Australian Broker Call

Morgan Stanley rates 3PL as Overweight (1) -

The IXL scheme of arrangement was voted down.

Subsequently, 25% shareholder Viburnum put forward a proposal whereby 3P Learning would acquire its longtime product partner Blake eLearning for $188m. If successful the transaction is due to complete March 22, 2021.

The transaction would result in 3P Learning shareholders owning 53% of a group with an implied valuation of around $360m.

Viburnum estimates pro forma FY21 revenue of $114m and pro forma earnings (EBIT) of $38m before cost synergies of $10m.

The broker maintains its Overweight rating with a target price of $1.50. Industry view: In-line.

Target price is $1.50 Current Price is $1.38 Difference: $0.12
If 3PL meets the Morgan Stanley target it will return approximately 9% (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 ALX as Downgrade to Neutral from Outperform (3) -

Atlas Arteria has surprised with a traffic update outside the quarter. Traffic has collapsed as expected due to the re-lockdown in France, but not as fas as Macquarie expected. Truck traffic remained largely unaffected.

The numbers are positive for dividend expectations but do not change the broker's earnings forecast of a strong rebound out of the virus impact. As this is captured in the share price, Macquarie downgrades to Neutral from Outperform.

Target falls to $6.68 from $6.73 on currency adjustments.

Target price is $6.68 Current Price is $6.73 Difference: minus $0.05 (current price is over target).
If ALX 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 $6.87, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

UBS rates ALX as Neutral (3) -

In the first two weeks since France entered nationwide lockdown, traffic has been down to around half of what it was during late March and April.

Heavy vehicle traffic has held up and, hence, UBS estimates heavy vehicles are down around -5% and light vehicles down around -50%.

A slow recovery has continued in Virginia although the growing number of coronavirus cases and restrictions regarding mass gatherings makes UBS suspect it will be protracted.

Forecasts assume Dulles Greenway traffic declines -20% in the December quarter. UBS has a Neutral rating on review with a target of $6.10.

Target price is $6.10 Current Price is $6.73 Difference: minus $0.63 (current price is over target).
If ALX meets the UBS target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.87, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

UBS rates AMA as Buy (1) -

The divestment of ACAD allows the business to focus on panel repair consolidation. UBS considers the multiple received for the sale was on the low side but strategically the transaction made sense.

The broker believes the second half of FY21 will be key in assessing the operating earnings margin potential of the panel repair business.

Valuation remains appealing and the broker has a Buy rating. Target is raised to $0.86 from $0.80.

Target price is $0.86 Current Price is $0.76 Difference: $0.1
If AMA meets the UBS target it will return approximately 13% (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 AMI as Buy (1) -

In an effort to allay investor confusion associated with the Dargues transaction, Ord Minnett emphasises the acquisition is good value and there is considerable upside compared to previous conservative assessments of the asset.

The broker reiterates a Buy rating and raises the target to $0.85 from $0.70.

Target price is $0.85 Current Price is $0.43 Difference: $0.42
If AMI meets the Ord Minnett target it will return approximately 98% (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

Citi rates AX1 as Upgrade to Buy from Neutral (1) -

The update from the AGM has signalled roll-out prospects are better than Citi had anticipated. The business is expected to be a beneficiary of more people going out and about.

Moreover, the broker highlights there is limited exposure to markets with significant disruption from the pandemic and a material growth opportunity in high-margin vertical accessories.

Rating is upgraded to Buy from Neutral and the target raised to $2.09 from $1.60.

Target price is $2.09 Current Price is $1.90 Difference: $0.19
If AX1 meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $1.98, suggesting upside of 0.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Morgan Stanley rates AX1 as Overweight (1) -

Morgan Stanley sees upside for earnings in the wake of a positive trading update by Accent Group. It's considered this will likely come from continued strong sales growth and an expanded store roll-out. 

Sales growth (excluding Auckland and Victoria) was up 15.7% for the first 20 weeks of FY21.

Management is on track to open around 80 stores versus the last target of around 40.

