Australian Broker Call

Credit Suisse rates 360 as Initiation of coverage with Outperform (1) -

Life360 operates a family-focused app focused on communication, location sharing, safety and driving. The business was founded in 2007 and had 18m monthly users as at end-2018. The user outlook is strong, the broker suggests, and user base is being increasingly monetised.

Losses in 2019 are expected to be greater than 2018 as the company invests in customer acquisition and R&D, but the broker sees the cost base as increasingly scalable and forecasts cash breakeven in 2021. Coverage initiated with an Outperform rating and a $5.20 target.

Target price is $5.20 Current Price is $3.88 Difference: $1.32
If 360 meets the Credit Suisse target it will return approximately 34% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

This company reports in USD. 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

Macquarie rates AOG as Underperform (5) -

Macquarie is not impressed with Aveo Group's weak trading update and limited reveal on the strategic review of its indicative bid. Net-profit-after-tax guidance misses the broker's FY19 forecast by -30%.

The broker notes that news the company intends changing its accounting treatment to recognise development on settlement rather than delivery is not a bad thing, but says the timing is interesting given the change will benefit Aveo Group's profit-and-loss statement provided the company sells down inventory.

Given the mounting headwinds, the broker believes that should a bid materialise at discount to net tangible assets, it may be a good thing for shareholders. Regardless of the outcome, the broker expects the stock to significantly underperform.

Macquarie cuts earnings per share -33%, -60% and -15% across FY19 to FY21. Target price falls to $1.61. Underperform rating retained.

Target price is $1.61 Current Price is $1.93 Difference: minus $0.32 (current price is over target).
If AOG meets the Macquarie target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.06, suggesting upside of 6.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.2

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

Morgans rates AOG as Hold (3) -

Aveo Group has issued net-profit-after-tax guidance -27% below consensus as weak housing conditions took their toll.

The profit warning was accompanied by news of changes to accounting treatment of development stock - timing of revenue recognition switches to settlement rather than delivery - and confirmation a confidential bid has been received.

Aveo Group confirms that it is continuing to negotiate with the bidder with a view to entering  a Scheme of Arrangement, and has set a deadline of July 22, 2019. Otherwise, Morgans notes the company's debt and gearing appear to be under control.

Hold rating retained. Target price falls to $1.81 from $1.95. Morgans notes the upside related to a bid could take the share price to $2.35 but notes significant downside risk if an offer fails to materialise.

Target price is $1.81 Current Price is $1.93 Difference: minus $0.12 (current price is over target).
If AOG 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 $2.06, suggesting upside of 6.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.2

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

Ord Minnett rates AOG as Accumulate (2) -

Ord Minnett notes the latest trading update revealed once more that residential conditions remained subdued, and this is affecting retirement settlement activity. In addition, talks with a potential suitor continue and the broker remains positive a transaction will emerge from this.

Ord Minnett continues to see "value" in the stock and expects this to be realised via an agreed all-cash offer. The broker maintains an Accumulate rating while the target remains at $2.75.

Target price is $2.75 Current Price is $1.93 Difference: $0.82
If AOG meets the Ord Minnett target it will return approximately 42% (excluding dividends, fees and charges).

Current consensus price target is $2.06, suggesting upside of 6.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.2

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

Ord Minnett rates AQZ as Buy (1) -

Ord Minnett judges the trading update as yet more evidence that this company's earnings are in an upswing. The analysts see the business as well-positioned while the relationship seems hunky dory with partner Virgin Australia ((VAH)).

Qantas ((QAN)) taking a 19.9% stake, subject to ACCC approval, further underscores the strategic value of the business, reason Ord Minnett analysts. Buy rating maintained. Target unchanged at $2.70.

Target price is $2.70 Current Price is $2.56 Difference: $0.14
If AQZ meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Deutsche Bank rates ASL as Buy (1) -

Ausdrill subsidiary Barminco has been awarded a five-year underground mining services contract in Botswana and subject to a financing deal being finalised by the client, which is expected, will commence work in December.

The broker views both the client and the project as sophisticated and well funded. Buy retained, target rises to $2.21 from $2.04.

Target price is $2.21 Current Price is $1.82 Difference: $0.39
If ASL meets the Deutsche Bank target it will return approximately 21% (excluding dividends, fees and charges).

