Australian Broker Call

Morgan Stanley rates 29M as Equal-weight (3) -

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

For 29Metals, the target rises to $2.20 from $1.80 now that the analyst increases its bull case weighting in its blended bull, base and bear valuation method.

The broker's bull case lifts as the company is now more sensitive to production upside and potential cost savings. The Overweight rating is retained. Industry View: Attractive.

Target price is $2.20 Current Price is $2.18 Difference: $0.02
If 29M meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $2.13, suggesting downside of -1.2% (ex-dividends)

The company's fiscal year ends in December.

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

Credit Suisse rates ACL as Neutral (3) -

Credit Suisse notes PCR test reimbursement fees for private providers are set to decline -19% from October 1, to $68.85 from $85.00, as testing rates continue to decline.

Current testing rates of 38,000 per day are the lowest since before the Delta variation, with the broker forecasting a conservative average 42,000 tests per day over the first half.

Within its pathology coverage, Credit Suisse notes Australian Clinical Labs is most sensitive to declines in covid volumes. The broker reduces its FY23 covid revenue forecast -39% to $87m, and its earnings per share forecast -19%. 

The Neutral rating is retained and the target price decreases to $4.45 from $5.35.

Target price is $4.45 Current Price is $4.07 Difference: $0.38
If ACL meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.5

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

Macquarie rates AFG as Outperform (1) -

Macquarie notes Australian Finance Group has successfully completed a $1bn Residential Mortgage Backed Securities (RMBS) issue, with a senior tranche of $600m priced at 155 basis points. A secondary tranche of $300m is priced at 110 basis points.

The broker predicts Australian Finance Group will deliver net interest margins of 140 basis points in FY23, declining from the 154 basis points in the second half of FY22.

Upgrades are issued to earnings per share forecasts as the broker switches from reporting cash earnings per share to adjusted earnings per share.

The Outperform rating and target price of $2.09 are retained.

Target price is $2.09 Current Price is $1.79 Difference: $0.3
If AFG meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

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

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

For Allkem, the broker lifts its target to $16.20 from $13.00 on higher lithium price forecasts. The Equal-weight rating is maintained. Industry View: Attractive.

Target price is $16.20 Current Price is $15.50 Difference: $0.7
If AKE meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $16.21, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Macquarie rates ALX as Neutral (3) -

Atlas Arteria will acquire the Chicago Skyway for US$2.0bn, funded by a $3.1bn entitlement offer. 

Macquarie notes the company acknowledges this purchase does not offer material revenue growth, but the tolling regime and ability to re-leverage the asset in the first two years offer value.

The broker also notes the Chicago Skyway offers Atlas Arteria scale and debt capacity growth, which can fund other equity investments. Macquarie's earnings per share forecasts decrease -11%, -29% and -31% through to 2024.

The Neutral rating is retained and the target price decreases to $7.22 from $8.10.

Target price is $7.22 Current Price is $7.98 Difference: minus $0.76 (current price is over target).
If ALX meets the Macquarie target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.62, suggesting downside of -2.5% (ex-dividends)

The company's fiscal year ends in December.

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

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

Morgan Stanley lowers its target price to $6.88 from $8.08 on news Atlas Arteria will issue $3.1bn of new equity to acquire a 66.67% interest in the Chicago Skyway toll road. The Equal-weight rating is maintained. Industry View: Cautious.

The broker feels the company's valuation of the toll road is fair and the transaction adds material portfolio diversification. Negatives include the Skyway revenue quality and a reduction in Atlas Arteria's distribution quality with 25% funded from capital in FY23.

In addition, the analyst points out the potential for a bid for Atlas Arteria has now lessened as a result of the purchase.

In summary, Morgan Stanley is incrementally uncertain about the transaction.

Target price is $6.88 Current Price is $7.98 Difference: minus $1.1 (current price is over target).
If ALX meets the Morgan Stanley target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.62, suggesting downside of -2.5% (ex-dividends)

The company's fiscal year ends in December.

