Australian Broker Call

Morgans rates ALX as Hold (3) -

Revenue in the March quarter from APRR was in line with expectations while Dulles Greenway was below forecasts. Morgans makes slight reductions to forecasts. The broker remains positive on the distribution growth outlook but believes the stock is fairly priced.

Morgans retains a Hold rating and raises the target to $6.76 from $6.64. The broker expects the distribution will grow to $0.48 per share by FY22, driven primarily by APRR.

Target price is $6.76 Current Price is $7.10 Difference: minus $0.34 (current price is over target).
If ALX meets the Morgans target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.11, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

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

The company has taken control of the ViPlus Dairy formula. As a result, Bellamy's can now begin selling a conventional formula in off-line channels in China. The formula will be sold at a discount to existing super premium brands and targeted at tier 3 and 4 cities.

Over time, the company is expected to replace the brand with its own. Morgan Stanley suspects the push into a non-organic product could be met with scepticism, given the risks to the brand, while a counter argument is that it can win shelf space and enhance retailer/distributor relationships.

Equal-weight rating maintained. Target is $10. Cautious industry view.

Target price is $10.00 Current Price is $10.95 Difference: minus $0.95 (current price is over target).
If BAL 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 $9.78, suggesting downside of -10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Morgan Stanley rates DMP as Overweight (1) -

Post the first quarter results from Domino's Pizza International, Morgan Stanley suspects the risk of Domino's Pizza Enterprises missing its low end of same-store sales guidance has increased and the fourth quarter performance will need to improve to achieve earnings (EBIT) guidance of over 10%.

 Overweight rating retained, as the valuation now reflects a slower growth trajectory and the broker acknowledges the path may be bumpy. Cautious industry view. Target is $50.

Target price is $50.00 Current Price is $42.90 Difference: $7.1
If DMP meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $44.40, suggesting upside of 3.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Morgan Stanley rates ELO as Overweight (1) -

The highlight in the March quarter was cash receipts of $9.5m, up 29%. Morgan Stanley believes, considering the company's billing structure, where cash receipts lead revenue, that this implies a strong fourth quarter.

Overweight rating retained, alongside In-Line industry view and $8.00 target.

Target price is $8.00 Current Price is $5.51 Difference: $2.49
If ELO meets the Morgan Stanley target it will return approximately 45% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Citi rates NST as Neutral (3) -

Pogo didn't live up to expectations during the March quarter but Citi analysts remain hopeful the June quarter will deliver the goods. The analysts point out company management has held up FY19 guidance at 850-900koz gold, with higher costs at A$1225-1275/oz.

Delayed arrival of mining equipment created a bottleneck at Pogo, point out the analysts. Reduced forecasts have pulled back the price target to $9.05 from $9.45. Citi reminds investors Northern Star has a history of delivering strong June quarter performances. Neutral.

Target price is $9.05 Current Price is $8.24 Difference: $0.81
If NST meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $8.30, suggesting upside of 0.7% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.2

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

Credit Suisse rates NST as Underperform (5) -

March quarter production was weaker than Credit Suisse expected. Cost guidance has been lifted to $1225-1275/oz. The company has confirmed production of 850-900,000 ounces in FY19.

Credit Suisse suspects the company's strategy is likely to use Kalgoorlie toll milling capacity in the June quarter to improve Australian production and cover for the shortfall at Pogo.

The broker notes a change from contract mining to owner operator at Pogo has gone badly, as delays were incurred getting equipment to site. Credit Suisse maintains an Underperform rating and $6.10 target.

Target price is $6.10 Current Price is $8.24 Difference: minus $2.14 (current price is over target).
If NST meets the Credit Suisse target it will return approximately minus 26% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.30, suggesting upside of 0.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.2

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

Macquarie rates NST as Outperform (1) -

The March quarter was softer than Macquarie expected, with transition activities at Pogo affecting production and costs. The ramp up at Pogo remains key to the broker's longer-term outlook and on this basis the resource/reserve update is considered critical.

The company expects a record final quarter in FY19 from strong Australian operations. Macquarie expects FY20 guidance and the long-term outlook to be provided mid 2019. The broker maintains an Outperform rating and reduces the target to $10.30 from $10.50.

