Australian Broker Call
January 16, 2017
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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: 12:08 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.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
| IGO - | INDEPENDENCE GROUP | Downgrade to Neutral from Outperform | Macquarie |
| WSA - | WESTERN AREAS | Downgrade to Neutral from Outperform | Macquarie |
Deutsche Bank rates BAP as No Rating (-1) -
Bapcor's quest to wrestle control of Hellaby Holdings (HBY.NZ) has now received control from Deutsche Bank. With Bapcor having accumulated a controlling stake, the analysts suggest HBY shareholders should accept the offer given the risks associated with remaining a minority shareholder.
Deutsche Bank does not cover Bapcor. The stockbroker has now downgraded Hellaby to Sell.
Current Price is $5.82. Target price not assessed.
Current consensus price target is $6.06, suggesting upside of 3.1% (ex-dividends)
Forecast for FY17:
Current consensus EPS estimate is 23.5, implying annual growth of 31.7%. Current consensus DPS estimate is 14.4, implying a prospective dividend yield of 2.4%. Current consensus EPS estimate suggests the PER is 25.0. |
Forecast for FY18:
Current consensus EPS estimate is 30.0, implying annual growth of 27.7%. Current consensus DPS estimate is 18.8, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 19.6. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates BTT as Underperform (5) -
BT's market update revealed strong numbers, but Credit Suisse nevertheless thinks it's best to remain cautious. The analysts continue to struggle with the share price valuation. Underperform. Target $10.50.
Target price is $10.50 Current Price is $10.64 Difference: minus $0.14 (current price is over target).
If BTT 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 $10.20, suggesting downside of -3.3% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 45.00 cents and EPS of 53.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 52.8, implying annual growth of 3.9%. Current consensus DPS estimate is 43.7, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 20.0. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 56.00 cents and EPS of 66.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 63.5, implying annual growth of 20.3%. Current consensus DPS estimate is 52.6, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 16.6. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates BTT as Outperform (1) -
BT Investment's Dec Q numbers show the fund manager continues to meet the broker's key benchmarks of funds flow, fund capacity and performance. The impact of lower performance fees is offset by ongoing positive net flows.
The broker has trimmed earnings forecasts but lifted its target to $11.08 from $10.76. Outperform retained.
Target price is $11.08 Current Price is $10.64 Difference: $0.44
If BTT meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $10.20, suggesting downside of -3.3% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 44.00 cents and EPS of 50.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 52.8, implying annual growth of 3.9%. Current consensus DPS estimate is 43.7, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 20.0. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 49.00 cents and EPS of 55.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 63.5, implying annual growth of 20.3%. Current consensus DPS estimate is 52.6, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 16.6. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates BTT as Overweight (1) -
Morgan Stanley thought the reported quarterly inflows were "impressive", though they missed forecasts nevertheless. The analysts point the finger at lower margin channels. All remains well among higher margin retail flows.
Pleasingly, the analysts note JOHCM delivered retail flows in both UK/Europe and the US, despite a tough environment. They see a small headwind to earnings from lower FuM and performance fees. Overweight rating retained. Target $11.30.
Target price is $11.30 Current Price is $10.64 Difference: $0.66
If BTT meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $10.20, suggesting downside of -3.3% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 46.00 cents and EPS of 57.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 52.8, implying annual growth of 3.9%. Current consensus DPS estimate is 43.7, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 20.0. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 54.00 cents and EPS of 64.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 63.5, implying annual growth of 20.3%. Current consensus DPS estimate is 52.6, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 16.6. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates BTT as Hold (3) -
BT Investment's funds under management rose 3.6% in the Dec quarter, mostly through flows into JO Hambro. Performance fee generation was the lowest in four years, the broker notes, given only one of seven major funds materially outperformed its benchmark.
The broker sees the stock as fair value in the short term, and retains Hold. Longer term the broker sees scope for structural growth. Target down a cent to $10.65.
Target price is $10.65 Current Price is $10.64 Difference: $0.01
If BTT meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges).
