Australian Broker Call

UBS rates A2M as Buy (1) -

The broker notes data shows a2 Milk's attempts to tighten inventory are beginnig to work, and there is no loss of brand health.

The broker sees a meaningful recovery in diagou sales of infant formula over the next three years, and substantial market share gains in China from offline rollout and free trade zone expansion. These assumptions underpin a Buy rating.

Target unchaged at NZ$15.50.

Current Price is $5.22. Target price not assessed.

Current consensus price target is $6.32, suggesting upside of 14.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: -0.3

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

Morgan Stanley rates ALD as Overweight (1) -

As part of a future energy and decarbonisation strategy, Ampol is exploring new technologies like Green Hydrogen that provide a pathway post-refining. Morgan Stanley views the various commitments and investments as a low-cost way to prepare for the energy transition.

Regarding electric vehicles, the broker estimates more cars will be charged at home, office or other locations. This could pull customers away from Ampol sites, which is considered a key medium-term uncertainty, and is likely to limit trading multiples.

The $31.70 target price and Overweight rating are unchanged. Industry view is Attractive.

Target price is $31.70 Current Price is $27.97 Difference: $3.73
If ALD meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $30.79, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Macquarie rates API as Outperform (1) -

Australian Pharmaceutical Industries has announced a non-exclusive agreement to distribute Pfizer Australia’s PBS medicines.

Macquarie believes this will deliver an additional circa $4m in operating income per annum from September 2021. Further, the agreement will generate a higher margin than its existing pharmacy distribution business.

The broker highlights with the construction of its new NSW DC, Australian Pharmaceutical Industries has a robust asset base that boosts capacity for wholesale distribution.

Outperform with a target of $1.45.

Target price is $1.45 Current Price is $1.17 Difference: $0.28
If API meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $1.35, suggesting upside of 14.4% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Macquarie rates APX as Neutral (3) -

On Investor Tech Day, Appen reiterated its product-led strategy and shared details on new products like Appen Intelligence, Appen In-Platform Audit and Appen Mobile.

While still early days, Macquarie notes the revenue contribution of products has already risen to 23% in the second half of 2020 from 17% in the first half of 2019.

The broker notes Appen's latest update on year-to-date revenue plus orders suggests more mild downside to consensus estimates for the first half. 

Neutral rating with the target dropping to $14.70 from $16.

Target price is $14.70 Current Price is $13.84 Difference: $0.86
If APX meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $21.97, suggesting upside of 67.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Macquarie rates BHP as Outperform (1) -

BHP Group achieved first ore at the South Flank project and Macquarie expects the mine to ramp up to 80mtpa over the next three years.

Since the South Flank project is meant to be a replacement for the Yandi mine in Pilbara, the broker does not expect any increase in group iron-ore production.

The rise in iron-ore prices should see BHP Group report record earnings in the second half of FY21, suggests Macquarie noting more upside risk to the dividend assumption.

Outperform rating reiterated with a target of $57.

Target price is $57.00 Current Price is $48.28 Difference: $8.72
If BHP meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $48.42, suggesting upside of 1.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

Morgan Stanley rates BHP as Overweight (1) -

In a review of iron ore price volatility, Morgan Stanley concludes it has sharply increased though the magnitude of daily change does
not seem to reflect underlying fundamentals. It's thought this reveals nervousness around the near-term demand prospects for iron ore.

The analyst feels the valuation is reasonable for BHP Group and any pullback in the price of the underlying commodity might not have a disproportionate impact on the share price, like in previous cycles.

The Overweight rating is retained with a target price of $47.35. Industry view: Attractive.

Target price is $47.35 Current Price is $48.28 Difference: minus $0.93 (current price is over target).
If BHP meets the Morgan Stanley target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $48.42, suggesting upside of 1.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

Citi rates BLX as Buy (1) -

Citi notes Beacon Lighting Group's FY21 net profit guidance at $35.5-$37.5m implies a second-half net profit of $14.3m, up 32% over last year and 40% higher than consensus forecast. This view is aided by the continuation of strong trading momentum and better than expects gross margins.