Market Sentiment: 1.0

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

Ord Minnett rates CLH as Lighten (4) -

Collection House has announced the sale of a payment arrangement book to Balbec Capital for $25m. The company will book an after-tax profit on sale of the portfolio of $5.1m. Ord Minnett is not that enthusiastic about the deal, describing it as an expensive form of debt financing.

The analysts observe Collection House has deployed a lot of capital in H2 FY19 with market expectations skewed towards a large rise in FY20 earnings. The largest shareholder is still selling, however, and the analysts believe this will keep downward pressure on the share price.

Lighten rating maintained, while the price target declines to $1.20 from $1.25.

Target price is $1.20 Current Price is $1.21 Difference: minus $0.01 (current price is over target).
If CLH meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.5

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

Morgans rates CSL as Hold (3) -

CSL is moving to direct distribution into China after gaining its Good Supply Practice Licence through the acquisition of Guangzhou Junxin Pharmaceutical last year.

The initial focus will be on CSL's Albumin product, and mastering the direct distribution process - shipping to China, regulator release, contingency stock build and distribution channels - laying the pipeline for other products.

The broker says the move will strengthen CSL's control of its destiny in China and remove intermediary expenses and expects benefits to flow to shareholders in the long term, as establishment expenses and transition disruption bite in the short term.

Morgans reduces sales and profit forecasts, cutting -5% to -10% from net-profit-after-tax forecasts. Earnings forecasts ease to low single-digits (down -7.5% in FY20), compared with consensus forecasts in excess of 10%, to manage expectations heading into the August result.

Otherwise, the broker believes the share price to be fair but retains a Hold rating, waiting for a better entry point. Target price rises to $199.20 from $195.10.

Target price is $199.20 Current Price is $214.68 Difference: minus $15.48 (current price is over target).
If CSL meets the Morgans target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $210.48, suggesting downside of -2.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

UBS rates CSR as Sell (5) -

UBS assesses CSR's property strategy and estimates the sale value for its Badgery's Creek and Bringelly holdings at $450m and $133m respectively.

But it notes the large plot sized and zonings is both a boon and restraint.

The broker retains a Sell rating based on valuation, noting the recent change of CEO activity, weak housing outlook and aluminium business. While there are plenty of positives, the broker perceives the share price to be overvalued.

Target price is steady at $2.70. 

Target price is $2.70 Current Price is $4.06 Difference: minus $1.36 (current price is over target).
If CSR meets the UBS target it will return approximately minus 33% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.41, suggesting downside of -16.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.4

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

Macquarie rates CWN as Upgrade to Outperform from Neutral (1) -

Macquarie has examined the strategic rationale for the Crown Resorts-Melco Resorts bid and has given it the thumbs up, pointing to the resulting revenue synergies and stronger penetration into the Asian premium market.

The broker believe the deal could offer 17% upside to the Crown share price, on a valuation basis. However, the broker notes that the near-term fundamentals are underwhelming as the US/China trade war continues to hurt VIP trade and the domestic environment faces its own hurdles.

The broker cuts earnings-per-share estimates -2% out to FY21 to recognise the removal of the share buy-back. Price target rises to $12.60 to reflect a 50:50 spread across fundamentals ($11.20 a share) vs Melco Resorts takeover at $14 a share.

Given the potential for a higher bid, the broker upgrades to Outperform from Neutral.

Target price is $12.60 Current Price is $12.22 Difference: $0.38
If CWN meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $11.72, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.2

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

Credit Suisse rates IAG as Neutral (3) -

Credit Suisse has updated its latter-year earnings forecasts for listed insurers to account for lower global bond yields and currency movements.

Changes are minor for IAG, being less exposed than peers to macro influences, the broker notes. But earnings risk remains and the broker finds the valuation stretched. Neutral and $7.80 target retained.

Target price is $7.80 Current Price is $8.22 Difference: minus $0.42 (current price is over target).
If IAG meets the Credit Suisse target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.76, suggesting downside of -5.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.2

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

Citi rates MTS as Sell (5) -

For Citi's initial response to the FY19 result, see yesterday's Report. On further reflection, Citi analysts believe risks remain to the downside, mostly because competition is still intensifying in Food/Hardware and contract losses build.

Earnings estimates have been increased, however, by 5%/11%/2% in FY20/21/22, largely due to the timing of cost initiatives and contract losses, the analysts explain. While the target lifts 6% to $2.60 on the back of higher forecasts, the Sell rating remains in place.

