Australian Broker Call
September 22, 2017
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COMPANIES DISCUSSED IN THIS ISSUE
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Last Updated: 10:52 AM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
| BTT - | BT INVEST MANAGEMENT | Upgrade to Add from Hold | Morgans |
| CBA - | COMMBANK | Upgrade to Add from Hold | Morgans |
Citi rates BKW as Neutral (3) -
Citi considers lower building product revenue and operating earnings margins in FY17 to be the drivers behind group earnings being -3% below consensus.
FY18 is expected to reveal lower earnings from property because of no plans for major land sales, while building product earnings will face pressure as the residential construction cycle fades.
Target remains $14.45. Neutral rating retained.
Target price is $14.45 Current Price is $13.75 Difference: $0.7
If BKW meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $14.53, suggesting upside of 6.0% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 54.00 cents and EPS of 99.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 105.5, implying annual growth of -15.5%. Current consensus DPS estimate is 55.3, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 13.0. |
Forecast for FY19:
Citi forecasts a full year FY19 EPS of 99.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 100.4, implying annual growth of -4.8%. Current consensus DPS estimate is 54.7, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 13.7. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates BKW as Buy (1) -
FY17 net profit was ahead of Deutsche Bank's estimates. No FY18 guidance was provided but management suggests the outlook is positive for building products because of a long pipeline of work on the east coast and restructuring in Western Australia.
Nevertheless, a -$10m decline in building products earnings versus FY16 was of concern to the broker, although it included impacts that are unlikely to be repeated. Increasing energy costs are also of concern going forward.
Deutsche Bank retains a Buy rating and reduces the target to $15.44 from $15.86.
Target price is $15.44 Current Price is $13.75 Difference: $1.69
If BKW meets the Deutsche Bank target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $14.53, suggesting upside of 6.0% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 51.00 cents and EPS of 99.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 105.5, implying annual growth of -15.5%. Current consensus DPS estimate is 55.3, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 13.0. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 51.00 cents and EPS of 92.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 100.4, implying annual growth of -4.8%. Current consensus DPS estimate is 54.7, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 13.7. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates BKW as Neutral (3) -
FY17 results were ahead of recently downgraded guidance, although Macquarie notes core building products were soft and it was a solid property division that drove the upside.
The broker observes energy costs are taking the lustre off building products, and property profits are expected to decline. Macquarie does not envisage any clear catalyst to drive a re-rating in this context.
Neutral retained. Target is reduced to $14.30 from $14.60.
Target price is $14.30 Current Price is $13.75 Difference: $0.55
If BKW meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $14.53, suggesting upside of 6.0% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 64.00 cents and EPS of 120.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 105.5, implying annual growth of -15.5%. Current consensus DPS estimate is 55.3, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 13.0. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 59.00 cents and EPS of 109.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 100.4, implying annual growth of -4.8%. Current consensus DPS estimate is 54.7, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 13.7. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates BKW as Hold (3) -
FY17 results were in line with Morgans. While the company has exposure to the residential construction market and has achieved good leverage to this thematic in recent years, with building activity slowing and higher energy costs, Morgans believes earnings growth over the next few years will be challenging.
This will be mitigated by the cross holding in WH Soul Pattinson ((SOL)) and increased land and development activity yet the broker considers the stock fully valued at current levels. Hold retained. Target rises to $13.94 from $13.60.
Target price is $13.94 Current Price is $13.75 Difference: $0.19
If BKW meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $14.53, suggesting upside of 6.0% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 52.00 cents and EPS of 103.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 105.5, implying annual growth of -15.5%. Current consensus DPS estimate is 55.3, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 13.0. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 54.00 cents and EPS of 100.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 100.4, implying annual growth of -4.8%. Current consensus DPS estimate is 54.7, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 13.7. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates BTT as Upgrade to Add from Hold (1) -
The company has announced it expects direct costs of GBP5m for external research services. The cost will be directly absorbed by JO Hambro.
Factoring in these costs, and reviewing underlying assumptions, leads Morgans to downgrade forecasts for earnings per share by -4-7% in the outer years. Nevertheless, the broker considers the outlook solid and JO Hambro should continue to deliver solid performance fees over the medium term.
Rating is upgraded to Add from Hold. Target is reduced to $11.96 from $12.54.
