Australian Broker Call

Citi rates A2M as Sell (5) -

Citi examines the effect upon a2 Milk of the recent entry of  Chinese competitor Feihe into the A2-protein infant milk formula (IMF) category.

The broker sees risks emerging longer-term from increased competition in lower-tier cities. Additionally, it's considered brand equity erosion could occur should smaller players price their A2 offerings to appeal to the mass market.

This comes at a time when a2 Milk is considered by the analyst likely needing to increasingly rely on offline store rollout (around 19,100 stores in June 2020). This is to offset pressure on the daigou channel.

The Sell rating and target price are unchanged.

Target price is $14.20 Current Price is $14.68 Difference: minus $0.48 (current price is over target).
If A2M meets the Citi target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.12, suggesting upside of 11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.1

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

Morgans rates AQR as Add (1) -

The APN Convenience Retail REIT has reaffirmed FY21 income guidance of 21.8-22.0 cents, which assumes some income from new acquisitions.

FY21 DPS guidance is for no less than 21.8 cents, in line with FY20. This equates to a distribution yield of 5.9% at current prices, calculates Morgans.

Several acquisitions were announced (valued at $51.1m) with further acquisitions expected.

The REIT remains a key yield pick for Morgans. It has weathered covid-19 well with no material income impacts and the broker notes there is currently no rent relief being provided.

The Add rating and $3.92 target price are unchanged..

Target price is $3.92 Current Price is $3.70 Difference: $0.22
If AQR meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Macquarie rates BHP as Outperform (1) -

Petroleum (especially oil) is a core segment of BHP Group. Macquarie expects a decline in the petroleum production on account of downgrades at the North West Shelf and the proposed exit of the group from the Bass Strait.

In such a scenario, production from the Gulf of Mexico is expected to ramp up to more than 50% from FY26 from the circa 20% in FY21. The broker expects strong earnings upside risk due to buoyant iron ore prices.    

Outperform rating is retained with a target of $44.

Target price is $44.00 Current Price is $36.45 Difference: $7.55
If BHP meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $40.81, suggesting upside of 14.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Credit Suisse rates BRG as Neutral (3) -

Management has guided to FY21 operating income ranging between $128-$132m. Credit Suisse has upgraded its sales growth forecast and assumes a longer than previously expected period of higher sales growth in the first half.

The group flagged some new product launches including the Bambino compact espresso machine, two commercial sous vide products (HydroPro and HydroPro Plus) and the Joule Oven Air Fryer.

In the broker's view, the new product launches are proof of the business’ commitment to investment in R&D and marketing and are important in driving top-line growth in the medium-to-long-term.

Neutral rating is retained with the target price rising to $27.72 from $26.79.

Target price is $27.72 Current Price is $26.09 Difference: $1.63
If BRG meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $27.30, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Morgan Stanley rates BRG as Overweight (1) -

For the first time, Breville Group provided FY21 operating income guidance of $128-$132m.

Morgan Stanley thinks the guidance is conservative because of the limited visibility on the group's key trading periods between October and December. Covid-19 adds another layer of complexity to the calculations.

Target is unchanged at $29. Overweight rating. Industry: In-line.

Target price is $29.00 Current Price is $26.09 Difference: $2.91
If BRG meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $27.30, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Morgans rates BRG as Add (1) -

Breville guides the business has experienced “healthy demand for its products year-to-date”, without disclosing the actual sales/growth rates, explains Morgans.

The analyst expects the guidance is primarily driven by solid revenue growth and gross margin strength, with the business continuing to reinvest in branding/marketing.

The broker believes there are indications from an inherently conservative management of potential future upside. This stems from earlier-than-usual guidance and the fact there is guidance at all in uncertain times.

Additionally, key overseas peer De’Longhi reported results earlier this week, reporting revenue up 26.8% for the third quarter.

Morgans believes it may be a market misconception the company benefits from the discretionary/at-home trend. FY20/FY21 earnings growth is in-line with historical levels.

The Add rating is unchanged and the target is increased to $29.18 from $27.46.

Target price is $29.18 Current Price is $26.09 Difference: $3.09
If BRG meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $27.30, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

UBS rates BRG as Buy (1) -

Breville Group has guided to 13-17% FY21 earnings growth, in line with expectation. The company noted continued healthy demand for its products across all geographies and highlighted the launch of new products this half.

These include an espresso machine, commercial sous vide and air fryer, as well as a specialty coffee marketplace in the US. The broker forecasts 18%pa compound earnings growth out to FY24 on increased penetration in all areas and ongoing rollout in Europe.

Buy and $29.90 target retained.

Target price is $29.90 Current Price is $26.09 Difference: $3.81
If BRG meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $27.30, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Ord Minnett rates BVS as Initiation of coverage with Hold (3) -

Ord Minnett initiates coverage on Bravura Solutions with a Hold recommendation and a target price of $3.10.

Ord Minnett's Hold rating is based on factors like Bravura’s true recurring revenue, which is lower than the other software peers. Less than half of the company’s revenues are recurring which exposes Bravura to more cyclical revenues than its ASX peers, asserts the broker.

Furthermore, led by project delays, revenue growth has slowed significantly over FY20. 

The broker sees a big opportunity over the next five years in Australian wealth management driven by the digitalisation of wealth management businesses. Bravura is considered well placed to benefit from this theme although the broker expects strong competition.

