Australian Broker Call

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

The CEO has highlighted the robust and growing revenue, operating leverage and a strong balance sheet. Morgans revises its forecasts to align with the company's expectations. This results in around 2% upgrades to FY19-20 forecasts.

As well as a change in valuation methodology, this lifts the target to $1.60 from $1.37. The broker upgrades to Add from Hold given the positive momentum being generated.

Target price is $1.60 Current Price is $1.47 Difference: $0.135
If CWY meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $1.43, suggesting downside of -1.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Credit Suisse rates GNC as Outperform (1) -

Credit Suisse expects a downgrade to east coast production when ABARES publishes its crop update this week. Lower crop production in NSW and southern Queensland would suggest little or no grain exports through Newcastle and Port Kembla in 2018 and grain moving north from Victoria to satisfy feed requirements.

The broker suggests a near-term seasonal downgrade probably presents an opportunity in the stock, which is trading towards the lower end of its typical trading range.

Outperform. Target is $9.42.

Target price is $9.42 Current Price is $8.40 Difference: $1.02
If GNC meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $9.84, suggesting upside of 15.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.4

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

Deutsche Bank rates MQG as Hold (3) -

Macquarie Group has reiterated FY18 guidance to be broadly aligned with FY17. Deutsche Bank envisages a stronger outlook, based on the commentary regarding the higher performance fees that are expected for the year.

FY18 forecasts are upgraded by 3%. The broker acknowledges performance fees are volatile and arguably non-recurring.

With the stock now trading in line with the major banks, the broker retains a Hold rating. Target is reduced to $89.50 from $90.70.

Target price is $89.50 Current Price is $85.18 Difference: $4.32
If MQG meets the Deutsche Bank target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $89.09, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

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

Morgan Stanley notes strong earnings guidance for the first half, which implies around 10% growth year-on-year. The broker suspects the unchanged FY18 guidance of "broadly in line" with FY17 appears increasingly conservative.

Equal-weight rating and In-Line industry view retained. Target is raised to $91 from $85.

Target price is $91.00 Current Price is $85.18 Difference: $5.82
If MQG meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $89.09, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Morgans rates MQG as Hold (3) -

The group provided an update in conjunction with an offshore investor presentation. FY18 guidance has been reaffirmed to be broadly in line with FY17.

Morgans suggests the group is tracking ahead of guidance at this stage and FY18 estimates for earnings per share are lifted by 1.5%.

The broker likes this story, in the longer term, given the strong position in niche business areas but retains a Hold rating, not envisaging quite enough upside in the stock as yet given a more challenged near-term growth profile. Target is reduced to $93.15 from $94.40.

Target price is $93.15 Current Price is $85.18 Difference: $7.97
If MQG meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $89.09, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

UBS rates MQG as Upgrade to Buy from Neutral (1) -

Macquarie Group has signalled that, as a result of stronger performance fees to be recognised in the first half, results are likely to be above the prior corresponding half and broadly aligned with the second half of FY17.

Following the update, UBS upgrades FY18 forecasts by 3% and expects net profit growth of 6.4%. As the shares have pulled back, the broker upgrades to Buy from Neutral.

Although the revenue outlook remains subdued, the broker continues to expect upside as operating leverage is delivered. Target is $91.

Target price is $91.00 Current Price is $85.18 Difference: $5.82
If MQG meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $89.09, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Ord Minnett rates PPH as Buy (1) -

Ord Minnett expects the upcoming second quarter will be solid and following a successful US$25m placement, the company is now executing its sales and marketing pivot to larger churches.

The broker expects the company can achieve 11%, 33% and 4% quarter-on-quarter growth in value over the next three quarters, respectively. Buy rating retained. Target is reduced to $2.38 from $2.52.

Target price is $2.38 Current Price is $1.92 Difference: $0.465
If PPH meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

UBS rates QBE as Buy (1) -

UBS understands, relative to Hurricane Harvey, wind losses from Hurricane Irma are likely to be a component of losses than flooding, although storm surge is the next collating concern.

The broker understands that QBE has negligible motor and traditional home-owner market share across Florida but does write 2.1% of policies in the commercial residential property market. QBE has less than 1% share of commercial, motor and home-owner insurance in Texas but does have around 3% share of multi-peril crop insurance.

The broker does not believe the immediate impact from these two hurricanes will be a concern, but does note two significant hits increase the risk that events later in the year could fully utilise the aggregate. The broker retains a Buy rating and $12.20 target.

Target price is $12.20 Current Price is $10.26 Difference: $1.94
If QBE meets the UBS target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $11.64, suggesting upside of 10.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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

Macquarie rates SIQ as Outperform (1) -

The company has acquired RACV Salary Solutions for $27m and Aspire for $5.6m. These businesses provide salary packaging administration and novated leasing services.

Macquarie observes the two acquisitions complement the company's existing footprint and have been acquired on attractive financial terms. The broker upgrades 2018 estimates by 12.9%. Outperform retained. Target is raised to $9.90 from $8.82.

Target price is $9.90 Current Price is $9.15 Difference: $0.75
If SIQ meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $9.03, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.8

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

Morgans rates SIQ as Add (1) -

The company has acquired RACV Salary Solutions and Aspire Benefits Management. Both businesses operate in the salary packaging/novated leasing sector. Before integration costs, the company expects acquired operating earnings of $12m.

Morgans observes, in addition, the company is delivering solid organic growth via scale benefits.

Revenue synergies from recent acquisitions provide some upside risk. Execution risk is expected to be relatively low given the company's track record. Add rating retained. Target is raised to $9.80 from $8.35.

Target price is $9.80 Current Price is $9.15 Difference: $0.65
If SIQ meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $9.03, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.8

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

Ord Minnett rates SIQ as Initiation of coverage with Accumulate (2) -

Ord Minnett initiates coverage with the Accumulate rating and $9.60 target. The broker's investment case is based on the company's market leadership in its core business, with around 34% of market share in externally-managed salary packaging in Australia.

The business also boasts a high tender win rate and a track record of value-accretive acquisitions. Ord Minnett anticipates organic growth will come via new tenders and increase in penetrating the existing employer client workforce.

Target price is $9.60 Current Price is $9.15 Difference: $0.45
If SIQ meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $9.03, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.8

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

Ord Minnett rates SXY as Initiation of coverage with Buy (1) -

Ord Minnett initiates coverage with a Buy rating and $0.39 target. Growth within the Western Surat gas project and the company's new Queensland land tenements are expected to result in production increasing more than sixfold by 2021.

The main risk is around execution, in the broker's opinion, with up to 90% of estimated value coming from the Surat Basin tenements where the company is yet to commence production.

This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.

Target price is $0.39 Current Price is $0.32 Difference: $0.067
If SXY meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $0.36, suggesting upside of 17.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.7

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

Deutsche Bank rates TAH as Buy (1) -

Along with the scheme booklet, the company has provided an update on the proposed merger with Tatts ((TTS)). The parties are currently awaiting a Federal Court decision. The synergy target has been reiterated.

Tabcorp continues to expect the transaction to deliver wagering improvements from optimising the performance of UBET's fixed odds.

Buy rating retained. Target is $5.20.

Target price is $5.20 Current Price is $4.17 Difference: $1.03
If TAH meets the Deutsche Bank target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $4.51, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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