Citi remains convinced Hardware faces a tougher backdrop, involving customer losses, corporate store closures, and a deteriorating macro environment.

Target price is $2.60 Current Price is $2.66 Difference: minus $0.06 (current price is over target).
If MTS meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.77, suggesting upside of 4.0% (ex-dividends)

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Credit Suisse rates MTS as Underperform (5) -

"Value trap" is how the broker describes Metcash, in the wake of its earnings result. The stock occasionally looks cheap but there's no clear route to value creation. A consistently declining market share points to a business that is becoming less competitive.

Cost reductions have now run their course and October will bring a step-down in revenues when the Drakes contract expires. With management wishing to increase expenditure on growth initiatives it is not clear if profit can stabilise in the near term, the broker warns. Underperform retained, target falls to $2.53 from $2.69.

Target price is $2.53 Current Price is $2.66 Difference: minus $0.13 (current price is over target).
If MTS meets the Credit Suisse target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.77, suggesting upside of 4.0% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Deutsche Bank rates MTS as Hold (3) -

Metcash's earnings miss disappointed the broker given conditions in the food industry are improving yet this was not reflected in the result. Low margin convenience and IGA sales deteriorated "meaningfully" in the second half. Hardware was also soft as management had warned, given the downturn in construction.

The broker expects such challenges will continue to drive earnings declines over the next two years, but notes that at a PE of 13x, the stock stands out as "cheap in an expensive market" and is defensive, hence Hold retained. Target falls to $2.75 from $2.80.

Target price is $2.75 Current Price is $2.66 Difference: $0.09
If MTS meets the Deutsche Bank target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $2.77, suggesting upside of 4.0% (ex-dividends)

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Macquarie rates MTS as Downgrade to Underperform from Neutral (5) -

Metcash's FY19 result missed the broker and consensus, deteriorating cash flow triggering a downgrade to Underperform from Neutral.

Macquarie notes that Metcash must spend money just to stand still and asks, in the midst of a capital expenditure war, "when is 'investment' simply a higher cost of doing business?"

Adding insult to injury the banner count fell another 2.5%. Earnings per share estimates fall -1% and target price eases -1% to $2.44.

Target price is $2.44 Current Price is $2.66 Difference: minus $0.22 (current price is over target).
If MTS meets the Macquarie target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.77, suggesting upside of 4.0% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Morgan Stanley rates MTS as Overweight (1) -

Metcash's FY19 was a miss as far as Morgan Stanley is concerned, noting market consensus had been less bullish pre-results release. Earnings estimates have been reduced in response.

Given the sharp sell-off post release, the broker retains an Overweight rating. Industry view: Cautious. Price target declines to $3.10 from $3.40.

Also, management expects additional cost savings to help mitigate the adverse impact of any further slowdown in construction activity in FY20, but Morgan Stanley still sees FY20 earnings to be down -1% as the impact of the customer loss (Drake) continues to flow through.

Target price is $3.10 Current Price is $2.66 Difference: $0.44
If MTS meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $2.77, suggesting upside of 4.0% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Ord Minnett rates MTS as Downgrade to Hold from Accumulate (3) -

The FY19 result missed the analysts' expectations with fingers pointing at the lower food result and slightly higher corporate, net interest and tax charges. Also, the tougher environment is now catching up with the Hardware division, suggests the broker.

Reduced earnings forecasts have pulled down the price target; to $2.85 from $3.30. Recommendation is downgraded to Hold from Accumulate. The analysts continue to see valuation support for the share price.

Target price is $2.85 Current Price is $2.66 Difference: $0.19
If MTS meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $2.77, suggesting upside of 4.0% (ex-dividends)

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

UBS rates MTS as Buy (1) -

The FY19 financial performance missed UBS's expectations by -3%, but the analysts also think compositionally it was a weak result. Earnings estimates have been culled by circa -4%, causing the price target to drop to $3.10 from $3.15.

Looking at the share price shellacking, however, the analysts do express their disbelief. Overreaction is the response. While Hardware, for example, remains under pressure UBS points out management is already embarking on further cost outs to offset.

Buy rating maintained. The broker earlier expressed its belief the outlook for Australia's supermarket sector is improving, and this view is hereby repeated.