Current consensus price target is $10.20, suggesting downside of -3.3% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 44.00 cents and EPS of 51.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 52.8, implying annual growth of 3.9%. Current consensus DPS estimate is 43.7, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 20.0. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 51.00 cents and EPS of 60.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 63.5, implying annual growth of 20.3%. Current consensus DPS estimate is 52.6, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 16.6. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates CWN as Buy (1) -
Citi analysts have lifted their price target to $13.15 from $12.75 on the trade-off from a lower equity stake in Melco Crown (thus also lower dividends) and the company's share buy back.
Melco Crown's announcement of a US$650m special dividend is seen as a pleasant surprise. EPS estimates have been reduced by 2-3% for the years ahead. The rating remains Buy.
Target price is $13.15 Current Price is $11.75 Difference: $1.4
If CWN meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $12.62, suggesting upside of 6.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 134.40 cents and EPS of 55.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 56.7, implying annual growth of -56.5%. Current consensus DPS estimate is 90.6, implying a prospective dividend yield of 7.7%. Current consensus EPS estimate suggests the PER is 20.8. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 53.00 cents and EPS of 59.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 54.7, implying annual growth of -3.5%. Current consensus DPS estimate is 51.0, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 21.6. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates DXS as Underperform (5) -
Credit Suisse calls it a "crowded trade". Updating its modeling has triggered minor reductions to estimates, but it's the premium valuation the broker cannot get past. Underperform. Target $8.78.
Target price is $8.78 Current Price is $9.00 Difference: minus $0.22 (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 $8.85, suggesting downside of -2.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 45.00 cents and EPS of 63.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 57.2, implying annual growth of -56.0%. Current consensus DPS estimate is 45.0, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 15.8. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 46.00 cents and EPS of 62.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 57.6, implying annual growth of 0.7%. Current consensus DPS estimate is 46.2, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 15.7. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates IGO as Downgrade to Neutral from Outperform (3) -
The lifting of the Indonesian nickel export ban has come as a surprise to the broker, who notes recent government rhetoric has been to the contrary. Given the lift extends only to those producers who can demonstrate plans to develop downstream processing facilities, it is uncertain as to what the impact will be.
The broker has thus left nickel price forecasts unchanged for the time being, while noting substantial downside risk. Independence is downgraded to Neutral. Target falls to $4.40 from $5.00. Earnings forecasts unchanged for the time being.
Target price is $4.40 Current Price is $4.16 Difference: $0.24
If IGO meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $4.17, suggesting upside of 3.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 14.00 cents and EPS of 6.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.8, implying annual growth of N/A. Current consensus DPS estimate is 4.8, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 34.2. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 13.00 cents and EPS of 30.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 39.7, implying annual growth of 236.4%. Current consensus DPS estimate is 13.2, implying a prospective dividend yield of 3.3%. Current consensus EPS estimate suggests the PER is 10.2. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates LNK as Outperform (1) -
The broker has reviewed its investment case for Link following the final migration of Superpartners clients and the inclusion of the stock in the ASX100.
The broker sees tailwinds provided by synergies, increased efficiency and value-added services, and retirement phase growth.
Target rises to $8.50 from $8.40, Outperform retained.
Target price is $8.50 Current Price is $7.70 Difference: $0.8
If LNK meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $8.41, suggesting upside of 8.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 19.80 cents and EPS of 33.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 32.3, implying annual growth of 156.6%. Current consensus DPS estimate is 17.8, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 24.0. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 23.70 cents and EPS of 40.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 39.6, implying annual growth of 22.6%. Current consensus DPS estimate is 20.9, implying a prospective dividend yield of 2.7%. Current consensus EPS estimate suggests the PER is 19.5. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates SHL as Neutral (3) -
In a preview to the upcoming interim report release, CS analysts observe FX continues to provide headwinds for the business.
The analysts estimate just under half of group earnings are derived from the three core diagnostic services in Australia, which weighs upon the organic growth profile.
