Australian Broker Call

UBS rates BXB as Buy (1) -

UBS survey data show the reported pooled pallet prices in the US were up 5% in the 12 months to June. While prices are slowing (from the 6% for the same period last year), the outlook is still considered positive for FY25.

Customers are predicting 3% price rises over the next 12 months, according to the survey.

Unfortunately for Brambles, CHEP appears to be losing volume market share, which the broker believes is due to the dual-sourcing trend, abundant whitewood supply at clearance prices, and CHEP prioritising its core client base.

The target rises to $17.40 from $17.30. Buy.

Target price is $17.40 Current Price is $14.54 Difference: $2.86
If BXB meets the UBS target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $16.44, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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 CNI as Overweight (1) -

Morgan Stanley highlights management at Centuria Capital is introducing an element of earnings volatility/operational risk to the overall business by acquiring a 50% stake in ResetData for -$21m.

ResetData is a liquid immersion cooled (LIC) data centre operator. Should this technology be proven and become mainstream, the broker suggests Centuria Capital could lead the transformation of office tenancy, which would aid inflows into its $21bn platform.

Overweight rating. Target $2.03. Industry view: In-Line. 

Target price is $2.03 Current Price is $1.53 Difference: $0.505
If CNI meets the Morgan Stanley target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $1.75, suggesting upside of 12.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

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

Macquarie rates CSC as Outperform (1) -

Capstone Copper's June-quarter copper production and C1 cash costs met consensus forecasts and management restated 2024 guidance albeit trending to the lower end of the guided range.

Revenue, earnings (EBITDA) and net profit after tax all outpaced consensus but met Macquarie's forecasts and net debt also proved a 4% beat on consensus.

Mantoverde outperformed while Mantos Blancos underperformed due to softer grades and recoveries and Santo Domingo capital expenditure costs met the broker's forecast.

EPS forecasts fall -3% in 2024, -1% in 2025 to 2027.

Outperform rating retained, the broker spying clear upside from here. Target price rises 2% to $13.10 from $12.80.

Target price is $13.10 Current Price is $9.60 Difference: $3.5
If CSC meets the Macquarie target it will return approximately 36% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Morgans rates GDF as Add (1) -

Garda Property's FY24 result appears to have fallen a touch shy of Morgans' expectation.

The company closed the year with gearing of 36.5% and hedging of 69% and its ICR covenant stood at 1.5x.

The portfolio was valued at roughly $500m with an 80% weighting to industrial following the $100m sale of a Melbourne office with a weighted average lease expiry of 4.8 years.

Add rating retained. Target price falls to $1.59 from $1.65.

Target price is $1.59 Current Price is $1.15 Difference: $0.44
If GDF meets the Morgans target it will return approximately 38% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Citi rates GMG as Buy (1) -

Prompted by investor queries, Citi confirms the EPS growth in FY25 for Goodman Group of 12.2%, with the caveat management tends to under promise and over deliver in terms of better-than-expected results.

The broker anticipates management will adopt a conservative tone to FY25 guidance.

The US Citi communications team has reaffirmed expectations of 40% growth in the four major cloud data centre spends in 2024 and this will underpin demand for Goodman Group as a developer of data centres.

Buy rating and $40 target unchanged.

Target price is $40.00 Current Price is $32.12 Difference: $7.88
If GMG meets the Citi target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $35.06, suggesting upside of 6.3% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

UBS rates GOR as Buy (1) -

UBS both lowers forecasts for production and raises cost estimates for the Gruyere gold mine following wet weather and ongoing poor mining rates restricting access to high grade ore.

Management at Gold Road Resources reduced 2024 guidance at Gruyere by -20koz to 290-305koz and increased costs (AISC) by $150/oz to $2,050-2,200/oz.

Gold Road Resources stays Buy-rated with the broker's price target falling by -9% to $2.15.

Target price is $2.10 Current Price is $1.71 Difference: $0.395
If GOR meets the UBS target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $2.00, suggesting upside of 19.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

UBS rates IGO as Neutral (3) -

From June quarter results for IGO, UBS highlights a "decent" turnaround at Nova and in-line production at Greenbushes, but remains cautious around an immediate turnaround for lithium prices.

Nickel production of 6.35kt in Q4 beat the broker's forecast and for the financial year just missed guidance of 21-21kt (actual 20.8kt).

