Australian Broker Call

Citi rates AGO as Neutral (3) -

FY17 iron ore volumes were in line with guidance and guidance for FY18 of 9-10mt has been maintained.. Despite a stable operating profile Citi downgrades net profit forecasts to $13m for FY17.

FY18 is downgraded to a loss of -$44m, largely driven by the broker's bearish iron ore price forecasts coupled with a stronger Australian dollar over the medium term.

The broker envisages a widening of price discounts for low-grade iron ore as a further headwind. Neutral retained with no target.

Current Price is $0.02. Target price not assessed.

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Ord Minnett rates ALQ as Hold (3) -

Management has guided to $70-75m for the first half net profit, which implies solid growth of 21%, Ord Minnett notes.

The broker believes the company's plans to increase operating earnings to $500m over the next five years is bullish and somewhat already reflected in valuation.

Ord Minnett retains a Hold recommendation. Target is $6.88.

Target price is $6.88 Current Price is $7.45 Difference: minus $0.57 (current price is over target).
If ALQ meets the Ord Minnett target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.99, suggesting downside of -4.9% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Citi rates BLX as Neutral (3) -

Citi expects the rolling out of stores will drive earnings growth in the medium term but in the near term there are downside risks from the closure of Masters as well as a weak consumer environment.

Citi expects a flat FY18 net profit, given its bearish view on Australian housing. The broker believes the stock is fairly priced. Neutral retained. Target is $1.40.

Target price is $1.40 Current Price is $1.39 Difference: $0.015
If BLX meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.5

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

Morgan Stanley rates IAG as Overweight (1) -

Morgan Stanley believes the business mix and price momentum support the stock's upgrade cycle. The consolidation of licences creates options for the near term in regard to capital returns.

Morgan Stanley expects FY18 to be a strong year, positioning the company for another buy-back. On a 6-12 month horizon the broker would not be surprised to see another quota share deal.

Overweight retained. Target is $7.00. Industry view is In-Line.

Target price is $7.00 Current Price is $6.64 Difference: $0.36
If IAG meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $6.56, suggesting downside of -0.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

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

Morgan Stanley analysts are a bit concerned the earnings tailwinds might be eroded by potential valuation headwinds, as bond yield rises could raise the discount rates used by investors, plus a higher AUD exchange rate reduces an Australian investor's valuation for  US and European assets.

Equal-weight retained. Target is raised to $5.83 from $5.52. Industry view: Cautious.

Target price is $5.83 Current Price is $5.73 Difference: $0.1
If MQA meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $5.73, suggesting upside of 1.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.2

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

Morgans rates MQA as Hold (3) -

June quarter data indicated solid growth on the APRR but disappointing traffic on Dulles Greenway. The recent increase in the AUD/EUR and AUD/USD has negatively affected Morgans valuation by -$0.10 per security.

Given forecast changes and FX movements, the broker has reduced the target to $5.75 from $5.98. Combined with uncertainty surrounding the potential acquisition of an additional stake in APRR, the broker reaffirms a Hold rating.

Target price is $5.75 Current Price is $5.73 Difference: $0.02
If MQA meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $5.73, suggesting upside of 1.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.2

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

Citi rates MYO as Buy (1) -

Citi analysts have been updating their assumptions and projections ahead of the upcoming interim report release in August. The re-modeling has had no impact on key metrics, the Buy rating or the $4.45 valuation/price target.

Target price is $4.45 Current Price is $3.37 Difference: $1.08
If MYO meets the Citi target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $4.04, suggesting upside of 20.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.5

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

Credit Suisse rates MYR as Neutral (3) -

The company's downgrade continues to highlight the external headwinds, Credit Suisse observes. The broker notes top--line weakness persisted through the second half despite a number of initiatives.

The broker retains a Neutral rating and lacks conviction in any value in the stock in the absence of a potential merger among department stores. Target is reduced to $0.72 from $0.82.

Target price is $0.72 Current Price is $0.75 Difference: minus $0.025 (current price is over target).
If MYR meets the Credit Suisse target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.75, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

Ord Minnett rates PPT as Downgrade to Lighten from Hold (4) -

June quarter funds under management revealed negative net flows. Ord Minnett lowers its rating to Lighten from Hold given the net outflows of around -$1bn and reduced leverage to markets because of the lower-growth corporate trust division and minimal performance fee opportunities in funds management.

The broker acknowledges its forecast for a fully franked dividend yield of around 5% provides some support to the share price, but with no sign of meaningful flows in the business for the near term earnings are largely in the hands of the market's direction. Target is reduced to $46.50 from $49.50.

