Australian Broker Call

Bell Potter rates A2M as Downgrade to Hold from Buy (3) -

Bell Potter ponders the potential impact on a2 Milk Co of a guidance downgrade by Synlait Milk ((SM1)), which was partly due to changes in infant milk formula orders.

Synlait Milk's issues may simply reflect restocking and destocking decisions on the part of a2 Milk around China's State Administration for Market Regulation (SAMR) re-registration, notes the analyst.

However, the broker decides to downgrade its rating for a2 Milk Co to Hold from Buy, not because of any issue for the company, but due to Bell Potter's higher forecasts relative to consensus.

After updating forecasts for cost of goods sold (COGS), currency and buyback adjustments, the broker's target falls to $6.80 from $7.65.

Target price is $6.80 Current Price is $5.95 Difference: $0.85
If A2M meets the Bell Potter target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $6.03, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Macquarie rates AGY as Outperform (1) -

Argosy Minerals' FY22 full-year result outpaced Macquarie's forecasts, the company reporting a loss that was roughly half that which the broker had expected, thanks to a stronger-than-expected profit share from its joint venture.

The company closed the year with a net cash balance of $36.6m.

Management reports the Rincon development is on schedule, with full ramp-up expected in the June quarter.

Outperform rating and 80c target price retained.

Target price is $0.80 Current Price is $0.40 Difference: $0.4
If AGY meets the Macquarie target it will return approximately 100% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates AKE as Outperform (1) -

Allkem has announced a 27% upgrade to its Olaroz resource estimate and Macquarie updates its base case forecasts accordingly.

The broker sharply increases ins resource option value for the mine but advises near-term group earnings and valuation are mostly unaffected.

Outperform rating and $17 target price retained.

Target price is $17.00 Current Price is $10.14 Difference: $6.86
If AKE meets the Macquarie target it will return approximately 68% (excluding dividends, fees and charges).

Current consensus price target is $16.12, suggesting upside of 39.8% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates AKE as Buy (1) -

Allkem management has reiterated its focus on growth, aiming to triple production in the coming two to three years, before doubling production again while vertically integrating downstream. While UBS does see some execution and timeline risk, it believes these factors are priced in.

The company has additionally increased the resource for Olaroz 27% to 21m tonnes, and focus at the asset is on bringing notional capacity to 42,500 tonnes per annum. 

The Buy rating and target price of $16.60 are retained.

Target price is $16.60 Current Price is $10.14 Difference: $6.46
If AKE meets the UBS target it will return approximately 64% (excluding dividends, fees and charges).

Current consensus price target is $16.12, suggesting upside of 39.8% (ex-dividends)

The company's fiscal year ends in June.

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 ALD as Outperform (1) -

Ampol's Lytton refinery has been closed for maintenance at its Fluidised Catalytic Cracking Unit, resulting in lower gasoline output for 40 days, but management does not expect consumers will be affected. Macquarie considers the fix to be relatively simple and unlikely to result in extensions.

The broker expects the situation offers Ampol an opportunity to optimise the outage and cuts Lytton's June-half earnings (EBIT) by -$58m to $295m. Meanwhile, management points to a strong start to 2023, thanks to good market conditions.

EPS forecasts fall -6% in 2023; are steady in 2024; and rise 3% in 2025.

Outperform rating retained. Target price is shaved to $39.45 from $39.50.

Target price is $39.45 Current Price is $29.87 Difference: $9.58
If ALD meets the Macquarie target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $35.27, suggesting upside of 14.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

UBS rates ALD as Buy (1) -

Ampol has suffered an unplanned outage causing operations to cease at the Lytton refinery. With an expected return to service in early May, the company has already guided to an earnings impact of between -$30m and -$50m, but UBS expects this impact can be absorbed by strong refining margins year to date. 

Anticipating  refining margins year-to-date are outperforming consensus estimates, UBS expects Ampol can deliver a beat at its April update. Further, the broker expects Ampol can secure additional earnings resilience through renegotiating fixed price fuel contracts in coming months. 

