Australian Broker Call

Bell Potter rates AMA as Buy (1) -

FY23 earnings were largely in line with forecasts. AMA Group has reiterated its FY24 EBITDA guidance of $86-96m. An underwritten $55m capital raising has also been announced to fund a repayment of debt as well as for liquidity and working capital.

Bell Potter expects EBITDA in the middle of the guidance range and includes the dilution impact of the capital raising. Buy rating retained. Target is reduced to $0.15 for $0.26.

Target price is $0.15 Current Price is $0.12 Difference: $0.03
If AMA meets the Bell Potter target it will return approximately 25% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Macquarie rates ANZ as Neutral (3) -

At an institutional briefing, ANZ Bank showcased its institutional Payments & Platforms business, focusing on the investment and transformation of the franchise over the last seven years.

The institutional business appears to be performing well, Macquarie notes, as investment in platform capabilities resulted in market share gains, customer wins and recognition from external surveys.

However the right timing is critical, the broker warns, given recent benefits of higher cash rates, solid markets income and reduced risk weightings on institutional business drove returns to the highest levels in a decade.

While recognising the benefits of improved Institutional business performance, on a through-the-cycle basis Macquarie sees ANZ's current discount to National Bank ((NAB)) as broadly appropriate. Neutral and $23.50 target retained.

Target price is $23.50 Current Price is $24.87 Difference: minus $1.37 (current price is over target).
If ANZ meets the Macquarie target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $26.47, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in September.

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

Citi rates ASB as Buy (1) -

Buy rating retained as the broker responds to Austal being awarded the LCU 1700 award at a much higher price than what was expected.

Only three vessels have been awarded, the broker observes, of a total potential of 12. Is the US Navy hamstrung by budget limitations, or is something else in play?

Target $2.75 (unchanged).

Target price is $2.75 Current Price is $1.91 Difference: $0.84
If ASB meets the Citi target it will return approximately 44% (excluding dividends, fees and charges).

Current consensus price target is $2.48, suggesting upside of 29.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Morgans rates ATA as Upgrade to Add from Hold (1) -

Atturra has acquired Sabervox and will pay -$5m up front with an earn-out of up to -$2.5m in cash based on performance to September 2024. The business specialises in providing managed IT services and cloud subscriptions to medium-sized customers in regional NSW.

Morgans observes the acquisition will provide better economies of scale in the existing managed services business and allow the company to expand its workforce regionally.

Rating is upgraded to Add from Hold as the broker rates management's execution and its business model highly.

While there is some uncertainty about general IT demand slowing, the broker believes this is offset by the high-growth dishes in which Atturra operates. Target is raised to $1.00 from $0.95.

Target price is $1.00 Current Price is $0.83 Difference: $0.17
If ATA meets the Morgans target it will return approximately 20% (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 CCX as Neutral (3) -

Citi analysts had earlier concluded City Chic remains a high risk turnaround story. The broker has stuck with its Neutral/High Risk rating but the price target has moved up to 55c from 49c on rolling forward of the modeling, plus various adjustments to forecasts.

Now that the retailer has exited the EMEA region, Citi points out its reliance on the Americas has increased substantially. The broker thinks the risks are to the downside.

The broker observes financial results from competitor Torrid have not been well-received in the US. Its own forecast for a -16% decline in City Chic's group sales for H1 might be too positive, Citi suggests.

Target price is $0.55 Current Price is $0.41 Difference: $0.14
If CCX meets the Citi target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $0.53, suggesting upside of 25.7% (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

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

Morgan Stanley observes the long-term impact on City Chic Collective's brands from aggressive discounting is an unknown and there is a risk that gross margins are permanently impaired.

The broker updates its modelling post the results and removes the EMEA segment which has now been divested. Revenue estimates for FY24 decrease by -25%.

Equal-weight. Target is raised to $0.45 from $0.40. Industry view: In line.

Target price is $0.45 Current Price is $0.41 Difference: $0.04
If CCX meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $0.53, suggesting upside of 25.7% (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

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

The Macquarie Commodities Strategy team has made broad upgrades to its US$ gold price outlook, including long-term price lifting 10% to US$1,650/oz. The new gold price outlook drives mixed but generally positive earnings upgrades and lifts target prices by an average of 6% across the broker's coverage.

Macquarie makes only one recommendation change to its gold stock coverage, with Capricorn Metals downgraded to Neutral from Outperform following recent share price strength, along with increased risk around approvals timing for Mt Gibson. Target unchanged at $4.80.

Target price is $4.80 Current Price is $4.28 Difference: $0.52
If CMM meets the Macquarie target it will return approximately 12% (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

Morgans rates DTL as Downgrade to Hold from Add (3) -

The Data#3 share price has run strongly, Morgans observes and, while rating the business highly, the price is now considered "fair". Rating is downgraded to Hold from Add, having been raised back on August 22.

At the time of the results Morgans believed the share price had overreacted to a small miss but since then it has bounced back strongly.

Macro economic uncertainty remains a key focus for investors, the broker adds, specifically regarding whether discretionary IT services expenditure will get cut, although the company is engaged in defensive areas such as health, education and resources so should be well placed. Target is raised to $ 7.00 from $6.50.

