Australian Broker Call

Citi rates AAD as Buy (1) -

Upon incorporating weather throughout the key Christmas trading period, Citi analysts suggest the ducks are lining up favourably for Village Road Show, but not so much for Ardent Leisure.

And yet, the stockbroker's recommendations are reflecting the opposite view with the latter rated Buy versus only a Neutral for the former. Price target remains $2.15.

Target price is $2.15 Current Price is $1.49 Difference: $0.66
If AAD meets the Citi target it will return approximately 44% (excluding dividends, fees and charges).

Current consensus price target is $1.93

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Citi rates HLS as Neutral (3) -

Citi notes 15.93% shareholder Jangho has made a preliminary, non-binding indication it is willing to pay $3.25 for the remaining shares outstainding. Citi notes Jangho already acquired Vision Eye Care in Australia, plus it also owns equity in Monash IVF ((MVF)).

It is Citi's view that FIRB will likely hold the key to a successful acquisition of the company formerly known as Primary Health Care. Neutral rating retained.

Target price is $2.90 Current Price is $2.58 Difference: $0.32
If HLS meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $2.89, suggesting upside of 12.1% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Ord Minnett rates HLS as Accumulate (2) -

Chinese suitor Jangho, also the largest shareholder, has launched an unsolicited offer, some 33% above the previous closing share price and Ord Minnett thinks the move is surprising, so close to federal elections, when political sensitivities are high.

The offer is actually seen as a negative, given it is likely to impact on physician recruitment. Accumulate rating retained, alongside an unchanged price target of $3.20.

Target price is $3.20 Current Price is $2.58 Difference: $0.62
If HLS meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $2.89, suggesting upside of 12.1% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Macquarie rates IAG as Underperform (5) -

The broker has updated its modeling and the end result is that consensus forecasts for shareholders' dividends are seen as too high. In Macquarie's opinion, the upcoming dividend payout (for H1 FY19) will likely be the lowest since H1 FY12.

Macquarie is now anticipating a 12c payout in H1, and a total payout of 35c for the full year. The analysts also anticipate a higher catastrophe allowance in FY20. Underperform rating retained. Target $6.80 (unchanged).

Target price is $6.80 Current Price is $6.90 Difference: minus $0.1 (current price is over target).
If IAG meets the Macquarie target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.61, suggesting upside of 10.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Ord Minnett rates IAG as Hold (3) -

Not completely unexpected, the insurer has suffered large 1H19 perils losses from hailstorm events. However, it is Ord Minnett's view these are likely to be offset in 2H19 by stop-loss reinsurance recoveries. The share price response on the day is seen as an over-reaction to the market update.

The broker sees clear appeal on an absolute valuation assessment, but also points out it sees more appeal in QBE Insurance ((QBE)) and "even" Suncorp ((SUN)). Hold rating retained. Target price remains $7.10.

Target price is $7.10 Current Price is $6.90 Difference: $0.2
If IAG meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $7.61, suggesting upside of 10.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Macquarie rates JHC as Underperform (5) -

Macquarie is catching up on the fact that Japara Healthcare issued a profit warning when just about everyone was baking in the sun or trying to escape from it.

While earnings pressure is seen continuing ahead of the Royal Commission, the analysts also note the freshly secured debt facility of $345m provides additional balance sheet headroom for development and corporate opportunities.

FY19 EPS forecast guidance triggers a downgrade by -16.4% on Macquarie's assessment, followed by a -12.2% cut for FY20 forecast. Target price loses -23c to $1.10. The analysts believe risk for further downgrades remains. Underperform rating retained.

Target price is $1.10 Current Price is $1.14 Difference: minus $0.04 (current price is over target).
If JHC meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.35, suggesting upside of 18.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Ord Minnett rates JHC as Hold (3) -

Yep, another profit warning has ensued. Ord Minnett states it was not surprised. However, the analysts take some "encouragement" from the securing of a new debt facility on top of refundable accommodation deposit (RAD) inflows.

Amidst all the negative news slow, the analysts make a point of reminding investors the sector does have reasonable long-term prospects. Ord Minnett sees potential for share price upside, noting the Royal Commission will not deliver its final report until 2020.

Hold rating retained. Target price $1.25 (unchanged). Also, the analysts have left their modelling of the group’s expansion plans intact.