Citi sees potential for stronger for longer trading conditions underpinned by the housing cycle and industry consolidation. The broker highlights the group has growth opportunities including international expansion, which in the broker's view, are underappreciated.

Buy rating with the target rising to $2.21 from $2.15.

Target price is $2.21 Current Price is $1.96 Difference: $0.25
If BLX meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Morgans rates BLX as Hold (3) -

Beacon Lighting’s strong trading momentum, higher gross margin (GM) and contained costs all contributed to profit guidance that was stronger than Morgans expected. The FY21 guidance was $35.5-37.5m.

The broker upgrades FY21-FY23 EPS forecasts by 16%, 12% and 3%, respectively. It’s estimated the strong Australian dollar provides decent margin protection during FY22.

The Hold rating is unchanged and the target price is increased to $2.01 from $1.81. While the analyst expects demand/sales conditions will normalise, the company’s earnings will set at levels materially above FY19. 

Target price is $2.01 Current Price is $1.96 Difference: $0.05
If BLX meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Credit Suisse rates COH as Neutral (3) -

After a read through of a competitor's result, Credit Suisse forecasts Cochlear's market share increasing to around 59% in FY21
from 53% in FY19. It's felt this is due to a superior brand and product portfolio, and a sharp focus on the patient pipeline during covid.

Despite this positive, the broker continues to believe emerging markets will weigh on growth into FY22. The forecast FY21 EPS increases by 1% on market share gains though FY22 and FY23 EPS estimates are lowered by -4%.

The Neutral rating is unchanged and the target falls to $225 from $230.

Target price is $225.00 Current Price is $216.58 Difference: $8.42
If COH meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $214.16, suggesting downside of -1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

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

Morgan Stanley observes plasma collections remain depressed even as the US exits the pandemic. This is due in part to the third round of stimulus (US$1400 checks) and the extension of US$300 federal unemployment checks from March to September.

The broker understands 21 US states have cancelled the unemployment benefits provided through the American Rescue Plan, and official withdrawal varies between June and July. This may mean an earlier recovery to plasma collections than the analyst anticipated.

That said, Morgan Stanley already models for a 25% growth in plasma collections for the 12 months to March 2022, so the Equal-weight rating and $267 target are unchanged. Industry view: In-Line.

Target price is $267.00 Current Price is $278.16 Difference: minus $11.16 (current price is over target).
If CSL meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $300.19, suggesting upside of 5.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.7

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

Morgan Stanley rates CTD as Overweight (1) -

Qantas Airways ((QAN)) announced it will lower front-end commissions paid to travel agents on international tickets to 1% from 5%. Morgan Stanley feels the impact is negligible for Corporate Travel Management as just 5% of pre-covid volume was International (ex Aust). 

Additionally, the broker notes just 10% of the company's International volumes, ex-Aust, are carried on Qantas. The analyst recommends buying into softness and the Overweight rating and $21.50 target are retained. Industry view is In-Line.

Target price is $21.50 Current Price is $18.54 Difference: $2.96
If CTD meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $21.53, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

UBS rates EML as Buy (1) -

Assessing the range of outcomes from the Irish central bank's investigation into EML Payments' EU subsidiary is challenging, the broker warns. Historical cases have involved fines of -EUR2-3m plus remediation efforts.

But the worst case could involve revoking the license or shutting down a sub-segment of the business such as digital banking. EML derives 27% of revenues from its Irish business. For now the broker retains Buy, but target drops to $5.30 from $6.20.

Target price is $5.30 Current Price is $2.91 Difference: $2.39
If EML meets the UBS target it will return approximately 82% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates FLT as Outperform (1) -

Reviewing the latest trading updates of Qantas Airways ((QAN)) and Serko ((SKO)) makes for an encouraging read through for Flight Centre, suggests Macquarie, with clear evidence of tailwinds in the domestic and A&NZ space.

