Australian Broker Call
October 12, 2017
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COMPANIES DISCUSSED IN THIS ISSUE
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Last Updated: 11:10 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.
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Today's Upgrades and Downgrades
| ANN - | ANSELL | Upgrade to Accumulate from Hold | Ord Minnett |
| FPH - | FISHER & PAYKEL HEALTHCARE | Downgrade to Underperform from Neutral | Credit Suisse |
| S32 - | SOUTH32 | Downgrade to Neutral from Outperform | Credit Suisse |
Macquarie rates AIZ as Outperform (1) -
Emirates will stop its Brisbane-Auckland and Melbourne-Auckland services from March 2018.
Macquarie observes this helps to balance a very competitive market and, while demand may not change materially, it removes some lower--cost capacity on these routes which should be positive for Air New Zealand.
The broker updates its data for market capacity and airfares and finds the outlook favourable for the airline.
Outperform maintained. Target is NZ$3.90.
Current Price is $3.14. Target price not assessed.
Current consensus price target is N/A
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 20.75 cents and EPS of 34.33 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 32.6, implying annual growth of N/A. Current consensus DPS estimate is 19.9, implying a prospective dividend yield of 6.3%. Current consensus EPS estimate suggests the PER is 9.7. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 21.69 cents and EPS of 36.88 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 33.0, implying annual growth of 1.2%. Current consensus DPS estimate is 19.9, implying a prospective dividend yield of 6.3%. Current consensus EPS estimate suggests the PER is 9.6. |
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
Ord Minnett rates ANN as Upgrade to Accumulate from Hold (2) -
Ahead of the company's investor briefing, Ord Minnett re-assesses the potential benefits of the company's transformation program and lifts earnings estimates to allow for relatively low-risk cost reductions in FY18.
Given the potential upside, the broker upgrades to Accumulate from Hold and raises the target to $25.50 from $21.40.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $25.50 Current Price is $23.20 Difference: $2.3
If ANN meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $22.54, 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 59.02 cents and EPS of 448.58 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 172.3, implying annual growth of N/A. Current consensus DPS estimate is 59.9, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 13.8. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 64.27 cents and EPS of 133.79 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 138.8, implying annual growth of -19.4%. Current consensus DPS estimate is 59.9, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 17.1. |
This company reports in USD. 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
Ord Minnett rates AOG as Accumulate (2) -
Ord Minnett reviews its forecasts as continued media scrutiny affects residential demand. The broker expects the company to deliver an FY18 result that is broadly in line with its guidance but considers this will be the peak in earnings.
Ord Minnett envisages sustainable earnings per share at about $0.17 and a sale of the Gasworks asset would be a positive catalyst that frees up capital to accelerate the buyback.
Accumulate rating maintained. Target is reduced to $3.60 from $3.70.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $3.60 Current Price is $2.35 Difference: $1.25
If AOG meets the Ord Minnett target it will return approximately 53% (excluding dividends, fees and charges).
Current consensus price target is $3.70, suggesting upside of 58.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 10.00 cents and EPS of 20.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 20.1, implying annual growth of -54.5%. Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 11.6. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 11.00 cents and EPS of 19.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 20.2, implying annual growth of 0.5%. Current consensus DPS estimate is 10.6, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 11.6. |
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates ASX as Hold (3) -
Deutsche Bank observes the first three months of trading for FY18 were largely flat. Capital raised was up 3%, largely from scrip raisings.
The broker observes corporates continue to be reluctant to raise money, new IPOs are scarce and M&A transactions are well below trend. This is considered cyclical and a recovery is expected over the medium term.
Hold retained. Target is $54.50.
Target price is $54.50 Current Price is $53.40 Difference: $1.1
If ASX meets the Deutsche Bank target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $51.32, suggesting downside of -3.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 203.00 cents and EPS of 228.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 231.4, implying annual growth of 3.1%. Current consensus DPS estimate is 207.7, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 23.1. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 202.00 cents and EPS of 239.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 244.4, implying annual growth of 5.6%. Current consensus DPS estimate is 217.8, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 21.8. |
Market Sentiment: -0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates BAP as Outperform (1) -
The company has sales agreements for non-core assets including NZ Footwear and contract resources. This has removed a key overhang and strength of the balance sheet,, Macquarie observes.
The broker continues to like the defensive earnings profile and believes the medium-long term margin upside is underappreciated.