Target price is $3.10 Current Price is $2.66 Difference: $0.44
If MTS meets the UBS target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $2.77, suggesting upside of 4.0% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Deutsche Bank rates ORA as Hold (3) -

Deutsche Bank has cut its earnings forecasts for Orora by -1-6% to reflect challenging market conditions in both North America and Australia, although the broker still believes FY19 guidance can be achieved.

US box demand has contracted and container board prices have declined, while higher gas prices in Australia and the glass furnace rebuild will drag.? Orora will focus on bedding down recent acquisitions and on organic growth domestically. Target falls to $3.15 from $3.30, Hold retained.

Target price is $3.15 Current Price is $3.24 Difference: minus $0.09 (current price is over target).
If ORA meets the Deutsche Bank target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.46, suggesting upside of 6.8% (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

Deutsche Bank rates PGH as Buy (1) -

Packaging and manufacturing volumes remain subdued, the broker notes, but Pact Group is passing through raw material cost increases and incrementally improving efficiencies. The broker sees earnings hitting the low end of the guidance range.

The broker expected a capital raise to address the balance sheet but it appears a debt issue is more likely. While the stock remains inexpensive, the balance sheet needs to be addressed and earnings consistency return before the market is prepared to return the stock to prior multiples, suggest the analysts. Buy and $4.25 target retained.

Target price is $4.25 Current Price is $2.28 Difference: $1.97
If PGH meets the Deutsche Bank target it will return approximately 86% (excluding dividends, fees and charges).

Current consensus price target is $3.24, suggesting upside of 41.9% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.2

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

Morgans rates PNI as Add (1) -

Pinnacle Investment Management's second-half 2019 funds under management largely met the broker's forecast with a couple of notable misses in the short-term investment arena from Antipodes and Firetrail.

Morgans expects the reduction in funds growth will affect operating leverage for these two businesses, but believes the long-term outlook to be solid.

The broker cuts forecasts -3.9% to -6.2% across FY19-21, expecting funds under management growth to taper, inflows to tighten, in-housing from large funds and weaker operating leverage.

Add rating retained for the medium term, but target price eases to $6.05 to reflect short-term pressure on the share price.

Target price is $6.05 Current Price is $4.65 Difference: $1.4
If PNI meets the Morgans target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $6.39, suggesting upside of 37.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Credit Suisse rates QBE as Neutral (3) -

Credit Suisse has updated its latter-year earnings forecasts for listed insurers to account for lower global bond yields and currency movements.

The premium rate environment is working in QBE's favour, the broker notes, but claims deterioration remains an earnings risk. A recovery in the company's below-peer underwriting rate is required to provide earnings stability and prompt a re-rate, suggest the analysts. Neutral retained, target falls to $12.55 from $13.00.

Target price is $12.55 Current Price is $11.75 Difference: $0.8
If QBE meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $12.99, suggesting upside of 10.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Credit Suisse rates RMD as Outperform (1) -

Industry participants are preparing for the bidding process in the US, beginning in July, which will set prices for devices for 2021. The price of the lead item will set the prices for all other items. The broker suggests bidders can either go low, to improve market share or high to improve profitability.

The broker sees ResMed as best placed, and not needing to offer price concessions. The company's comprehensive solutions offer an alternative to price discounts. Outperform retained, target rises to $18.45 from $17.30 on FX adjustment.

Target price is $18.45 Current Price is $17.30 Difference: $1.15
If RMD meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $16.64, suggesting downside of -3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.5

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

Citi rates S32 as Buy (1) -

Upon returning from a company organised Illawarra site visit, Citi analysts note that while coal quality is first class, costs and sustaining capital are high. The fixed cost base is high, the analysts emphasise.

They have increased opex and capex forecasts for Illawarra and cut price forecasts for thermal coal by -6% for FY20, resulting in lowered estimates for South32. Price target loses -10c to $3.90.

Buy rating retained as Citi analysts, once again, note the share price looks pretty cheap, while also acknowledging global uncertainty about coal might deter at least some investors from jumping on board.

Target price is $3.90 Current Price is $3.22 Difference: $0.68
If S32 meets the Citi target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $3.77, suggesting upside of 17.2% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

This company reports in USD. 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 S32 as Neutral (3) -

Macquarie downgrades earnings estimates for South32 to reflect higher costs at its Illawarra operations in the short and medium term, after a site tour revealed the company would proceed with the Dendrobium life extension.

