difference: $3.24
If BHP meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $38.53, suggesting upside of 2.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 232.43 cents and EPS of 332.34 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 336.5, implying annual growth of N/A. Current consensus DPS estimate is 222.8, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 11.2. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 174.32 cents and EPS of 249.29 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 277.7, implying annual growth of -17.5%. Current consensus DPS estimate is 180.0, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 13.6. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $9.73
Morgan Stanley rates BOQ as Underweight (5) -
Morgan Stanley envisages ongoing challenges for the bank's retail network because of weak mortgage loan growth, downward pressure on margins and the need for significant investment. Another dividend reduction is probable if profitability continues to fall.
Management has lowered the risk profile, but the broker observes the business loan book is now growing faster than housing and collective provisioning becomes more pro-cyclical under new accounting changes. So, a deterioration in the economy would translate to larger and faster provisioning increases.
Underweight rating. Industry view is In-Line. Price target is $8.40.
Target price is $8.40 Current Price is $9.73 Difference: minus $1.33 (current price is over target).
If BOQ meets the Morgan Stanley target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $8.80, suggesting downside of -9.6% (ex-dividends)
The company's fiscal year ends in August.
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 68.00 cents and EPS of 78.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 78.8, implying annual growth of -16.8%. Current consensus DPS estimate is 67.8, implying a prospective dividend yield of 7.0%. Current consensus EPS estimate suggests the PER is 12.3. |
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 68.00 cents and EPS of 73.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 76.0, implying annual growth of -3.6%. Current consensus DPS estimate is 62.7, implying a prospective dividend yield of 6.4%. Current consensus EPS estimate suggests the PER is 12.8. |
Market Sentiment: -0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $12.40
Credit Suisse rates DXS as Reinstate coverage with Neutral (3) -
Credit Suisse envisages scope for further growth in the company's managed funds platform because of continued demand for office and industrial assets by global capital.
Growth is expected to come via an internal development pipeline and acquisitions. Credit Suisse reinstates coverage with a Neutral rating and $12.20 target.
As of June 30, 2019 the company had a $15.6bn direct property portfolio heavily weighted to office and industrial.
Target price is $12.20 Current Price is $12.40 Difference: minus $0.2 (current price is over target).
If DXS meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $12.96, suggesting upside of 4.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 53.00 cents and EPS of 68.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 66.4, implying annual growth of -46.7%. Current consensus DPS estimate is 53.0, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 18.7. |
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 54.00 cents and EPS of 71.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 68.6, implying annual growth of 3.3%. Current consensus DPS estimate is 54.9, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 18.1. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $7.91
Macquarie rates IAG as Underperform (5) -
Although Macquarie concludes the competition regulator, the ACCC, could allow Insurance Australia Group to purchase the CommInsure home and personal motor insurance portfolio, the former is not considered a natural owner of the asset.
This is because of risks in the distribution channel and the impact of perils concentration on reinsurance pricing. One positive aspect of losing so much market share in recent years is that Insurance Australia can now pass the ACCC requirements, the broker asserts.
Although the portfolio appears profitable in Commonwealth Bank's ((CBA)) hands, adding in the additional costs could lower group margins for Insurance Australia. Macquarie maintains an Underperform rating and $7 target.
Target price is $7.00 Current Price is $7.91 Difference: minus $0.91 (current price is over target).
If IAG meets the Macquarie target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $7.52, suggesting downside of -4.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 33.00 cents and EPS of 37.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 37.7, implying annual growth of 0.7%. Current consensus DPS estimate is 30.7, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 21.0. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 35.00 cents and EPS of 39.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 39.8, implying annual growth of 5.6%. Current consensus DPS estimate is 32.2, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 19.9. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $7.44
Morgan Stanley rates ILU as Overweight (1) -
Although the outlook for zircon holds genuine concerns, Morgan Stanley believes these are overdone. After a significant drop in sales volume in 2019, investors are worried this could be a repeat of 2012-17, which involved price destruction, inventory build up and capital at risk.
The broker suggests this time around such a situation is unlikely, as the six-month fixed pricing has reduced the appetite for building up inventory and low availability of credit has kept the supply chain lean. Substitution has also stabilised.
Morgan Stanley suspects there could be an improvement in the market in 6-12 months, noting the lag between start and completion in the Chinese property market has widened significantly, but the relationship is not broken. Overweight rating and Attractive industry view maintained. Target is reduced to $10.90 from $11.25.
