Australian Broker Call

Morgans rates ADI as Hold (3) -

The company has announced the acquisition of four industrial assets located east of the Melbourne CBD. The assets bolster the industrial weighting of the fund and, Morgans observes, provide value-adding opportunities down the track.

The distribution guidance for FY19 is unchanged at $0.17 per security. Morgans maintains a Hold rating and raises the target to $2.79 from $2.76.

Target price is $2.79 Current Price is $2.77 Difference: $0.02
If ADI meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $2.93, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

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

Morgans rates AHG as Hold (3) -

The company now expects FY19 net profit to be around $50m. The downgrade from prior guidance of $52-56m was not unexpected, Morgans suggests, particularly in light of recent industry trends.

A potential write-down of refrigerated logistics receivables was a surprise but remains unquantified. Still, the broker believes the impact should be relatively contained and not materially affect the valuation.

Hold rating maintained. Target is reduced to $2.41 from $2.52.

Target price is $2.41 Current Price is $2.29 Difference: $0.12
If AHG meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $2.20, suggesting downside of -4.1% (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

Ord Minnett rates ALL as Buy (1) -

The company is scheduled to report first half results on May 23. Ord Minnett increases earnings forecast by 3.2% for FY19 and 3.3% for FY20. The broker notes the strong recurring revenue and the fact the company is consistently gaining market share in North American operations.

Further growth opportunities exist in digital and title development for both land-based and digital platforms. Buy rating maintained. Target rises to $33.25 from $31.25.

Target price is $33.25 Current Price is $26.89 Difference: $6.36
If ALL meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $31.68, suggesting upside of 17.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.9

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

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

The company has updated pre-tax profit guidance for the first half, expecting this to be between -7% and -10% lower than the comparable half.

Morgan Stanley believes this is broadly in line with what the market expects. No new information was provided regarding the Automotive Holdings ((AHG)) acquisition.

Equal-weight. Target $7. Industry view: In-Line.

Target price is $7.00 Current Price is $8.57 Difference: minus $1.57 (current price is over target).
If APE meets the Morgan Stanley target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.89, suggesting downside of -8.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Deutsche Bank rates AZJ as Hold (3) -

The Federal Court has ruled in favour of Aurizon and Pacific National in a case brought by the ACCC in respect of the proposed sale of the Acacia Ridge terminal and intermodal business in Queensland.

This allows Aurizon to progress with the sale of the terminal and finalise an exit from the loss-making intermodal business. Key to the ruling was Pacific National's decision to give undertakings which guarantee access to other players involved in the Queensland rail and road haulage industry. The court is yet to rule on costs.

Deutsche Bank maintains a Hold rating and $4.80 target.

Target price is $4.80 Current Price is $5.08 Difference: minus $0.28 (current price is over target).
If AZJ meets the Deutsche Bank target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.74, suggesting downside of -6.7% (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

Deutsche Bank rates CCL as Hold (3) -

The company has reiterated guidance at its AGM, expecting 2019 will be another transition year. Deutsche Bank, accordingly, forecasts a -2% decline in earnings.

Meanwhile, New Zealand, Fiji and PNG, as well as alcohol/coffee, are delivering in line with long-term plans. Australia and Indonesia are expected to remain tough.

Hold rating and $8 target maintained.

Target price is $8.00 Current Price is $9.18 Difference: minus $1.18 (current price is over target).
If CCL meets the Deutsche Bank target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.36, suggesting downside of -9.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

UBS rates CCL as Sell (5) -

The company has reiterated that 2019 will be the second year in a two-year transition period, forecasting earnings per share will grow in mid single digits in 2020 and beyond. UBS assesses, on current trading, this is reasonable.

The broker notes Indonesian volumes in the first quarter were up over 10% but the impact on earnings is likely to be only modest. PNG, New Zealand and Fiji as well as coffee/alcohol are considered on track to deliver double-digit 2019 earnings (EBIT) growth.

UBS retains a Sell rating with a view that earnings risk has not abated. Target is $7.70.

Target price is $7.70 Current Price is $9.18 Difference: minus $1.48 (current price is over target).
If CCL meets the UBS target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.36, suggesting downside of -9.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

UBS rates CSL as Buy (1) -

UBS updates modelling assumptions, upgrading estimates by 3% over the forecast period. While aware of the potential competitive pressures on certain Behring products, the broker's overall view is unchanged.

Market dynamics support robust immunoglobulin growth and Chinese albumin growth is expected to recover. The broker assesses favourable market segmentation for Seqirus places the business in a position to grow share without using price as a lever.

Buy rating maintained. Target is raised to $223.00 from $207.50.

