Australian Broker Call

Macquarie rates ALQ as Outperform (1) -

With ALS recently upgrading full year guidance by 6% at the mid-point, now anticipating $260-265m, Macquarie notes the company should continue to benefit from the increased capacity and price environment through to the end of the year.

The company increased its commodity network capacity by 15%, while the recent MinAnalytical acquisition boosted WA capacity 40%. The broker notes increased capacity delivered some benefit in the second half but expects a larger impact in the year ahead.

Macquarie forecasts 15% EPS growth in FY23, up from a previous 11%.

The Outperform rating is retained and the target price increases to $14.70 from $14.00.

Target price is $14.70 Current Price is $13.44 Difference: $1.26
If ALQ meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $13.77, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Macquarie rates APA as No Rating (-1) -

The Australian Energy Market Operator (AEMO) is predicting gas demand will decline -21% by 2030 and -40% by 2050, but Macquarie finds continued near-term opportunity for APA Group in addressing the declining southern state supply.

According to the broker, without government policy enforcing the closure of the gas network to new connections the rapid decline predicted by the AEMO appears unrealistic. 

Macquarie sees opportunity in the stage 2 and 3 expansion of the South West Queensland and Moomba Sydney pipeline systems, which it anticipates will add around 180 terajoules to daily capacity.

The broker is on restriction.

Current Price is $10.59. Target price not assessed.

Current consensus price target is $9.93, suggesting downside of -7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

UBS rates BPT as Buy (1) -

UBS raises its 2022 Brent oil forecast to US$95/bbl from US$81/bbl. For 2023, the estimate climbs to US$85/bbl from US$80/bbl and then to US$80/bbl from US$75/bbl for 2024, while US$75/bbl is unchanged for 2025.

All changes are mainly driven by impacts from the Russia/Ukraine conflict, explains the analyst, and the long term (from 2026) Brent forecast also rises to US$75/bbl from US$70/bbl. UBS also increases its JKM LNG forecast by 14-108% between 2022-24.

The broker raises its price target for Beach Energy to $1.85 from $1.65 and retains a Buy rating.

Target price is $1.85 Current Price is $1.61 Difference: $0.24
If BPT meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $1.78, suggesting upside of 12.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Citi rates COL as Buy (1) -

Citi notes the Federal Budget should provide an around $8bn boost to household disposable income spread between FY22 and FY23.

Supermarkets are set to be the largest beneficiaries of the budget measures, with consumers more able to absorb rising food prices, explains the analyst.

The broker maintains its Buy rating and $19.30 target for Coles Group.

Target price is $19.30 Current Price is $17.93 Difference: $1.37
If COL meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $18.81, suggesting upside of 4.9% (ex-dividends)

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Macquarie rates CVN as Neutral (3) -

Carnarvon Energy has completed a $70m equity raise to boost its balance sheet ahead of the Dorado final investment decision, with Macquarie expecting the company can now fund a 10-12.5% stake in Dorado.

The broker anticipates Carnarvon Energy may only need to sell 7.5-10% in Dorado, which coupled with a 30% selldown from Santos ((STO)) implies an approximate 40% stake could be on the table for a new entrant.

Macquarie has all eyes on the drilling of the Apus-1 discovery in April, with the well offering a larger prospect than Pavo North. A successful drilling program could add a further 50-60% to the broker's valuation, and de-risk Apus.

The Neutral rating is retained and the target price decreases to $0.32 from $0.36.

Target price is $0.32 Current Price is $0.32 Difference: $0
If CVN meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Macquarie rates EML as Outperform (1) -

EML Payments looks to benefit from the impacts of interest rate forward curves on its $2.7bn stored client balances according to Macquarie. The broker predicts interest on stored balances will peak at 1.7% in FY24, equating to a $45m interest revenue upside.

Further, the broker expects the removal of the Cental Bank of Ireland growth cap will support the growth of the company's gross profit ratio in FY23.

The Outperform rating is retained and the target price increases to $3.95 from $3.80.