Target price is $10.90 Current Price is $7.44 Difference: $3.46
If ILU meets the Morgan Stanley target it will return approximately 47% (excluding dividends, fees and charges).
Current consensus price target is $8.87, suggesting upside of 19.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 16.00 cents and EPS of 76.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 68.5, implying annual growth of -5.1%. Current consensus DPS estimate is 15.0, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 10.9. |
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 19.00 cents and EPS of 80.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 81.7, implying annual growth of 19.3%. Current consensus DPS estimate is 15.8, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 9.1. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
JHX JAMES HARDIE INDUSTRIES N.V.
Building Products & Services
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Overnight Price: $23.58
Morgan Stanley rates JHX as Overweight (1) -
Morgan Stanley is increasingly confident the business can deliver on primary demand growth and margin targets. James Hardie has adjusted its strategy to increase the focus on pushing demand, rather than relying on the traditional pull from builders and installers.
The broker considers the company's initiatives make sense and reiterates an Overweight rating. Overall, the US and European investor briefings have provided greater confidence in the business. Price target is $25. Cautious industry view.
Target price is $25.00 Current Price is $23.58 Difference: $1.42
If JHX meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $24.39, suggesting upside of 3.4% (ex-dividends)
The company's fiscal year ends in March.
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 56.33 cents and EPS of 115.48 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 116.3, implying annual growth of N/A. Current consensus DPS estimate is 65.7, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 20.3. |
Forecast for FY21:
Morgan Stanley forecasts a full year FY21 dividend of 65.19 cents and EPS of 134.64 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 130.7, implying annual growth of 12.4%. Current consensus DPS estimate is 77.9, implying a prospective dividend yield of 3.3%. Current consensus EPS estimate suggests the PER is 18.0. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.52
Macquarie rates KLL as Outperform (1) -
The company has reported a loss of -$11.8m in FY19. Beyondie is now fully funded and Macquarie expects accelerated development in the first quarter and first production in the second quarter of FY21.
The company is expected to make a final investment decision shortly, which should mean the substantial early works move into full development. Outperform rating and $0.90 target entertained.
Target price is $0.90 Current Price is $0.52 Difference: $0.38
If KLL meets the Macquarie target it will return approximately 73% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 1.70 cents. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 0.00 cents and EPS of 2.60 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $11.02
Morgan Stanley rates NST as Underweight (5) -
The company has announced a mill expansion at Pogo, taking throughput to 1.3mtpa from 1.0mtpa.
Although this is better than previously expected, Morgan Stanley assesses the majority of the expansion is already factored into estimates from 2022 and, therefore, is unlikely to have a significant impact on valuation.
Underweight rating. Industry view is Attractive. Target is $8.60.
Target price is $8.60 Current Price is $11.02 Difference: minus $2.42 (current price is over target).
If NST meets the Morgan Stanley target it will return approximately minus 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $11.13, suggesting upside of 1.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 16.10 cents and EPS of 44.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 60.1, implying annual growth of 146.3%. Current consensus DPS estimate is 16.3, implying a prospective dividend yield of 1.5%. Current consensus EPS estimate suggests the PER is 18.3. |
Forecast for FY21:
Morgan Stanley forecasts a full year FY21 EPS of 38.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 68.7, implying annual growth of 14.3%. Current consensus DPS estimate is 17.7, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 16.0. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $4.88
Macquarie rates NUF as Downgrade to Neutral from Outperform (3) -
Seasonal conditions continue to be tough, particularly in northern NSW and Queensland. Macquarie reduces estimates for earnings per share by -19% and -8% in FY20 and FY21, respectively.
Rating is downgraded to Neutral from Outperform and the target reduced to $5.30 from $5.77. After a small rally from its lows the stock is now trading at parity to global peers, the broker notes. The company reports its results on September 30.
Target price is $5.30 Current Price is $4.88 Difference: $0.42
If NUF meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $6.08, suggesting upside of 24.6% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 0.00 cents and EPS of 28.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 23.4, implying annual growth of -17.0%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 20.9. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 7.40 cents and EPS of 36.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 36.5, implying annual growth of 56.0%. Current consensus DPS estimate is 8.4, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 13.4. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $3.67
Credit Suisse rates OGC as Upgrade to Outperform from Neutral (1) -
Credit Suisse observes Haile finally appears set to perform, with a 2022 target for over 200,000 ounces per annum of low-cost production. Throughput is considered sustainable at over 4mtpa and a recovery uplift to 85%.