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

Morgan Stanley rates AWC as Overweight (1) -

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

For Alumina Ltd, the broker raises its target to $1.85 from $1.75 on a rise in long-term alumina and aluminium price forecasts. It's felt the stock may have reached a nadir for patient value investors seeking a rebound in the alumina price.

The Overweight rating is unchanged. Industry view: Attractive.

Target price is $1.85 Current Price is $1.46 Difference: $0.39
If AWC meets the Morgan Stanley target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $1.70, suggesting upside of 18.9% (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

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

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

BHP Group benefits from increases to long term prices, most notably for iron ore, copper, met coal and thermal coal, and the target rises to $43.20 from $37.15.

The Equal-weight rating is retained. Industry View: Attractive.

Target price is $43.20 Current Price is $38.60 Difference: $4.6
If BHP meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $41.35, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Citi rates BPT as Neutral (3) -

The Citi global commodity team significantly upgrades its global gas price forecasts, while short-term Australian east coast wholesale prices have been trimmed. It's felt east coast gas supplies will be a priority as industry and government work together.

The lower east coast wholesale pricing assumptions reduces the broker's FY24 EPS forecast for Beach Energy by -5.9%, though higher long-term equilibrium prices are envisaged. The net effect is a 3% rise in target price to $1.88. The Neutral rating is maintained.

Target price is $1.88 Current Price is $1.65 Difference: $0.23
If BPT meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $1.84, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Morgans rates CHL as Add (1) -

Morgans assesses a broadly positive FY22 result for Camplify Holdings with strong underlying momentum though a decrease in gross margins to 46% from 62% in FY21 negatively surprised.

Higher insurance costs and an increase in lower-margin van sales weighed on margins. The broker expects a recovery in gross margins on price rises and the sale of the higher-margin Summer Series vans.

As a consequence of adopting a more conservative stance on the company's international expansion, the analyst lowers FY23-25 revenue estimates by -23-24%. The target falls to $3.70 from $4.25, while the Add rating is maintained.

Target price is $3.70 Current Price is $2.10 Difference: $1.6
If CHL meets the Morgans target it will return approximately 76% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

UBS rates CLV as Upgrade to Buy from Neutral (1) -

Clover's second half sales surprisingly beat the top end of guidance, driven by improved China infant formula market conditions and new customers, UBS notes.

At its first half result, Clover indicated solid early second half trading may have benefited from order pull-forward, though this does not appear to have been the case

The broker sees two medium term opportunities -- new customers in China and new products and omega-3 expansion beyond infant formula. An increased cost of capital takes the broker's target down to $1.35 from $1.40 but rating upgraded to Buy from Neutral.

Target price is $1.35 Current Price is $1.17 Difference: $0.18
If CLV meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in July.

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

Macquarie rates COE as Neutral (3) -

Finding Cooper Energy well placed to benefit from higher East Coast gas prices as re-pricing occurs from 2024, Macquarie has incorporated these opportunities into the company's existing gas contract book. 

The broker notes the gas market remains tight and contract pricing remains high. With Cooper Energy gearing up for re-pricing events between 2024-2026, Macquarie assumes a $10 per gigajoule uplift.

Cooper Energy is also targeting a gas contract to support its final investment decision for the Annie gas field by end of year, and is confident this will be obtained. Earnings per share for FY23 increase 9%. 

The Neutral rating is retained and the target price increases to $0.28 from $0.24.

Target price is $0.28 Current Price is $0.27 Difference: $0.01
If COE meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $0.29, suggesting upside of 10.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Morgan Stanley rates DDR as Overweight (1) -

Dicker Data is one of the stocks where Morgan Stanley came away more bullish than consensus following the August reporting season.

The broker feels the announced equity raise both strengthens the balance sheet and points to strong ongoing IT demand as -$30m is being set aside for a warehouse expansion.

A rebound in IT infrastructure spend post covid is also anticipated by the analyst.

The Overweight rating is maintained for Dicker Data. Target is $14. Industry View: In-Line.