Target price is $223.00 Current Price is $202.50 Difference: $20.5
If CSL meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $208.46, suggesting upside of 2.9% (ex-dividends)

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: 0.4

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

Citi rates DLX as Neutral (3) -

Citi observes the takeover bid from Nippon Paint is progressing and there is a low likelihood of a competing offer. The company expects to overcome a first half miss on earnings with a strong recovery in the second half and meet guidance.

The highlight for Citi was a stronger March quarter, which suggests that the housing market, at least in terms of detached housing or renovations, may be showing signs of bottoming out. Neutral rating and $9.80 target.

Target price is $9.80 Current Price is $9.71 Difference: $0.09
If DLX meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $9.62, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in September.

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

Deutsche Bank rates DLX as Hold (3) -

First half results were weaker than Deutsche Bank expected. The broker expects the market to ignore the result, given the takeover bid by Nippon Paint.

The special dividend of 28c was higher than anticipated. Full year guidance has been maintained. Deutsche Bank retains a Hold rating and $9.80 target.

Target price is $9.80 Current Price is $9.71 Difference: $0.09
If DLX meets the Deutsche Bank target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $9.62, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in September.

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

Macquarie rates DLX as No Rating (-1) -

First half results were slightly below Macquarie's expectations. FY19 guidance has been maintained. The acquisition by Nippon Paint is expected to be completed mid August, subject to the independent expert report, regulatory approvals and in the absence of a superior proposal.

Macquarie is on research restrictions and cannot provide a rating target.

Current Price is $9.71. Target price not assessed.

Current consensus price target is $9.62, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in September.

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 DLX as Underweight (5) -

First half earnings (EBIT) were -4% below Morgan Stanley's forecasts. A $0.15 first half dividend and $0.28 special dividend have been confirmed.

Management has indicated that second quarter revenue growth returned to more normal levels and April has followed the trend. Guidance for FY19 is maintained. The takeover process by Nippon Paint continues.

Underweight maintained. Target is $9.80. Cautious sector view maintained.

Target price is $9.80 Current Price is $9.71 Difference: $0.09
If DLX meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $9.62, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in September.

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

Morgans rates DLX as Hold (3) -

First half results were weaker than Morgans expected. Nevertheless, management has maintained guidance for FY19 underlying net profit to be higher than FY18. Morgans reduces FY19 estimates by -1%.

As the business is currently under a takeover offer by Nippon Paint the broker maintains a Hold rating, reducing the target to $9.37 from $9.80.

Target price is $9.37 Current Price is $9.71 Difference: minus $0.34 (current price is over target).
If DLX 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 $9.62, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in September.

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

Ord Minnett rates DLX as Hold (3) -

First half results disappointed Ord Minnett. Net profit was $68.2m, -7.2% behind the broker's forecasts. A strong rebound is expected in the second half and the company has retained guidance, expecting higher net profit versus FY18.

Ord Minnett calculates this requires 11% growth in the second half and makes for a challenging target. Hold rating maintained. Target is reduced to $9.40 from $9.80.

Target price is $9.40 Current Price is $9.71 Difference: minus $0.31 (current price is over target).
If DLX meets the Ord Minnett target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.62, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in September.

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

UBS rates DLX as Neutral (3) -

The company reported a -4% decline in underlying first half earnings (EBIT). UBS notes there is no sign of a softening housing market in the numbers, as revenue growth for paint in the second quarter accelerated to 6%.

UBS maintains a Neutral rating, with a view that an alternative offer to the Nippon Paint proposal is low. Target is $9.80.

Target price is $9.80 Current Price is $9.71 Difference: $0.09
If DLX meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $9.62, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in September.

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

Credit Suisse rates GMG as Outperform (1) -

Goodman Group has reaffirmed FY19 guidance of growth in operating earnings of 9.5% and distribution growth of 7%. Credit Suisse notes the update highlighted the global demand for logistics space within the proximity of consumers in urban locations.

The company expects development work in progress to approach $5bn by FY20 and assets under management to exceed $45bn by June this year. The broker maintains an Outperform rating and increases the target to $14.04 from $13.22.

Target price is $14.04 Current Price is $13.54 Difference: $0.5
If GMG meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $13.30, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in June.

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

Deutsche Bank rates GMG as Hold (3) -

The company has reaffirmed FY19 earnings guidance of $0.511 per security and distribution guidance of $0.30. Deutsche Bank considers the update demonstrates continued strength in the business and the industrial sector, but this is already priced into the stock.

The broker maintains a Hold rating. Target is $12.46.

Target price is $12.46 Current Price is $13.54 Difference: minus $1.08 (current price is over target).
If GMG meets the Deutsche Bank target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.30, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in June.

