Australian Broker Call

Citi rates A2M as Upgrade to Neutral from Sell (3) -

Policy changes in China have caused Citi to upgrade its recommendation to Neutral from Sell. The new policy reduces the risk that the company will be exposed to a risky transition period.

Cross-border e-commerce  B2C imports can now be treated as personal goods instead of merchandise from January 1, 2018. As a result, infant formula will no longer require the CFDA registration that was previously the case.

In order for Citi to turn more positive, confidence is required in the margin outlook as the company moves to a direct and sustainable model. Target is raised to $2.60 from $2.05.

Target price is $2.60 Current Price is $2.57 Difference: $0.03
If A2M meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $2.60, suggesting upside of 2.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

This company reports in NZD. 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

Ord Minnett rates AGL as Accumulate (2) -

Despite performing strongly, AGL remains Ord Minnett's preferred stock in the sector, mainly because of the earnings leverage to increasing wholesale forward prices. The broker upgrades earnings estimates significantly to include the impact of elevated electricity prices.

The main risks in the broker's view are growing pressure on policy makers to implement changes that could negatively affect electricity prices and the timing of the company realising higher wholesale prices.

Accumulate rating retained. Target rises to $28.50 from $25.00.

Target price is $28.50 Current Price is $25.54 Difference: $2.96
If AGL meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $25.91, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.6

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

Credit Suisse rates BKL as Neutral (3) -

The Chinese government has announced that cross-border e-commerce imports will be treated as personal articles from January 1, 2018. This will allow the company to continue selling through free trade zone bonded warehouses as these articles do not require Chinese registration.

Credit Suisse does not believe the policy change will stimulate demand but it could prompt a shift in China's selling channels. The broker's industry feedback does not suggest there has been any change from weaker seasonality for Blackmores in the March quarter.

Credit Suisse retains some concern about high inventory levels and record low pricing. Neutral rating retained. Target rises to $115 from $110.

Target price is $115.00 Current Price is $113.68 Difference: $1.32
If BKL meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $113.50, suggesting downside of -2.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.2

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

Morgans rates BOQ as Hold (3) -

Morgans expects the bank to announce cash earnings of $369m for the first half when it reports on March 30.  An interim fully franked dividend of $0.38 per share is expected.

The result is expected to be marred by a contracting home loan book and very little total loan growth. Hold rating retained. Target is raised to $11.00 from $10.80.

Target price is $11.00 Current Price is $11.70 Difference: minus $0.7 (current price is over target).
If BOQ meets the Morgans target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.43, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

Credit Suisse rates DOW as Underperform (5) -

Downer now owns 19.99% of Spotless ((SPO)), acquiring the latest shares at $1.15 each. An all-cash offer is made to acquire the rest of the company at $1.15 per share. This is conditional on a 90% minimum acceptance and no reduction in the company's $80-90m earnings guidance.

Credit Suisse's concern about not being able to find synergies for the deal was confirmed with management signalling this was never about synergies, rather the acquisition is about scale.The broker observes that such an assertion has been made before.

The broker still struggles to find a compelling rationale for the deal. Underperform and $5.90 target retained.

Target price is $5.90 Current Price is $7.42 Difference: minus $1.52 (current price is over target).
If DOW meets the Credit Suisse target it will return approximately minus 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.04, suggesting downside of -18.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.2

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

Deutsche Bank rates DOW as Hold (3) -

The broker is not a fan of Downer's proposed takeover of Spotless Group. Spotless' weak operational performance and deteriorating market conditions are concerning, as is the fact Downer will not be conducting due diligence.

The broker also sees integration risks, high cost synergies and the unlikelihood earnings will recover to historical levels.

Taking into consideration the rights issue, drawdown of debt and the takeover itself, the broker has dropped its Downer target to $5.49 from $6.47. Hold retained.

Target price is $5.49 Current Price is $7.42 Difference: minus $1.93 (current price is over target).
If DOW meets the Deutsche Bank target it will return approximately minus 26% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.04, suggesting downside of -18.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.2

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

Macquarie rates DOW as Downgrade to Neutral from Outperform (3) -

The company has made an opportunistic bid for Spotless ((SPO)) and now owns 19.99%. The all-cash offer is for 100% at $1.15 a share. This is conditional on a 90% minimum acceptance and no reduction to FY17 earnings guidance.

