Australian Broker Call

Deutsche Bank rates CTX as Buy (1) -

The realised refiner margin of US$12.43/bbl in January was ahead of Deutsche Bank's forecasts. The broker continues to forecast realised margin of US$9.74/bbl for the remainder of 2017.

Forecasts for earnings per share have increased by 1.2%. Buy rating retained. Target rises to $35.35 from $35.30.

Target price is $35.35 Current Price is $28.28 Difference: $7.07
If CTX meets the Deutsche Bank target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $33.79, suggesting upside of 17.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.6

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

Morgan Stanley rates FAR as Overweight (1) -

Morgan Stanley believes 2017 will be a pivotal year for the company and its Senegal asset, with the path to commercialisation becoming clearer. Follow-up drilling has recently commenced on the SNE discovery.

The broker expects the company to raise further equity over time and factors this into valuation, but believes the quality of the resource, Woodside's ((WPL)) role as operator and clarity on commercial by session plans will win out. Overweight retained. Target rises to $0.13 from $0.11. Industry view: In-Line.

Target price is $0.13 Current Price is $0.08 Difference: $0.05
If FAR meets the Morgan Stanley target it will return approximately 63% (excluding dividends, fees and charges).

Current consensus price target is $0.16, suggesting upside of 100.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY16:

Forecast for FY17:

Market Sentiment: 1.0

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

Citi rates MML as Upgrade to Neutral from Sell (3) -

It was a weak result, as expected, comment analysts at Citi. They have reduced estimates and the price target to 38c from 45c in response.

However, the savage share price response has now triggered an upgrade to Neutral from Sell. Also, the analysts flag the company might need some near-term funding, estimated at circa US$5m, for working capital.

Target price is $0.38 Current Price is $0.34 Difference: $0.04
If MML meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $0.44, suggesting upside of 27.5% (ex-dividends)

The company's fiscal year ends in June.

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 NSR as Hold (3) -

First half results revealed a mix of organic growth and acquisitions, with higher occupancy offsetting a lower rate per square metre. The company has reiterated FY17 guidance.

Morgans retains a Hold rating and reduces the target to $1.54 from $1.69. The broker expects acquisitions will continue to roll out and estimates there is currently around $50m in balance sheet capacity.

The broker expects upside risks relate to higher growth in yields on the underlying portfolio as well as scale benefits. Downside risks include increased competition/supply and general property market  moves.

Target price is $1.54 Current Price is $1.44 Difference: $0.1
If NSR meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $1.48, suggesting upside of 1.9% (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 ORE as Neutral (3) -

First half results were broadly in line. Production forecasts for the second half were reduced by -40% and the company expects to take longer to ramp up to nameplate.

Macquarie considers the scenario ahead extremely challenging, as the company will produce far less lithium than previously forecast and costs will be substantially higher than expected.  The proposed Japanese hydroxide plant is a potential upside, but the broker does not attribute any value to this in its analysis.

Neutral maintained. Target is reduced to $3.17 from $4.35.

Target price is $3.17 Current Price is $3.05 Difference: $0.12
If ORE meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.14, suggesting upside of 32.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.8

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

Morgans rates ORE as Add (1) -

The company has reduced its projected production rate for the June half, with the issue being the profile of the lithium concentration in the evaporation ponds and not enough in the harvest ponds to feed the plant.

Morgans adjusts its model to account for the lower production rate. Target is reduced to $5.39 from $5.46. The broker believes the market's reaction to the reduced production rate is overdone and maintains an Add rating.

Target price is $5.39 Current Price is $3.05 Difference: $2.34
If ORE meets the Morgans target it will return approximately 77% (excluding dividends, fees and charges).

Current consensus price target is $4.14, suggesting upside of 32.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.8

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

Citi rates OSH as Neutral (3) -

Citi is updating estimates and target price based on latest revisions to oil price forecasts.

Neutral rating retained. Target rises to $7.21 from $7.19.

Target price is $7.21 Current Price is $6.90 Difference: $0.31
If OSH meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $8.06, suggesting upside of 14.4% (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: 0.6

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

Ord Minnett rates PRG as Accumulate (2) -

Ord Minnett prefers Programmed Maintenance in the outsourced service provider sector because of the valuation upside and better cash flow conversion.

The business also has options in marine and increased scale in its staffing, with an attractive equity story as it de-leverages.  Accumulate maintained. Target rises to $2.21 from $1.80.

Target price is $2.21 Current Price is $1.75 Difference: $0.465
If PRG meets the Ord Minnett target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $2.02, suggesting upside of 12.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.7

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

Ord Minnett rates RHP as Downgrade to Hold from Buy (3) -

First half results were worse than expected. FY17 revenue guidance has again been lowered, although the EBITDA target of $4m  is unchanged.