Target price is $3.95 Current Price is $2.89 Difference: $1.06
If EML meets the Macquarie target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $4.18, suggesting upside of 40.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Citi rates HVN as Buy (1) -

Citi notes the Federal Budget should provide an around $8bn boost to household disposable income spread between FY22 and FY23.

Discretionary retailers are set to potentially benefit as consumers may allocate a portion of benefits to investment in the home, cars and hobbies, explains the analyst.

The broker maintains the Buy rating and $5.90 target price for Harvey Norman.

Target price is $5.90 Current Price is $5.61 Difference: $0.29
If HVN meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $6.05, suggesting upside of 6.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Citi rates JBH as Neutral (3) -

Citi notes the Federal Budget should provide an around $8bn boost to household disposable income spread between FY22 and FY23.

Discretionary retailers are set to potentially benefit as consumers may allocate a portion of benefits to investment in the home, cars and hobbies, explains the analyst.

The broker maintains the Neutral rating and $55 target price for JB Hi-Fi.

Target price is $55.00 Current Price is $55.21 Difference: minus $0.21 (current price is over target).
If JBH meets the Citi target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $57.65, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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 sees 10% (bearish scenario) and 33% (bullish scenario) growth in online total transaction value (TTV) for Jumbo Interactive. The broker's forecast incorporates 20% growth from strong new customer adds and market share projections.

The analyst points out total online sales, the company's share of online sales and customer acquisition is positively correlated with high jackpots.

The Overweight rating and $22 target are retained. Industry view: In-line.

Target price is $22.00 Current Price is $18.65 Difference: $3.35
If JIN meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $20.13, suggesting upside of 6.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Ord Minnett rates MQG as Accumulate (2) -

Macquarie Group had previously guided to a sizeable commodities income increase in FY22 prior to the Russia-Ukraine conflict, which has now driven volatility in energy and equity markets that will likely further support the company's result, according to Ord Minnett.

The company had suggested a 15-25% increase to commodities income, and Ord Minnett now predicts commodities income will reach 27% growth on the previous year, equating to $3.4bn, before declining to $2.6bn in FY23.

The Accumulate rating is retained and the target price increases to $227.00 from $223.00.

Target price is $227.00 Current Price is $202.83 Difference: $24.17
If MQG meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $221.60, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Citi rates MTS as Neutral (3) -

Citi notes the Federal Budget should provide an around $8bn boost to household disposable income spread between FY22 and FY23.

Supermarkets are set to be the largest beneficiaries of the budget measures, with consumers more able to absorb rising food prices, explains the analyst.

The broker maintains its Neutral rating and $4.40 target for Metcash.

Target price is $4.40 Current Price is $4.51 Difference: minus $0.11 (current price is over target).
If MTS 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 $4.68, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Morgan Stanley rates NEA as Overweight (1) -

Nearmap has updated the market with a range of announcements, including that the North American annual contract value (ACV) has surpassed US$50m, up at least US$5.5m from December 31.

The achievement of more than $150m ACV for the group is also welcomed by Morgan Stanley.

The analyst believes the signing of the company's largest-ever government contract in North America is evidence of differentiated value add from products such as 3D and artificial intelligence.

The $2.60 target price and Overweight rating are retained. Industry view In-Line.

Target price is $2.60 Current Price is $1.51 Difference: $1.09
If NEA meets the Morgan Stanley target it will return approximately 72% (excluding dividends, fees and charges).

Current consensus price target is $2.03, suggesting upside of 33.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

UBS rates ORG as Buy (1) -

UBS raises its 2022 Brent oil forecast to US$95/bbl from US$81/bbl. For 2023, the estimate climbs to US$85/bbl from US$80/bbl and then to US$80/bbl from US$75/bbl for 2024, while US$75/bbl is unchanged for 2025.

All changes are mainly driven by impacts from the Russia/Ukraine conflict, explains the analyst, and the long term (from 2026) Brent forecast also rises to US$75/bbl from US$70/bbl. UBS also increases its JKM LNG forecast by 14-108% between 2022-24.