Target price is $3.10 Current Price is $3.21 Difference: minus $0.11 (current price is over target).
If BVS meets the Ord Minnett target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Market Sentiment: 0.5

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

Morgans rates CBA as Downgrade to Reduce from Hold (5) -

Following a trading update, Morgans downgrades earnings forecasts for Commonwealth Bank and lowers the rating to Reduce from Hold.

On a run-rate basis, the unaudited first quarter cash profit is -7.5% softer than the broker forecast for FY21. It’s considered the quarter had been impacted by a collective provision top-up that is not expected to be repeated in coming quarters.

Morgans lowers cash EPS forecasts by -3.8% and -4.8% for FY22 and FY23, respectively. This is largely due to lower net interest margin (NIM) forecasts and higher operating expense forecasts.

The first quarter NIM is lower than the second half FY20. The contraction was largely attributable to a lower interest rate environment as well as unfavourable lending margins and higher liquid assets.

The bank said an increase in operating expenses was the result of increased investment spend and higher staff costs due to continued impacts from covid-19.

The target price is decreased to $63 from $66.

Target price is $63.00 Current Price is $73.07 Difference: minus $10.07 (current price is over target).
If CBA 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 $67.66, suggesting downside of -7.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.4

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

Citi rates CHC as Buy (1) -

Citi had previously flagged upside to Charter Hall Group's FY21 guidance. At the AGM the group duly upgraded the guidance by 4% to 53cps.

Despite the upgrade, the broker sees further upside to FY21 guidance, given the potential for continued strong asset under management (AUM) growth.

The analyst explains the group is benefitting from the covid-19 related international border restrictions, with new global sovereign funds and pension fund partnerships established since June. 

The Buy rating and $14.75 target price are unchanged.

Target price is $14.75 Current Price is $13.98 Difference: $0.77
If CHC meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $13.80, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Credit Suisse rates CHC as Neutral (3) -

Charter Hall Group has lifted its FY21 operating earnings guidance to 53c versus 51c previously. While Credit Suisse expected the group's funds under management (FUM) to grow by circa $3bn in FY21, the group has already hit that target. 

Even then, the broker does not expect the group to "sit still". The broker is positive on the medium-to-long-term outlook for Australian commercial real estate and Charter Hall's ability to capitalise on investor demand.

Credit Suisse retains its Neutral rating with the target increased to $13.96 from $12.21.

Target price is $13.96 Current Price is $13.98 Difference: minus $0.02 (current price is over target).
If CHC meets the Credit Suisse target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.80, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Macquarie rates CHC as Outperform (1) -

Charter Hall Group acquired $3bn worth of assets over the first four months of FY21, leading to a 7% increase in the group's assets under management (AUM) since June to $43.3bn. This beats Macquarie's previous full-year forecast of $42.3bn.

Macquarie has lifted its AUM assumptions to $44.7bn. Overall, the broker sits 5.5% above guidance for FY21.  

With the group in an earnings upgrade cycle wth risks skewed to the upside, Macquarie maintains its Outperform rating with the target rising to $15.21 from $13.45.

Target price is $15.21 Current Price is $13.98 Difference: $1.23
If CHC meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $13.80, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Morgan Stanley rates CHC as Overweight (1) -

Charter Hall Group's latest market update gives investors a reason to smile. The company upgraded its FY21 earnings forecast guidance to 53c from 51c led by stronger-than-expected transactions with acquisitions worth $3bn and $0.4bn of divestments.

The platform's asset under management (AUM) at $43.4bn is broadly in line with Morgan Stanley's FY21 forecast. With $6.5bn of investment capacity, the group has, as Morgan Stanley puts it, "plenty of dry powder".

Overweight rating reiterated with a target price of $13.10. In-Line industry view maintained.

Target price is $13.10 Current Price is $13.98 Difference: minus $0.88 (current price is over target).
If CHC 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 $13.80, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

UBS rates CHC as Neutral (3) -

Charter Hall Group's trading update highlighted increased assets under management to date, a known transaction pipeline and record high level of investment capacity, the broker notes. A guidance upgrade to a 53c dividend from 51c nevertheless fell short of expectation.

But the broker anticipates further upgrades through FY21 on performance fee, transaction and AUM growth. Neutral and $12.25 target retained.

Target price is $12.25 Current Price is $13.98 Difference: minus $1.73 (current price is over target).
If CHC meets the UBS target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.80, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Citi rates CSR as Buy (1) -

CSR’s strategy day highlighted to Citi an increased focus on collaboration between the company’s portfolio of brands and improving the supply chain to enhance earnings flexibility through the cycle.

The broker warns the benefits will take the next five years to fully realise. Further quantification of the benefits and costs will be released at a later date.

CSR’s strategic direction makes sense to the analyst, and positions the business for profitable growth. While the supply chain initiatives are more tangible, the ability to cross-sell the full product suite beyond what already exists is considered yet to be proven.

The Buy rating and target price of $5.20 are unchanged.

Target price is $5.20 Current Price is $4.80 Difference: $0.4
If CSR meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $5.10, suggesting upside of 7.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Macquarie rates CSR as Outperform (1) -

With 51% of building products' exposure to detached home building, CSR sees an opportunity to build its position in the non-residential markets. The company strategy is to focus on supply chain integration which Macquarie believes is a low-risk, high-return area of focus.

The group plans to generate 50% of power from renewable sources while reducing energy per tonne of product by -20%. Macquarie continues to keep an eye on the Schofields project.

Considering the stock remains fairly valued, Macquarie retains its Outperform rating with a target of $5.10.