The Buy rating and target price of $37.00 are retained. 

Target price is $37.00 Current Price is $29.87 Difference: $7.13
If ALD meets the UBS target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $35.27, suggesting upside of 14.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Macquarie rates ALX as Neutral (3) -

Macquarie reports that the French government is planning to change concessions on its auto routes (APRR and AREA).

The broker assesses that this creates uncertainty for investors and might affect Atlas Arteria's ability to raise long dated debt if the approach affects dividends.

But while acknowledging the threat to valuation, Macquarie says the situation could offer a chance for the company to bring forward the concession re-tender, which would result in short-term earning losses being offset by a 20-year to 30-year concessions extension.

Neutral rating and $6.44 target price are retained.

Target price is $6.44 Current Price is $6.46 Difference: minus $0.02 (current price is over target).
If ALX meets the Macquarie target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.48, suggesting upside of 2.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

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

As the margin environment has become more challenging, Morgan Stanley lowers its EPS estimates for Bank of Queensland and reduces its target to $7.00 from 7.40. Cost growth is forecast to be greater than estimated at the start of 2023.

The broker points out the bank's mortgage growth has been below system, and its recent deposit rate increases have been less than the majors.

The Equal-weight rating is unchanged. Industry view: In-Line.

Target price is $7.00 Current Price is $6.40 Difference: $0.6
If BOQ meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $7.57, suggesting upside of 16.8% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.1

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

Macquarie rates FBU as Outperform (1) -

Macquarie expects New Zealand February building consents to show a sharp deterioration but Fletcher Building observes a strong capacity buffer in the country of roughly 30%.

Outperform rating and NZ$8 target price retained, the broker expecting a sharp retreat in the share price, combined  with strong FY24 guidance should underpin the company's share price from here.

Macquarie says the market appears to be factoring in a steeper fall than history would suggest (or a structural deterioration in the company's business) but sees no evidence of this.

Current Price is $3.98. Target price not assessed.

Current consensus price target is $5.25, suggesting upside of 28.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

This company reports in NZD. 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

Macquarie rates HAS as Outperform (1) -

Macquarie cuts its rare-earths price forecasts to reflect shifts in supply and demand and spot prices.

While observing strong headwinds, the broker expects demand could recover given restocking by magnet producers and improved consumption but that this demand was likely to be skewed to the December half. Macquarie also believes the market's response to Tesla's announcement to be unduly harsh.

Meanwhile, China has announced its first batch of 2023 rare-earths production quotas and Macquarie observes a 19% jump in mining quotas and an 18% rise in refining quotas, year on year. The broker expects the NdPr market will remain tight but advises unplanned mine disruptions or restocking by magnet producers could shift dynamics. 

Outperform rating and $3.60 target price retained for Hastings Technology Metals. 

Target price is $3.60 Current Price is $2.34 Difference: $1.26
If HAS meets the Macquarie target it will return approximately 54% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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

Macquarie rates ILU as Outperform (1) -

Macquarie cuts its rare-earths price forecasts to reflect shifts in supply and demand and spot prices.

While observing strong headwinds, the broker expects demand could recover given restocking by magnet producers and improved consumption but that this demand was likely to be skewed to the December half. Macquarie also believes the market's response to Tesla's announcement to be unduly harsh.

Meanwhile, China has announced its first batch of 2023 rare-earths production quotas and Macquarie observes a 19% jump in mining quotas and an 18% rise in refining quotas, year on year. The broker expects the NdPr market will remain tight but advises unplanned mine disruptions or restocking by magnet producers could shift dynamics. 

EPS forecasts for Iluka Resources fall -1% to -8% across FY23 to FY27.

Neutral rating retained. Target price falls -4% to $12.30.

Target price is $12.30 Current Price is $10.16 Difference: $2.14
If ILU meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $11.37, suggesting upside of 10.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

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

Citi likes land lease exposure given a secure CPI-linked income stream and strong medium-term growth potential via an ageing population. Such exposure is considered an attractive alternative when compared to other retirement products.