The upshot will be a rise in development rates, couple with constrained production rates. The higher capital expenditure combined with earnings restraints causes the broker to cut earnings-per-share forecasts -2% and FY20-FY23 forecasts fall -7% to -9%.

Target price falls to $3.20. Neutral rating is retained.

Target price is $3.20 Current Price is $3.22 Difference: minus $0.02 (current price is over target).
If S32 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 $3.77, suggesting upside of 17.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

This company reports in USD. 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

UBS rates SGP as Sell (5) -

UBS sees headwinds for Stockland, despite the rate cuts, easier APRA loan conditions and the Liberal election win.

The broker notes the company's volumes are down -25% in Victoria and -70% in NSW, which is likely to take its toll in the not-too-distant future. UBS notes that the profit contribution from one lot in NSW equates to 3-7 lots in Victoria.

On the upside, margins are strong and debt costs are down.

The broker lowers earnings-per-share -2% to -6% in FY19 and FY20.

Sell rating retained. Target price rises to $4 from $3.85 to reflect lower cap and discount rates.

Target price is $4.00 Current Price is $4.45 Difference: minus $0.45 (current price is over target).
If SGP meets the UBS target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.07, suggesting downside of -8.5% (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

Credit Suisse rates SUN as Neutral (3) -

Credit Suisse has updated its latter-year earnings forecasts for listed insurers to account for lower global bond yields and currency movements.

Suncorp has underperformed the market by some -10%, the broker notes, due to earnings downgrades reflecting weather, operating costs and lower bond yields.

The company has sought to address weather risk in outer years but the broker is hesitant to incorporate this ahead of the management change. Neutral retained, target falls to $13.70 from $14.00.

Target price is $13.70 Current Price is $13.46 Difference: $0.24
If SUN meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $13.99, suggesting upside of 4.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Deutsche Bank rates VEA as Buy (1) -

Viva Energy Group's update confirmed refinery earnings are even worse than the broker had feared, but there are signs of strength in Fuels & Marketing relative to the weak update provided by Caltex Australia ((CTX)) last week.

The broker doesn't believe refining margins can get much worse, and retail margins are showing signs of improvement.

The company is considered well positioned since the Coles ((COL)) renegotiation and has more margin to play with, the broker suggests. Buy retained, target falls to $2.45 from $2.55.

Target price is $2.45 Current Price is $2.17 Difference: $0.28
If VEA meets the Deutsche Bank target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting upside of 15.0% (ex-dividends)

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

Morgan Stanley rates VEA as Upgrade to Overweight from Equal-weight (1) -

Morgan Stanley upgrades to Overweight from Equal-weight on the expectation that forecasts are close to bottoming. In addition, refining offers potential for significant upside medium term, argue the analysts.

The analysts also suggest greater evidence of Viva Energy's retail strategy expansion delivering positive results should start emerging. Lower margins in comparison with rival Caltex Australia ((CTX)) are seen as a form of protection in difficult times.

Target lifts by 5c to $2.35. Industry view is In-Line.

Target price is $2.35 Current Price is $2.17 Difference: $0.18
If VEA meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting upside of 15.0% (ex-dividends)

The company's fiscal year ends in December.

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

Ord Minnett rates VEA as Accumulate (2) -

The company has provided H1 guidance of $150-180m and Ord Minnett remains of the view that access to retail fuel margins remains a medium-term driver of strong EBITDA growth for Viva Energy.

Alas, with updated guidance below expectations the analysts have been forced to further lower forecasts, which pulls down the price target to $2.40 from $2.60. Accumulate rating retained.

Target price is $2.40 Current Price is $2.17 Difference: $0.23
If VEA meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting upside of 15.0% (ex-dividends)

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

UBS rates VEA as Buy (1) -

Viva Energy Group's first-half guidance met the broker and was generally in line with the weak April trading update. 

On the upside, volume rose 2% in a weak market, suggesting market share gains, and UBS believes the stock is on the up.

FY19 earnings-per-share forecasts ease -2% to reflect the near-term weakness but outer years are steady.

Buy rating retained, the broker expecting the retail business will grow at a strong incremental return, and noting a strong balance sheet and favourable valuation (an earnings multiple of 7.8x reflecting 9% compound average growth rate).

Target price steady at $2.55.

Target price is $2.55 Current Price is $2.17 Difference: $0.38
If VEA meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting upside of 15.0% (ex-dividends)

The company's fiscal year ends in December.

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