Target price is $5.10 Current Price is $4.80 Difference: $0.3
If CSR meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $5.10, suggesting upside of 7.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Ord Minnett rates CSR as Accumulate (2) -

Ord Minnett reviews key points from CSR's investor day.

Management believes a new business unit structure and a solutions approach will enable share gains. On supply chain, a central team is being formed, and cost-savings and efficiencies are expected over a five-year time horizon, although no targets have been set as yet.

Currently, supply chain costs represent about 9% of sales ($140m) and management will look to improve this metric. The company will move towards a centralised function over the coming years.

The analyst explains the company has done some cross-selling in the past and now is looking to enhance this area by reorganising business units.

Overall, as there were no hard targets provided by management, both the $5 target price and the Accumulate rating are unchanged.

Target price is $5.00 Current Price is $4.80 Difference: $0.2
If CSR meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $5.10, suggesting upside of 7.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

UBS rates CSR as Buy (1) -

CSR's strategy day was light on specifics but big on goals, the broker notes. The company wants to expand from just selling plasterboard, bricks and tiles for houses towards a more complete suite of products offering greater versatility to customers.

CSR also wants to push more into non-residential, reducing its exposure to the housing cycle and possibly delivering market share gains and higher margins. Buy and $5.19 target retained. CSR remains the broker's top pick in the sector.

Target price is $5.19 Current Price is $4.80 Difference: $0.39
If CSR meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $5.10, suggesting upside of 7.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Morgan Stanley rates ECX as Overweight (1) -

EclipX Group's FY20 core net profit at $47.5m was 22% above Morgan Stanley's forecast and even beat the broker's FY21 expectations of $45.7m. Morgan Stanley notes the second half was helped by higher prices of used vehicles.

The broker has lifted its core net profit forecast by 12-16% in FY21-22 and expects growth from a recovery in activity levels along with tailwinds from Victoria.

Overweight rating is maintained with the target rising to $2.10 from $1.70. Industry view: In-line.

Target price is $2.10 Current Price is $1.71 Difference: $0.39
If ECX meets the Morgan Stanley target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $2.05, suggesting upside of 14.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates EML as Initiation of coverage with Outperform (1) -

Macquarie highlights the diversified nature of EML Payments with the company dealing in issue and management of physical and digital and prepaid stored-value products ranging from reloadable cards to traditional, single-store gift cards.

The broker expects the company to continue its strategy of diversifying away from the physical gift cards business and towards incentive programs and digital cards. 

In FY21, about $19-$20bn of gross debit value (GDV) is expected to be processed with the broker forecasting an FY22 5-year compounded annual growth rate of 31% for revenue and 29% for gross profit.

Since about 45% of the GDV is generated mostly in December, the broker fears the lockdown measures in Europe, if extended over Christmas, present a downside risk to its FY21 forecasts.

Macquarie initiates coverage with an Outperform rating and a target price of $4.20.

Target price is $4.20 Current Price is $3.42 Difference: $0.78
If EML meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates FLT as Neutral (3) -

Flight Centre announced a $400m convertible notes offering with a conversion price of $20.04 and maturity date of 17 November, 2027. The offer is at a circa 30% premium to the reference share price of $15.30.

$100m of the amount raised will be used to repay debt with the rest used for restructuring debt deals and strengthening the company's liquidity position. 

While Pfizer’s recent announcement on a covid-19 vaccine is a positive, Macquarie remains cautious since any meaningful recovery in orders is unlikely until international borders re-open.

Forecasting a 50% recovery in the total transaction value (TTV) by FY22, Macquarie retains its Neutral rating with a target of $13.50. 

Target price is $13.50 Current Price is $16.04 Difference: minus $2.54 (current price is over target).
If FLT meets the Macquarie target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.94, suggesting downside of -11.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Credit Suisse rates GNC as Outperform (1) -

GrainCorp delivered a solid FY20 result, observes Credit Suisse, further validating a lower cost position and improved market position.

The broker believes the market is under-estimating through-the-cycle efficiencies achieved as a result of changes undertaken through 2019-20. 

Credit Suisse retains its Outperform rating with the target price rising to $5.03 from $4.85.

Target price is $5.03 Current Price is $3.95 Difference: $1.08
If GNC meets the Credit Suisse target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $5.00, suggesting upside of 15.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates GNC as Outperform (1) -

GrainCorp reported a net loss of -$16m for FY20, much lower than Macquarie's estimated profit of $12m. A final dividend of 7c came as a surprise to the broker, more so since the company hasn’t paid a dividend since FY18.

With the malt demerger, bulk liquid terminal sale and the change in leadership, Macquarie considers FY20 to be a year of transformation and believes the business is now building momentum.

The broker thinks FY21 is shaping up very well and expects the attractive earnings growth to continue into FY22.

Macquarie retains its Outperform rating and raises the target to $5.26 from $4.84.

Target price is $5.26 Current Price is $3.95 Difference: $1.31
If GNC meets the Macquarie target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $5.00, suggesting upside of 15.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

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

While the FY20 result for GrainCorp was a material improvement in earnings (EBITDA) on the previous corresponding period, it was below Morgans' forecasts and consensus. 

Highlights for the broker include the benefit of the crop production contract ($47m net gain) and the non-repeat of international trading losses (up $65m). Additionally, there was a stronger Grains division performance and higher oilseed crush volumes and margins. 

The final dividend of 7 cents was a positive surprise to the analyst and highlighted the company’s positive outlook.

The FY21 outlook statements were materially stronger than Morgans expected with earnings growth in FY21. This was driven by a significantly larger 2020/21 East Coast winter crop and ongoing benefits from the company’s recent operating initiatives. 