Macquarie believes the play is an opportunity  to diversify, as the company has previously signalled, but the deal size is larger than expected.

The acquisition is consistent with a services strategy but the broker believes this needs to be balanced against the company's higher post-deal gearing and execution risk regarding turning Spotless around.

Macquarie downgrades to Neutral from Outperform  and reduces the target to $7.10 from $7.60.

Target price is $7.10 Current Price is $7.42 Difference: minus $0.32 (current price is over target).
If DOW meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.04, suggesting downside of -18.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.2

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

Credit Suisse rates KMD as Neutral (3) -

First half net profit was in line with expectations and guidance. Improved operating cost savings partly offset gross margin declines, Credit Suisse observes.

The company made no outlook comments other than to reiterate a focus on maintaining gross margin and operating efficiency. Given the material weighting of the earnings to the second half, this is in line with the broker's expectations.

Target price is raised to NZ$2.03 from NZ$1.98. Neutral rating retained.

Current Price is $1.78. Target price not assessed.

Current consensus price target is $2.05, suggesting upside of 15.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

This company reports in NZD. 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

Deutsche Bank rates KMD as Buy (1) -

Kathmandu's first half result was pre-released back in February so there were few surprises. It was an encouraging performance, the broker suggests, given a generally weak Christmas for apparel retailers.

Marketing and new product strategies appear to be working and could increase sales over time. No guidance was offered and the broker has made no changes to forecasts. Buy and NZ$2.25 target retained.

Current Price is $1.78. Target price not assessed.

Current consensus price target is $2.05, suggesting upside of 15.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

This company reports in NZD. 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

Macquarie rates KMD as Outperform (1) -

First half net profit was in line with guidance provided in February.  EBITDA was down -2% and modestly below Macquarie's forecasts.

The broker believes confidence should improve regarding the sustainability of margins and the profit turnaround achieved under the new management in the face of takeover activity in FY16.

Macquarie believes the valuation is undemanding and the stock still has potential for corporate activity. Outperform and $2.20 target retained.

Target price is $2.20 Current Price is $1.78 Difference: $0.42
If KMD meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $2.05, suggesting upside of 15.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

This company reports in NZD. 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

Macquarie rates NHC as Outperform (1) -

First-half results were in line with expectations. The acquisition of Bengalla delivered around 73% of the profits for the company and the doubling of the dividend to 4c per share, Macquarie observes.

The broker believes, if the Chinese government policies keep coal prices at current levels, there is upside risk to valuation. Outperform maintained. Target is $2.30.

Target price is $2.30 Current Price is $1.86 Difference: $0.44
If NHC meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $1.95, suggesting upside of 6.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Morgans rates NHC as Hold (3) -

First half underlying net profit was well ahead of forecasts. Cash flow was strong and driven by the performance of Bengalla.

Morgans upgrades earnings forecasts but notes the stock is trading close to revised valuation, which ascribes a 60% risk weighting to Acland stage III for approvals and timing risk.

Hold rating retained. Target rises to $1.80 from $1.69.

Target price is $1.80 Current Price is $1.86 Difference: minus $0.06 (current price is over target).
If NHC meets the Morgans target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.95, suggesting upside of 6.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Citi rates PMV as Neutral (3) -

Smiggle has driven strong growth against a challenging environment in the first half, Citi observes. Sales growth was highly concentrated in Smiggle, Peter Alexander and Just Jeans.

Core fashion brands struggled, with slower sales growth and gross margin contraction, particularly in womens wear. Citi observes  the company is relying on earnings growth from Smiggle.

Further global expansion for Smiggle would be a positive catalyst. The stock is considered fair value, based on the upside potential in this brand, partly offset by pressure in the core brands. Target rises to $15.10 from $13.80. Neutral.

Target price is $15.10 Current Price is $13.79 Difference: $1.31
If PMV meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $15.61, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.7

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

Credit Suisse rates PMV as Upgrade to Outperform from Neutral (1) -

First-half results continue to support the expansion of Smiggle, Credit Suisse observes. Smiggle and Peter Alexander account for 55% of forecast retail EBIT in FY17.