The analyst also notes increased risk as the nickel business winds down and ahead of an upcoming strategy reset.

The Neutral rating is retained and the target falls to $5.70 from $6.10.

Target price is $5.70 Current Price is $5.03 Difference: $0.67
If IGO meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $5.98, suggesting upside of 19.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Morgans rates IMR as Speculative Buy (1) -

Imricor Medical Systems' June-quarter result recorded cash outflows of -US$3.3m on receipts of US$140,000, in line with guidance, observes Morgans.

Imricor Medical Systems has completed a large capital raising removing funding concerns. Morgans considers this to be a positive, leaving the company free to pursue its clinical trial and sales drive.

The broker maintains its view that the company is catalyst rich. The broker raises its estimates on the number of procedure conducted per site to 60 from 50. FY25 EPS forecasts edge higher.

Speculative Buy rating retained. Target price eases to 94c from 96c to reflect the capital raising's cost and dilution.

Target price is $0.94 Current Price is $0.51 Difference: $0.43
If IMR meets the Morgans target it will return approximately 84% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Bell Potter rates IPG as Buy (1) -

Bell Potter previews expectations for the FY24 result from IPD Group.

The broker forecasts "strong" earnings and believes the company will report inline to better-than-expected EBITDA over guidance.

The extent to which earnings growth is generated via revenue versus margins will also be a key point of focus for the analyst, as well as organic versus acquisition growth.

Channel checks support the recent contract winds across multiple sectors, Bell Potter confirms.

Buy rating and $5.60 target unchanged. 

Target price is $5.60 Current Price is $4.54 Difference: $1.06
If IPG meets the Bell Potter target it will return approximately 23% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Ord Minnett rates JHX as Hold (3) -

Ord Minnett raises James Hardie Industries' target price to $55 from $50 ahead of the publication of the company's pre-guided June-quarter result, citing the likelihood of US Federal Reserve rate cuts.

The broker surmises this could drive a rebound in new housing starts by early 2026 and raises FY26 EPS forecasts by 18%.

While the result has been pre-guided, the broker does express concern that the result could reveal signs of softening demand in the repair and remodel market in North America and lowers its September-quarter NPAT forecasts to sit -5% below consensus, expecting a -6% fall in quarterly earnings from the North America fibre cement division.

Hold rating retained.

Target price is $55.00 Current Price is $50.93 Difference: $4.07
If JHX meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $57.73, suggesting upside of 11.8% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

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

Market Sentiment: 0.7

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

Ord Minnett rates LYC as Buy (1) -

Lynas Rare Earths has published a major increase in ore reserves for Mt Weld Mine, causing Ord Minnett to raise its mine-life forecasts.

The broker also observed a positive elemental oxide grade, which it estimates could increase cash earnings by $14m pa in FY29, and results in a 70c increase in the broker's net asset value to $9.70.

All up, ore reserve tonnage rose 63% while the grade fell -23% (resulting in a 22% net increase in REO content).

The broker is awaiting news on the capital expenditure for the company's rebuild of its Malaysian crack and leaching plan, which it suspects will cut its valuation.

Buy rating and $8 target price retained for now.

Target price is $8.00 Current Price is $5.91 Difference: $2.09
If LYC meets the Ord Minnett target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $6.66, suggesting upside of 13.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Bell Potter rates NEU as Buy (1) -

Bell Potter is looking to Arcadia 2Q24 results as an indication of whether 2024 guidance for Daybue can be retained for Neuren Pharmaceuticals.

The broker highlights at the lower end of 2024 guidance Neuren Pharmaceuticals will receive around $138m in royalties, with potential for approval in Canada by the end of 2024 and Europe by the end of 2025.

There are no changes to the analyst's forecasts.

Buy rating and $28 target unchanged.

Target price is $28.00 Current Price is $17.01 Difference: $10.99
If NEU meets the Bell Potter target it will return approximately 65% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

UBS rates NSR as Neutral (3) -

Commenting on National Storage REIT's 4Q results, UBS notes the 2H rate growth was better than the 1H, but momentum slowed in Q4.

The broker suggests a meaningful step-up will be required for both the back book rate and occupancy to meet FY24 revenue per available metre (RevPAM) growth guidance of 4.2%.

The Neutral rating and $2.40 target are maintained.