Morgans upgrades FY21, FY22 and FY23 earnings estimates by 12.9%, 20.7% and 9.5%, respectively.

The rating is upgraded to Add from Hold and the target price is increased to $4.79 from $4.18.

Target price is $4.79 Current Price is $3.95 Difference: $0.84
If GNC meets the Morgans target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $5.00, suggesting upside of 15.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

UBS rates GNC as Buy (1) -

GrainCorp posted a clear earnings miss in FY20 but the broker is not concerned, given the country was still drought-bound for half the period. It's not anymore, and indeed forecasts are for a bumper crop in FY21, similar to the last bumper crop in FY17.

GrainCorp would enjoy strong leverage to a good harvest, but for now the broker is remaining conservative given it's early in the period. Earnings risk is nevertheless considered skewed to the upside, leading to a rise in forecasts for FY21.

Target rises to $4.90 from $4.50, Buy retained.

Target price is $4.90 Current Price is $3.95 Difference: $0.95
If GNC meets the UBS target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $5.00, suggesting upside of 15.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates IVC as Underperform (5) -

InvoCare acquired two pet cremation businesses for $49.8m, executing on its plan to deliver annual revenue of circa $19.3m and operating income of about $5.2m.

While the acquisitions is a logical extension of its pilot stage pet cremation business, Macquarie is more concerned about the market share trends in InvoCare's core business with the latest ABS data indicating higher than anticipated losses in 2019.

Noting the valuation looks stretched, Macquarie maintains its Underperform rating with the target rising to $9.40 from $9.00.

Target price is $9.40 Current Price is $11.64 Difference: minus $2.24 (current price is over target).
If IVC meets the Macquarie target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.08, suggesting downside of -4.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Morgans rates IVC as Add (1) -

InvoCare has expanded significantly, according to Morgans, with two acquisitions in the pet cremation sector.

Family Pet Care is the largest pet cremation services provider in Australia, while Pets in Peace is the largest operator in Queensland.

The broker estimates 2% accretion for the acquisitions in FY21.

Overall, the analyst sees the easing of restrictions (particularly in Victoria) as a positive.

The Add rating is unchanged and the target price is increased to $13 from $11.

Target price is $13.00 Current Price is $11.64 Difference: $1.36
If IVC meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $11.08, suggesting downside of -4.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Ord Minnett rates IVC as Hold (3) -

InvoCare has acquired two pet cremations businesses in a bid to increase its presence in the market that is growing at about 9% per annum.

Ord Minnett believes the synergies with InvoCare's funeral business to be minimal. Near-term earnings risk prompts the broker to await signs of returns improving from the large capital outlay in the network and brand optimisation program. 

Hold rating retained. Target is increased to $11.50 from $11.

Target price is $11.50 Current Price is $11.64 Difference: minus $0.14 (current price is over target).
If IVC 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 $11.08, suggesting downside of -4.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

UBS rates IVC as Neutral (3) -

After a difficult year, InvoCare has diversified its exposure through two acquisitions in the pet cremation business. The broker believes pet cremation offers greater growth than the traditional funeral industry, with less volatility.

Having suffered from funeral attendee restrictions and an almost non-existent flu season due to lockdowns and masks/sanitiser,  InvoCare's core business remains under pressure, but the broker expects normalisation in future years. 

Incorporating the acquisitions into valuation lifts the price target to $11.30 from $10.75, Neutral retained.

Target price is $11.30 Current Price is $11.64 Difference: minus $0.34 (current price is over target).
If IVC meets the UBS target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.08, suggesting downside of -4.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Citi rates MPL as Neutral (3) -

After recording policyholder growth of 2.27% in the first four months of the year, Medibank Private now aims to record “approximately 2%” growth in FY21, compared to the prior target of greater than 1%.

Citi lifts EPS estimates for FY21, FY22  and FY23 by 3%, 2% and 4%, respectively.

The Neutral rating and target of $2.80 are unchanged.

Target price is $2.80 Current Price is $2.85 Difference: minus $0.05 (current price is over target).
If MPL meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.84, suggesting downside of -2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Macquarie rates MPL as Neutral (3) -

Medibank Private's trading update was slightly positive and focused on improving policyholder growth in a flat market. The insurer has increased its FY21 total policyholder growth target to circa 2% from circa 1%. The dividend payout ratio remains unchanged.

Neutral retained. Target falls to $2.65 from $2.75.

Target price is $2.65 Current Price is $2.85 Difference: minus $0.2 (current price is over target).
If MPL meets the Macquarie target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.84, suggesting downside of -2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgan Stanley rates MPL as Overweight (1) -

Medibank Private's major AGM takeaway points include raising the FY21 growth target to circa 2% from 1% looking at the strong results in the first four months of the financial year. 

Claims expense per policy growth in FY21 is still expected to be in line with FY20. Dividend payout is expected to be at the top end of the 75-85% target range.

While finding the commentary encouraging, Morgan Stanley notes price is also an important FY21 driver. Morgan Stanley reaffirms its Overweight rating with a target price of $3.10. Industry view: In-line.

Target price is $3.10 Current Price is $2.85 Difference: $0.25
If MPL meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.84, suggesting downside of -2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgans rates MPL as Hold (3) -

A first quarter trading update revealed management believes they have gained market share and expects the trend to continue for the year (as per guidance of 2% growth in a flat market)

There was 2.3% policyholder growth in the first four months of the year and management now expects total FY21 policyholder growth to be 2% (versus 1% previously – in a flat market).