Target price is $46.50 Current Price is $52.06 Difference: minus $5.56 (current price is over target).
If PPT 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 $48.89, suggesting downside of -3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

Citi rates PRY as Neutral (3) -

FY17 underlying net profit is expected to be around $92m, at the lower end of the prior $92-102m guidance. Citi remains sceptical of the restructuring and transformation costs in terms of the expectations they will be "one-off".

The broker considers FY18 consensus estimates for net profit of around $106m as optimistic. The broker believes a weakening operating performance is juxtaposed with elevated risk of corporate action, given Jhango's presence on the register.

Neutral rating and $3.50 target retained.

Target price is $3.50 Current Price is $3.63 Difference: minus $0.13 (current price is over target).
If PRY meets the Citi target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.64, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Credit Suisse rates PRY as Underperform (5) -

The company has confirmed financial guidance for FY17, with underlying net profit expected to be $92m and implying a drop of -11% on the prior year. A non-cash impairment charge of $575m associated with the write-down of goodwill in the medical centre division is expected.

GP recruitment appears to have improved in the second half but Credit Suisse suspects this may not accurately reflect the increase on a full-time equivalent basis.

Moreover, while the shift to more flexible contracts may have facilitated the uplift it appears to be coming at a significant price. Underperform retained. Target is $3.40.

Target price is $3.40 Current Price is $3.63 Difference: minus $0.23 (current price is over target).
If PRY meets the Credit Suisse target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.64, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Ord Minnett rates PRY as Hold (3) -

The company has guided to FY17 underlying net profit  at the lower end of $92-102m. In addition, around $575m in non-cash write-downs related to medical centres goodwill have been announced.

Ord Minnett notes doctor numbers are at record levels with the number of GPs up by 35% but on full-time equivalent basis the number will be lower. Nevertheless, the broker considers this a positive sign given the challenges the company has faced attracting GPs.

Hold rating maintained. Target rises to $3.60 from $3.50.

Target price is $3.60 Current Price is $3.63 Difference: minus $0.03 (current price is over target).
If PRY meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.64, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

UBS rates PRY as Buy (1) -

Financial performance missed the company's own guidance in February and now Primary Health Care has had to guide investors towards the lower end of its guidance ahead of the August FY report.

UBS thinks the bottom might be near. The analysts see a better FY18 ahead on the back of a turnaround for Pathology & Imaging, plus the arrival of new CEO with "strong GP pedigree" (UBS' words).

UBS is sticking to its 15.3% EPS growth forecast for FY18. Buy rating retained. Target drops to $3.95 from $4.10.

Target price is $3.95 Current Price is $3.63 Difference: $0.32
If PRY meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.64, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

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

Morgan Stanley has a positive view on the leverage to import-export flows and the structural shift in logistics but believes much of the positive aspects is in the price. Target is raised to $2.63 from $2.18.

Equal-weight rating, Cautious industry view retained.

Target price is $2.63 Current Price is $2.64 Difference: minus $0.01 (current price is over target).
If QUB meets the Morgan Stanley target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.70, suggesting upside of 2.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.4

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

Citi rates RRL as Downgrade to Neutral from Buy (3) -

Citi analysts conclude FY17 has been a year of strong performance for Regis Resources. They expect the same from FY18.

However, it's the share price valuation they have an issue with, hence the downgrade to Neutral from Buy. Operationally, they continue to see the risk as being skewed towards positive surprises.

The stockbroker's Bull case valuation is $4.70, while the Bear case valuation is $3.10. Current target price sits at $3.90, up from $3.75 prior.

Target price is $3.90 Current Price is $3.72 Difference: $0.18
If RRL meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $3.37, suggesting downside of -12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

Credit Suisse rates RRL as Underperform (5) -

The company posted a record June quarter, comfortably achieving FY17 forecasts. Credit Suisse observes well-funded exploration continues to deliver new sources of ore and improves the reserve life at Duketon.

Underperform rating and $3.50 target retained.

Target price is $3.50 Current Price is $3.72 Difference: minus $0.22 (current price is over target).
If RRL meets the Credit Suisse target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.37, suggesting downside of -12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

Macquarie rates RRL as Neutral (3) -

Regis' record breaking production in the June Q beat the broker's expectation by 10% and costs were -18% lower than expected, with Duketon North proving the stand-out. FY17 guidance should be comfortably met and FY18 guidance has been upgraded.