Ord Minnett points to a seemingly quick slowdown in the profitable private segment, where the broker envisaged key competitive advantages. Medium-term forecasts are reduced significantly and the rating is downgraded to Hold from Buy. Target falls to $0.46 from $1.00.

Target price is $0.46 Current Price is $0.45 Difference: $0.015
If RHP meets the Ord Minnett target it will return approximately 3% (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

Ord Minnett rates SPO as Initiation of coverage with Lighten (4) -

Ord Minnett initiates coverage with a Lighten rating and $0.71 target. Spotless has 8% of its revenue up for renewal in FY18 and current renewal rates have dropped to less than 75%. The broker considers the risk/reward equation unfavourable,  given an enterprise value to EBITA multiple of 10.4.

Organic growth has been poor and low cash flow conversion has caused leverage to rise. These factors, along with the unwinding of previous margin gains, will lead to significant margin weakness, in the broker's view.

Target price is $0.71 Current Price is $0.78 Difference: minus $0.065 (current price is over target).
If SPO 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 $0.74, suggesting downside of -8.9% (ex-dividends)

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 TCL as Outperform (1) -

The 395 express lanes add 40c of value, in Credit Suisse's view.  The Virginia Department of Transport has approved the company's US$460m project to build 13km of express lanes on the I-395.  The lanes are due to open in late 2019.

The broker retains an Outperform rating and raises the targeted $12.60 from $12.30.

Target price is $12.60 Current Price is $11.17 Difference: $1.43
If TCL meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $11.76, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.6

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

UBS rates TFC as Buy (1) -

First half results were slightly weaker than expected, as a result of a slower ramp up in deliveries of the maiden  Indian sandalwood harvest.

UBS reduces medium-term forecasts for earnings per share by around -10% but increases FY20-21 forecasts, as the company looks to smooth its harvest over the next few years.

The company is now exploring a potential spin-off, or IPO, of the Santalis division, in a structure that would mean it maintains 50-60% ownership  but provide funding for clinical trials. If the company is successful in unlocking the value, the broker estimates it would be accretive.

UBS maintains a Buy rating and $3.20 target.

Target price is $3.20 Current Price is $1.44 Difference: $1.76
If TFC meets the UBS target it will return approximately 122% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Morgans rates TGP as Hold (3) -

First half results were in line with recent guidance following the sale of the funds management platform. Morgans retains a Hold rating, awaiting further detail on the deployment and timing of capital.

The broker notes the buy-back provides liquidity for investors that may want to exit their investment, given the significant change in strategy. Target is $0.95.

Target price is $0.95 Current Price is $0.87 Difference: $0.08
If TGP meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

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 VAH as Lighten (4) -

The company is  cancelling its planned Perth-Abu Dhabi service, which Ord Minnett presumes is designed to improve profitability.

The broker believes the key driver of profitability is domestic yields. There is evidence of a moderation in yield compression in the December quarter, but the broker notes passenger demand remains anaemic and believes there is risk to earnings on the downside. Lighten retained. Target is $0.20.

Target price is $0.20 Current Price is $0.19 Difference: $0.01
If VAH meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $0.20, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.6

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

UBS rates WPL as Buy (1) -

The main contributors to production growth UBS envisages for the next three years will be Wheatstone and Greater Enfield,  followed by Canadian pipeline gas. The combined increase in volumes is around 24mmboe, which will be partly offset by lower pipeline gas and liquids from the North West Shelf.

UBS forecast 2018 production to increase to 90.9mmboe. Beyond 2020 the broker looks to Pluto expansion, Senegal and Myanmar to drive the next wave of growth. Buy retained. Target rises to $35.30 from $35.10.

Target price is $35.30 Current Price is $30.88 Difference: $4.42
If WPL meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $32.70, suggesting upside of 6.1% (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: 0.2

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

Morgans rates XPD as Downgrade to Reduce from Add (5) -

2016 results beat forecasts. The company announced that,  because of restrictions on direct investment offshore, the buy-back announced in August has been terminated. The board believes it is more important to preserve capital for potential acquisitions than to pay dividends.

Morgans considers this a major change in strategy. It appears new acquisition opportunities relate to local shoe component manufacturers. No guidance was provided for 2017.

Despite an attractive cash position and exposure to one of the fastest-growing sporting codes in China, Morgans finds it cannot recommend the company as an investment, given the cash is effectively in lock-up and dividends will not be paid for the foreseeable future.

The broker believes earnings multiples have become irrelevant as has revenue/earnings growth from a domestic investor perspective. The broker downgrades to Reduce from Add. Target is reduced to 5.9 cents from $0.15.

Target price is $0.06 Current Price is $0.04 Difference: $0.016
If XPD meets the Morgans target it will return approximately 37% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Market Sentiment: -1.0

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