Target price is $11.96 Current Price is $10.88 Difference: $1.08
If BTT meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $11.70, suggesting upside of 4.7% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 47.00 cents and EPS of 55.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 56.1, implying annual growth of 3.1%. Current consensus DPS estimate is 46.6, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 19.9. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 50.00 cents and EPS of 59.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 63.7, implying annual growth of 13.5%. Current consensus DPS estimate is 52.8, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 17.6. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates CBA as Sell (5) -
Citi has updated its model to reflect the divestment of the Australasian based life insurance businesses. Cash forecasts for earnings per share for FY19/20 are lowered by -2%.
Sell rating retained. Target is $76.50.
Target price is $76.50 Current Price is $76.07 Difference: $0.43
If CBA meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $78.16, suggesting upside of 1.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 435.00 cents and EPS of 561.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 574.8, implying annual growth of -0.5%. Current consensus DPS estimate is 437.4, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 435.00 cents and EPS of 551.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 580.9, implying annual growth of 1.1%. Current consensus DPS estimate is 445.9, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 13.2. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates CBA as Neutral (3) -
The bank has announced the divestment of its Australasian life insurance business and Credit Suisse downgrades forecasts for earnings per share by -1-2%, considering the decision strategically sensible.
The broker views the stock as constrained by governance and control issues that will take some time to resolve.
Neutral retained. Target is $75.
Target price is $75.00 Current Price is $76.07 Difference: minus $1.07 (current price is over target).
If CBA meets the Credit Suisse target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $78.16, suggesting upside of 1.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 435.00 cents and EPS of 583.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 574.8, implying annual growth of -0.5%. Current consensus DPS estimate is 437.4, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 457.00 cents and EPS of 601.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 580.9, implying annual growth of 1.1%. Current consensus DPS estimate is 445.9, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 13.2. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates CBA as Neutral (3) -
Macquarie considers the disposal of the life business incrementally positive for the bank, albeit mildly dilutive to earnings.
The main downside arises from a medium-term earnings recovery, given the business is being disposed of at a trough in earnings.
Neutral. Target is $78.00.
Target price is $78.00 Current Price is $76.07 Difference: $1.93
If CBA meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $78.16, suggesting upside of 1.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 433.80 cents and EPS of 563.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 574.8, implying annual growth of -0.5%. Current consensus DPS estimate is 437.4, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 439.60 cents and EPS of 560.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 580.9, implying annual growth of 1.1%. Current consensus DPS estimate is 445.9, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 13.2. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates CBA as Underweight (5) -
Morgan Stanley believes the sale of the life insurance business is a small positive, even though a buy-back is unlikely and earnings per share will be diluted by around -2% in the near term.
In addition, the bank has announced it will undertake a strategic review of the global asset management business and consider a range of options including an IPO.
Underweight. Target is $72. Industry view is In-Line.
Target price is $72.00 Current Price is $76.07 Difference: minus $4.07 (current price is over target).
If CBA meets the Morgan Stanley target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $78.16, suggesting upside of 1.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 434.00 cents and EPS of 565.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 574.8, implying annual growth of -0.5%. Current consensus DPS estimate is 437.4, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 439.00 cents and EPS of 571.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 580.9, implying annual growth of 1.1%. Current consensus DPS estimate is 445.9, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 13.2. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates CBA as Upgrade to Add from Hold (1) -
Morgans believes the agreement to sell the life businesses in Australasia is a positive for shareholders. The broker calculates it will provide a 30 basis points uplift to the group return on tangible equity. The transaction is also expected to result in a pro--forma uplift to the FY17 CET1 capital ratio of around 70 basis points.
Morgans adjusts forecasts for the expected sale, assuming a completion date of September 2018. Given the increased risk of a loss of market share following the announcement of APRA's prudential inquiry into the bank the broker factors in a higher risk premium to valuation.
This results in a lowering of the target to $80 from $83. Rating is upgraded to Add from Hold.
Target price is $80.00 Current Price is $76.07 Difference: $3.93
If CBA meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $78.16, suggesting upside of 1.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 441.00 cents and EPS of 601.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 574.8, implying annual growth of -0.5%. Current consensus DPS estimate is 437.4, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 447.00 cents and EPS of 617.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 580.9, implying annual growth of 1.1%. Current consensus DPS estimate is 445.9, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 13.2. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates CBA as Neutral (3) -
CBA has sold its life insurance businesses in Australia (CommInsure) and NZ to AIA for $3.8bn. The proceeds will boost tier one capital by 70bps, the broker notes, but the deal will not complete till late next year. AIA will provide products for CBA customers for 20 years.
The bank is also considering an IPO for its massive Colonial funds management business. The broker sees it as strategically sensible to revert to concentrate on the core banking business, while not making a meaningful difference to earnings. Neutral and $83 target retained.