Importantly for Morgans, management also noted that about one third of new policyholders in the first quarter came from the Medibank Private brand. This is in-line with the company’s aspirations to grow this brand in FY21.

The Hold rating is unchanged and the target is increased to $2.90 from $2.82.

Target price is $2.90 Current Price is $2.85 Difference: $0.05
If MPL meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $2.84, suggesting downside of -2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgan Stanley rates NEA as Overweight (1) -

Nearmap has guided to annual recurring revenue of $120-$128m with Morgan Stanley expecting the numbers to be at the upper end of the range at $127.4m.

The broker thinks the range may be conservative but a more pressing concern for the broker is the use of constant currency which implies a -6% fx headwind.

The company reiterated its 20-40% annual contract value (ACV) growth target and a churn target of less than 10%.

The broker is Overweight on the stock with a target price of $3.10. Industry view: In-line.

Target price is $3.10 Current Price is $2.40 Difference: $0.7
If NEA meets the Morgan Stanley target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $3.15, suggesting upside of 31.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Credit Suisse rates NEC as Outperform (1) -

Nine Entertainment provided a strong trading update and guided towards mostly flat metro TV ad revenues in the first half, better than Credit Suisse's expected decline of -9%. 9Now revenues are also expected to be up circa 25% in the first half.

Furthermore, led by a double-digit decline in TV costs, the company expects the operating income in the first half to be up circa 30%, beating the broker's prior estimate for a decline of -7%.

While this update only accelerates what could have been an inevitable cyclical recovery, Credit Suisse notes the fact FTA TV has bounced back so quickly affirms its importance to the advertisers and suggests any structural decline will take longer to play out.

Credit Suisse raises the target to $2.75 from $2.35 with an Outperform rating.

Target price is $2.75 Current Price is $2.48 Difference: $0.27
If NEC meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $2.36, suggesting downside of -3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgan Stanley rates NEC as Overweight (1) -

Morgan Stanley states its Overweight thesis is based on its bullish view on the rising value of Nine Entertainment's ((NEC)) streaming TV assets including Stan and 9Now. 

To create meaningful overall shareholder value, Morgan Stanley feels it is crucial for Nine Entertainment's traditional media assets to hold their worth and not be a source of major earnings leakage.

Overweight rating is retained with a target of $2.40. Industry view: Attractive.

Target price is $2.40 Current Price is $2.48 Difference: minus $0.08 (current price is over target).
If NEC meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.36, suggesting downside of -3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Ord Minnett rates NEC as Buy (1) -

Nine Entertainment's trading update reflected better than expected free-to-air (FTA) advertising performance along with cost-savings and strong positioning into the first half of FY21.

The first-half metro FTA ad revenues were broadly flat versus last year, a materially better-than-feared result. Ord Minnett is impressed by the company's cost reduction. 

Led by the TV advertising market recovery, the broker increases its FY21 operating earnings forecast by 26.3%. 

Ord Minnett maintains a Buy rating and increases the target to $2.70 from $2.00.

Target price is $2.70 Current Price is $2.48 Difference: $0.22
If NEC meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.36, suggesting downside of -3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

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

According to Morgans, persistently strong trading conditions and the acquisition of T4U have seen National Tyre & Wheel upgrade first half earnings (EBITDA) guidance.

The broker highlights this guidance does not include any material contribution to earnings from synergies arising from the August acquisition of Tyres4U.

The balance sheet has deleveraged far quicker than previously expected by the analyst, putting dividends firmly back on the agenda in the short term.

Given the deleveraging and potential synergy upside from T4U, the rating is upgraded to Add from Hold.

Morgans upgrades EPS forecasts by circa 50-85% in forecast years which sees the target price increased to $1.00 from $0.63.

Target price is $1.00 Current Price is $0.86 Difference: $0.14
If NTD meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Ord Minnett rates SEK as Hold (3) -

Ord Minnett examines Seek's Zhaopin reviews along with informal user feedback from China’s online recruiting market to assess competitive trends.

The broker finds Zhaopin faces competition from other job boards. Unlike Zhaopin, its competitor 51job offers customised recruiting packages with negotiable prices. Also, vertical recruiting websites like Liepin seem to be winning market share.

The broker also highlights the most common criticisms associated with Zhaopin have been around candidate quality and database issues, leading to poor user experience. 

Ord Minnett maintains its Hold recommendation with a $20.15 target price.

Target price is $20.15 Current Price is $24.75 Difference: minus $4.6 (current price is over target).
If SEK meets the Ord Minnett target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.68, suggesting downside of -17.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

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

At the AGM, Sonic Healthcare announced a level of growth that is unprecedented, according to Citi. It's considered likely the growth is directly related to the pandemic. October revenue was up 33% on the previous corresponding period.

The company is experiencing record covid testing volumes in the US and Europe, as a result of the pandemic's second wave. The base business is negatively impacted but “less than first waves”, explains the broker.

The analyst considers the company should be in a solid position to pursue acquisitions beyond covid. This is considered a key upside risk to forecasts.

Citi lifts EPS estimates for FY21, FY22 and FY23 by 58%, 28% and 5%, respectively.

The rating is increased to Buy from Neutral and the target raised to $38.50 from $35.50.

Target price is $38.50 Current Price is $34.30 Difference: $4.2
If SHL meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $36.93, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Morgan Stanley rates SHL as Overweight (1) -

Sonic Healthcare's AGM disclosed revenue in October was up 33% versus last year. 11m covid-19 PCR tests have been performed to date and while testing in Australia is -50% off the peak levels, the base business is up year on year.