Hence, the broker initiates coverage on Ingenia Communities with a Buy rating. The company is Australia's leading provider of affordable manufactured housing (land lease) and holiday parks. 

Citi's US research team note US peers have between 5-10 times the number of current sites as Ingenia, which highlights to the domestic analysts significant growth potential for the industry.

Key risks include a weaker housing market and continued construction and supply-chain issues, caution Citi.

The broker sets a $4.40 target price.

Target price is $4.40 Current Price is $3.53 Difference: $0.87
If INA meets the Citi target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $4.31, suggesting upside of 20.3% (ex-dividends)

The company's fiscal year ends in June.

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

Bell Potter rates IRI as Upgrade to Buy from Hold (1) -

While no changes are made to forecasts, Bell Potter upgrades its rating for Integrated Research to Buy from Hold given the unchanged 65c target price suggests more than 50% upside to the latest share price.

As no trading update is expected until around mid-July, the broker points to a lack of catalysts to lift the share price in the interim.

Target price is $0.65 Current Price is $0.42 Difference: $0.23
If IRI meets the Bell Potter target it will return approximately 55% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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

Ord Minnett rates LAU as Buy (1) -

Ord Minnett sees a "vacuum of opportunity" within the refrigerated transport industry, following the announcement that Scott's Refrigerated Transport has entered into receivership. It estimates the company accounted for up to 10% of the industry.

The broker's analysis sees Lindsay Australia gaining a $40m revenue uplift in the coming fiscal year, as the next largest industry participant, while reports have suggested Lindsay may be considering acquiring some assets from Scott's.

The Buy rating is retained and the target price increases to $1.10 from $0.83.

Target price is $1.10 Current Price is $0.94 Difference: $0.165
If LAU meets the Ord Minnett target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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

Macquarie rates LYC as Outperform (1) -

Macquarie cuts its rare-earths price forecasts to reflect shifts in supply and demand and spot prices.

The broker expects demand could rise again in 2023 given restocking by magnet producers and improved consumption but that this demand was likely to be skewed to the December half. Macquarie also believes the market's response to Tesla's announcement to be unduly harsh.

Meanwhile, China has announced its first batch of 2023 rare-earths production quotas and Macquarie observes a 19% jump in mining quotas and an 18% rise in refining quotas, year on year. The broker expects the NdPr market will remain tight but advises unplanned mine disruptions or restocking by magnet producers could shift dynamics. 

EPS forecasts for Lynas Rare Earths fall -1% to -19% across FY23 to FY27.

Neutral rating retained. Target price falls to $6.80 from $8.10.

Target price is $6.80 Current Price is $6.36 Difference: $0.44
If LYC meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $7.77, suggesting upside of 18.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

Ord Minnett rates NUF as Accumulate (2) -

Nufarm has reported positive momentum has carried into the new year, with the company benefiting from favourable agricultural conditions across major grain-producing regions. Assuming normal seasonal conditions, the company expects to deliver modest underlying earnings growth in the fiscal year. 

Ord Minnett finds Nufarm remains undervalued by the market, despite the company increasingly being credited for growth potential. The broker sees Nufarm as a growth story, and expects further upside is to come. 

The Accumulate rating and target price of $7.50 are retained. 

Target price is $7.50 Current Price is $5.52 Difference: $1.98
If NUF meets the Ord Minnett target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $7.09, suggesting upside of 26.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Morgans rates PIQ as Speculative Buy (1) -

Proteomics International Laboratories has released promising study results, according to Morgans, on a potential new blood test diagnostic for endometriosis. Compared to existing diagnosis methods, the results are considered excellent.

The analyst points out the results still need to be confirmed in a larger independent setting prior to negotiating regulatory pathways and commercialisation.

The test measures the concentration of 14 biomarkers in the blood that could provide early screening to determine the need (or not) for invasive surgery in women.

The Add rating and $1.77 target are unchanged.