Even then, the broker warns of downward pressure on revenue with airlines cutting commissions, and lower revenue margins in a recovery where there is a shift to domestic and to online.

The broker assumes an 80-85% total travel value (TTV) recovery in FY24. Also, in line with the company’s expectations, Macquarie expects both leisure and corporate to recover to pre-pandemic levels in FY24.

Outperform rating with a target of $17.50.

Target price is $17.50 Current Price is $14.93 Difference: $2.57
If FLT meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $16.86, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Citi rates ILU as Neutral (3) -

Iluka Resources has given a six months notice to the government of Sierra Leone stating its intention to suspend operations temporarily unless the miner is able to implement a cost reduction strategy and attract new investors for the continuation of mining in Area 1.

Citi lowers its risk weighting on Sierra Leone in its financial valuation to 50% from 80%. As a result, the broker lowers its earnings per share forecasts for the stock.

Target price drops to $8.15 from $8.60 and the Neutral rating is retained.

Target price is $8.15 Current Price is $7.80 Difference: $0.35
If ILU meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $6.89, suggesting downside of -8.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Credit Suisse rates ILU as Underperform (5) -

Sierra Rutile (SRL) may be suspended in six months, clouding the future for Sembehun, which requires the SRL plant and infrastructure to be operating, cautions Credit Suisse.

Iluka Resources provided the government notice of the potentially temporary suspension, unless it can identify cost savings and productivity improvements in the interim.

Partially offsetting this is a sharp rise in Chinese rutile prices, which the analyst believes may lift global prices.  The Underperform rating is maintained. The broker downgrades the risk weighting for SRL/Sembehun and lowers the target to $5.30 from $5.70.

Target price is $5.30 Current Price is $7.80 Difference: minus $2.5 (current price is over target).
If ILU meets the Credit Suisse target it will return approximately minus 32% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.89, suggesting downside of -8.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

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

On May 19, Sierra Rutile (SRL) provided the Government of Sierra Leone six months notice of its intention to temporarily suspend operations at Sierra Rutile, effective 19 November 2021, citing unsustainable operational performance.

Morgan Stanley highlights that in the event SRL cannot return to profitability and attract new investors within two years (the maximum allowed suspension period) SRL would move into closure and rehabilitation.

The announcement highlights a risk to which the analyst had previously alluded. The Equal-weight and target price of $6 are retained for now, though Morgan Stanley notes the stock has run significantly higher than the price target. Industry view: Attractive.

Target price is $6.00 Current Price is $7.80 Difference: minus $1.8 (current price is over target).
If ILU meets the Morgan Stanley target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.89, suggesting downside of -8.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Ord Minnett rates ILU as Downgrade to Accumulate from Buy (2) -

The company has indicated its Sierra Rutile operations will be suspended in six months if it is unable to make the project more profitable or attract a new investor.

The announcement has come as no surprise to Ord Minnett with the broker noting this has been a troubled asset for quite a while. Iluka has better growth options available closer to home, states the analyst.

As forecast earnings have been reduced by -14%, the broker's price target has retreated to $8 from $8.20. The Buy recommendation has been downgraded one notch to Accumulate.

Target price is $8.00 Current Price is $7.80 Difference: $0.2
If ILU meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $6.89, suggesting downside of -8.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

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

Morgan Stanley believes that, on-balance, the appointment of an external candidate in Simon Dixon to the CFO role is a mild positive for Lendlease Group.

The broker will be interested to see if the appointment results in any changes to the policy on revenue recognition methodology for commercial projects. This is considered a key investor question. Equal-weight rating and $13.98 target retained. Industry view: In-line.