Morgan Stanley estimates covid testing will contribute $956m to Sonic Healthcare's operating income in FY21. 

Looking at Sonic Healthcare's strong balance sheet and proven critical role in healthcare infrastructure support, Morgan Stanley reaffirms its Overweight rating with a target of $40.40. Industry view: In-line.

Target price is $40.40 Current Price is $34.30 Difference: $6.1
If SHL meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $36.93, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Morgans rates SHL as Hold (3) -

A trading update revealed sales are up in the Australian base business for Sonic Healthcare, while covid-19 testing is down around -50% from prior peak levels, highlights Morgans.

Offshore, the broker notes covid-19 testing is at record levels in the EU and US on increasing infection rates. The overseas base business is seeing less impact than earlier in the pandemic.

The analyst makes material upgrades to FY21-23 earnings estimates and increases the price target to $34.57 from $31.14.

The Hold rating is unchanged.

Target price is $34.57 Current Price is $34.30 Difference: $0.27
If SHL meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $36.93, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Ord Minnett rates SHL as Hold (3) -

Ord Minnett reviews its earnings forecasts for Sonic Healthcare post the company’s AGM.

Rising case numbers in Europe and the US will ensure covid-19 testing volumes remain high going into FY22, asserts the broker.

October revenues grew 33%, up from the 29% revenue growth in the September quarter. The broker is disappointed since the growth was a little below the uplift forecast and has cut its revenue estimate by -2.5% and net profit by -3% for FY21.

Ord Minnett retains a Hold rating and reduces the target to $36.30 from $37.00.

Target price is $36.30 Current Price is $34.30 Difference: $2
If SHL meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $36.93, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

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

The latest update points to a better ad market trajectory, hinting at a broadly flat operating income in the first half, well ahead of Credit Suisse's expected decline of -41%.

Broadcaster video on demand (BVOD) revenue growth during the first four months of the first half is considered impressive by the broker.  

Credit Suisse upgrades its rating to Outperform from Neutral. Target rises to $0.40 from $0.12.

Target price is $0.40 Current Price is $0.21 Difference: $0.19
If SWM meets the Credit Suisse target it will return approximately 90% (excluding dividends, fees and charges).

Current consensus price target is $0.25, suggesting upside of 13.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Ord Minnett rates SWM as Buy (1) -

Seven West Media's trading update reflected better than expected free-to-air (FTA) advertising performance along with cost-savings and strong positioning in the first half of FY21.

Seven’s forward bookings hint advertising revenues for the first half could be down about -5% versus last year but Ord Minnett is impressed by the company's focus on cost reduction.

Led by the TV advertising market recovery, the broker increases its FY21 operating earnings forecast by 32.2%. 

Ord Minnett maintains its Buy rating and increases the target to $0.28 from $0.20.

Target price is $0.28 Current Price is $0.21 Difference: $0.07
If SWM meets the Ord Minnett target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $0.25, suggesting upside of 13.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Credit Suisse rates TLS as Outperform (1) -

The disclosures at Telstra's investor day around InfraCo reinforce Credit Suisse's view around the value of the underlying assets.

Mobile trends remain encouraging with management confirming transacting minimum monthly commitments (TMMCs) were up in the first half. Growth in postpaid average revenue per user (ARPU) is expected in the second half.

Credit Suisse retains its Outperform rating with a target of $3.85.

Target price is $3.85 Current Price is $3.08 Difference: $0.77
If TLS meets the Credit Suisse target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $3.49, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Morgans rates TLS as Hold (3) -

Telstra has reignited plans to help crystallise the unrealised value of some of InfraCo. Morgans views the strategy as a big positive and believes value can be realised.

The company will be restructured into three legally separate business units. These are InfraCo Fixed, InfraCo Towers and ServeCo (customer-servicing segment). 

Management has committed to launching a process to monetise part of InfraCo Towers during CY2021. This strategy highlights to Morgans the sum of the parts is worth more than the whole.

Separately, FY21 guidance was reiterated. Also, the return on invested capital (ROIC) target was massaged up to around 8% from greater than 7%, notes the analyst.

The Hold rating and target price of $3.21 are unchanged.

Target price is $3.21 Current Price is $3.08 Difference: $0.13
If TLS meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $3.49, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Ord Minnett rates TLS as Upgrade to Accumulate from Hold (2) -

Ord Minnett summarises that Telstra had a primary focus at the investor day on the ongoing rollout of the 5G network and the potential spin-off of its TowerCo assets.

A key takeaway for the broker is management expects to arrest five years of operating earnings (EBITDA) declines through increased revenue and margins in the mobile segment. This is due primarily to 5G and ongoing cost savings in fixed wireless broadband.

Other highlights included earnings (EBITDA) are expected to grow 4–14% per annum over the next two years, and the sale of TowerCo could be up to 6–7% value-accretive.

Management expects to commence a process to sell InfraCo Towers in 2021. Ord Minnett estimates the TowerCo assets could be worth 3.7–3.9bn, assuming a 5% weighted average cost of capital (WACC). A sale at that price is considered to be 6% value accretive.

The rating is increased to Accumulate from Hold and the target price is increased to $3.65 from $3.40.

Target price is $3.65 Current Price is $3.08 Difference: $0.57
If TLS meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $3.49, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

UBS rates TLS as Buy (1) -

The broker suggests Telstra's share price has languished below $3 due to bearishness around dividends, infrastructure valuation and mobile competition. The dividend payout has since been confirmed, and yesterday's announced tower spin-off will crystalise value.