Overweight rating. Target is $2.00. Industry view: In-line.

Target price is $2.00 Current Price is $1.90 Difference: $0.1
If AX1 meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $1.98, suggesting upside of 0.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Morgans rates AX1 as Hold (3) -

Morgans upgrades forecasts for Accent Group by around 5% on a higher projected store rollout by management.

Sales growth (excluding Victoria) was up 15.7% for the first 20 weeks of FY21.

The broker believes attractive rental deals, along with a good performance from recently-opened stores have likely contributed to the extra store rollout.

The Hold rating is unchanged and the target increased to $1.86 from $1.67.

Target price is $1.86 Current Price is $1.90 Difference: minus $0.04 (current price is over target).
If AX1 meets the Morgans target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.98, suggesting upside of 0.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Morgan Stanley rates BHP as Overweight (1) -

BHP Group held a commercial round-table which addressed a wide range of topics from near-term demand trends to long-term expectations for the company's core commodities. These included iron ore, coal, and oil products.

Morgan Stanley notes Chinese demand is in a plateau phase. This is considered likely to continue through the middle of the current decade and be followed by a decline. Iron ore demand should under-perform steel production growth given the rising role of scrap in the mix.  

Also, the oil market is still in a recovery mode with an anticipated return to 2019 demand levels. This will likely be followed by very modest demand growth, with a plateau to be reached some time between 2025 and 2035.

Overweight rating is retained with a target price of $40.4. Industry view: Attractive.

Target price is $40.40 Current Price is $36.14 Difference: $4.26
If BHP meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $40.72, suggesting upside of 9.6% (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

Ord Minnett rates CAJ as Accumulate (2) -

Ord Minnett assesses the diagnostic imaging industry has defensive qualities that are appealing for the longer term but the nature of the pandemic means volumes were not immune to declines, of up to -50% in some regions.

Still, the rebound has been swift and consolidation continues. Capitol Health continues to be active, with the acquisition of Direct Radiology. Ord Minnett retains an Accumulate rating and raises the target to $0.30 from $0.28.

Target price is $0.30 Current Price is $0.28 Difference: $0.02
If CAJ meets the Ord Minnett target it will return approximately 7% (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

Morgan Stanley rates CBA as Underweight (5) -

APRA has announced that it will reduce Commonwealth Bank's operational risk overlay. This is given the progress on governance, accountability and risk culture frameworks and practices via its Remedial Action Plan.

Half of the May 2018 capital add-on of around $1bn or circa $12.5bn of risk weighted assets (RWA) will be removed.

This adds around 17 basis points to CET1 capital and lifts the proforma ratio to approximately 12.5%, which implies around $9bn of surplus above the "unquestionably strong" benchmark of 10.5%.

Morgan Stanley expects investors to increasingly focus on the potential for a large buyback with the FY21 or first half FY22 result.

The Underweight rating and target price of $68.50 are unchanged.  Industry view: In-line.

Target price is $68.50 Current Price is $80.00 Difference: minus $11.5 (current price is over target).
If CBA meets the Morgan Stanley target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $69.86, suggesting downside of -12.4% (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 CBA as Hold (3) -

The Australian Prudential Regulation Authority will reduce the $1bn capital add-on applied to Commonwealth Bank by -$500m. This is in response to the bank's progress in addressing concerns over governance and accountability.

Ord Minnett assesses this provides options for capital management. It results in a further increase in the CET1 ratio of 17 basis points, lifting the pro forma ratio to 12.5%.

The broker suspects Commonwealth Bank will be the first major bank to announce capital management post the pandemic. Hold maintained. Target rises to $74.70 from $65.80.

Target price is $74.70 Current Price is $80.00 Difference: minus $5.3 (current price is over target).
If CBA meets the Ord Minnett target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $69.86, suggesting downside of -12.4% (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 CCX as Upgrade to Buy from Neutral (1) -

In its update, City Chic has noted 18.7% comparable growth in sales, excluding the Victorian stores which were closed. Citi expects Australian online sales were likely up more than 50%.