Target price is $2.40 Current Price is $2.40 Difference: $0
If NSR meets the UBS target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $2.40, suggesting upside of 0.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Macquarie rates NST as Outperform (1) -

Macquarie observes that it's steady as she goes at Northern Star Resources from a site visit.

The broker observes the KCGM expansion is on track and management guided for initial -$1.5bn capital expenditure and a two-year ramp-up.

The broker notes Fimiston is close to producing ore from its underground operations and the east wall remediation is nearly finished.

Outperform rating and $17 target price retained.

Target price is $17.00 Current Price is $14.18 Difference: $2.82
If NST meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $15.46, suggesting upside of 8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

UBS rates NST as Buy (1) -

The first year of the three-year build and two-year ramp-up by Northern Star Resources at the KCGM operation is completed, and the expansion to 27mtpa from 13mtpa is showing good progress, notes UBS.

A recent tour of the KCGM site reinforeces the analyst's view that KCGM is a leading australian gold asset.

The Buy rating and $16 target are unchanged.

Target price is $16.00 Current Price is $14.18 Difference: $1.82
If NST meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $15.46, suggesting upside of 8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Citi rates NXT as Buy (1) -

NextDC's contract update met Citi's forecasts but has most likely fallen shy of buy-side expectations, observes the broker.

Despite a possible cut to consensus revenue forecasts, the broker spies another record year of bookings in FY26 and retains its long-term view, adding the update was only for Sydney and expects further wins in both Melbourne and Sydney.

Buy rating and $19.75 target price retained.

Target price is $19.75 Current Price is $15.67 Difference: $4.08
If NXT meets the Citi target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $20.14, suggesting upside of 28.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.9

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

Macquarie rates RHC as Neutral (3) -

At first glance, Ramsay Health Care's preliminary FY24 results missed consensus' forecasts by -7% and Macquarie's forecasts by -4%.

After including one-off items, this falls to -14% and -13% respectively.

The result excludes the after-tax cash profit from Ramsay Sime Darby of $618m. Capital expenditure is expected to be sharply lower.

Neutral rating and $50.10 target price are retained heading into the August 30 full results presentation.

Target price is $50.10 Current Price is $45.20 Difference: $4.9
If RHC meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $53.44, suggesting upside of 22.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Ord Minnett rates RHC as Downgrade to Hold from Accumulate (3) -

Ord Minnett downgrades Ramsay Health Care to Hold from Accumulate in response to the company's trading update, which revealed hefty asset write-downs and charges (mainly in Europe and Britain) and higher interest and depreciation and amortisation charges.

The imposts were expected but not quite so soon, observes the broker, and these overshadowed signs of improvement in labour productivity and activity.

Ord Minnett now doubts earnings (EBIT) margins will recover to pre-covid levels.

Target price falls to $46.80 from $49.40.

Target price is $46.80 Current Price is $45.20 Difference: $1.6
If RHC meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $53.44, suggesting upside of 22.0% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Citi rates WDS as Neutral (3) -

Citi considers Woodside Energy's Beaumont acquisition to be at the wrong point in the cycle.

Citi says it doesn't penalise companies experimenting with new energy in the 2020s in order to scale in the 2030s with lower risk, but questions the wisdom of a big-ticket expenditure (that is likely to be exhausted by 2030) just as recessionary fears emerge (the broker's commodities desk expects contango in 2025) and hot on the heels on the Driftwood project.

While Neutral rated on a one-year view, Citi is negative near term. Target price is steady at $28. But the broker observes that both upside and downside risks are mounting.

Target price is $28.00 Current Price is $26.48 Difference: $1.52
If WDS meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $31.08, suggesting upside of 23.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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 WDS as Overweight (1) -

As part of a transition to green energy, Woodside Energy will potentially purchase OCI Global's "Clean Ammonia Project" in Beaumont, Texas for -US$2.35bn. The aim is to secure early-mover advantage in the lower carbon ammonia market.

Management believes the project will produce around 3.2MtCO2 epa in Scope 3 avoidance compared to conventional marine fuel with investment of circa -US$3.7bn (73% of the company's US$5bn 2030 target).

Overweight rating. Target $32. Industry view: Attractive. 

Target price is $32.00 Current Price is $26.48 Difference: $5.52
If WDS meets the Morgan Stanley target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $31.08, suggesting upside of 23.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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