Australian Broker Call

Citi rates ALU as Neutral (3) -

Analysis of website visits has taught Citi analysts December was a strong month for Altium's flagship product, Octopart. For the first time in 2023, report the analysts, web visits returned to growth year-on-year.

The broker is, however, not yet prepared to lift its forecasts, preferring to await H1 financials, to be released in February.

Observed trends for the month were less buoyant for Altium365 and the digital store front, but the analysts refer to seasonality and the much lesser importance for the latter to explain why those are not a worry.

Target $46.65. Neutral.

Target price is $46.65 Current Price is $44.15 Difference: $2.5
If ALU meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $46.41, suggesting upside of 2.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Morgans rates ASX as Hold (3) -

Following on from the ASX's December trading activity update, Morgans finds the closing month offered a better environment for the exchange overall.

One month does not make for a decisive turnaround, and with H2 as a whole still painting a rather mixed picture, the broker has slightly reduced forecasts.

Price target declines to $60.20 from $60.70. Hold.

Target price is $60.20 Current Price is $62.57 Difference: minus $2.37 (current price is over target).
If ASX meets the Morgans target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $61.03, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

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

Citi rates AWC as Buy (1) -

Buy/High Risk rating retained with a price target of $1.10 following AWAC partner Alcoa's announcement production at troubled refinery Kwinana will cease, leading to circa 600 job losses.

The closure will trigger estimated JV cash drains of -US$130m in 2024 and another -US$60m in 2025, Citi analysts highlight.

There will be an additional -US$40m asset depreciation change with Citi explaining the asset will be actively managed rather than being dismantled, so total costs remain an open question.

And now for the all-important key question: by how much will the price of alumina rise? Citi has identified South32 ((S32)) as one major beneficiary of the move.

Target price is $1.10 Current Price is $0.98 Difference: $0.12
If AWC meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $1.01, suggesting downside of -12.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.6

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

Macquarie rates AWC as Neutral (3) -

Alumina Ltd's AWAC joint venture partner is putting the Kwinana refinery on care and maintenance from this year's June quarter onwards.

Macquarie points out the two remaining refineries in WA, Pinjarra and Wagerup, are lower cost operations with higher margins.

To account for the change, including costs and impairment, EPS estimates decrease for 2024 and 2025, and increase thereafter. The broker's target price lifts by 6% to 85c.

Neutral. Next dividend payout to shareholders is not expected until 2025.

Target price is $0.85 Current Price is $0.98 Difference: minus $0.13 (current price is over target).
If AWC 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 $1.01, suggesting downside of -12.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.6

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

Ord Minnett rates AWC as Accumulate (2) -

AWAC partner Alcoa has announced the curtailing of production at high cost refinery Kwinana from this year's june quarter onwards and Ord Minnett points out the ageing asset posted a net loss of -US$130m in 2023.

The broker, whitelabeling the opinion of Morningstar, doesn't think the decision will materially affect its $1.18 fair value estimate for Alumina Ltd shares.

Accumulate. Fair value $1.18.

Target price is $1.18 Current Price is $0.98 Difference: $0.2
If AWC meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $1.01, suggesting downside of -12.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.6

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

Citi rates AX1 as Neutral (3) -

Citi analysts believe market consensus is too conservative on Accent Group, a view supported by the observation sales trends for footwear, clothing and watch and jewellery retailers improved during the recent Christmas trading period.

On this basis, the broker has now opened a so-called Trading Watch, anticipating positive share price action on a 90 days horizon.

Accent Group is scheduled to report H1 financials on February 22.

According to the FNArena archive, Citi's rating for Accent Group is Neutral with a price target of $1.93.

Target price is $1.93 Current Price is $1.92 Difference: $0.01
If AX1 meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $2.17, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Citi rates CAR as Buy (1) -

Analysis into demand and supply trends for Australia's leading "internet" companies has provided positive signals for Car Group, Citi analysts report.

Apart from positive indications for operations in Korea and Brazil, in Australia dealer listings have started to improve, report the analysts, while overall demand is holding up.

In addition, the broker believes demand seems to be improving for real estate listings too, with REA Group seen as further extending its lead locally over Domain Holdings.

The Buy rating and $29.65 target are unchanged for CAR Group.

Target price is $29.65 Current Price is $30.39 Difference: minus $0.74 (current price is over target).
If CAR meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.86, suggesting downside of -5.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Macquarie rates CGF as Neutral (3) -

Macquarie explains how credit spreads have become a headwind for Challenger, while the premium of annuity rates versus bank deposit rates has narrowed, decreasing the relative "value" proposition.

The broker suspects there are downside risks to retail sales in H1, but probably with higher margins.

Earnings estimates have risen slightly for FY24 and FY25. Target gains 20c to $6.50. Neutral.

Target price is $6.50 Current Price is $6.65 Difference: minus $0.15 (current price is over target).
If CGF 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 $6.78, suggesting upside of 3.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Macquarie rates CMM as Neutral (3) -

Capricorn Metals' preliminary Q2 production report proved modestly stronger than what Macquarie had forecast. Stronger grades made the difference.

Macquarie believes the company is well on its way to achieving its own production guidance.

Neutral. Target $4.80. Forecasts have increased.