Citi forecasts a -150 basis points decline in gross margin for the City Chic brand and envisages the company will also invest in marketing Avenue.

The company plans a new website in Australia, targeting a lower price point and more conservative fashion style. This will leverage the Avenue range.

Rating is upgraded to Buy from Neutral, as the broker detects improving momentum, and the target is steady at $3.20.

Target price is $3.20 Current Price is $2.70 Difference: $0.5
If CCX meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $3.68, suggesting upside of 30.6% (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

Macquarie rates CCX as Outperform (1) -

City Chic Collective's AGM revealed solid first half sales growth to date of 7.9%, or 18.7% ex-Victoria store closures. Strong momentum in A&NZ online has continued, the broker notes, and Avenue in the US has traded well during election disruption.

The company continues to survey potential M&A opportunities and the broker retains Outperform and a $4.30 target.

Target price is $4.30 Current Price is $2.70 Difference: $1.6
If CCX meets the Macquarie target it will return approximately 59% (excluding dividends, fees and charges).

Current consensus price target is $3.68, suggesting upside of 30.6% (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 CCX as Overweight (1) -

Morgan Stanley notes a positive trading update for City Chic Collective, ahead of the broker's expectations.

Comparable sales growth for the first 20 weeks of FY21 were up 18.7% (excluding Victoria).

Gross margins were still down but improving, explains the analyst.

The  Overweight rating is unchanged. Target is $3.55. Industry view is In-line.

Target price is $3.55 Current Price is $2.70 Difference: $0.85
If CCX meets the Morgan Stanley target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $3.68, suggesting upside of 30.6% (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 CGF as Outperform (1) -

Credit Suisse increases its valuation for the life business to reflect the potential growth opportunity in the annuity market. The broker reiterates an Outperform rating and raises the target to $6.00 from $4.90.

The broker notes encouraging signs of book growth, a recovery in margins in the second half and a free option on regulatory support amid a strong capital position.

Target price is $6.00 Current Price is $5.27 Difference: $0.73
If CGF meets the Credit Suisse target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $4.67, suggesting downside of -13.3% (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 CSL as Equal-weight (3) -

The gene therapy company UniQure announced positive data from its Phase III HOPE-B gene therapy trial. This is a gene therapy for the treatment of patients with haemophilia B for which CSL has obtained exclusive global rights to develop and commercialise.

Morgan Stanley calculates upside for CSL by assuming a successful launch and 10% market share by FY25. The broker estimates this could generate US$270m in revenue by FY25 (pre-royalty) and lift EPS by around 4% in FY25.

The Equal-weight rating and $294 price target are unchanged. Industry view: In-line.

Target price is $294.00 Current Price is $313.53 Difference: minus $19.53 (current price is over target).
If CSL 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 $316.67, suggesting downside of -0.3% (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: 0.4

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

Morgan Stanley rates DHG as Overweight (1) -

Morgan Stanley remains bullish on the Australian real estate advertising market, due to positive cyclical and structural factors. Accordingly, the broker lifts the EPS forecast for FY22 and FY23 by 17% and 20%, respectively.

While REA Group ((REA)) has been the broker's high-conviction pick, Domain Holdings is suggested to investors wanting maximum, concentrated, high-beta exposure to the Sydney and Melbourne real estate cycle.

The analyst calculates the company offers around twice the EPS leverage to the Australian real estate recovery versus REA Group.

Note: The analyst warns it depends on your appetite for risk and high leverage can cut both ways.

The Overweight rating is unchanged. The target price is increased to $4.90 from $3.40. Industry view is Attractive. 

Target price is $4.90 Current Price is $4.41 Difference: $0.49
If DHG meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $4.44, suggesting upside of 0.6% (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

UBS rates GUD as Neutral (3) -

GUD Holdings will acquire AMA Group's ((AMA)) automotive components and accessories division (ACAD) for $70m, to be funded by an institutional placement and share purchase plan.

UBS considers the business is a strong strategic fit within the GUD portfolio and will provide diversification benefits.