The poor performance of the mature clothing brands did not come as a surprise to the broker. Target is upgraded to $15.38 from $14.50 largely because of the Smiggle expansion.

The recent share price weakness means the broker upgrades to Outperform from Neutral.

Target price is $15.38 Current Price is $13.79 Difference: $1.59
If PMV meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $15.61, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.7

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

Deutsche Bank rates PMV as Upgrade to Buy from Hold (1) -

Premier's earnings result was in line with Deutsche Bank and guidance. The highlight of the result is Smiggle's emergence as now Premier's largest brand, overtaking Just Jeans. Throw in Peter Alexander and these two high margin brands account for some 40% of sales.

Smiggle's store rollout in the UK has now progressed to a point of scale and firmly establishes the brand's global credentials, Deutsche suggests. A later Easter and school holiday period locally suggests an even better second half.

Upgrade to Buy. Target rises to $15.00 from $14.25.

Target price is $15.00 Current Price is $13.79 Difference: $1.21
If PMV meets the Deutsche Bank target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $15.61, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.7

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

Macquarie rates PMV as Outperform (1) -

First half results again demonstrated to Macquarie the ability of Smiggle and Peter Alexander to drive profit growth, even in the wake of material GBP translation headwinds.

The broker notes the global performance of Smiggle continues to go from strength to strength and outperforms expectations. Outperform retained. Target rises to $17.19 from $16.84.

Target price is $17.19 Current Price is $13.79 Difference: $3.4
If PMV meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $15.61, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.7

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

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

In Morgan Stanley's view, Premier Investment's interim report showed Smiggle and Peter Alexander offsetting weak LFL sales and gross margin pressure in the mature brands.

The analysts are projecting low double-digit EPS growth in the short term with upside potential as earnings shift further to the growth brands. Alas, they also believe this is already priced in.

Equal-weight rating retained. Price target drops to $14 from $14.75. Industry view is In-Line. Both EPS and DPS estimates have been reduced.

Target price is $14.00 Current Price is $13.79 Difference: $0.21
If PMV meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $15.61, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.7

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

UBS rates PMV as Buy (1) -

UBS found the first half results solid in difficult circumstances. While the performance of Portmans and Jackie E was lacklustre, the broker believes the core brands as a portfolio are unlikely to have all five firing at once.

Meanwhile the outlook is improved and the roll-out of high-performer Smiggle has accelerated. UBS retains a Buy rating. Target is raised to $17.00 from $16.85.

Target price is $17.00 Current Price is $13.79 Difference: $3.21
If PMV meets the UBS target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $15.61, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.7

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

Deutsche Bank rates SGM as Hold (3) -

Due to a combination of stronger Chinese demand from Chinese infrastructure, property and manufacturing, the broker has increased its iron ore price forecasts by 14-20% in FY17-18. However the broker the broker still expects to see US$55/t again as swing supply returns to the market.

Scrap prices are highly correlated to the iron ore price. Increased forecasts flow to a target price increase for Sims to $12.79 from $12.33 but Hold retained, as the share price is already there.

Target price is $12.79 Current Price is $12.73 Difference: $0.06
If SGM meets the Deutsche Bank target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $12.96, suggesting upside of 4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.4

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

Macquarie rates SIV as Neutral (3) -

The company has announced a fully underwritten pro-rata non-renounceable entitlement offer at $7.00 per share to raise $21m.

The capital raising reinforces Macquarie's view around cash flow and funding for future earnings growth. Even with this capital raising the broker expects the company to hit its current debt facility limit in the first half of FY18.

Neutral retained. Target reduced to $6.68 from $6.81. The broker cancels expectations for the dividend reinvestment plan for the first half. Earnings per share estimates for FY17 are reduced by -1.9% and FY18 by -7.4%.

Target price is $6.68 Current Price is $7.77 Difference: minus $1.09 (current price is over target).
If SIV meets the Macquarie target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.5

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

Deutsche Bank rates SPO as Sell (5) -

The broker already had a Sell rating on Spotless with a target of 63c. Downer EDI's takeover offer of $1.15 provides an attractive exit price, the broker suggests.

The broker has altered neither its rating nor target.