Target price is $10.30 Current Price is $8.24 Difference: $2.06
If NST meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $8.30, suggesting upside of 0.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.2

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

Morgan Stanley rates NST as Underweight (5) -

Production was weak in the March quarter, amid operating issues and delays at Pogo. Guidance has been downgraded, with costs increasing. Production expectations are maintained at 850-900,000 ounces.

Morgan Stanley notes in the year to date all-in sustainable costs are tracking at $1317/oz, above the new and higher guidance of $1225-1275/oz.

Underweight rating. Industry view is Attractive. Target is $6.60.

Target price is $6.60 Current Price is $8.24 Difference: minus $1.64 (current price is over target).
If NST meets the Morgan Stanley target it will return approximately minus 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.30, suggesting upside of 0.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.2

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

Ord Minnett rates NST as Accumulate (2) -

Northern Star produced 186,000 ounces of gold in the March quarter, -11% below Ord Minnett's forecasts. All-in sustaining costs were $1369/oz. The broker was underwhelmed by the quarter, noting Pogo suffered from delays to equipment delivery which has meant the shift in the mining method had commenced without the necessary fleet being available.

This has resulted in lower grades and gold output and a very high cost for the quarter. Ord Minnett increases site cost estimates for the next 12 months to reflect the delays. Accumulate rating maintained. Target is reduced to $9.80 from $10.20.

Target price is $9.80 Current Price is $8.24 Difference: $1.56
If NST meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $8.30, suggesting upside of 0.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.2

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

UBS rates NST as Neutral (3) -

March quarter production was -22% below forecasts and unit costs 20% above what UBS expected. The main reason was the late delivery of the new mining fleet at Pogo. The broker considers this ultimately immaterial if the turnaround at the asset is successful.

Nevertheless, Australian production was also weaker than expected. The broker suggests a repeat of the last couple of quarters may put the company's usual premium rating at risk.

Recent weakness in the share price has improved the risk/reward balance and UBS maintains a Neutral rating. Target is reduced to $9.00 from $9.60.

Target price is $9.00 Current Price is $8.24 Difference: $0.76
If NST meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $8.30, suggesting upside of 0.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.2

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

Morgans rates OEL as Add (1) -

Morgans updates research for the company's farm-in to the Talos Energy Green Canyon project after the recent capital raising and redemption of convertible notes.

The broker believes the company is building meaningful earnings from a portfolio of low-cost and low-risk conventional oil and gas exploration.

Morgans considers now an ideal time to pursue farm-ins, given an expectation that competition for assets will surge as the oil price recovery picks up pace.

An Add rating is maintained with the target raised to $0.15 from $0.13.

Target price is $0.15 Current Price is $0.06 Difference: $0.09
If OEL meets the Morgans target it will return approximately 150% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 1.0

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

Citi rates OSH as Sell (5) -

Citi analysts have been on a path to educating investors about changes taking place in the global market for LNG. The analysts recently returned from a trip through Asia, and returned with even more conviction in their thesis for what the future of LNG will likely look like.

In a few years' time, the analysts believe, customers will be purchasing LNG at lower prices; not something that is priced in today's equity prices. Short to medium term a slowing in Chinese demand should be on the horizon, as well as lingering doubts about whether Asia ex-China can build required infrastructure in a timely fashion.

Updating forecasts and assumptions has pulled down the price target to $7.33. Sell rating retained.

Target price is $7.33 Current Price is $8.07 Difference: minus $0.74 (current price is over target).
If OSH meets the Citi target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.67, suggesting upside of 7.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

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

Morgan Stanley believes the company is close to confirming the expansion of a further three trains in PNG. A confirmation of this expansion could lead to a re-rating, in the broker's opinion, upon successful delivery.

The existing two train plant continues to run above the broker's assumptions. Morgan Stanley notes leverage is high, and the business is moving into a heavy expansion phase.

The broker also notes a number of key catalysts are likely in coming months and, as the company needs to deliver on these catalysts, an Equal-weight rating is maintained. Target is raised to $8.60 from $8.00. Industry view is In-Line.

Target price is $8.60 Current Price is $8.07 Difference: $0.53
If OSH meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $8.67, suggesting upside of 7.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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