The broker updates operating assumptions, incorporating the acquisition and incremental trading update and forecasts $40m in revenue in the second half and a 17% incremental margin. Neutral rating and $12.50 target retained.

Target price is $12.50 Current Price is $11.85 Difference: $0.65
If GUD meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $12.95, suggesting upside of 5.7% (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 IAG as Downgrade to Neutral from Buy (3) -

Citi assesses the company is now conservatively provisioned after its capital raising. The perception that Insurance Australia is a quality play in the sector is somewhat dented, in the broker's view.

Estimates for earnings per share are reduced for FY21 by -102% to allow for new business interruption provisioning and the equity raising. Citi downgrades to Neutral from Buy and lowers the target to $5.70 from $6.25.

Target price is $5.70 Current Price is $5.46 Difference: $0.24
If IAG meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $5.72, suggesting upside of 11.3% (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 IAG as Outperform (1) -

Insurance Australia Group has shifted $856m into a Business Interruption claims provision and announced a $750m capital raise to fund it. Ahead of the test case that has left insurance companies liable, the stock was trading at a -20% discount to long term averages.

Investors had feared such an outcome, the broker notes, but the capital raise is actually less than -20% and Macquarie suggests the unwinding of this discount will outweigh the dilution of the raising. The dividend is nevertheless in question.

Target falls to $5.30 from $5.50, Outperform retained.

Target price is $5.30 Current Price is $5.46 Difference: minus $0.16 (current price is over target).
If IAG meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.72, suggesting upside of 11.3% (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 IAG as Overweight (1) -

Insurance Australia Group is taking a total post-tax, post quota share (QS) provision of -$865m. Morgan Stanley estimates that the pre-tax of 30%, pre-quota share reinsurance protection of 32.5%, provision is -$1.83bn.

The broker believes investors will be surprised at the size of the provision, given the risk was well known. When combined with a softer first quarter underlying margin, the analyst considers a de-rating risk is possible.

Morgan Stanley advises the provision may prove to be conservative, given it also allows for prevention of access, but this will not be clear for some time.

Overweight. Target is $6.50. Industry view: In-line.

Target price is $6.50 Current Price is $5.46 Difference: $1.04
If IAG meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $5.72, suggesting upside of 11.3% (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

Ord Minnett rates IAG as Hold (3) -

The company intends to raise up to $750m in new capital for significant increases to business interruption provisions.

Ord Minnett believes this has likely removed business interruption as an issue and shifted the balance towards conservatism and possible capital releases in the future.

The broker maintains a Hold rating and raises the target to $5.10 from $5.08.

Target price is $5.10 Current Price is $5.46 Difference: minus $0.36 (current price is over target).
If IAG meets the Ord Minnett target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.72, suggesting upside of 11.3% (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

Ord Minnett rates IDX as Buy (1) -

Ord Minnett assesses the diagnostic imaging industry has defensive qualities that are appealing for the longer term but the nature of the pandemic means volumes were not immune to declines, up to -50% in some regions.

Still, the rebound has been swift and consolidation continues. The broker expects Integral Diagnostics will play at the top end of the market.

Buy rating retained. Target rises to $4.73 from $4.63.

Target price is $4.73 Current Price is $4.29 Difference: $0.44
If IDX meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $4.78, suggesting upside of 9.9% (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

Morgans rates JHC as Hold (3) -

Recent AGM commentary pointing to difficult conditions in the last quarter, leads Morgans to lower FY21 forecasts on lower occupancy estimates.

After recent takeover activity in the sector, the broker notes two changes to substantial shareholders. Former founder and CEO Andrew Sudholz has increased ownership to 8.1% (was 6.0%) and Aurrum Holdings has become a substantial holder at 6.3%.

Morgans removes a -15% valuation discount and places a 15% premium to reflect potential corporate activity and increases the target price to $0.74 from $0.52.

The Hold rating is unchanged.