That just leaves mobile, but the broker sees 5G, and specifically the new 5G iPhones, as an opportunity to migrate customers to higher price-points. Management noted 72% of iPhone pre-orders are on plans. Buy and $3.70 target retained.

Target price is $3.70 Current Price is $3.08 Difference: $0.62
If TLS meets the UBS target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $3.49, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Citi rates WES as Sell (5) -

Sales growth for Bunnings (25.2%) and Officeworks (23.4%) is broadly in-line with trading updates from housing-led retailers, according to Citi. This reflects the ongoing investment in the home.

To reflect this home investment and stronger consumer spending, the broker upgrades EPS estimates for FY21 and FY22 by 5% and around 1%, respectively. 

The analyst highlights BIG W ((WOW)) is still outperforming both Kmart and Target sales (which are on the improve).

Sell rating retained. Target is raised to $43 from $42. 

Target price is $43.00 Current Price is $48.78 Difference: minus $5.78 (current price is over target).
If WES meets the Citi target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $47.00, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Macquarie rates WES as Neutral (3) -

In the four months to October, Bunnings was the standout with sales growth of 29% (excluding Melbourne) led by people working on DIY projects while at home. Kmart and Target sales grew by 12.1% and 6.7% while supply chain issues led to market share losses for BIG W. 

Macquarie considers Catch Group to be a key growth driver as it reached 2.7m active customers at the end of October, adding circa 400k over the last four months.

Seeing continued strength in Bunnings, Macquarie maintains its Neutral rating with a target of $49.70.

Target price is $49.70 Current Price is $48.78 Difference: $0.92
If WES meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $47.00, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

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

Wesfarmers provided an update showing strong trading at Bunnings and Officeworks, both ahead of Morgan Stanley's estimates. Kmart grew by 3.7% led by lower stock related issues.  

Morgan Stanley highlights the strong trading update with manageable costs implies substantial first half consensus earnings upside risk.

Equal-weight rating is maintained with a target price of $44. Industry view: Cautious.

Target price is $44.00 Current Price is $48.78 Difference: minus $4.78 (current price is over target).
If WES meets the Morgan Stanley target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $47.00, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Morgans rates WES as Hold (3) -

A trading update by Wesfarmers to the end of October was better than Morgans expected.

Bunnings delivered total sales growth of 25.2%, which was well ahead of the broker’s 12.7% forecast for the first half. This was driven by continued growth in both consumer and commercial segments.

Officeworks’ total sales was also better than the broker expected, with growth of 23.4% versus a 12.0% forecast. 

Like-for-like sales at Kmart and Target were solid, according to Morgans, boosted by very strong online growth. 

The broker lifts FY21 group underlying earnings (EBIT) estimates.

The target price is increased to $49.20 from $46.50 and the Hold rating is unchanged.

Target price is $49.20 Current Price is $48.78 Difference: $0.42
If WES meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $47.00, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Ord Minnett rates WES as Lighten (4) -

Wesfarmers released a retail trading update for the four months ended October. Sales growth in Bunnings, Officeworks and Catch Group were again standouts, notes Ord Minnett.

The broker explains Kmart and Target were the most negatively affected, due to the Melbourne lockdown, although underlying performance is improving. Sales trailed the performance of BIG W ((WOW)).

Covid-related costs are falling, with operating leverage expected by the analyst to drive higher underlying Bunnings earnings (EBIT) margins.

Ord Minnett increases the underlying EPS forecast by 8.2% in FY21. The estimates fall slightly in FY22 and FY23.

The Lighten recommendation is unchanged and the target price is increased to $45.00 from $43.00.

Target price is $45.00 Current Price is $48.78 Difference: minus $3.78 (current price is over target).
If WES meets the Ord Minnett target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $47.00, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

UBS rates WES as Neutral (3) -

Wesfarmers posted a solid September quarter as expected, with sales up 19% year on year or 24% ex-Melbourne. Bunnings, Officeworks and Catch drove the increase, the broker notes. K-Mart/Target also performed well, but sales growth fell well short of Big W ((WOW)).

Wesfarmers is a strong business, the broker acknowledges, but that strength is already priced in. The broker also estimates some 20% of covid period sales are "pull forward", suggesting few catalysts from here.

Target rises to $46.50 from $39.50 on a mark-to-market of equity holdings. Neutral retained.

Target price is $46.50 Current Price is $48.78 Difference: minus $2.28 (current price is over target).
If WES 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 $47.00, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Citi rates WPL as Neutral (3) -

Citi's previously perceived funding shortfall has been exacerbated by the failure of the Scarborough sales process. Given a large $2.3bn franking credit balance, issuing new equity is considered more likely than cutting the 80% payout ratio, in the broker's view.

The company laid out a number excellent arguments (according to the analyst) as to why monetising Scarborough via Pluto-2 is a better concept than the North West Shelf.

Citi retains its Neutral rating and suggests the oil sector offers better opportunities elsewhere.

The target price is increased slightly to $22.06 from $21.64.

Target price is $22.06 Current Price is $20.77 Difference: $1.29
If WPL meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $23.23, suggesting upside of 12.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Morgans rates WPL as Add (1) -

Woodside Petroleum remains committed to the Browse gas project, which is a surprise to Morgans, given its challenged investment return and carbon profile.

The company also revealed at an investor day the end to trying to sell down its 73.5% upstream interest in Scarborough, being unable to secure a partner. 