Target price is $4.80 Current Price is $4.43 Difference: $0.37
If CMM meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Morgan Stanley rates CTD as Overweight (1) -

Morgan Stanley lauds the competitive advantage Corporate Travel Management has built through investments in technology and accretive acquisitions, building up scale, in comparison with local peers Flight Centre ((FLT)), Helloworld Travel ((HLO)) and Webjet ((WEB)).

The broker argues developing proprietary technology has allowed Corporate Travel to venture into niches such as government, where global competitors have historically been less focused, as well as in smaller sized businesses.

The broker awaits the release of H1 financials to assess the traditional H2 skew. Target $29. Overweight. Industry view is In-Line.

Target price is $29.00 Current Price is $19.47 Difference: $9.53
If CTD meets the Morgan Stanley target it will return approximately 49% (excluding dividends, fees and charges).

Current consensus price target is $22.85, suggesting upside of 15.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Citi rates DHG as Neutral (3) -

Analysis into demand and supply trends for Australia's leading "internet" companies has provided positive signals for Car Group, Citi analysts report.

Apart from positive indications for operations in Korea and Brazil, in Australia dealer listings have started to improve, report the analysts, while overall demand is holding up.

In addition, the broker believes demand seems to be improving for real estate listings too, with REA Group seen as further extending its lead locally over Domain Holdings.

Citi's rating for Domain Holdings Australia is Neutral with a price target of $3.70.

Target price is $3.70 Current Price is $3.37 Difference: $0.33
If DHG meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $3.21, suggesting downside of -5.8% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.5

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

Macquarie rates GLN as Outperform (1) -

Galan Lithium's update on the Hombre Muerto West project includes management signalling latent capacity in production wells.

Macquarie suggests this could provide flexibility during phase 1 commissioning.

The broker has identified share price catalysts in the form of offtake and funding updates, as well, potentially, further exploration updates.

Target $1.20. Outperform.

Target price is $1.20 Current Price is $0.67 Difference: $0.53
If GLN meets the Macquarie target it will return approximately 79% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Macquarie rates JBH as Upgrade to Neutral from Underperform (3) -

In hindsight, Macquarie concludes its own assumptions for consumer spending have been too conservative. In addition, JB Hi-Fi is seen as the best in class with a superior cost structure that is keeping online competition at bay, unlike trends across the globe.

Today's update sees the broker lifting its forecasts by between 7%-8% for the years ahead. Valuation lifts to $55 from $45.

Macquarie has upgraded its rating to Neutral from Underperform.

Target price is $55.00 Current Price is $53.78 Difference: $1.22
If JBH meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $46.32, suggesting downside of -15.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

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

Morgan Stanley rates JIN as Overweight (1) -

Morgan Stanley has taken the view that if Jumbo Interactive can manage to connect its charity customers with the existing consumer base, large pools of high margin revenues await the company.

Equally important: such success is currently not incorporated in consensus forecasts. The broker reiterates its Overweight rating. Target $19.30 (down from $21 in November). Industry view is In-Line.

Forecasts have been reduced.

Target price is $19.30 Current Price is $13.48 Difference: $5.82
If JIN meets the Morgan Stanley target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $16.16, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Macquarie rates QBE as Outperform (1) -

Looking forward to February 16, when QBE Insurance is scheduled to report 2023 financials, Macquarie observes the shares are now trading at a premium vis a vis international peers whereas the years past were characterised by a slight discount.

Marking-to-market has led to upgraded forecasts. The underlying trajectory remains positive, assure the analysts, though it is slowing.

The EPS estimate for 2023 has been cut by -9.7%, but 2024 and thereafter have seen slight increases.

For 2024, Macquarie is anticipating mid-single-digit gross written premia (GWP) growth and 93.5% CoR guidance. Outperform. Target $16.60.

Target price is $16.60 Current Price is $15.08 Difference: $1.52
If QBE meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $17.31, suggesting upside of 15.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.8

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

Citi rates REA as Neutral (3) -

Analysis into demand and supply trends for Australia's leading "internet" companies has provided positive signals for Car Group, Citi analysts report.

Apart from positive indications for operations in Korea and Brazil, in Australia dealer listings have started to improve, report the analysts, while overall demand is holding up.

In addition, the broker believes demand seems to be improving for real estate listings too, with REA Group seen as further extending its lead locally over Domain Holdings.

The broker's price target for REA Group remains $159, alongside a Neutral rating.

Target price is $159.00 Current Price is $178.54 Difference: minus $19.54 (current price is over target).
If REA meets the Citi target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $157.50, suggesting downside of -12.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Morgan Stanley rates RIO as Overweight (1) -

Morgan Stanley's European team of mining sector analysts has updated modeling for Rio Tinto. Their price target has moved to 6,220p from 6200p as a result.

Changes made include the incorporation of the Simandou project.

Overweight. Industry view is Attractive.

Target price is $146.00 Current Price is $131.90 Difference: $14.1
If RIO meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $125.67, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

Morgans rates TRP as No Rating (-1) -

Morgans has decided to change its research approach for Tissue Repair. No longer will the broker provide a rating, valuation or forecasts.

Hence, the prior Speculative Buy rating and 79c target are no longer valid.

As to exactly why the broker continues to monitor this tiny company is not explained.

Current Price is $0.26. Target price not assessed.

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