Target price is $13.98 Current Price is $11.95 Difference: $2.03
If LLC meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $13.84, suggesting upside of 14.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Credit Suisse rates NUF as Neutral (3) -

The first half result was strongly above the forecast of Credit Suisse and, temporary factors aside, performance appears to be trending well. It's felt the result and outlook suggest stabilisation and progress on the performance improvement plan in-line with expectations.

The outlook points to an increase in sales in Europe though product mix improvements could be temporary, explains the broker. However, it's considered there could also be a touch of conservatism in management comments.

The broker makes little change to FY22 and FY23 forecasts, other than in Seed Technology and lowers the target price to $4.85 from $5. The Neutral rating is unchanged.

Target price is $4.85 Current Price is $5.05 Difference: minus $0.2 (current price is over target).
If NUF meets the Credit Suisse target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.59, suggesting upside of 18.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Macquarie rates NUF as Outperform (1) -

Macquarie is pleased with Nufarm's "very strong" first-half result with beats across all divisions. Going ahead, FY21 net profit is expected to be lower than the first half due to an earnings skew towards the first half.

While acknowledging demand-pull forward and a higher second-half tax rate, Macquarie senses an element of conservativism on the guidance for the second half.

The broker thinks the market backdrop remains favourable regarding commodity fundamentals.

Outperform rating with the target rising to $5.90 from $5.70.

Target price is $5.90 Current Price is $5.05 Difference: $0.85
If NUF meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $5.59, suggesting upside of 18.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Morgan Stanley rates NUF as Downgrade to Equal-weight from Overweight (3) -

Despite a much improved first half result, Morgan Stanley lowers the rating for Nufarm to Equal-weight from Overweight due to valuation concerns. Better seasonal conditions, lower costs and improved execution were considered keys to the result.

Group earnings (EBITDA) margins of 14% exceeded the broker's forecasts. Strong margins in Europe were considered due to an
improved mix, delivery of cost-out and raw material prices easing. The analyst increases the FY21 earnings (EBITDA) forecast by 5%.

Target price falls to $5.30 from $5.60. Industry view: In-Line.

Target price is $5.30 Current Price is $5.05 Difference: $0.25
If NUF meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $5.59, suggesting upside of 18.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Morgans rates NUF as Add (1) -

After a stronger-than-expected first half result, Morgans upgrades FY21-23 earnings (EBITDA) forecasts by 7.8%, 3.3% and 2.9%, respectively. Thus, the target price rises to 6.50 from $6.15. 

The broker highlights an increased market share across several key markets and the sale of higher margin products. Additionally, benefits from the Performance Improvement Program (PIP) are estimated to be lowering the cost base.

The analyst maintains an Add rating due to positive industry fundamentals and self-help measures (like the PIP) that should deliver a solid earnings recovery over the next couple of years. The Add rating is unchanged.

Target price is $6.50 Current Price is $5.05 Difference: $1.45
If NUF meets the Morgans target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $5.59, suggesting upside of 18.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Ord Minnett rates NUF as Hold (3) -

Nufarm's interim result beat Ord Minnett's expectations by no less than 33%. And while dividends remain suspended, the broker notes the company's review of capital management principles is to be finalised by end 2021.

Ord Minnett highlights demand conditions remain favourable for the company, driven by elevated crop prices and relatively low channel inventory levels. The broker's increased forecasts imply a recovery in earnings in the years ahead.

Equally important, Nufarm is also progressing towards its Performance Improvement Program target of $35–40m by FY22, on run-rate basis.

Ord Minnett retains a Hold rating in combination with a price target of $5.25, up from $4.90.

Target price is $5.25 Current Price is $5.05 Difference: $0.2
If NUF meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $5.59, suggesting upside of 18.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

UBS rates NUF as Buy (1) -

Nufarm surprised with a first half earnings result 50% above consensus and 118% above the same period last year. Strength was seen across all segements, but particularly strong were Europe and A&NZ.

Management warned the first half may indicate a pull-forward of demand from the second half on a rush to restock inventory as a hegde against further covid disruption, but the broker highlights favourable weather conditions expected across key regions.