Target price is $0.63 Current Price is $1.08 Difference: minus $0.45 (current price is over target).
If SPO meets the Deutsche Bank target it will return approximately minus 42% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.89, suggesting downside of -14.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.5

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

Macquarie rates SPO as Downgrade to Underperform from Neutral (5) -

Downer EDI ((DOW)) now owns 19.99% of the company, acquiring the latest shares at $1.15 each. An all-cash offer is made to acquire the rest of the company at $1.15 per share. This is conditional on a 90% minimum acceptance and no reduction in the company's $80-90m earnings guidance.

Macquarie envisages revenue remaining under pressure in the second half, with FY18 to experience the benefits of business development investment.

After the share price rally, the broker downgrades to Underperform from Neutral and recommends that investors sell into a bid that is subject to conditions and with relatively low risk of another bidder emerging. Target is raised to $1.10 from $0.84.

Target price is $1.10 Current Price is $1.08 Difference: $0.02
If SPO meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $0.89, suggesting downside of -14.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.5

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

Ord Minnett rates SPO as Upgrade to Hold from Lighten (3) -

Following the launch of a takeover offer from Downer EDI ((DOW)), the stock price closed 6% short of the $1.15 offer price. Although Ord Minnett accepts there is potential for higher bids, the current transaction is expected to have a good chance of proceeding.

Downer shareholders do not have the ability to block the deal and financing appears secure. The main threat is Spotless downgrading its $80-90m net profit guidance, the preservation of this being a condition of the deal.

Ord Minnett upgrades to Hold from Lighten and raises the target to $1.05 from $0.71.

Target price is $1.05 Current Price is $1.08 Difference: minus $0.03 (current price is over target).
If SPO meets the Ord Minnett target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.89, suggesting downside of -14.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.5

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

Morgans rates TGA as Hold (3) -

The company has provided formal FY17 guidance for net profit of $24-26m, which includes a $4m provision for an expected ASIC penalty and further customer compensation.

The company expects a lower second half dividend versus the prior corresponding half and Morgans expects it will lower its dividend pay-out ratio going forward. Hold rating and $1.75 target retained.

The broker looks to gain greater confidence in the near-term earnings trajectory and the impact of the final regulatory framework before taking a more positive view.

Target price is $1.75 Current Price is $1.57 Difference: $0.18
If TGA meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Citi rates TPM as Buy (1) -

First half EBITDA beat Citi's forecasts. This was almost entirely due to the higher margins in the iiNet business. Despite delivering  underlying operating earnings of $417m in the first half, guidance has been kept unchanged for FY17 at $820-830m.

The main catalysts Citi envisages are mobile roaming and spectrum auctions. The ACCC is due to rule on a mobile roaming decision in the next month and ACMA will auction the remaining 700 MHz spectrum  on April 4.

Buy rating retained. Target falls to $8.65 from $9.50.

Target price is $8.65 Current Price is $6.98 Difference: $1.67
If TPM meets the Citi target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $7.89, suggesting upside of 16.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Credit Suisse rates TPM as Downgrade to Underperform from Neutral (5) -

The first half result was ahead of forecasts. Credit Suisse retains estimates for FY17 EBITDA at the upper end of the reiterated $820-830m  guidance range.

The broker does not believe the stock is expensive but the risk around its mobile ambitions is significant. Credit Suisse believes the cost of entering the mobile market will be extremely high and visibility on returns is limited.

Rating is downgraded to Underperform from Neutral. Target is reduced to $6.20 from $6.80.

Target price is $6.20 Current Price is $6.98 Difference: minus $0.78 (current price is over target).
If TPM meets the Credit Suisse target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.89, suggesting upside of 16.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Deutsche Bank rates TPM as Buy (1) -

TPG's first half result was strong, the broker suggests, featuring robust revenue growth in the consumer businesses and stable growth in corporate. Fibre-to-the-basement is proving more popular than TPG expected which helps mitigate margin compression from NBN migration, the broker notes.

On a forecast compound annual earnings growth rate of 10% and a high total share holder return implied by current valuation, the broker retains Buy. Target rises to $10.56 from $10.35.

Target price is $10.56 Current Price is $6.98 Difference: $3.58
If TPM meets the Deutsche Bank target it will return approximately 51% (excluding dividends, fees and charges).