Target price is $1.77 Current Price is $0.89 Difference: $0.885
If PIQ meets the Morgans target it will return approximately 100% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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

Macquarie rates PMV as Outperform (1) -

Premier Investments FY23 interim result outpaced Macquarie's earnings (EBIT) forecasts by 15.3%, thanks to record sales, and management advises that trading to date and stock cycling from covid points to a strong July half as well.

The company finished the half with net cash of $401.4m.

Management announced its Smiggle rollout with plans to open 30 to 45 stores, and reiterated that its Peter Alexander expansion is on track.

EPS forecasts rise 19% in FY23; and FY24 EPS forecasts rise 6%.

Outperform rating retained. Target price rises to $30.50 from $29.

Target price is $30.50 Current Price is $24.70 Difference: $5.8
If PMV meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $26.92, suggesting upside of 3.2% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Morgan Stanley rates PMV as Overweight (1) -

Premier Investments remains Morgan Stanley's preferred pick under its coverage of the small cap Retail sector. This follows 1H results which beat consensus forecasts for sales and earnings by 5% and 6%, respectively.

A balance of $400m in net cash allowed the declaration of 70c in dividends, inclusive of a 16c special dividend.

Management noted strong trading momentum into the 2H, and the broker now sees scope for higher dividends and/or highly-accretive M&A activity.

The biggest highlight for the analysts was a return to a growth outlook due to a resumption of the store roll-out and intended offshore expansion for Peter Alexander.

The Overweight rating is unchanged and the target rises to $31 from $30.50. Industry view: In-Line.

Target price is $31.00 Current Price is $24.70 Difference: $6.3
If PMV meets the Morgan Stanley target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $26.92, suggesting upside of 3.2% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Ord Minnett rates PMV as Lighten (4) -

While the first half saw Premier Investments benefit from a rebound in demand for items including school bags and stationary, Ord Minnett continues to expect the company to suffer as sales across fashion and department store retailers to decline significantly over the second half.

The broker points out Smiggle was the company's strongest performing brand in the period, with sales up 30% year-on-year, while sales across the retailer's six apparel brands increased 15% but underperformed the market. 

The Lighten rating and target price of $19.00 are retained.

Target price is $19.00 Current Price is $24.70 Difference: minus $5.7 (current price is over target).
If PMV meets the Ord Minnett target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $26.92, suggesting upside of 3.2% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Shaw and Partners rates PMV as Buy (1) -

Shaw and Partners continues to find Premier Investments the best placed ASX-listed retailer to perform in the current environment, following the release of the company's first half result. Retail earnings in the period lifted 12.9% year-on-year, while total sales were up 17.6%. 

Further, the company has already flagged a solid start to its second half, particularly against strong comparables in the previous year. The company has highlighted a focus on global growth initiatives, including net store additions and increases to wholesale prices. 

The Buy rating is retained and the target price increases to $28.74 from $28.14.

Target price is $28.74 Current Price is $24.70 Difference: $4.04
If PMV meets the Shaw and Partners target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $26.92, suggesting upside of 3.2% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

UBS rates PMV as Neutral (3) -

While Premier Investments reported strong sales growth across its brands in the first half, UBS pinpoints 15.1% growth from Peter Alexander, 19.9% growth from Portmans, 14.3% growth from Just Jeans and 30.3% growth from Smiggle as highlights. 

The company has launched its multi-brand online platform in Australia, encompassing its seven brands, with the platform next expected to be rolled out in New Zealand. Further growth opportunity exists for the retailer in new store openings for both Peter Alexander and Smiggle.

The Neutral rating and target price of $26.00 are retained.

Target price is $26.00 Current Price is $24.70 Difference: $1.3
If PMV meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $26.92, suggesting upside of 3.2% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

UBS rates QUB as Neutral (3) -

February has seen the largest monthly decline in container volumes reported in the last twenty years, down -19% year-on-year across the four major ports. Botany led the decline, as noted by UBS, down -26%, while Melbourne declined -20%, Fremantle -17% and Brisbane -8%.

Within Qube Holdings' portfolio, UBS considers Patrick to be most exposed to volume-related risk, while Logistics should benefit from a more diverse end customer mix. 

