Australian Broker Call

Citi rates APO as Sell (5) -

Out of home advertising has grown at about double the pace of advertising in general over the past five years and Citi retains a positive view on the sector overall, predicting sector growth will continue to outpace advertising in general.

Coverage of the out-of-home sector has been transferred to a new lead analyst who suggests the ACCC is likely to approve the tie-up between APN Outdoor and JCDecaux, but acknowledges there is significant downside risk should the ACCC block the deal.

Given the risks, the Sell rating remains in place. Target $4.95. Earnings estimates have been lifted.

Target price is $4.95 Current Price is $6.33 Difference: minus $1.38 (current price is over target).
If APO meets the Citi target it will return approximately minus 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.72, suggesting downside of -9.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.2

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

Credit Suisse rates BSL as Outperform (1) -

The balance sheet is robust and cash generation strong so Credit Suisse expects the buyback of $150m per half will be renewed along with a unchanged 6c per share half-year dividend. The company will report results on August 13.

Exceptionally strong US steel spreads are likely to be the principal driver of earnings growth, the broker suggests. Outperform rating maintained. Target is raised to $19.00 from $16.90.

Target price is $19.00 Current Price is $18.19 Difference: $0.81
If BSL meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $19.09, suggesting upside of 4.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.8

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

Ord Minnett rates BWP as Hold (3) -

Ord Minnett updates forecasts for FY19-24 following the FY18 result. The broker assumes the trust will renew 13 of its 16 expiries for the next three years, equating to 80% retention.

Leases that Bunnings ((WES)) will not renew are likely to be Maitland, Northland and Belmont North, although the outcome is not yet confirmed. In addition to the five assets sold or contracted for sale in FY18 the broker also assumes the company will sell Cairns in FY20.

Hold rating maintained. Target is raised to $3.25 from $3.23.

Target price is $3.25 Current Price is $3.26 Difference: minus $0.01 (current price is over target).
If BWP meets the Ord Minnett target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.89, suggesting downside of -11.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.8

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

Morgans rates CBA as Add (1) -

Morgans expects underlying income growth of 4.4% and underlying expenses growth of 6.1% when the bank reports its FY18 results on August 8.

As the bank has announced the intention of de-merging its wealth management and mortgage broking businesses the broker hopes for clarity regarding the potential impact on the capital position.

Forecasts are reduced by -0.3% and -0.6% respectively for FY18 and FY19. Add rating and $79 target maintained

Target price is $79.00 Current Price is $73.40 Difference: $5.6
If CBA meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $73.63, suggesting upside of 0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.1

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

Citi rates HT1 as Neutral (3) -

Out of home advertising has grown at about double the pace of advertising in general over the past five years and Citi retains a positive view on the sector overall, predicting sector growth will continue to outpace advertising in general.

Coverage of the out-of-home sector has been transferred to a new lead analyst and he suggests the ACCC might prefer a tie-up between oOh!media ((OML)) and Adshell over the proposed merger between oOh!media and JC Decaux, due to little overlap, but then the first combination will command a market share of nearly 50%.

Target price $2.45. Neutral. Earnings estimates have been lifted.

Target price is $2.45 Current Price is $2.41 Difference: $0.04
If HT1 meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $2.56, suggesting upside of 6.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

Ord Minnett rates LNK as Hold (3) -

The share price has come under pressure following legislative changes to superannuation accounts and may benefit from delays, or a winding back, of the rules, Ord Minnett observes. This positive aspect is not included in estimates but is reflected in the target price, which is raised to $8.05 from $7.50.

Hold rating maintained as, while the stock is not considered expensive, the broker envisages better opportunities elsewhere. Link will report its FY18 result on August 17.

Target price is $8.05 Current Price is $7.80 Difference: $0.25
If LNK meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $8.19, suggesting upside of 5.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

Credit Suisse rates NHF as Neutral (3) -

The company will acquire QBE's ((QBE)) travel insurance business for up to $25m. Credit Suisse notes the acquisition is effectively the distribution and claims capability, as it excludes capital supporting the business and the QBE brand.

The broker suspects that, despite management's assertions to the contrary a few years ago, nib is moving away from Australian private health insurance. With 30% of earnings now outside this sector, the broker does not see significant percentage expansion unless there are more acquisitions or private health earnings, relatively, come down.

Credit Suisse also points out that these adjacent businesses offer lower returns and bring integration risks. Neutral rating and $5.35 target maintained.

Target price is $5.35 Current Price is $5.83 Difference: minus $0.48 (current price is over target).
If NHF meets the Credit Suisse target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.88, suggesting upside of 0.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Ord Minnett rates NHF as Hold (3) -

Ord Minnett adjusts estimates to reflect the acquisition of the QBE ((QBE)) travel insurance business for $25m, to be incorporated into the World Nomads Group.

The broker notes the acquisition is entirely goodwill related in that no capital will come on board. The company intends to target a 15% return on equity but this appears to the broker to exclude $11m in integration costs. Hold rating maintained. Target rises to $5.78 from $5.71.