Target price is $0.74 Current Price is $0.79 Difference: minus $0.05 (current price is over target).
If JHC meets the Morgans target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.63, suggesting downside of -24.7% (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

Credit Suisse rates KGN as Neutral (3) -

Credit Suisse notes Kogan.com has been well-positioned in the context of household goods expenditure recently. The broker also suggests the medium-term growth story is intact because of the strong private-label offering and a growing product range.

The one issue is the extent to which above-trend growth reverses from the fourth quarter of FY21 and weakens sentiment for the stock. As a result, Credit Suisse retains a Neutral rating and reduces the target to $19.49 from $21.33.

Target price is $19.49 Current Price is $17.50 Difference: $1.99
If KGN meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

UBS rates KGN as Neutral (3) -

The trading update was solid but below UBS estimates. The broker assesses the business is robust for the longer term, with around 983,000 customers acquired during the pandemic.

Caution prevails because of margin normalisation as the lift in gross margin in the second half is not considered sustainable.

UBS is also cautious about valuation, believing the share price implies 19% online penetration in FY25 compared with 11% today. As bricks & mortar recovers partially and competition in online intensifies, customer acquisition costs are also expected to rise.

Neutral retained. Target is reduced to $18 from $22.

Target price is $18.00 Current Price is $17.50 Difference: $0.5
If KGN meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Ord Minnett rates LLC as Hold (3) -

Commentary from the AGM was cautious, Ord Minnett observes. Lendlease has flagged a skew to the second half because of the timing of realised profits from development. No explicit guidance was provided.

The planned sale of 25% of the retirement portfolio is in progress, which will reduce the company's interest to 50%. Ord Minnett suggests the company has stayed on message and retains a Hold rating. Target is $13.20.

Target price is $13.20 Current Price is $14.49 Difference: minus $1.29 (current price is over target).
If LLC meets the Ord Minnett target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.89, suggesting downside of -3.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Ord Minnett rates LYC as Buy (1) -

Ord Minnett suggests the fact Lynas Corp may not have been selected by the US Department of Defence for the Light RE tender is immaterial.

The broker continues to believe the stock can re-rate because of commodity price strength and several potential geopolitical catalysts.

The broker lifts earnings estimates by 7% and retains a Buy rating with the target increased to $4.20 from $4.05.

Target price is $4.20 Current Price is $3.38 Difference: $0.82
If LYC meets the Ord Minnett target it will return approximately 24% (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

Morgans rates MX1 as Add (1) -

Morgans notes Micro-X has outlined four platforms for growth, underpinned by the company’s x-ray technology. They are mobile x-ray, back scatter imager, airport self-service checkpoint and CT brain scanner.

Management believes the technology has a five year competitive window to secure a leading position in each of these market segments.

The distribution agreement with Carestream has been amended to be non-exclusive, providing the company with additional channels to sell through.

Morgans makes no changes to forecasts and the increase in price target to $0.50 from $0.32, results from an adjustment to financial modelling assumptions.

The Speculative Buy rating is unchanged.

Target price is $0.50 Current Price is $0.34 Difference: $0.16
If MX1 meets the Morgans target it will return approximately 47% (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

Morgan Stanley rates NEC as Overweight (1) -

The Australian corporate regulator, the ACCC, is developing a mandatory code of conduct to address the bargaining power imbalances between Australian news media businesses and digital platforms, specifically Google and Facebook.

Morgan Stanley highlights a key outcome may be to require the digital platforms to explicitly make some payment for local news content shown on Google Search and Facebook News Feed.

The broker's base case assumes Nine Entertainment receives an incremental $0-30m net revenue stream in perpetuity. The code is expected to be legislated on December 10.

Overweight rating is retained. The target price is increased to $2.70 from $2.40. Industry view: Attractive.

Target price is $2.70 Current Price is $2.37 Difference: $0.33
If NEC meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $2.62, suggesting upside of 9.6% (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 ORI as Neutral (3) -

Credit Suisse notes disappointment with FY21 guidance relative to expectations heading into the results. There were few surprises in aggregate with EBIT of $605m in the middle of guidance.