The Horseshoe underground development is expected to deliver over 800,000tpa of higher average grade ore. The appeal in the Philippines court is set for September 18 and, if favourable, could be a positive catalyst, in the broker's view.
The share price appears to be pricing a negative outcome and the broker upgrades to Outperform from Neutral on valuation. Target is $4.25.
Target price is $4.25 Current Price is $3.67 Difference: $0.58
If OGC meets the Credit Suisse target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $4.78, suggesting upside of 30.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 4.25 cents and EPS of 14.53 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 18.6, implying annual growth of N/A. Current consensus DPS estimate is 3.5, implying a prospective dividend yield of 1.0%. Current consensus EPS estimate suggests the PER is 19.7. |
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 5.62 cents and EPS of 19.98 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 36.0, implying annual growth of 93.5%. Current consensus DPS estimate is 4.6, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 10.2. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates OGC as Outperform (1) -
Macquarie notes mining has improved and plant upgrades are nearly complete at Haile. There is also impressive underground potential at Palomino.
The task is now to deliver consistency and improve recoveries, the broker suggests. Outperform rating and $6 target maintained.
Target price is $6.00 Current Price is $3.67 Difference: $2.33
If OGC meets the Macquarie target it will return approximately 63% (excluding dividends, fees and charges).
Current consensus price target is $4.78, suggesting upside of 30.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 1.42 cents and EPS of 25.23 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 18.6, implying annual growth of N/A. Current consensus DPS estimate is 3.5, implying a prospective dividend yield of 1.0%. Current consensus EPS estimate suggests the PER is 19.7. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 1.42 cents and EPS of 22.68 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 36.0, implying annual growth of 93.5%. Current consensus DPS estimate is 4.6, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 10.2. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates OGC as Accumulate (2) -
Ord Minnett reduces its discounted cash flow valuation for Haile because of a slower ramp-up and higher costs and Didipio because of costs. Valuation for Waihi and Macraes is increased because of longer mine life.
The broker envisages much greater value in the New Zealand operations and previously modelled as Martha and, in the longer term, the high-grade Wharekirauponga deposit adds life to Waihi.
Ord Minnett maintains an Accumulate rating and reduces the target to $4.80 from $5.20.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $4.80 Current Price is $3.67 Difference: $1.13
If OGC meets the Ord Minnett target it will return approximately 31% (excluding dividends, fees and charges).
Current consensus price target is $4.78, suggesting upside of 30.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 5.67 cents and EPS of 21.26 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 18.6, implying annual growth of N/A. Current consensus DPS estimate is 3.5, implying a prospective dividend yield of 1.0%. Current consensus EPS estimate suggests the PER is 19.7. |
Forecast for FY20:
Ord Minnett forecasts a full year FY20 dividend of 5.67 cents and EPS of 31.18 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 36.0, implying annual growth of 93.5%. Current consensus DPS estimate is 4.6, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 10.2. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $7.94
Macquarie rates ORG as Outperform (1) -
Macquarie assesses retail churn is providing some upside for the stock. The recent disruption to the oil supply chain is also expected to mean a risk premium is added to oil prices.
Capital expenditure demand is expected to stay low in FY20 and FY21 as the uncertainty over electricity market rules is likely to delay any firm commitment to projects. Outperform and $9.12 target retained.
Target price is $9.12 Current Price is $7.94 Difference: $1.18
If ORG meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $8.37, suggesting upside of 5.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 29.00 cents and EPS of 55.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 57.1, implying annual growth of -17.0%. Current consensus DPS estimate is 31.1, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 13.9. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 32.00 cents and EPS of 52.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 58.4, implying annual growth of 2.3%. Current consensus DPS estimate is 34.0, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 13.6. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
RHC RAMSAY HEALTH CARE LIMITED
Healthcare services
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Overnight Price: $62.13
Citi rates RHC as Buy (1) -
Target price retained at $74 while the Buy rating is hereby re-iterated as Citi analysts toy with the idea that Ramsay Health Care might be eyeing an acquisition of a primary care business in Australia.
Done on the right metrics, the analysts believe such a transaction would be EPS accretive but dilutive for Return on Invested Capital (ROIC), but nevertheless acceptable for shareholders because of the strategic benefits.