Target price is $14.00 Current Price is $10.48 Difference: $3.52
If DDR meets the Morgan Stanley target it will return approximately 34% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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

Ord Minnett rates DDR as Hold (3) -

Dicker Data has held its first TechX event in three years, with Ord Minnett noting a number of key focus areas. The broker highlighted Dicker Data will increasingly focus on its services segment to support customer cash flow. 

The company noted its reseller customers have indicated they anticipate revenue growth to sizeably outperform profit growth in the coming years as supply constraints and wage pressures continue to impact, and encouraged resellers to issue price rises if they hadn't in the past 90 days.

The Hold rating and target price of $11.50 are retained.

Target price is $11.50 Current Price is $10.48 Difference: $1.02
If DDR meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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

Morgan Stanley rates DRR as Overweight (1) -

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

For Deterra Royalties, the broker keeps its $5.20 target price unchanged after taking into account revised iron ore price forecasts and making changes to cost assumptions due to inflation.

Morgan Stanley lowers iron ore price forecasts for FY23 but maintains the FY24 forecast and lifts estimates in FY25. The long-term forecast is also increased.

Overweight retained. Industry View: Attractive.

Target price is $5.20 Current Price is $4.34 Difference: $0.86
If DRR meets the Morgan Stanley target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $4.95, suggesting upside of 16.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

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

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

In the Gold sector, the broker raises its target price for Evolution Mining to $2.55 from $2.50 after increasing long term gold forecasts and accounting for higher costs.

The Equal-weight rating is maintained. Industry View: Attractive.

Target price is $2.55 Current Price is $2.22 Difference: $0.33
If EVN meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $2.76, suggesting upside of 28.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Morgan Stanley rates FMG as Underweight (5) -

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

For Fortescue Metals, the broker raises its target to $15.15 from $14.70, after the broker lowers iron ore price forecasts for FY23 but maintains the FY24 forecast and lifts estimates in FY25. The long-term forecast is also increased.

The Underweight rating is retained on valuation, explains the analyst, and given continued Fortescue Future Industries (FFI) investment has generated no clear returns and will potentially impact future dividends. 

Industry View: Attractive.

Target price is $15.15 Current Price is $17.77 Difference: minus $2.62 (current price is over target).
If FMG meets the Morgan Stanley target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.56, suggesting downside of -7.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Credit Suisse rates HLS as Neutral (3) -

Credit Suisse notes PCR test reimbursement fees for private providers are set to decline -19% from October 1, to $68.85 from $85.00, as testing rates continue to decline.

Current testing rates of 38,000 per day are the lowest since before the Delta variation, with the broker forecasting a conservative average 42,000 tests per day over the first half.

As a result, Credit Suisse  lowers its earnings outlook for Healius, which it notes is relatively sensitive to changing covid volumes.

The broker forecasts covid revenues of $175m in the coming year, compared to $755m in the previous year, and reduced its earnings per share estimate -6%. 

The Neutral rating is retained and the target price decreases to $3.95 from $4.15.

Target price is $3.95 Current Price is $3.61 Difference: $0.34
If HLS meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $4.18, suggesting upside of 20.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Macquarie rates HLS as Outperform (1) -

Incorporating the announced lower Medicare reimbursement for PCR testing from October 1, Macquarie now anticipates Healius will achieve covid earnings of $59m, $36m and $24m through to FY25, down from a previous forecast of $79m, $42m and $28m.

While this drives earnings per share declines of -10%, -3% and -2% in the same years, Macquarie notes it continues to see appeal in the stock at current levels, with the company's sustainable improvement program offering some insulation. 

The Outperform rating is retained and the target price decreases to $4.85 from $4.90.

Target price is $4.85 Current Price is $3.61 Difference: $1.24
If HLS meets the Macquarie target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $4.18, suggesting upside of 20.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Morgan Stanley rates IGO as Underweight (5) -

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

For IGO, the broker raises its target price to $12.45 from $9.85 after lower 2022 lithium hydroxide and 2022/23 nickel price forecasts are offset by a lower currency and higher spodumene price forecasts for FY23/24.

The Underweight rating is maintained. Industry view: Attractive.