Target price is $1.25 Current Price is $1.14 Difference: $0.11
If JHC meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $1.35, suggesting upside of 18.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

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

The company's trading update didn't exactly excite, and that is putting it mildly, missing management's own expectations. Macquarie downgrades to Neutral from Outperform.

The analysts suggest macro uncertainty, NZ weather and retail competition in general are all impacting. Forecasts have been lowered. Target price slumps to $2.28 from $3.13.

Target price is $2.28 Current Price is $2.24 Difference: $0.04
If KMD meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $2.64, suggesting upside of 17.9% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY19:

Forecast for FY20:

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 ORE as Buy (1) -

The broker is playing catch up, noting Orocobre's quarterly update achievements were pretty much in line with expectations. The major exception has been a major miss for the realised price estimate, with the analysts arguing this has not been properly communicated or explained by the company.

As a result of this, Ord Minnett suggests investors are likely to keep the shares in the sin bin for the time being. The market needs to see more transparency and coherent messaging before a re-rating can occur, the analysts argue.

Buy rating retained with a price target of $6 (unchanged).

Target price is $6.00 Current Price is $3.25 Difference: $2.75
If ORE meets the Ord Minnett target it will return approximately 85% (excluding dividends, fees and charges).

Current consensus price target is $5.38, suggesting upside of 65.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Macquarie rates PLS as Outperform (1) -

The company has announced offtake partners, Ganfeng and Great Wall, will cornerstone the balance of funding for the Stage 2 expansion while a Stage 3 investigation is underway. Macquarie analysts point out strong demand from customers has led management at the company to commence an investigation into whether Stage 3 should add an extra 2.5Mtpa of processing capacity.

Macquarie has updated its modeling, including for the equity raising and subsequent dilution in addition to increased bond coupon payments, which results in a reduction for EPS forecasts in the order of -9%. Target price retained at $1.20 with reference to "positive longer-term demand indicators". Outperform.

Target price is $1.20 Current Price is $0.73 Difference: $0.47
If PLS meets the Macquarie target it will return approximately 64% (excluding dividends, fees and charges).

Current consensus price target is $1.08, suggesting upside of 47.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Macquarie rates SDA as Neutral (3) -

Macquarie is catching up on the company's profit warning issued on December 24th. At the same time, management announced the contract renewal by major customer Carnival, for another three years, with options for further extensions.

The analysts observe the energy sector segment also performed below expectations, also due to higher than expected industry churn. Macquarie analysts remain cautious of an expected offshore recovery given current oil price and volatility.

Price target falls to $3 from $5 previously on lowered expectations. Neutral rating retained.

Target price is $3.00 Current Price is $2.85 Difference: $0.15
If SDA meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $3.98, suggesting upside of 39.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.3

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

Macquarie rates SUN as Underperform (5) -

Macquarie has come to the conclusion that Suncorp is now likely cum downgrade at the next upcoming release of financial results. In particular the cash ROE target of 10% seems unachievable, suggest the analysts.

Not making things any rosier, Macquarie also believes the bankinsurer could be at risk of breaching its FY19 aggregate reinsurance cover, putting additional downside risk on current forecasts.

Marking to market for the first half revealed but operational headwinds. Macquarie seems positioned for more of the same. Underperform rating retained. Target price falls to $12.75 from $14.30.

Target price is $12.75 Current Price is $12.28 Difference: $0.47
If SUN meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $14.80, suggesting upside of 20.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Ord Minnett rates SUN as Hold (3) -

Ord Minnett has updated modeling for the banksinsurer, including for recent hailstorm claims in Sydney and a small reduction in sustainable margins for the insurance operations.

All in all, a better second half is anticipated. Hold rating retained, with the price target falling to $14.15 from $15.

Investors should note DPS forecasts have been lowered for both FY19 and FY20.

Target price is $14.15 Current Price is $12.28 Difference: $1.87
If SUN meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $14.80, suggesting upside of 20.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Citi rates VRL as Neutral (3) -

Upon incorporating weather throughout the key Christmas trading period, Citi analysts suggest the ducks are lining up favourably for Village Road Show, but not so much for Ardent Leisure.

And yet, the stockbroker's recommendations are reflecting the opposite view with the latter rated Buy versus only a Neutral for the former. Target left unchanged at $2.40.

Target price is $2.40 Current Price is $2.83 Difference: minus $0.43 (current price is over target).
If VRL meets the Citi target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.40, suggesting downside of -15.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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