With no sell down, a Chevron NWS stake purchase on the cards, and Browse still progressing, Morgans rates the risk for an equity raising as high.

The Add rating is maintained and the target price is increased to $24 from $23.30.

Target price is $24.00 Current Price is $20.77 Difference: $3.23
If WPL meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $23.23, suggesting upside of 12.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Morgans rates WPR as Add (1) -

Waypoint REIT has now completed the internalisation of management (transfer of CEO) in-line with Morgans expectations.

The guidance for 2020 is unchanged.

The balance sheet remains well positioned with good liquidity, according to the broker.

The REIT remains a preferred yield play, in the opinion of Morgans. This is due to the stability of underlying income. 

The Add rating is unchanged and the target price is increased to $2.88 from $2.81.

Target price is $2.88 Current Price is $2.74 Difference: $0.14
If WPR meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $2.76, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Citi rates XRO as Neutral (3) -

The resilience of the core ANZ business and strong margin expansion were key positives for Citi in Xero's first half result. Weakness in subscriber adds in international markets and slowing growth in annualised monthly recurring revenue (AMRR) were considered negatives.

The broker doesn't see the risk/reward for the company as compelling, despite having multiple growth levers and a strong balance sheet.

The analyst remains concerned about potential business failures impacting the company, when government stimulus measures are either eased or ended.

Citi raises FY21 earnings (EBITDA) estimates by 27% to reflect the first half beat. Upgrades are lower (4-5%) in outer years to reflect a step-up in costs to accelerate growth.

The Neutral rating is unchanged and the target price is increased to $125 from $121.30.

Target price is $125.00 Current Price is $123.50 Difference: $1.5
If XRO meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $104.49, suggesting downside of -14.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: -0.2

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

Credit Suisse rates XRO as Neutral (3) -

Xero's first-half result shows growth in subscribers and revenue to be close to Credit Suisse's expectations although the broker points out the large operating income beat was due to lower sales & marketing costs.

In the broker's view, the business trades on its robust valuation multiple due to the top-line opportunity rather than near-term profitability. Investors would do well to temper enthusiasm for the profit outcome, advises Credit Suisse.

Noting the business is fairly valued, Credit Suisse retains its Neutral rating with the target raised to $119 from $111.

Target price is $119.00 Current Price is $123.50 Difference: minus $4.5 (current price is over target).
If XRO meets the Credit Suisse target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $104.49, suggesting downside of -14.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: -0.2

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

Macquarie rates XRO as Neutral (3) -

Xero's first-half result showed revenue at the group level in-line with the broker's forecast, with Australia faring better than expected. The US and Rest of World (ROW) regions were more subdued on account of covid-19.

Macquarie notes the strong operating income and free cash flow performance demonstrate Xero's ability to manage costs in a challenging environment.

Led by potential pressure on subscriber growth and average revenue per user, the broker considers the near-term outlook uncertain. 

Macquarie retains its Neutral rating with target rising to $115.93 from $85.

Target price is $115.93 Current Price is $123.50 Difference: minus $7.57 (current price is over target).
If XRO 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 $104.49, suggesting downside of -14.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: -0.2

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

Morgan Stanley rates XRO as Overweight (1) -

Despite a challenging covid-19 backdrop for SMEs, Morgan Stanley notes Xero's first-half growth slowdown was less than feared. The company delivered 21% growth in revenue. The operating income and cash flows were also slightly ahead of expectations.

The key question now, says the broker, is if the company will see an acceleration in subscribers in the second half. The broker is inclined to answer in the affirmative.

Morgan Stanley retains its Overweight rating with a target price of $100. Industry view: Attractive.

Target price is $100.00 Current Price is $123.50 Difference: minus $23.5 (current price is over target).
If XRO meets the Morgan Stanley target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $104.49, suggesting downside of -14.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: -0.2

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

Ord Minnett rates XRO as Lighten (4) -

Xero reported a first-half FY21 underlying net profit of NZ$34.5m, significantly ahead of Ord Minnett’s forecast. The strong result was considered somewhat of a by-product of covid-19.

First half revenue and subscribers were 2% ahead of the broker's forecast. Net additions largely surprised on the upside, due to Australia, as international markets came in below the expectation of the analyst.

Ord Minnett highlights sales and marketing expenses fell sharply, resulting in a strong boost to profits and cash. It was also considered pleasing the company managed to grow in all regions.

The Lighten rating is unchanged and the target increased materially to $90 from $60, as Ord Minnett rolls the forecasting model forward to September 2021. This target price increase is due to a reduction in the weighted average cost of capital (WACC) assumption.

Target price is $90.00 Current Price is $123.50 Difference: minus $33.5 (current price is over target).
If XRO meets the Ord Minnett target it will return approximately minus 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $104.49, suggesting downside of -14.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: -0.2

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

UBS rates XRO as Sell (5) -

The biggest surprise in Xero's consensus-beating result, the broker suggests, was the extent of temporary cost benefits. But net additional subscribers also handsomely beat the broker's forecast.

Virus uncertainty meant management provided no trading commentary or guidance, and while the broker has upgraded its FY21 earnings forecast by 80%, it warns there is inherent uncertainty is this number.

Target rises to $77 from $72, but this is still well below the current share price. Sell retained.

Target price is $77.00 Current Price is $123.50 Difference: minus $46.5 (current price is over target).
If XRO meets the UBS target it will return approximately minus 38% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $104.49, suggesting downside of -14.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: -0.2

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