The broker raises its price target for Origin Energy to $7 from $6.75 and retains its Buy rating.

Target price is $7.00 Current Price is $6.31 Difference: $0.69
If ORG meets the UBS target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $6.34, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Credit Suisse rates SGM as Outperform (1) -

Following an investor day presentation by Sims, Credit Suisse is increasingly confident of structurally higher scrap prices due to a green premium (via the carbon price) and the increased price for coking coal.

As a result, the broker lifts its FY25 scrap price by US$40/t to US$350/t. The price target rises to $25.40 from $21.30 and the Outperform rating is maintained.

Target price is $25.40 Current Price is $21.50 Difference: $3.9
If SGM meets the Credit Suisse target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $20.40, suggesting downside of -5.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Ord Minnett rates SGM as Buy (1) -

While prices remain strong and demand high for scrap, Sims largely focused on opportunities outside its core scrap trading operations at its recent investor day, with Ord Minnett noting diversification could offer further value to the stock price.

Company commentary focused on lifecycle services, resource renewal and energy as potential areas of opportunity, and while further detail is required on necessary expenditure and returns potential the broker sees positives in the strategy.

The Buy rating and target price of $20.00 are retained.

Target price is $20.00 Current Price is $21.50 Difference: minus $1.5 (current price is over target).
If SGM meets the Ord Minnett target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.40, suggesting downside of -5.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Citi rates SIG as Neutral (3) -

Following the FY22 results Citi believes near-term earnings visibility for Sigma Healthcare is limited. Also, given ongoing issues with ERP implementation and distribution centre restructuring, risks are considered to be skewed to the downside.

The company reported a net loss of -$7m due to the above-mentioned issues and change in SaaS accounting methodology. The broker retains its Neutral rating and increases its target price to $0.52 from $0.50.

Target price is $0.52 Current Price is $0.53 Difference: minus $0.01 (current price is over target).
If SIG 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 $0.51, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in January.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Credit Suisse rates SIG as Neutral (3) -

Following FY21 results for Sigma Healthcare, Credit Suisse believes there is significant short-term earnings uncertainty and lowers its target price to $0.51 from $0.53. The latter was partly attributable to a new reporting methodology.

While the pre-announced loss of -$7.2m was in-line, the analyst considers cash flow was weak. Under the direction of new CEO Vikesh Ramsunder all explicit guidance was withdrawn.

Management noted operational issues from the rollout of its ERP system led to a -1% loss in market share. The Neutral rating is maintained as no significant upside for the share price is expected.

Target price is $0.51 Current Price is $0.53 Difference: minus $0.02 (current price is over target).
If SIG meets the Credit Suisse target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.51, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in January.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Macquarie rates SIG as Neutral (3) -

Although Sigma Healthcare reported a 1.3% sales increase for FY22, totaling $3.45bn, the company acknowledged ongoing issues with the implementation of its ERP software continues to impact sales. Macquarie notes system stabilisation is expected by end of April.

Company commentary has suggested the remote training of staff and new processes have hindered the ERP roll out but full optimisation is expected in January.

The company is also nearing the completion of its $390m, five-year investment cycle. The broker expects capital expenditure to normalise between $5-10m from FY24.

The Neutral rating is retained and the target price decreases to $0.52 from $0.53.

Target price is $0.52 Current Price is $0.53 Difference: minus $0.01 (current price is over target).
If SIG 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 $0.51, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in January.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

UBS rates STO as Buy (1) -

UBS raises its 2022 Brent oil forecast to US$95/bbl from US$81/bbl. For 2023, the estimate climbs to US$85/bbl from US$80/bbl and then to US$80/bbl from US$75/bbl for 2024, while US$75/bbl is unchanged for 2025.

All changes are mainly driven by impacts from the Russia/Ukraine conflict, explains the analyst, and the long term (from 2026) Brent forecast also rises to US$75/bbl from US$70/bbl. UBS also increases its JKM LNG forecast by 14-108% between 2022-24.