The broker acknowledges Orica has taken steps to mitigate its exposure to thermal coal, although the company appears to consider the issue mainly as a China-Australian trade concern.

Credit Suisse notes the NSW market is short ammonium nitrate so this is likely to provide strength for Orica's position even in a declining thermal coal market.

The stock appears fairly priced and the broker retains a Neutral rating, reducing the target to $15.91 from $16.41.

Target price is $15.91 Current Price is $16.28 Difference: minus $0.37 (current price is over target).
If ORI meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.32, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in September.

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 ORI as Outperform (1) -

Orica's FY20 profit missed the broker on interest charges but earnings were in line with guidance. North America disappointed but other areas performed relatively well, the broker notes, and the Burrup development is tracking to plan.

The broker has cut its target to $19.00 from $19.25 but retains Outperform on leverage to a global economic recovery post-covid and an expectation Orica will be a beneficiary of the shift back to value and cyclicals.

Target price is $19.00 Current Price is $16.28 Difference: $2.72
If ORI meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $18.32, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in September.

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 ORI as Equal-weight (3) -

Morgan Stanley forecasts anticipated first half FY21 earnings (EBIT) growth. This is now considered unlikely in the wake of reported FY20 results, where operating cash flow disappointed the broker.

In order to meet consensus FY21 expectations, the analyst warns second half FY21 growth would need to exceed 25% versus the previous corresponding period.

Company guidance is for first half FY21 earnings to be lower than the previous corresponding period, but earnings growth at the full-year.

Equal-weight maintained. Target is unchanged at $19. Industry view is Cautious.

Target price is $19.00 Current Price is $16.28 Difference: $2.72
If ORI meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $18.32, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in September.

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

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

The FY20 result was in-line with guidance, with earnings particularly weak in the second half, notes Morgans.

Headwinds in emerging economies are flagged to persist into the first half FY21. Guidance for a strong second half onwards has the broker upgrading FY22 and FY23 forecasts.

With 16% upside to a target price of $18.95 (from $15.55), the broker upgrades to Add from Hold.

Target price is $18.95 Current Price is $16.28 Difference: $2.67
If ORI meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $18.32, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in September.

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

Ord Minnett rates ORI as Hold (3) -

FY20 underlying earnings were in line with Ord Minnett's forecasts. The main surprise was the weaker cash conversion because of receivables, which management expects will normalise before the end of the first half.

Management has outlined a path to growth, underpinned by more normal mine activity, incremental earnings from Burrup and the Exsa acquisition.

Ord Minnett factors the benefits into forecasts although remains conscious of the lacklustre performance over recent years. Hold maintained. Target is reduced to $16.50 from $17.00.

Target price is $16.50 Current Price is $16.28 Difference: $0.22
If ORI meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $18.32, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in September.

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 ORI as Buy (1) -

FYY20 earnings (EBIT) declined -9% and in line with guidance. Depressed global thermal coal prices drove a -13% drop in revenue from that market.

Orica expects organic ammonium nitrate volume growth of 1% in FY21. UBS is pleased Burrup is now operating at 85% and set to deliver the benefit of a full year of earnings.

The broker expects pricing pressure to be a headwind to Australian volumes, as 35% of contracts are due for re-negotiating.

Buy rating retained on valuation grounds and UBS forecasts earnings growth of 5-10% in FY21-22. Target is lowered to $19.40 from $20.25.

Target price is $19.40 Current Price is $16.28 Difference: $3.12
If ORI meets the UBS target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $18.32, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in September.

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

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

With the Oil Search share price having risen 47% this month, Morgans downgrades the rating to Hold from Add.

The broker warns of potential future funding constraints, which highlights the importance of being able to sell down the Alaskan interests to 36% from 51%.

At the same time the recent investor day illustrated to the analyst how much value the company has added to its Alaskan assets, while also raising concerns about PNG growth.

The target price of $3.65 is unchanged.