This suggests to the broker guidance may be a bit conservative. Buy retained, target rises to $5.95 from $5.70.

Target price is $5.95 Current Price is $5.05 Difference: $0.9
If NUF meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $5.59, suggesting upside of 18.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Macquarie rates PNI as Outperform (1) -

Pinnacle Investment Management Group's funds under management (FUM) were $84.9bn in April, up 20.4% versus December 2020. Macquarie notes the flows update highlights a continuation of sales momentum with mandate crystallisation accelerating throughout FY21.

The second half flows to April at $9.9bn exceed Macquarie's expectations with retail flows at $1.8bn or up 32.3% of opening FUM and Institutional flows at $8.1bn, up 45.2% of opening FUM.

Outperform retained with a target price of $11.37.

Target price is $11.37 Current Price is $9.78 Difference: $1.59
If PNI meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $11.67, suggesting upside of 18.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Ord Minnett rates PX1 as Downgrade to Hold from Buy (3) -

Plexure Group's fully audited FY21 release is labelled "a reasonable set of revenue and EBITDA numbers" by Ord Minnett. The numbers were largely in-line with the unaudited guidance provided earlier.

Cash flow generated surprised on the upside. However, downward pressure on the gross profit margin is seen as a concern by the broker. Main customer McDonald's is making the company pay for a higher rate of communications and infrastructure costs as app usage increases.

Ord Minnett has reduced its forecasts, while acknowledging risks have risen, but also that a re-negotiation of the contract is probably overdue, without putting too much faith in this actually happening.

Lower forecasts have pulled back Ord Minnett's price target to $0.80 from $1.36. Given higher short-term execution risks, the rating has been downgraded to Hold from Buy.

Target price is $0.80 Current Price is $0.60 Difference: $0.2
If PX1 meets the Ord Minnett target it will return approximately 33% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.0

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

Macquarie rates QAN as Outperform (1) -

Qantas Airways has guided to $400-450m in FY21 operating income versus Macquarie's expected $438m and also re-iterated its FY22 domestic capacity guidance. The airline has pushed the international recovery back three-months to December 2021.

Macquarie notes while earnings are bouncing back, led by the core domestic businesses, international recovery has been delayed. Even so, the broker still sees FY23 earnings exceeding pre-covid levels with cost-out and cash generation expected to see reduced levels of debt.

Outperform with the target dropping to $6.10 from $6.45.

Target price is $6.10 Current Price is $4.68 Difference: $1.42
If QAN meets the Macquarie target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $5.69, suggesting upside of 20.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Morgan Stanley rates QAN as Overweight (1) -

While FY21 guidance was slightly below Morgan Stanley's expectations, the focus now turns to current net cash generation and  ‘recovered’ earnings capacity. It's felt the former is tracking better than expected and the company remains well positioned on the latter.

Management expects fourth quarter Group Domestic capacity to be 95% of normal versus around 90% previously. Even as the group is prioritising capacity growth/demand generation, the broker notes average fares for February to April are 1-3% ahead of pre-covid.

The analyst reduces the forecast FY22 profit (PBT) to $750m from $957m, driven by a significant reduction in forecast International capacity. This is partially offset by a modest improvement in the Domestic capacity forecast.

The Overweight rating and target of $5.90 are retained. Industry view: In-line.

Target price is $5.90 Current Price is $4.68 Difference: $1.22
If QAN meets the Morgan Stanley target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $5.69, suggesting upside of 20.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Ord Minnett rates QAN as Buy (1) -

Qantas' market update revealed the airline's balance sheet repair is progressing much quicker than Ord Minnett had anticipated, the broker comments.

The offset is that guidance for more than a -$2bn loss with operating earnings of $400-450m is lower than Ord Minnett's forecasts on both accounts.

But balance sheet repair is considered the most important factor. Plus Ord Minnett maintains the view Qantas will come out at the other end of this global pandemic in a much stronger position.