Target price is $7.00 Current Price is $7.21 Difference: minus $0.21 (current price is over target).
If DTL meets the Morgans target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Citi rates GUD as Buy (1) -

Citi assesses there are positive aspects for G.U.D. Holdings from the August new car sales data, with deliveries the second highest since June 2021 and the ongoing mix shift towards SUVs/4WDs continuing.

Uncertainty exists around the sustainability of the recovery, which appears to be supply driven, as deliveries are largely reflecting fulfilment of orders and may not represent the true picture, the broker points out.

Citi reduces FY24 net profit forecast by -3% to reflect export investment and overhead reallocation post the sale of Davey. Target is raised to $13.95 from $13.30, driven by higher market multiples and removal of the discount to APG. Buy rating retained.

Target price is $13.95 Current Price is $11.99 Difference: $1.96
If GUD meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $13.33, suggesting upside of 11.4% (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

Citi rates MND as Buy (1) -

As fresh contracts are being awarded, with Monadelphous Group grabbing its own share, Citi analysts highlight momentum for the industry overall is improving.

The broker sees imminent opportunities from the lithium and rare earths space. On Citi estimates, contracts will total between $1-1.4bn over the next two years.

Monadelphous should be well placed to benefit from accelerating project award momentum, the broker suggests. Buy. Target $15.30.

Target price is $15.30 Current Price is $13.77 Difference: $1.53
If MND meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $14.36, suggesting upside of 3.8% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Ord Minnett rates ORI as Hold (3) -

Ord Minnett observes customers seeking productivity gains and sustainability outcomes are increasingly adopting premium products and new technology which should ultimately reflect in Orica's bottom line.

Generally the broker expects explosives will become a tighter market for re-contracting where there has already been "impressive" price increases since the end of FY21.

While the company has not provided any material update since the first half results and is not due to report full year earnings until November, Ord Minnett projects a five-year EBITDA growth rate of 10% to $1.4bn by FY27. Hold rating and $16.50 target.

Target price is $16.50 Current Price is $15.48 Difference: $1.02
If ORI meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $18.07, suggesting upside of 15.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Macquarie rates RMD as Outperform (1) -

ResMed 's share price has declined by -26% over the past three months, Macquarie notes, driven primarily by PE multiple de-rating implying a 20% premium to the ASX200 Industrials compared with a ten-year average of 60%.

The broker sees this as driven by concerns relating to the impacts of GLP-1 receptor agonists (RA) on the long-term growth outlook. GLP-1 RA have been approved for chronic weight management, with clinical trial results showing significant weight reductions.

As such, the uptake of GLP-1 RA has the potential to reduce the number of patients with OSA, impacting growth for ResMed. However, Macquarie notes significant weight regain following withdrawal from GLP-1 RA treatment as well a number of side effects and potential safety concerns.

The broker cuts volume growth assumptions to FY33 to capture impacts associated with GLP-1 RA uptake. Target falls to $32.60 from $36.50. Outperform retained, as the broker sees the current share price impact as overstated.

Target price is $32.60 Current Price is $23.83 Difference: $8.77
If RMD meets the Macquarie target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $35.05, suggesting upside of 49.2% (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: 0.6

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

Morgan Stanley rates SLC as Overweight (1) -

Morgan Stanley updates estimates, envisaging upside to the share price if Superloop can deliver on forecasts of $50m for EBITDA in FY24, supported by 80-90% cash flow conversion.

The broker also suspects this could prove conservative if the company continues to deliver strong growth, noting guidance is typically provided at the AGM in October. Overweight rating retained. Target price is reduced to $0.90 from $1.00. Industry view: In-line.

Target price is $0.90 Current Price is $0.70 Difference: $0.2
If SLC meets the Morgan Stanley target it will return approximately 29% (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

Bell Potter rates TLX as Buy (1) -

Bell Potter observes the outlook for Telex Pharmaceuticals over the remainder of 2023 is firm with the company having enjoyed many gains amongst academic centres. The end of the transitional pass through (TPT) pricing is on June 30, 2025.

Beyond this the broker suspects there will be price adjustments and a -20-25% downward revision is not considered an unreasonable assumption. As an offset, expansion of the market for new users is likely to continue and potentially grow overall market value.

Buy rating and $14 target maintained.

Target price is $14.00 Current Price is $11.47 Difference: $2.53
If TLX meets the Bell Potter target it will return approximately 22% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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 WHC as Neutral (3) -

The NSW government will raise coal royalties by 2.6 percentage points, to 8.8-10.8% from July 1, 2024. The new rates will be 10.8% for open cut, 9.8% for underground, and 8.8% for deep underground.

This is the first change in NSW royalties since 2009 and more modest than the increase that occurred recently in Queensland. UBS expects the change will impact Whitehaven Coal's earnings the most, reducing its EPS forecasts by -7.1% in FY25.

Neutral maintained. Target is reduced to $6.30 from $6.75.

Target price is $6.30 Current Price is $6.18 Difference: $0.12
If WHC meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $7.12, suggesting upside of 14.1% (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