Target price is $5.78 Current Price is $5.83 Difference: minus $0.05 (current price is over target).
If NHF meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.88, suggesting upside of 0.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Citi rates OML as Buy (1) -

Out of home advertising has grown at about double the pace of advertising in general over the past five years and Citi retains a positive view on the sector overall, predicting sector growth will continue to outpace advertising in general.

Coverage of the out-of-home sector has been transferred to a new lead analyst and he suggests the wave of consolidation throughout the sector, still undecided in outcomes, has created a lot of uncertainty. The best way to play this uncertainty for investors is through oOh!media.

Citi reiterates its Buy rating, anticipating a solid result in August. Target $5.35 on reduced estimates, in particular DPS forecasts.

Target price is $5.35 Current Price is $4.85 Difference: $0.5
If OML meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $5.30, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

Citi rates QMS as Initiation of coverage with Buy (1) -

Out of home advertising has grown at about double the pace of advertising in general over the past five years and Citi retains a positive view on the sector overall, predicting sector growth will continue to outpace advertising in general.

Coverage of the out-of-home sector has been transferred to a new lead analyst who has initiated QMS Media with a Buy rating and $1.45 price target. The company is seen as a take-over target, while still trading at a discount to peers while offering 16% ebitda CAGR over the next three years.

Target price is $1.45 Current Price is $1.05 Difference: $0.4
If QMS meets the Citi target it will return approximately 38% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Citi rates RMD as Neutral (3) -

Revenue growth in FY18 was in line with Citi's expectations. The company has gained market share in both masks and devices across all geographies and has guided for FY19 gross margins of 58.1%. Expenses are slated to be around 24-25% of revenue along with R&D at 6-7% of revenue.

Beyond the second half of FY19 Citi expects masks growth will decelerate towards market growth rates as the mature phase of the product life cycle is met by competitors launching new masks. Neutral rating and $15 target maintained.

Target price is $15.00 Current Price is $14.26 Difference: $0.74
If RMD meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $14.22, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

Credit Suisse rates RMD as Neutral (3) -

The fourth quarter result was mixed and -2% below Credit Suisse forecasts. However, US device and mask growth was robust. The broker believes the strength in the US market, where the company has gained share in both products, is because of increased awareness of its cloud-connected offering.

Nevertheless, competitors are in the early stages of launching new masks and the broker does not envisage the company gaining share in the short term. Neutral rating maintained. Target is raised to $13.60 from $12.75.

Target price is $13.60 Current Price is $14.26 Difference: minus $0.66 (current price is over target).
If RMD meets the Credit Suisse target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.22, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

Deutsche Bank rates RMD as Buy (1) -

Deutsche Bank observes good growth was achieved in the Americas and in masks and accessories, although the fourth quarter missed revenue and net profit forecasts.

The broker maintains a positive outlook, with earnings supported by a growing awareness of obstructive sleep apnoea, expansion in current & new markets and growth in the SaaS business. Buy rating and US$124 target.

Current Price is $14.26. Target price not assessed.

Current consensus price target is $14.22, suggesting downside of -0.3% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

Morgans rates RMD as Add (1) -

Results were broadly in line with Morgans estimates. Reimbursement changes across several countries have helped to increase the adaptation of cloud-based devices and this, in turn, has supported market share gains for ResMed.

The broker believes a growing installed base of connected devices and focus on resupply should bode well for continued strength in the high-margin mask/accessories category. Morgans maintains an Add rating and raises the target to $16.41 from $14.36.

Target price is $16.41 Current Price is $14.26 Difference: $2.15
If RMD meets the Morgans target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $14.22, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

Ord Minnett rates RMD as Hold (3) -

Results were generally in line with Ord Minnett forecasts, although the dividend was below expectations as was net profit. The broker is encouraged by the strong sales in masks, even as a key competitor reported double-digit growth.

The broker attributes the sales to improved US economic conditions and a boost from re-supply infrastructure. The broker maintains a Hold rating and raises the target to $14.00 from $13.75.

Target price is $14.00 Current Price is $14.26 Difference: minus $0.26 (current price is over target).
If RMD meets the Ord Minnett target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.22, suggesting downside of -0.3% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

UBS rates RMD as Neutral (3) -

Fourth quarter results were in line with UBS estimates. UBS suggests the company's differentiated approach to re-supply is resonating with the durable medical equipment distributors and translating into robust growth in masks and accessories.

Moreover, the HealthcareFirst acquisition continues to expand Brightree's SaaS offering outside of the core DME segment. Neutral rating maintained. Target reduced to US$108 from US$109.

Current Price is $14.26. Target price not assessed.

Current consensus price target is $14.22, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

Macquarie rates SEK as Neutral (3) -

The company has updated the market with confirmation this year's result will be at the top end of guidance, but next year should be flat on the back of heavy reinvestment.

Macquarie analysts, in an initial response, point out the top line outlook remains positive, also finding support from the robust macro environment. There are also significant items looming.

Macquarie analysts recall they had downgraded to Neutral in February based upon valuation concerns and now suggest such valuation concerns are likely to stick around for longer, in more general terms. Neutral. Target $20.34.

Target price is $20.34 Current Price is $19.98 Difference: $0.36
If SEK meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $19.33, suggesting downside of -3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.3

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