Buy rating retained with unchanged price target of $5.70. On revised forecasts, Qantas will remain unprofitable in both FY21 and FY22.

Target price is $5.70 Current Price is $4.68 Difference: $1.02
If QAN meets the Ord Minnett target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $5.69, suggesting upside of 20.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

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

In a review of iron ore price volatility, Morgan Stanley concludes it has sharply increased though the magnitude of daily change does
not seem to reflect underlying fundamentals. It's thought this reveals nervousness around the near-term demand prospects for iron ore.

The analyst feels the valuation is reasonable for Rio Tinto and any pullback in the price of the underlying commodity might not have a disproportionate impact on the share price, like in previous cycles.

Equal-weight rating retained. Industry view is In-Line. The target price is $106.

Target price is $106.00 Current Price is $123.26 Difference: minus $17.26 (current price is over target).
If RIO meets the Morgan Stanley target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $127.14, suggesting upside of 4.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.6

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

Credit Suisse rates SKC as Neutral (3) -

After reflecting upon the amount of fiscal/monetary stimulus igniting consumption, Credit Suisse lifts FY21 forecast revenues for premium slot machines. As they are considered a higher margin product, forecast margins also increase.

The Neutral rating is maintained though the analyst suggests looking for entry points to take advantage of solid earnings momentum and the online gaming option. The target lifts to NZ$3.25 from NZ$3.00.

Current Price is $3.26. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.7

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

Macquarie rates SYD as Neutral (3) -

Sydney Airport Holdings' domestic passenger traffic for April was in line with Macquarie's expectation, reflecting the ongoing recovery. Domestic recovery is expected to provide the income for the airport to meet debt covenants.

Macquarie cautions the threat of domestic creep into international peak period slots remains an issue although highlights the impact will be more on longer-term growth rather than FY23 earnings which are expected to bounce with international recovery.

Neutral rating retained with a target of $6.04.

Target price is $6.04 Current Price is $5.77 Difference: $0.27
If SYD meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $6.19, suggesting upside of 5.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Ord Minnett rates SYD as Hold (3) -

Ord Minnett has further lowered its international passenger assumptions for Sydney Airport following yesterday's traffic update for April.

The broker has also pushed out the timing as to when Sydney Airport will start paying tax. That date is now set at December 2024.

Hold rating retained, while the broker's price target increases to $5.70 from $5.60.

Target price is $5.70 Current Price is $5.77 Difference: minus $0.07 (current price is over target).
If SYD meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.19, suggesting upside of 5.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

UBS rates WEB as Buy (1) -

Webjet posted another soft earnings result, roughly in line on stronger revenues offset by higher costs. But the signs are looking more positive, the broker suggests, given potential reopenings for the northern summer, and pent-up demand evident from improving bookings.

Market share gains are apparent and costs have been cut, but the delay of Australian travel, and possibly subdued conditions in Germany and the Scandis, mean the broker's assumed broader recovery is pushed out to FY23.

Buy retained, target falls to $5.45 from $5.75.

Target price is $5.45 Current Price is $4.66 Difference: $0.79
If WEB meets the UBS target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $5.38, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Macquarie rates WOW as Outperform (1) -

In an exploration of Endeavour Group’s hotels segment, Macquarie highlights the segment generates a considerably higher margin at circa 16% as compared to retail liquor which is a high volume, low margin business of circa 5-6%.

Macquarie highlights there are no obvious areas of operational inefficiency when compared with listed peers like Coles ((COL)) and Metcash ((MTS)) as the business is running on high operational efficiency already.

The analysts state the latter is what should be expected given the Endeavour Group is being spun-off from a very efficient and well run business that is Woolworths.

Outperform rating and $44.5 target.

Target price is $44.50 Current Price is $40.68 Difference: $3.82
If WOW meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $42.54, suggesting upside of 2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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