Target price is $12.45 Current Price is $14.56 Difference: minus $2.11 (current price is over target).
If IGO meets the Morgan Stanley target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.68, suggesting downside of -0.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

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

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

For Iluka Resources, the broker's mineral sands forecast is unchanged. The target rises to $11.25 from $11.00 on favourable currency movements. 

The Equal-weight rating is retained. Industry view: Attractive.

Target price is $11.25 Current Price is $10.11 Difference: $1.14
If ILU meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $11.24, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

UBS rates JHX as Buy (1) -

The key takeaways for UBS from James Hardie's investor days in New York were unchanged FY23 guidance and an unchanged strategy under the new CEO, which the broker sees as positive.

The company continues to deal with stock shortages in the US, as do all peers, but order backlogs will support FY23, UBS notes,  before rennovation & restoration demand slows in FY24.

Signifiant upside remains in Europe but energy prices will crimp performance in the near term.

Buy and $52.50 target unchanged.

Target price is $52.50 Current Price is $33.97 Difference: $18.53
If JHX meets the UBS target it will return approximately 55% (excluding dividends, fees and charges).

Current consensus price target is $48.57, suggesting upside of 44.9% (ex-dividends)

The company's fiscal year ends in February.

Forecast for FY23:

Forecast for FY24:

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

Morgan Stanley rates MIN as Downgrade to Equal-weight from Overweight (3) -

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

The broker lowers its rating for Mineral Resources to Equal-weight from Overweight after a 47% share price rally since March, though raises its target to $78.90 from $64.80. 

The valuation benefits from higher forecasts for long-term iron ore and lithium prices. Industry view: Attractive.

Target price is $78.90 Current Price is $71.45 Difference: $7.45
If MIN meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $82.58, suggesting upside of 17.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Morgan Stanley rates NCM as Overweight (1) -

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

In the Gold sector, the broker lowers its Newcrest Mining target price to $21.70 from $23.40 though sees value beginning to emerge and retains an Overweight rating. Industry View: Attractive.

While Morgan Stanley lowers gold, silver and copper price forecasts for FY23, forecasts rise in FY24 for gold and silver, offset by slightly lower copper prices.

Target price is $21.70 Current Price is $17.20 Difference: $4.5
If NCM meets the Morgan Stanley target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $21.97, suggesting upside of 28.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Morgan Stanley rates NST as Overweight (1) -

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

In the Gold sector, the broker lowers its Northern Star Resources target price to $9.05 from $9.15 though sees value beginning to emerge and retains an Overweight rating. Industry View: Attractive.

While Morgan Stanley lowers gold and silver price forecasts for FY23, forecasts rise in FY24.

Target price is $9.05 Current Price is $7.73 Difference: $1.32
If NST meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $10.03, suggesting upside of 30.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Citi rates NUF as Buy (1) -

Recent independent crop estimates, as well as demand and pricing commentary by peer companies, leaves Citi bullish on the agriculture market. It's felt Nufarm will benefit from higher grain prices in a tight supply market with favourable rainfall.

Planting of summer crops in 2022-23 is estimated by ABARES to be well above average.

The broker's target price rises to $6.40 from $6.30 after updated currency assumptions lead to profit forecast increases over FY22-24. The Buy rating is maintained.

Target price is $6.40 Current Price is $5.37 Difference: $1.03
If NUF meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $6.73, suggesting upside of 23.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

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

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

For OZ Minerals, the broker's target price rises to $23.10 from $17.20 on long-term price forecasts rises for copper and gold.

The Equal-weight rating is unchanged. Industry View: Attractive.

Target price is $23.10 Current Price is $26.01 Difference: minus $2.91 (current price is over target).
If OZL meets the Morgan Stanley target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $25.48, suggesting downside of -0.6% (ex-dividends)

The company's fiscal year ends in December.

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

Morgan Stanley rates PWR as Overweight (1) -

A significant hurdle to consolidating the Toyota assets (held by the Peter Warren family) into the listed entity has been removed, with news private equity has sold its stake in Peter Warren Automotive, explains Morgan Stanley.