The shares are seen trading at a premium vis-a-vis the broader market. Neutral rating retained. Target $21.75. Minor changes have been made to forecasts.
Target price is $21.75 Current Price is $21.19 Difference: $0.56
If SHL meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $22.92, suggesting upside of 7.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 77.00 cents and EPS of 108.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 109.6, implying annual growth of -0.4%. Current consensus DPS estimate is 78.0, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 19.5. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 81.00 cents and EPS of 116.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 121.0, implying annual growth of 10.4%. Current consensus DPS estimate is 84.5, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 17.6. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates WSA as Downgrade to Neutral from Outperform (3) -
The lifting of the Indonesian nickel export ban has come as a surprise to the broker, who notes recent government rhetoric has been to the contrary. Given the lift extends only to those producers who can demonstrate plans to develop downstream processing facilities, it is uncertain as to what the impact will be.
The broker has thus left nickel price forecasts unchanged for the time being, while noting substantial downside risk. Western Areas is downgraded to Neutral. Target falls to $3.00 from $3.60. Earnings forecasts unchanged for the time being.
Target price is $3.00 Current Price is $2.65 Difference: $0.35
If WSA meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $2.54, suggesting downside of -6.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 4.00 cents and EPS of 17.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 2.0, implying annual growth of N/A. Current consensus DPS estimate is 0.9, implying a prospective dividend yield of 0.3%. Current consensus EPS estimate suggests the PER is 135.5. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 8.00 cents and EPS of 24.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 12.5, implying annual growth of 525.0%. Current consensus DPS estimate is 3.1, implying a prospective dividend yield of 1.1%. Current consensus EPS estimate suggests the PER is 21.7. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates WSA as Lighten (4) -
In a surprise move, Indonesia has eased regulations around the country’s nickel ore export ban. Ord Minnett points out the restart of nickel ore exports could materially increase supply and negatively impact nickel prices globally.
Ord Minnett already holds a medium-term nickel price outlook below both spot and consensus price forecasts. Lighten rating retained. Target $2.30.
Target price is $2.30 Current Price is $2.65 Difference: minus $0.35 (current price is over target).
If WSA meets the Ord Minnett target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $2.54, suggesting downside of -6.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 11.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 2.0, implying annual growth of N/A. Current consensus DPS estimate is 0.9, implying a prospective dividend yield of 0.3%. Current consensus EPS estimate suggests the PER is 135.5. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 0.00 cents and EPS of 1.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 12.5, implying annual growth of 525.0%. Current consensus DPS estimate is 3.1, implying a prospective dividend yield of 1.1%. Current consensus EPS estimate suggests the PER is 21.7. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| BAP - | BAPCOR LIMITED | No Rating - Deutsche Bank | Overnight Price $5.82 |
| BTT - | BT INVEST MANAGEMENT | Underperform - Credit Suisse | Overnight Price $10.64 |
| Outperform - Macquarie | Overnight Price $10.64 | ||
| Overweight - Morgan Stanley | Overnight Price $10.64 | ||
| Hold - Morgans | Overnight Price $10.64 | ||
| CWN - | CROWN RESORTS | Buy - Citi | Overnight Price $11.75 |
| DXS - | DEXUS PROPERTY | Underperform - Credit Suisse | Overnight Price $9.00 |
| IGO - | INDEPENDENCE GROUP | Downgrade to Neutral from Outperform - Macquarie | Overnight Price $4.16 |
| LNK - | LINK ADMINISTRATION | Outperform - Macquarie | Overnight Price $7.70 |
| SHL - | SONIC HEALTHCARE | Neutral - Credit Suisse | Overnight Price $21.19 |
| WSA - | WESTERN AREAS | Downgrade to Neutral from Outperform - Macquarie | Overnight Price $2.65 |
| Lighten - Ord Minnett | Overnight Price $2.65 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 4 |
| 3. Hold | 4 |
| 4. Reduce | 1 |
| 5. Sell | 2 |
Monday 16 January 2017
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