Target price is $83.00 Current Price is $76.07 Difference: $6.93
If CBA meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $78.16, suggesting upside of 1.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 441.00 cents and EPS of 572.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 574.8, implying annual growth of -0.5%. Current consensus DPS estimate is 437.4, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 450.00 cents and EPS of 567.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 580.9, implying annual growth of 1.1%. Current consensus DPS estimate is 445.9, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 13.2. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates CTX as Buy (1) -
Citi calculates the divestments required to appease the ACCC review of the BP/Woolworths ((WOW)) deal in order to calculate the possible upside for Caltex.
The broker identifies the potential for $60-120m of operating earnings offsets for the company from retaining StarCard volumes, buying a few divested stores, acquiring a number of BP re-sellers and continuing use of infrastructure by BP.
The company has guided to $150m in lost operating is from the loss of the wholesale supply contract before considering any offsets.
Buy retained. Target is $37.66.
Target price is $37.66 Current Price is $32.10 Difference: $5.56
If CTX meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $34.92, suggesting upside of 9.0% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 123.00 cents and EPS of 244.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 238.3, implying annual growth of 2.9%. Current consensus DPS estimate is 121.6, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 126.00 cents and EPS of 251.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 237.2, implying annual growth of -0.5%. Current consensus DPS estimate is 120.3, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 13.5. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates FBU as Underperform (5) -
There is speculation that the company has appointed an independent entity, KPMG, to audit four construction division projects. If confirmed, Macquarie would welcome an independent review of the company's construction book.
The broker believes a review should also include a look at transfer pricing within the construction division given higher related-party sales.
Underperform rating is retained. Target is NZ$6.54.
Current Price is $7.11. Target price not assessed.
Current consensus price target is $9.00, suggesting upside of 26.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 34.72 cents and EPS of 53.02 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 58.7, implying annual growth of N/A. Current consensus DPS estimate is 38.1, implying a prospective dividend yield of 5.4%. Current consensus EPS estimate suggests the PER is 12.1. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 34.92 cents and EPS of 48.51 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 59.0, implying annual growth of 0.5%. Current consensus DPS estimate is 38.3, implying a prospective dividend yield of 5.4%. Current consensus EPS estimate suggests the PER is 12.1. |
This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates GEM as Buy (1) -
Deutsche Bank considers the acquisition of 19 early education and childcare centres a positive as the company has shown pricing discipline and the deal should be around 4% accretive.
The acquisition is expected to provide earnings support in the event the company is unable to improve occupancy trends in the short term. Deutsche Bank maintains a Buy rating and raises the target to $4.50 from $4.40.
Target price is $4.50 Current Price is $3.94 Difference: $0.56
If GEM meets the Deutsche Bank target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $4.43, suggesting upside of 7.7% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 24.00 cents and EPS of 25.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 25.0, implying annual growth of 1.3%. Current consensus DPS estimate is 21.5, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 16.4. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 20.00 cents and EPS of 28.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.2, implying annual growth of 16.8%. Current consensus DPS estimate is 20.0, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 14.1. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates GEM as Buy (1) -
G8 has announced the proposed acquisition of 19 brownfield daycare centres, despite being focused on a greenfield rollout strategy. It reminds us that the company will still consider acquisitions if the price is right and the location is complimentary, the broker notes.
The broker's valuation does not account for further acquisitions so any will provide for upside potential. Initial analysis suggests 3% earnings accretion from yesterday's deal. The broker continues the see the stock as offering value anyway. Buy retained. Target rises to $4.60 from $4.45.
Target price is $4.60 Current Price is $3.94 Difference: $0.66
If GEM meets the UBS target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $4.43, suggesting upside of 7.7% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 21.60 cents and EPS of 25.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 25.0, implying annual growth of 1.3%. Current consensus DPS estimate is 21.5, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 16.4. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 20.00 cents and EPS of 29.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.2, implying annual growth of 16.8%. Current consensus DPS estimate is 20.0, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 14.1. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates GXL as Initiation of coverage with Neutral (3) -
Citi initiates coverage with a Neutral rating and $5.70 target. The company is the market leader in the defensive pet care category with a focus on in-store veterinary clinics and services.
Citi remains concerned about the potential need to harmonise prices between Petbarn's in-store and online offerings in view of the imminent launch of Amazon in Australia.
The broker also believes increased competition is a primary reason for the company's slowing rate of veterinary acquisitions.