Current consensus price target is $7.89, suggesting upside of 16.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Macquarie rates TPM as Neutral (3) -

First half operating earnings were ahead of expectations. The earnings run rate is expected to be tempered in the second half by higher marketing costs and a pick up in migrations to the NBN.

Macquarie believes the company is executing well in the current environment  and the underlying business is tracking well against guidance. That said, an overhang exists with the uncertain prospects around Singapore and the Australian mobile strategies.

Neutral retained. Target is  raised to $7.80.

Target price is $7.80 Current Price is $6.98 Difference: $0.82
If TPM meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $7.89, suggesting upside of 16.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Morgan Stanley rates TPM as Overweight (1) -

Post the interim report, Morgan Stanley analysts (clearly pleased) comment TPG Telecom is showing "best practice" in an increasingly competitive domestic telecom market.

Cost reduction and synergies from the iiNet acquisition continue to feature prominently. Morgan Stanley thinks guidance for the year looks conservative, though H2 does look more challenging, the analysts admit.

The actual result beat market consensus, the analysts point out. Overweight rating. Industry view is In-Line and target is $10.75.

Target price is $10.75 Current Price is $6.98 Difference: $3.77
If TPM meets the Morgan Stanley target it will return approximately 54% (excluding dividends, fees and charges).

Current consensus price target is $7.89, suggesting upside of 16.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Morgans rates TPM as Reduce (5) -

The first half result was stronger than Morgans expected. The broker estimates the stand-alone EBITDA growth was 3.9% and notes that, over the half, 98% of operating cash flow was poured into capital expenditure.

The broker notes significant progress in reducing iiNet costs and attempting where possible to offset the margin crunch that looms with the NBN. Nevertheless, Morgans believes this will be difficult to avoid and will become evident in the second half.

Reduce retained.  Target falls to $6.03 from $6.47.

Target price is $6.03 Current Price is $6.98 Difference: minus $0.95 (current price is over target).
If TPM meets the Morgans target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.89, suggesting upside of 16.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Ord Minnett rates TPM as Downgrade to Lighten from Hold (4) -

Ord Minnett found the first half results mixed and believes the FTTB opportunity is now at risk, while broadband margin should begin a decline from this point onwards as the ii-Net-induced margin improvement has run its course.

The stock is envisaged trading at a significant premium to its peers on an enterprise value/EBITDA basis, as well as on a free cash flow multiple as the company embarks on its Singapore mobile venture.

While expecting the company will meet FY17 guidance the broker expects FY18-19 will be tough as the NBN migration accelerates. Rating is downgraded to Lighten from Hold. Target is reduced to $6.10 from $6.65.

Target price is $6.10 Current Price is $6.98 Difference: minus $0.88 (current price is over target).
If TPM meets the Ord Minnett target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.89, suggesting upside of 16.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

UBS rates TPM as Neutral (3) -

The highlight in the first half results for UBS was the performance of iiNet, with EBITDA growth of 27.5%. The broker increases its FY17 EBITDA forecast to the top of the guidance range ($820-830m), which implies its second half expectations are broadly unchanged.

Overshadowing what is considered to be conservative guidance, is the upcoming auction of mobile spectrum. UBS believes TPG is likely to participate and, if successful, estimates a metro-centric roll-out could cost $1.5bn and upwards, with cost dependent on how much spectrum is acquired and the extent to which the company builds the network rather than leases infrastructure.

UBS maintains a Neutral recommendation and the target is raised to $7.00 from $6.20.

Target price is $7.00 Current Price is $6.98 Difference: $0.02
If TPM meets the UBS target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $7.89, suggesting upside of 16.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Ord Minnett rates WFD as Accumulate (2) -

Ord Minnett observes the stock has been a poor performer over the past year.

The broker has a bullish medium-term view, as investment in assets are improving portfolio quality and driving material growth over the next three years. There is also a healthy medium-term retail and apartment pipeline.

Ord Minnett retains an  Accumulate rating and reduces the target to $11.00 from $11.60 on the back of increased AUD/USD forecasts.

Target price is $11.00 Current Price is $8.54 Difference: $2.46
If WFD meets the Ord Minnett target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $9.48, suggesting upside of 10.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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