Target price is $74.00 Current Price is $62.13 Difference: $11.87
If RHC meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $68.30, suggesting upside of 9.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 166.00 cents and EPS of 300.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 293.9, implying annual growth of 10.9%. Current consensus DPS estimate is 159.3, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 21.1. |
Forecast for FY21:
Citi forecasts a full year FY21 dividend of 181.00 cents and EPS of 329.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 314.1, implying annual growth of 6.9%. Current consensus DPS estimate is 168.3, implying a prospective dividend yield of 2.7%. Current consensus EPS estimate suggests the PER is 19.8. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $4.81
Ord Minnett rates RRL as Hold (3) -
Ord Minnett observes operating risks remain elevated as the Duketon operation gradually moves to the underground and permit delays push out any development at McPhillamys.
No gold production is expected at McPhillamys before FY23 and the broker increases capital expenditure estimates by 10%.
The business continues to generate cash but the broker maintains a Hold rating for now and lowers the target to $4.80 from $5.30. In time, Ord Minnett envisages plenty of optimisation and life extensions at all operations.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $4.80 Current Price is $4.81 Difference: minus $0.01 (current price is over target).
If RRL meets the Ord Minnett target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $4.88, suggesting upside of 1.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Ord Minnett forecasts a full year FY20 EPS of 51.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 42.1, implying annual growth of 30.8%. Current consensus DPS estimate is 17.6, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 11.4. |
Forecast for FY21:
Ord Minnett forecasts a full year FY21 EPS of 74.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 46.2, implying annual growth of 9.7%. Current consensus DPS estimate is 16.1, implying a prospective dividend yield of 3.3%. Current consensus EPS estimate suggests the PER is 10.4. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $10.63
Citi rates SGM as Downgrade to Neutral from Buy (3) -
Upon the company's sudden -and quite heavy- profit warning so soon post the August reporting season, Citi analysts have pulled back their recommendation to Neutral from Buy. As earnings estimates receive the chainsaw massacre treatment, the price target tumbles to $11.50 from $12.50.
The analysts point out that, taking guidance from company management's commentary, the near term outlook for scrap markets appears weak with management noting volumes are falling.
Target price is $11.50 Current Price is $10.63 Difference: $0.87
If SGM meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $10.60, suggesting downside of -0.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 32.00 cents and EPS of 58.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 66.6, implying annual growth of -11.3%. Current consensus DPS estimate is 31.4, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 16.0. |
Forecast for FY21:
Citi forecasts a full year FY21 dividend of 37.00 cents and EPS of 74.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 83.6, implying annual growth of 25.5%. Current consensus DPS estimate is 36.2, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 12.7. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates SGM as Outperform (1) -
The company expects the first half result to be "materially lower" than the prior corresponding first half. This earnings warning comes soon after the FY19 results where, Credit Suisse points out, management had highlighted macro headwinds stemming from the US/China trade war, low Turkish steel demand and soft automotive demand.
It appears management concerns have rapidly been realised and its ability to successfully navigate the challenges has been hampered by events outside of its control.
Credit Suisse notes volatility in scrap markets produces material variability in earnings between quarters and the fact the company is reluctant to provide guidance ranges compounds the challenge in deriving an earnings outlook.
The broker reduces first half estimates for earnings (EBIT) by -50% and leaves the second half unchanged. Outperform rating and $12.90 target maintained.
Target price is $12.90 Current Price is $10.63 Difference: $2.27
If SGM meets the Credit Suisse target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $10.60, suggesting downside of -0.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 30.81 cents and EPS of 61.66 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 66.6, implying annual growth of -11.3%. Current consensus DPS estimate is 31.4, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 16.0. |
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 43.02 cents and EPS of 86.05 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 83.6, implying annual growth of 25.5%. Current consensus DPS estimate is 36.2, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 12.7. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates SGM as Downgrade to Underperform from Neutral (5) -
Sims Metal expects first half results to be substantially weaker than in the previous year. Weak macro economic conditions, falling scrap prices and higher freight costs are cited.
Macquarie reduces estimates for earnings per share by -40.5% for FY20 and -12.6% for FY21. The broker downgrades to Underperform from Neutral and reduces the target to $9.30 from $11.70.
Target price is $9.30 Current Price is $10.63 Difference: minus $1.33 (current price is over target).
If SGM meets the Macquarie target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $10.60, suggesting downside of -0.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 10.00 cents and EPS of 51.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 66.6, implying annual growth of -11.3%. Current consensus DPS estimate is 31.4, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 16.0. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 15.00 cents and EPS of 77.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 83.6, implying annual growth of 25.5%. Current consensus DPS estimate is 36.2, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 12.7. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates SGM as Lighten (4) -
The company expects significant falls in prices, both ferrous and non-ferrous, are likely to have a negative impact on the first half results.