Target price is $5.70 Current Price is $5.26 Difference: $0.44
If GXL meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $6.20, suggesting upside of 17.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 21.00 cents and EPS of 36.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 36.9, implying annual growth of 1.9%. Current consensus DPS estimate is 19.8, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 14.3. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 22.00 cents and EPS of 37.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 39.6, implying annual growth of 7.3%. Current consensus DPS estimate is 21.0, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 13.3. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates LLC as Outperform (1) -
Credit Suisse observes the company's military housing scheme generates profits across development management fees, construction margins and investment income.
The investment income in particular represents an extremely high quality annuity-style stream that has been historically undervalued, the broker suggests.
Outperform maintained and target raised to $19.66 from $18.60, to reflect a revised military housing valuation.
Target price is $19.66 Current Price is $17.84 Difference: $1.82
If LLC meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $17.58, suggesting downside of -2.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 76.45 cents and EPS of 147.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 147.4, implying annual growth of 13.3%. Current consensus DPS estimate is 70.5, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 12.2. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 89.06 cents and EPS of 162.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 154.9, implying annual growth of 5.1%. Current consensus DPS estimate is 79.3, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 11.6. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates NHF as No Rating (-1) -
The company has acquired GU Health for $155.5m, to be funded by an equity placement a non-underwritten share purchase plan along with new debt.
Ord Minnett increases forecasts for earnings per share by 3% for FY19. The broker is currently restricted on research and is unable to provide a recommendation or target.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Current Price is $5.69. Target price not assessed.
Current consensus price target is $5.67, suggesting downside of -4.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 29.00 cents and EPS of 19.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 26.4, implying annual growth of -2.9%. Current consensus DPS estimate is 20.3, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 22.6. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 33.00 cents and EPS of 22.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.9, implying annual growth of 9.5%. Current consensus DPS estimate is 22.3, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 20.6. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates RIO as Accumulate (2) -
The company has announced it will increase its buy-back by US$2.5bn to take it to US$4.0bn. Ord Minnett estimates this, plus US$4.9bn in forecast dividends, represents cash returns to shareholders in 2017 equivalent to 10.3% of market capitalisation.
The broker considers this is management making good on its promise and the full return of the sale proceeds of the Coal & Allied assets. Accumulate retained. Target is $74.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $74.00 Current Price is $65.50 Difference: $8.5
If RIO meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $72.62, suggesting upside of 9.4% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 308.68 cents and EPS of 513.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 562.0, implying annual growth of N/A. Current consensus DPS estimate is 331.1, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 11.8. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 332.33 cents and EPS of 553.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 486.6, implying annual growth of -13.4%. Current consensus DPS estimate is 279.7, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 13.6. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates SUN as Buy (1) -
The company has released details of its business improvement program and expects a cumulative $329m net benefit by FY20.
The detail puts meat on the bones of the cost reductions and is an attempt, in Citi's opinion, to address market concerns that the expenditure on the marketplace strategy is just business-as-usual and likely to recur.
While Citi believes the market will continue to harbour concerns about this strategy until there is some revenue benefits, comfort lies in the fact that the company is aware and keen to address the issue. Buy rating and $14 target retained.
Target price is $14.00 Current Price is $12.59 Difference: $1.41
If SUN meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $13.90, suggesting upside of 9.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 76.00 cents and EPS of 85.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 87.0, implying annual growth of 3.8%. Current consensus DPS estimate is 74.2, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 14.6. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 79.00 cents and EPS of 97.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.4, implying annual growth of 10.8%. Current consensus DPS estimate is 75.6, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 13.2. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates SUN as Buy (1) -
The company has outlined more detail behind the acceleration in expenditure on the marketplace strategy. The group will spend $142m to deliver an integrated customer experience for its many brands.
In general, Deutsche Bank notes top line premium growth across the sector has stepped up and margins are trending towards mid cycle levels.
Specifically, the broker considers the quality of the company's bank asset exceptional, which should ultimately benefit from a move to advanced accreditation. Moreover, the troubled life insurance business has now shrunk meaningfully and is not a major driver of valuation.
Deutsche Bank retains a Buy rating and reduces the target to $14.20 from $14.60.
Target price is $14.20 Current Price is $12.59 Difference: $1.61
If SUN meets the Deutsche Bank target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $13.90, suggesting upside of 9.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 73.00 cents and EPS of 92.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 87.0, implying annual growth of 3.8%. Current consensus DPS estimate is 74.2, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 14.6. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 74.00 cents and EPS of 94.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.4, implying annual growth of 10.8%. Current consensus DPS estimate is 75.6, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 13.2. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates SUN as Accumulate (2) -
The company has provided detail on its expenditure ($142m) plans for the marketplace acceleration strategy. Ord Minnett welcomes the detail, given the likely long-dated benefits implied by the company.