Should a consolidation transaction occur, the analyst feels it will be quality accretive and allow more M&A opportunities.

The broker keeps its Overweight rating and $3.10 target. Industry View: In Line.

Target price is $3.10 Current Price is $2.99 Difference: $0.11
If PWR meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Macquarie rates RIO as Neutral (3) -

Rio Tinto announced the formation of a joint venture with Baowu Group to develop the Western Range iron ore project. Macquarie notes once fully operational this project offers annual production capacity of 25m tonnes. 

With Baowu representing a 46% interest, Macquarie notes Rio Tinto's share of the estimated -US$2.0bn project capital costs will be -US$1.3bn. This includes -US$220m in upgrades to the Paraburdoo plant, which will be entirely funded by Rio Tinto.

Shareholder approval is due in late October. The Neutral rating and target price of $93.00 are retained.

Target price is $93.00 Current Price is $94.83 Difference: minus $1.83 (current price is over target).
If RIO 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 $105.36, suggesting upside of 11.5% (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: 0.6

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

Morgan Stanley rates RIO as Overweight (1) -

Subject to conditions including shareholder and government approval, Rio Tinto has announced it will form a joint venture with Chinese steel group Baowu to develop Western Range in the Pilbara for -US$2bn, of which Rio Tinto will contribute -US$1.3bn.

The broker highlights Western Range will produce 25Mtpa and help sustain Pilbara Blend production from Rio's Paraburdoo hub.

Separately, Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

The broker likes Rio Tinto, with 21% of valuation tied to aluminium, which is poised to rebound due to low inventories and EU supply pressures. The company also benefits from increases to long term price forecasts for iron ore and copper.

The company is the third most preferred exposure behind Whitehaven Coal and South32 in Morgan Stanley's mining coverage.

The target price rises to $118.50 from $113.50 and the Overweight rating is maintained. Industry view: Attractive.

Target price is $118.50 Current Price is $94.83 Difference: $23.67
If RIO meets the Morgan Stanley target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $105.36, suggesting upside of 11.5% (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: 0.6

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

UBS rates RIO as Neutral (3) -

Rio Tinto has formed a joint-venture with China's Baowu Group (Rio 54%) to develop the Western Range mine in the Paraburdoo hub in the Pilbara. The JV is an extension of the existing Rio/Baowu JV at Eastern Range that is set to deplete soon.

While capex intensity will increase as a result, UBS estimates an internal rate of return of 22% assuming a US$65/t long term iron ore price. The broker is cautious on iron ore in the next 6-12 months due to China's covid policy and a weak Chinese property market.

Neutral and $90 target retained.

Target price is $90.00 Current Price is $94.83 Difference: minus $4.83 (current price is over target).
If RIO meets the UBS target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $105.36, suggesting upside of 11.5% (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: 0.6

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

Morgan Stanley rates RRL as Underweight (5) -

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

In the Gold sector, the broker lowers its Regis Resources target price to $1.50 from $1.55. Currency benefits lift the FY23 EPS forecast though the FY24 estimate falls as higher cost estimates offset higher gold price forecasts and a lower currency.

The Underweight rating is maintained. Industry View: Attractive.

Target price is $1.50 Current Price is $1.59 Difference: minus $0.09 (current price is over target).
If RRL 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 $1.78, suggesting upside of 15.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Morgan Stanley rates S32 as Overweight (1) -

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

The broker likes South32, with 46% valuation tied to aluminium, which is poised to rebound due to low inventories and EU supply pressures. The company is the second most preferred exposure behind Whitehaven Coal in Morgan Stanley's mining coverage.

The analyst's valuation benefits from higher long term prices across South32's key commodities and the target rises to $5.30 from $4.60. Overweight. Industry view: Attractive.

Target price is $5.30 Current Price is $4.32 Difference: $0.98
If S32 meets the Morgan Stanley target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $5.01, suggesting upside of 25.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.9

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

Morgan Stanley rates SFR as Overweight (1) -

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

The broker increases its long-term copper and zinc price forecasts and the target price for Sandfire Resources rises to $5.95 from $5.40. Overweight. Attractive industry view.