Target price is $3.65 Current Price is $3.54 Difference: $0.11
If OSH meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $3.61, suggesting downside of -2.5% (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: -0.1

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

Morgan Stanley rates REA as Overweight (1) -

Morgan Stanley has done a comparative analysis between Rea Group and Domain Holdings Australia ((DHG)). The broker sees both as out-performers versus the broader market and rates both as Overweight.

Overall, Morgan Stanley remains bullish on the Australian real estate advertising market, due to positive cyclical and structural factors. 

While REA Group has been the broker's high-conviction pick, Domain Holdings is suggested to investors wanting maximum, concentrated, high-beta exposure to the Sydney and Melbourne real estate cycle

Domain Holdings is more leveraged because REA Group is much larger and more diversified (international operations) and Domain Holdings also has higher debt to amplify any EPS impact.

The analyst calculates Domain Holdings offers around twice the EPS leverage to the Australian real estate recovery versus REA Group.

Note: The analyst warns it depends on your appetite for risk and high leverage can cut both ways.

Overweight rating. Target is $150. Industry view: Attractive.

Target price is $150.00 Current Price is $140.51 Difference: $9.49
If REA meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $123.05, suggesting downside of -12.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Macquarie rates SKO as Outperform (1) -

Serko's first half "result" brought unchanged cash-burn guidance of -NZ$2-4m per month on travel guidance of 40-70% pre-covid levels. The broker has looked further into the Bookings.com JV and is now more comfortable with the opportunity.

The broker estimates a possible $3/share and 50% of valuation. Near term catalysts include Melbourne coming out of lockdown, while medium term it depends on a vaccine re-opening Europe. Outperform retained, target rises to NZ$5.91 from NZ$5.51.

Current Price is $5.50. Target price not assessed.

Current consensus price target is $6.55, suggesting upside of 24.3% (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: 1.0

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

Ord Minnett rates SKO as Buy (1) -

First half results were slightly better than Ord Minnett expected. The broker was not surprised that the revenue from the traditional online booking business declined materially.

While this revenue stream will remain a core part of the business, successful execution of the Booking.com deal is considered key to future share price performance. Buy rating retained. Target rises to $6.55 from $6.42.

Target price is $6.55 Current Price is $5.50 Difference: $1.05
If SKO meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $6.55, suggesting upside of 24.3% (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: 1.0

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

Ord Minnett rates SYD as Lighten (4) -

Sydney Airport has indicated total passenger numbers declined -94% in October, with domestic down -93% and international down -97%.

Ord Minnett assumes domestic traffic recovers to be down -50% by the end of 2020 and international to be down -85%.

While the numbers may appear a little optimistic, the broker believes there is pent-up demand. Lighten rating and $6 target retained.

Target price is $6.00 Current Price is $6.81 Difference: minus $0.81 (current price is over target).
If SYD meets the Ord Minnett target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.01, suggesting downside of -13.1% (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

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

Virtus Health has noted a swift recovery across all geographies in the first quarter, which has resulted in revenue rising 19% on the previous corresponding period.

Morgans expects this level of growth to continue until December and then believes lockdowns overseas may result in some moderation.

The broker makes no changes to forecasts, while also considering future earnings upgrades are likely given positive comments by management.

The Add rating is downgraded to Hold from Add, due to a strong recent share price, and the target is increased to $5.31 from $4.34.

Target price is $5.31 Current Price is $5.51 Difference: minus $0.2 (current price is over target).
If VRT meets the Morgans target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.84, suggesting downside of -11.1% (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

UBS rates VRT as Buy (1) -

Virtus Health provided a strong trading update, flagging 19% revenue growth in the first quarter. Pre-tax profit rose 86% to $19m.

The pandemic-related restrictions impacted on the company's low-cost clinics while its full-service business grew ahead of the market.

UBS finds market growth remains elevated and believes management will continue to execute on efficiencies and de-leveraging initiatives.

Buy rating retained. Target rises to $5.70 from $4.10.

Target price is $5.70 Current Price is $5.51 Difference: $0.19
If VRT meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $4.84, suggesting downside of -11.1% (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