The broker estimates Santos has the most valuation upside and is the most preferred exposure under its coverage of the sector. The target rises to $9.90 from $8.90. Buy.

Target price is $9.90 Current Price is $7.92 Difference: $1.98
If STO meets the UBS target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $9.27, suggesting upside of 17.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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 SUL as Buy (1) -

Citi notes the Federal Budget should provide an around $8bn boost to household disposable income spread between FY22 and FY23.

Discretionary retailers are set to potentially benefit as consumers may allocate a portion of benefits to investment in the home, cars and hobbies, explains the analyst.

The broker maintains the Buy rating and $14.50 target price for Super Retail.

Target price is $14.50 Current Price is $10.46 Difference: $4.04
If SUL meets the Citi target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $13.68, suggesting upside of 28.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Citi rates TWE as Buy (1) -

In a meeting with Treasury Wine Estates, Citi established that Treasury Premium Brands is aiming to drive profitable volume growth of its priority brands. In addition, an expansion is planned into new markets in Continental Europe, Africa and Asia.

The company wants to be a leader in quality low and non-alcoholic wines and sees the growth potential in the zero alcohol category being driven by younger consumers.

The Buy rating and $13.78 target are retained.

Target price is $13.78 Current Price is $11.85 Difference: $1.93
If TWE meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $13.34, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Ord Minnett rates UWL as Upgrade to Accumulate from Hold (2) -

Uniti Group has received a revised takeover offer from the Morrison & Co and Brookfield Infrastructure consortium of $5 per share, up from a previous bid of $4.50 per share. Ord Minnett notes Uniti Group is exclusively engaging with the offer, and has not engaged with a competing offer from the Connect consortium.

The broker finds Uniti Group's assets, including private fibre assets, a more than 290,000 premise pipeline and high margin network revenues, demand a multiple at the mid to high end of the 15.5-28.0x multiple range achieved by recent telco infrastructure purchases.

The rating is upgraded to Accumulate from Hold and the target price increases to $5.00 from $4.05.

Target price is $5.00 Current Price is $4.64 Difference: $0.36
If UWL meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Citi rates WES as Neutral (3) -

Citi notes the Federal Budget should provide an around $8bn boost to household disposable income spread between FY22 and FY23.

Discretionary retailers are set to potentially benefit as consumers may allocate a portion of benefits to investment in the home, cars and hobbies, explains the analyst.

The broker maintains the Neutral rating and $50 target price for Wesfarmers.

Target price is $50.00 Current Price is $50.65 Difference: minus $0.65 (current price is over target).
If WES meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $54.10, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Citi rates WOW as Buy (1) -

Citi notes the Federal Budget should provide an around $8bn boost to household disposable income spread between FY22 and FY23.

Supermarkets are set to be the largest beneficiaries of the budget measures, with consumers more able to absorb rising food prices, explains the analyst.

The broker maintains its Buy rating and $40.30 target for Woolworths Group.

Target price is $40.30 Current Price is $36.86 Difference: $3.44
If WOW meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $37.08, suggesting upside of 0.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

UBS rates WPL as Downgrade to Neutral from Buy (3) -

UBS raises its 2022 Brent oil forecast to US$95/bbl from US$81/bbl. For 2023, the estimate climbs to US$85/bbl from US$80/bbl and then to US$80/bbl from US$75/bbl for 2024, while US$75/bbl is unchanged for 2025.

All changes are mainly driven by impacts from the Russia/Ukraine conflict, explains the analyst, and the long term (from 2026) Brent forecast also rises to US$75/bbl from US$70/bbl. UBS also increases its JKM LNG forecast by 14-108% between 2022-24.

Nonetheless, the broker downgrades its rating for Woodside Petroleum to Neutral from Buy as shares are approaching full valuation. The price target rises to $34.60 from $29.

Target price is $34.60 Current Price is $32.81 Difference: $1.79
If WPL meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $30.55, suggesting downside of -6.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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