With details on the McPhillamys development timeline and cost as yet unclear, and the strong A$ providing a headwind for gold producers, the broker retains Neutral and a $3.20 target.

Target price is $3.20 Current Price is $3.72 Difference: minus $0.52 (current price is over target).
If RRL meets the Macquarie target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.37, suggesting downside of -12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

UBS rates RRL as Sell (5) -

UBS analysts suggest investors might be pricing this share price to perfection, which implies the risks are now firmly skewed to the downside. Sell rating retained with an unchanged $3.16 price target.

The analysts note Regis Resources' strategy of commercialising high grade satellite resources has been highly successful, but the next six targets might be of lower quality, plus the market might be overly optimistic on undeveloped McPhillamys in NSW.

Thus while today's premium valuation has been well earned, says UBS, there is likely to be better value elsewhere in the sector.

Target price is $3.16 Current Price is $3.72 Difference: minus $0.56 (current price is over target).
If RRL meets the UBS target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.37, suggesting downside of -12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

Macquarie rates STO as Outperform (1) -

It was a strong June Q report from Santos, the broker notes. Production and sales guidance has been upgraded, costs have been cut, drilling has increased without an increase to capex guidance and 2018 hedging is now in place.

The efficiencies target set by the company in 2016 is beginning to play out, the broker notes, and further improvement should be seen in the second half 2017. Outperform and $4.00 target retained.

Target price is $4.00 Current Price is $3.26 Difference: $0.74
If STO meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $3.75, suggesting upside of 16.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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

Morgans rates STO as Downgrade to Reduce from Hold (5) -

Management may be working hard to turn the business around but Morgans still believes the company is stuck in a difficult strategic, economic and political position.

Outside of rising oil price or asset sales, the broker expects the stock to continue to underperform higher-margin peers.

Given the amount of uncertainty surrounding GLNG's long-term operating outlook and the size of the earning/valuation sensitivity to the oil price, Morgans downgrades to Reduce from Hold. Target is lowered to $2.28 from $3.17.

Target price is $2.28 Current Price is $3.26 Difference: minus $0.98 (current price is over target).
If STO meets the Morgans target it will return approximately minus 30% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.75, suggesting upside of 16.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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

Morgan Stanley rates SUN as Underweight (5) -

Morgan Stanley believes now is the time to switch to Insurance Australia Group ((IAG)). The upcoming results are expected to be an important catalyst which could drive a divergence in stock performance.

Underweight and $13.50 target retained. In-Line sector view.

Target price is $13.50 Current Price is $14.39 Difference: minus $0.89 (current price is over target).
If SUN meets the Morgan Stanley target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.25, suggesting upside of 0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.1

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

Ord Minnett rates VOC as Hold (3) -

Ord Minnett notes speculation that Vodafone Hutchison is potentially looking to join private equity firms KKR and Affinity Equity Partners in making a bid for Vocus.

The broker suspects the deal would be accretive for Vodafone Hutchison's owners. Such a combination will create Australia's third fully integrated telecoms carrier.

Ord Minnett does not expect bids to go materially higher than the current $3.50 a share non-binding bids on the table, although theoretically Vodafone Hutchison has most capacity because of synergies.

Hold rating maintained. Target is $3.30.

Target price is $3.30 Current Price is $3.50 Difference: minus $0.2 (current price is over target).
If VOC meets the Ord Minnett target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.29, suggesting downside of -6.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Macquarie rates WPL as Neutral (3) -

Woodside's June Q production beat the broker by 4% but lower LNG volumes from NWS and Pluto meant revenues missed by -7%. Weak contract pricing for Pluto is a concern if this is a sign of things to come, the broker suggests.

Also unclear is just how big the Senegal resource is. Pluto de-bottlenecking is a positive but exploration success is required if there is to be another train, the broker notes. Neutral retained, target falls to $28.50 from $29.50.

Target price is $28.50 Current Price is $29.46 Difference: minus $0.96 (current price is over target).
If WPL meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $30.18, suggesting upside of 4.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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

Morgans rates WPL as Hold (3) -

LNG production on the North West Shelf dropped -5% in the June quarter and was below forecasts. Morgans suspects the company is likely to be stuck with a collection of mostly large-scale, dry, remote and consequently capital intensive development assets.

Outside of Senegal, the broker envisages limited returns. The broker still envisages the growth profile is undersized relative to the existing production base and susceptible to commodity price risk. Target is reduced to $30.46 from $30.76. Hold retained.

Target price is $30.46 Current Price is $29.46 Difference: $1
If WPL meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $30.18, suggesting upside of 4.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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