Target price is $5.95 Current Price is $4.21 Difference: $1.74
If SFR meets the Morgan Stanley target it will return approximately 41% (excluding dividends, fees and charges).

Current consensus price target is $5.41, suggesting upside of 30.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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 SHL as Outperform (1) -

Credit Suisse notes PCR test reimbursement fees for private providers are set to decline -19% from October 1, to $68.85 from $85.00, as testing rates continue to decline.

Current testing rates of 38,000 per day are the lowest since before the Delta variation, with the broker forecasting a conservative average 42,000 tests per day over the first half.

Credit Suisse notes declining testing volumes have only minor impact on Sonic Healthcare given its global diversification.

The broker estimates testing to contribute $355m to revenue in the first half and $260m in the second, compared to $1.3bn and $1.09bn respectively in the last year.

The Outperform rating and target price of $38.50 are retained.

Target price is $38.50 Current Price is $32.44 Difference: $6.06
If SHL meets the Credit Suisse target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $36.15, suggesting upside of 13.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Macquarie rates SHL as Underperform (5) -

Incorporating the announced lower Medicare reimbursement for PCR testing from October 1, Macquarie now anticipates Sonic Healthcare will achieve covid earnings of $405m, $205m and $130m through to FY25.

This drives earnings per share declines of -2%, -2% and -1% in the same years, with Macquarie noting impacts for Sonic Healthcare are largely offset by an assumed continuation of the US Public Health Emergency into 2023.

The broker expects the company to deliver recovery in its base business through to FY25. The Underperform rating and target price of $31.50 are retained.

Target price is $31.50 Current Price is $32.44 Difference: minus $0.94 (current price is over target).
If SHL 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 $36.15, suggesting upside of 13.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Citi rates STO as Buy (1) -

The Citi global commodity team significantly upgrades its global gas price forecasts, while short-term Australian east coast wholesale prices have been trimmed. It's felt east coast gas supplies will be a priority as industry and government work together.

Behind Woodside Energy, Santos is next preferred under the broker's coverage of the sector and the target price rises to $9.00 from $8.30. The company is set to benefit from longer term east coast gas prices and elevated LNG prices in the near-term.

The Buy rating is maintained.

Target price is $9.00 Current Price is $7.69 Difference: $1.31
If STO meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $9.66, suggesting upside of 21.3% (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: 1.0

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

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

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

For Syrah Resources, the broker raises its target price to $1.75 from $1.55 after updating forecasts for graphite in line with current spot prices and adjusting the ramp-up profile at Balama Graphite project.

The Equal-weight rating is unchanged. Industry View: Attractive.

Target price is $1.75 Current Price is $1.83 Difference: minus $0.08 (current price is over target).
If SYR meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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: 0.0

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

Citi rates WDS as Upgrade to Buy from Neutral (1) -

The Citi global commodity team significantly upgrades its global gas price forecasts, while short-term Australian east coast wholesale prices have been trimmed. It's felt east coast gas supplies will be a priority as industry and government work together.

Atfter mark-to-marking gas prices, the broker estimates Woodside Energy is best-placed to benefit via LNG sales on the spot market. The rating is raised to Buy from Neutral and the target is increased to $36.50 from $33.30.

Target price is $36.50 Current Price is $32.34 Difference: $4.16
If WDS meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $35.78, suggesting upside of 6.1% (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: 0.5

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

Morgan Stanley rates WHC as Overweight (1) -

Morgan Stanley generally raises target prices across its Australian Mining coverage, with the sector generally undervalued and set to benefit from inflation. 

Higher short and long-term thermal price forecasts drive EPS forecasts higher for Whitehaven Coal and the broker's price target rises to $11.20 from $9.00.

In late June, Morgan Stanley elevated Whitehaven Coal to its most preferred stock. Despite an 81% share price rally since, a further 30% rally above the new $11.20 target is considered achievable.

Overweight retained. Industry view: Attractive.

Target price is $11.20 Current Price is $8.48 Difference: $2.72
If WHC meets the Morgan Stanley target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $9.48, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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