Nevertheless, the broker suspects this may not influence investor sentiment until benefits are actually seen in volumes on a sustainable basis. Accumulate. Target price remains $13.75.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $13.75 Current Price is $12.59 Difference: $1.16
If SUN meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $13.90, suggesting upside of 9.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 71.00 cents and EPS of 82.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 87.0, implying annual growth of 3.8%. Current consensus DPS estimate is 74.2, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 14.6. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 72.00 cents and EPS of 95.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.4, implying annual growth of 10.8%. Current consensus DPS estimate is 75.6, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 13.2. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates SUN as Buy (1) -
Suncorp broke with tradition and provided details of its cost-out plans at its AGM yesterday -- a move the broker puts down to underperformance since the company's earnings result with cost unknowns a major contributor.
While the cost-out numbers suggest material upside to valuation, the broker has not changed its forecasts at this stage as typically with a cost-out of this scale, investment erodes the benefit. The broker will first have a chat with Suncorp to seek more conviction. Buy and $14.80 target retained.
Target price is $14.80 Current Price is $12.59 Difference: $2.21
If SUN meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $13.90, suggesting upside of 9.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 77.00 cents and EPS of 88.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 87.0, implying annual growth of 3.8%. Current consensus DPS estimate is 74.2, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 14.6. |
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 81.00 cents and EPS of 97.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.4, implying annual growth of 10.8%. Current consensus DPS estimate is 75.6, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 13.2. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates SYR as Outperform (1) -
The company has now obtained the funding for working capital and phase #1 of the battery anode material plant.
Credit Suisse's target is reduced to $6.80 from $7.45, reflecting equity dilution and a more cautious spherical coating ramp-up profile. Outperform retained.
Target price is $6.80 Current Price is $3.51 Difference: $3.29
If SYR meets the Credit Suisse target it will return approximately 94% (excluding dividends, fees and charges).
Current consensus price target is $4.42, suggesting upside of 23.5% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 8.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -8.7, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 0.00 cents and EPS of 17.34 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.1, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 44.2. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| BKW - | BRICKWORKS | Neutral - Citi | Overnight Price $13.75 |
| Buy - Deutsche Bank | Overnight Price $13.75 | ||
| Neutral - Macquarie | Overnight Price $13.75 | ||
| Hold - Morgans | Overnight Price $13.75 | ||
| BTT - | BT INVEST MANAGEMENT | Upgrade to Add from Hold - Morgans | Overnight Price $10.88 |
| CBA - | COMMBANK | Sell - Citi | Overnight Price $76.07 |
| Neutral - Credit Suisse | Overnight Price $76.07 | ||
| Neutral - Macquarie | Overnight Price $76.07 | ||
| Underweight - Morgan Stanley | Overnight Price $76.07 | ||
| Upgrade to Add from Hold - Morgans | Overnight Price $76.07 | ||
| Neutral - UBS | Overnight Price $76.07 | ||
| CTX - | CALTEX AUSTRALIA | Buy - Citi | Overnight Price $32.10 |
| FBU - | FLETCHER BUILDING | Underperform - Macquarie | Overnight Price $7.11 |
| GEM - | G8 EDUCATION | Buy - Deutsche Bank | Overnight Price $3.94 |
| Buy - UBS | Overnight Price $3.94 | ||
| GXL - | GREENCROSS | Initiation of coverage with Neutral - Citi | Overnight Price $5.26 |
| LLC - | LEND LEASE CORP | Outperform - Credit Suisse | Overnight Price $17.84 |
| NHF - | NIB HOLDINGS | No Rating - Ord Minnett | Overnight Price $5.69 |
| RIO - | RIO TINTO | Accumulate - Ord Minnett | Overnight Price $65.50 |
| SUN - | SUNCORP | Buy - Citi | Overnight Price $12.59 |
| Buy - Deutsche Bank | Overnight Price $12.59 | ||
| Accumulate - Ord Minnett | Overnight Price $12.59 | ||
| Buy - UBS | Overnight Price $12.59 | ||
| SYR - | SYRAH RESOURCES | Outperform - Credit Suisse | Overnight Price $3.51 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 11 |
| 2. Accumulate | 2 |
| 3. Hold | 7 |
| 5. Sell | 3 |
Friday 22 September 2017
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This document is provided for informational purposes only. It does not
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