Ord Minnett has reduced its forecast for FY20 and now expects the worst half-year performance since the company was loss-making in the first half of FY16.
A recovery before the end of 2019 is considered unlikely and further deterioration in the macro economic environment cannot be ruled out. Ord Minnett maintains a Lighten rating and reduces the target to $9.50 from $10.50.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $9.50 Current Price is $10.63 Difference: minus $1.13 (current price is over target).
If SGM meets the Ord Minnett target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $10.60, suggesting downside of -0.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Ord Minnett forecasts a full year FY20 EPS of 49.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 66.6, implying annual growth of -11.3%. Current consensus DPS estimate is 31.4, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 16.0. |
Forecast for FY21:
Ord Minnett forecasts a full year FY21 EPS of 83.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 83.6, implying annual growth of 25.5%. Current consensus DPS estimate is 36.2, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 12.7. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.51
Macquarie rates SYR as Underperform (5) -
The first half loss was driven by impairments and a write-down of inventory. Macquarie cuts realised pricing assumptions and production estimates for Balama in light of the recent update.
This drives a reduction in the target to $0.50 from $0.90. Given the company's decision to curtail production because of a weaker market, the broker assesses realised pricing is the key sensitivity in the operating outlook for Balama. Underperform rating maintained.
Target price is $0.50 Current Price is $0.51 Difference: minus $0.01 (current price is over target).
If SYR 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 $1.06, suggesting upside of 107.8% (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 5.95 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -9.4, 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 minus 4.54 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -8.1, 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. |
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
TWE TREASURY WINE ESTATES LIMITED
Food, Beverages & Tobacco
More Research Tools In Stock Analysis - click HERE
Overnight Price: $18.43
Citi rates TWE as Sell (5) -
Citi analysts have been long-time sceptics about the pace of growth that can be sustained at Treasury Wine Estates and today's research update is yet again raising question marks. Asian sales will slow down to 10%-15% per annum, the analysts assure investors.
Thus far, market share gains both by Australian wines and by Treasury Wine inside the Australian wines segment have generated very strong growth numbers in the Chinese market, point out the analysts.
Now the Chinese market is becoming more competitive and this means the company will be more reliant on sales and margin improvement in the Americas, but this already is a competitive wine market, points out Citi. Sell. Target $15.60.
Target price is $15.60 Current Price is $18.43 Difference: minus $2.83 (current price is over target).
If TWE meets the Citi target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $18.66, suggesting upside of 1.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 46.00 cents and EPS of 71.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 73.2, implying annual growth of 25.3%. Current consensus DPS estimate is 46.7, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 25.2. |
Forecast for FY21:
Citi forecasts a full year FY21 dividend of 54.00 cents and EPS of 81.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 86.5, implying annual growth of 18.2%. Current consensus DPS estimate is 55.8, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 21.3. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $3.39
Citi rates WHC as Buy (1) -
Whitehaven Coal's current intention is to spend billions on (nearly) doubling production volumes by FY30, while also paying out dividends and retain a credit rating, point out the analysts. At the same time, cost savings remain on the agenda.
Ahead of the inaugural Investor Day, Citi analysts believe the plan is achievable. They see Whitehaven Coal as one of only few resources producers which offers such a strong growth outlook while trading at a steep discount to Net Present Value (NPV).
Target at $4 and Buy rating retained. Dividends are expected to be a lot lower in the years ahead.