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

Macquarie rates GMG as Outperform (1) -

Third quarter operating conditions showed improvement, Macquarie notes, expected to benefit earnings beyond FY20. FY19 guidance is maintained for earnings per security of 51.1c and distributions of 30c.

The broker considers the valuation relative to growth stocks in the equity market is fair, although Goodman Group offers higher risk-adjusted returns.

Macquarie maintains an Outperform rating and raises the target 6.4% to $14.57.

Target price is $14.57 Current Price is $13.54 Difference: $1.03
If GMG meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $13.30, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates GMG as Sell (5) -

Ord Minnett notes most of Goodman Group's managed funds are in the money and development margins should be supported out to FY21. The broker expects 10% growth in earnings per share in FY19, followed by 8% and 7% in the subsequent two years, respectively.

Development volumes have been stable over the last 3.5 years but should lift in the fourth quarter and FY20 as two large Hong Kong projects commence. The broker maintains a Sell rating based on valuation, with a target of $11.50.

Target price is $11.50 Current Price is $13.54 Difference: minus $2.04 (current price is over target).
If GMG meets the Ord Minnett target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.30, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates GMG as Neutral (3) -

UBS observes Goodman Group is progressing with global development opportunities in gateway cities with increasing conviction. The company remains bullish about the trends despite a slower-than-expected March quarter.

Market expectations are also high, the broker notes. UBS expects the company to outperform the A-REIT sector and the market should continue to reward strong fundamentals and superior earnings growth over the medium term.

Neutral rating maintained. Target is raised to $13.10 from $12.32.

Target price is $13.10 Current Price is $13.54 Difference: minus $0.44 (current price is over target).
If GMG meets the UBS target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.30, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in June.

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 S32 as Reinstate Coverage with Overweight (1) -

Morgan Stanley believes the decline in the share price recently has created an opportunity and the market under-appreciates the company's assets, not to mention its advanced growth projects.

The broker expects shareholder returns of 9.5% in FY19 and 7.0% in FY20, with significant upside risk. The company is improving its asset quality through restructuring, departing South Africa Energy Coal, which has underperformed.

The broker reinstates coverage with an Overweight rating and $4.05 target. Industry view is Attractive.

Target price is $4.05 Current Price is $3.52 Difference: $0.53
If S32 meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $3.92, suggesting upside of 11.3% (ex-dividends)

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: 0.6

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

Credit Suisse rates SBM as Downgrade to Underperform from Neutral (5) -

St Barbara will acquire Canadian gold producer, Atlantic Gold. Credit Suisse observes exploration success is needed to create value, assessing the CAD802m price is a 28% premium to the valuation.

The company has been assessing potential acquisitions over the past two years and Atlantic Gold is the first to meet criteria. While it withstands due diligence it falls short on value considerations, the broker suggests.

Nevertheless, the assets look good, adding long life and low-cost gold production. Credit Suisse downgrades to Underperform from Neutral and reduces the target to $2.72 from $3.30.

Target price is $2.72 Current Price is $3.32 Difference: minus $0.6 (current price is over target).
If SBM meets the Credit Suisse target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.36, suggesting upside of 1.3% (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

Ord Minnett rates SBM as Accumulate (2) -

St Barbara will acquire Canadian Atlantic Gold, which owns the Moose River project in Nova Scotia. Ord Minnett has a strong view on the underlying value of the Australian business and believes this transaction does not stretch the balance sheet.

Importantly, the broker suggests, the acquisition will diversify the portfolio and should deliver significant growth in production and earnings. The price, equivalent to $768m, is considered fair and the deal well funded by cash and an entitlement offer.

Ord Minnett maintains an Accumulate rating and reduces the target to $3.60 from $4.00.

Target price is $3.60 Current Price is $3.32 Difference: $0.28
If SBM meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.36, suggesting upside of 1.3% (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

Morgans rates STA as Initiation of coverage with Speculative Buy (1) -

Morgans initiates formal coverage of Strandline Resources with a Speculative Buy rating and $0.38 target. Activity has lifted across the company's mineral sands portfolio amid fully approved developments in Tanzania and Australia.

The main risks include securing full project finance, development costs and over-runs and commodity price risk.

Fungoni is 25km South of Dar es Salaam, the capital and major port of Tanzania, with a measured and indicated mineral resource of 21.7mt at 2.8% total heavy mineral, using a cut-off grade of 1%. The other development is at Coburn in Western Australia, a construction-ready project producing high-value heavy mineral concentrate.

Target price is $0.38 Current Price is $0.14 Difference: $0.24
If STA meets the Morgans target it will return approximately 171% (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