The Neutral rating is retained and the target price decreases to $3.35 from $3.40.

Target price is $3.35 Current Price is $3.04 Difference: $0.31
If QUB meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $3.40, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in June.

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

Macquarie rates SIG as Neutral (3) -

Sigma Healthcare's FY22 full-year result appears to have disappointed Macquarie, the company registering a -2% market-share loss due to operational problems relating to the company's Enterprise Resource Planning system (now fixed).

Meanwhile, the company sold its low-margin, unprofitable WholeLife pharmacy brand, which Macquarie expects will free up $35m to $40m of cash; its third-party logistics business held the course and boasts growth prospects, and management upgraded FY24 earnings (EBIT) guidance by 48%.

EPS forecasts fall -52% in FY23 to reflect the weak result and the WholeLife sale.

Neutral rating retained. Target price eases -3% to $65c, Macquarie expecting HMC Capital's ((HMC)) takeover interest to provide near-term support.

Target price is $0.65 Current Price is $0.65 Difference: $0
If SIG meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $0.58, suggesting downside of -14.0% (ex-dividends)

The company's fiscal year ends in January.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.4

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

Bell Potter rates SM1 as Buy (1) -

Synlait Milk's underlying profit for the 1H was broadly in line with Bell Potter's forecast.

However, the broker's forecasts are lowered to reflect an elevated cost structure and a more protracted volume uplift in the new Pokeno customer, resulting in a $2.55 target down from $3.20.

Results included a NZ$10.5m year-on-year rise in inventory provisioning and NZ$8.5m in unrecovered nutritionals cost inflation, which the analysts expect will unwind in FY24.

Management guides to FY23 profit of between NZ$15-25m and expects a completion of the State Administration for Market Regulation (SAMR) re-registration for a2 Milk Co's Chinese labeled infant formula by the 4Q of FY23.

Target price is $2.55 Current Price is $2.18 Difference: $0.37
If SM1 meets the Bell Potter target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $2.55, suggesting upside of 25.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.3

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

Macquarie rates SM1 as Underperform (5) -

Synlait Milk's FY22 interim result met downgraded guidance and Macquarie advises the composition of FY23 challenges could result in an extension of the company's woes into FY24 and beyond.

Cost inflation, forecast weaker demand for a2 in 2024, delay of "Customer S" volumes until the June quarter, and higher interest costs, exacerbated by higher inventory, all took their toll.

While some normalisation is forecast in FY24, the broker expects the company will struggle to meet medium to long-term return on capital employed.

EPS forecasts rise 1% in FY23; fall -20% in FY24; and fall -10% in FY25.

Underperform rating retained. Target price falls to NZ$2.10 from NZ$2.61.

Current Price is $2.18. Target price not assessed.

Current consensus price target is $2.55, suggesting upside of 25.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.3

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

UBS rates SM1 as Buy (1) -

Synlait Milk's interim performance proved better than what UBS had penciled in with the broker referring to strong Ingredient stream returns countering higher SG&A (costs) and a lower gross profit from Nutritionals.

Management at the company had previously issued a profit warning. Price target NZ$5.30. UBS's forecasts imply the company will resume paying a dividend from next year (FY24) onwards.

Current Price is $2.18. Target price not assessed.

Current consensus price target is $2.55, suggesting upside of 25.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.3

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

Ord Minnett rates TNE as Lighten (4) -

While finding TechnologyOne to have shown relative strength in the face of weakness that has impacted the broader technology sector over much of the last year, Ord Minnett feels the current share price can only be justified with overly optimistic assumptions. 

The broker feels the valuation implies a 15% revenue growth rate over the next decade, a significant increase on the average 11% growth rate the company has achieved in the five years prior. Ord Minnett expects a more modest 12% compound annual growth rate can be achieved.

The Lighten rating is retained with a target price of $11.20.

Target price is $11.20 Current Price is $14.21 Difference: minus $3.01 (current price is over target).
If TNE meets the Ord Minnett target it will return approximately minus 21% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.18, suggesting downside of -7.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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