Target price is $4.00 Current Price is $3.39 Difference: $0.61
If WHC meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $4.12, suggesting upside of 21.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 29.00 cents and EPS of 31.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 27.9, implying annual growth of -47.9%. Current consensus DPS estimate is 18.4, implying a prospective dividend yield of 5.4%. Current consensus EPS estimate suggests the PER is 12.2. |
Forecast for FY21:
Citi forecasts a full year FY21 dividend of 15.00 cents and EPS of 30.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 27.1, implying annual growth of -2.9%. Current consensus DPS estimate is 13.5, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 12.5. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Today's Price Target Changes
Company | Last Price | Broker | New Target | Prev Target | Change | |
BAL | BELLAMY'S AUSTRALIA | $12.97 | Morgan Stanley | N/A | 8.70 | -100.00% |
Morgans | 13.25 | 7.65 | 73.20% | |||
Ord Minnett | 13.25 | 8.00 | 65.63% | |||
DXS | DEXUS PROPERTY | $12.40 | Credit Suisse | 12.20 | 9.14 | 33.48% |
IAG | INSURANCE AUSTRALIA | $7.91 | Macquarie | 7.00 | 6.95 | 0.72% |
ILU | ILUKA RESOURCES | $7.44 | Morgan Stanley | 10.90 | 11.25 | -3.11% |
NUF | NUFARM | $4.88 | Macquarie | 5.30 | 5.77 | -8.15% |
OGC | OCEANAGOLD | $3.67 | Ord Minnett | 4.80 | 5.20 | -7.69% |
RRL | REGIS RESOURCES | $4.81 | Ord Minnett | 4.80 | 5.30 | -9.43% |
SGM | SIMS METAL MANAGEMENT | $10.63 | Citi | 11.50 | 12.50 | -8.00% |
Macquarie | 9.30 | 11.70 | -20.51% | |||
Ord Minnett | 9.50 | 10.50 | -9.52% | |||
SYR | SYRAH RESOURCES | $0.51 | Macquarie | 0.50 | 0.90 | -44.44% |
Summaries
BAL | BELLAMY'S AUSTRALIA | No Rating - Morgan Stanley | Overnight Price $12.97 |
Hold - Morgans | Overnight Price $12.97 | ||
Hold - Ord Minnett | Overnight Price $12.97 | ||
BHP | BHP | Outperform - Macquarie | Overnight Price $37.76 |
BOQ | BANK OF QUEENSLAND | Underweight - Morgan Stanley | Overnight Price $9.73 |
DXS | DEXUS PROPERTY | Reinstate coverage with Neutral - Credit Suisse | Overnight Price $12.40 |
IAG | INSURANCE AUSTRALIA | Underperform - Macquarie | Overnight Price $7.91 |
ILU | ILUKA RESOURCES | Overweight - Morgan Stanley | Overnight Price $7.44 |
JHX | JAMES HARDIE | Overweight - Morgan Stanley | Overnight Price $23.58 |
KLL | KALIUM LAKES | Outperform - Macquarie | Overnight Price $0.52 |
NST | NORTHERN STAR | Underweight - Morgan Stanley | Overnight Price $11.02 |
NUF | NUFARM | Downgrade to Neutral from Outperform - Macquarie | Overnight Price $4.88 |
OGC | OCEANAGOLD | Upgrade to Outperform from Neutral - Credit Suisse | Overnight Price $3.67 |
Outperform - Macquarie | Overnight Price $3.67 | ||
Accumulate - Ord Minnett | Overnight Price $3.67 | ||
ORG | ORIGIN ENERGY | Outperform - Macquarie | Overnight Price $7.94 |
RHC | RAMSAY HEALTH CARE | Buy - Citi | Overnight Price $62.13 |
RRL | REGIS RESOURCES | Hold - Ord Minnett | Overnight Price $4.81 |
SGM | SIMS METAL MANAGEMENT | Downgrade to Neutral from Buy - Citi | Overnight Price $10.63 |
Outperform - Credit Suisse | Overnight Price $10.63 | ||
Downgrade to Underperform from Neutral - Macquarie | Overnight Price $10.63 | ||
Lighten - Ord Minnett | Overnight Price $10.63 | ||
SYR | SYRAH RESOURCES | Underperform - Macquarie | Overnight Price $0.51 |
TWE | TREASURY WINE ESTATES | Sell - Citi | Overnight Price $18.43 |
WHC | WHITEHAVEN COAL | Buy - Citi | Overnight Price $3.39 |
RATING SUMMARY
Rating | No. Of Recommendations |
1. Buy | 10 |
2. Accumulate | 1 |
3. Hold | 6 |
4. Reduce | 1 |
5. Sell | 6 |
Tuesday 17 September 2019
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The content of this information does in no way reflect the opinions of
FNArena, or of its journalists. In fact we don't have any opinion about
the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe
and comment on. By doing so we believe we provide intelligent investors
with a valuable tool that helps them in making up their own minds, reading
market trends and getting a feel for what is happening beneath the surface.
This document is provided for informational purposes only. It does not
constitute an offer to sell or a solicitation to buy any security or other
financial instrument. FNArena employs very experienced journalists who
base their work on information believed to be reliable and accurate, though
no guarantee is given that the daily report is accurate or complete. Investors
should contact their personal adviser before making any investment decision.
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