Outperform. Target is raised to $6.25 from $6.20.
Target price is $6.25 Current Price is $5.25 Difference: $1.005
If BAP meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $6.47, suggesting upside of 22.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 16.10 cents and EPS of 32.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.1, implying annual growth of 30.9%. Current consensus DPS estimate is 17.1, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 16.9. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 21.70 cents and EPS of 36.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 35.6, implying annual growth of 14.5%. Current consensus DPS estimate is 20.6, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 14.8. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates BAP as Overweight (1) -
The company will sell the footwear and part of the resource services business it acquired with the takeover of Hellaby. This leaves TBS as the only non-core business left for sale.
Morgan Stanley considers the divestments a sign of positive progress and remains confident that, with the subsequent sale of TBS as well, a key risk will be removed and this should drive a re-rating.
Overweight rating retained. Target is $7.00. Industry view: In-line.
Target price is $7.00 Current Price is $5.25 Difference: $1.755
If BAP meets the Morgan Stanley target it will return approximately 33% (excluding dividends, fees and charges).
Current consensus price target is $6.47, suggesting upside of 22.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 18.90 cents and EPS of 31.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.1, implying annual growth of 30.9%. Current consensus DPS estimate is 17.1, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 16.9. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 EPS of 36.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 35.6, implying annual growth of 14.5%. Current consensus DPS estimate is 20.6, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 14.8. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates BBN as Neutral (3) -
Citi suspects the company's strong business model may be hurting in the short term as inferior competitors are forced to shutdown, leading to margin pressure.
The broker is cautious, given current trading conditions, and forecasts 3% sales growth for FY18. Target price falls to $1.60 from $1.70. Neutral rating retained.
Target price is $1.60 Current Price is $1.66 Difference: minus $0.06 (current price is over target).
If BBN meets the Citi target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $1.89, suggesting upside of 9.6% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 7.60 cents and EPS of 13.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.8, implying annual growth of 21.6%. Current consensus DPS estimate is 7.9, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 14.6. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 7.70 cents and EPS of 12.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 13.2, implying annual growth of 11.9%. Current consensus DPS estimate is 9.0, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 13.1. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates BBN as Neutral (3) -
The trading update suggests that conditions remain challenging and commentary implies downside risk to full year operating earnings guidance of $25.3-27.0m.
Macquarie has concerns about sector rationalisation and the consequent impact on short-term trading is materialising. Nevertheless, the broker remains positive on the medium to longer term.
Neutral maintained. Target reduced to $1.65 from $1.70.
Target price is $1.65 Current Price is $1.66 Difference: minus $0.01 (current price is over target).
If BBN 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 $1.89, suggesting upside of 9.6% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 7.70 cents and EPS of 11.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.8, implying annual growth of 21.6%. Current consensus DPS estimate is 7.9, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 14.6. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 9.80 cents and EPS of 13.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 13.2, implying annual growth of 11.9%. Current consensus DPS estimate is 9.0, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 13.1. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates BBN as Overweight (1) -
The company's update shows a pick up in sales but at lower margins because of excess clearance activity associated with the closure of a number of competitors.
Morgan Stanley believes this poses a near-term risk but also a significant medium-term opportunity and supports a view that the company will continue to take share in the baby category.
Overweight rating. Target is $2.35. Sector view is In-Line.
Target price is $2.35 Current Price is $1.66 Difference: $0.69
If BBN meets the Morgan Stanley target it will return approximately 42% (excluding dividends, fees and charges).
Current consensus price target is $1.89, suggesting upside of 9.6% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 8.10 cents and EPS of 12.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.8, implying annual growth of 21.6%. Current consensus DPS estimate is 7.9, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 14.6. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 9.60 cents and EPS of 14.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 13.2, implying annual growth of 11.9%. Current consensus DPS estimate is 9.0, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 13.1. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates BSL as Outperform (1) -
At its AGM the company has confirmed first half guidance. BlueScope has highlighted that the domestic gas supply guarantee is a significant breakthrough, given the significant impact of an energy crisis on the company and customers.
Credit Suisse believes a benefit from lower prices is unlikely in the near-term and at the earliest would be FY19. The company will update on the impact of anti-dumping legislation that is progressing through Parliament at the first half result in February.
The broker retains an Outperform rating and $12.75 target.
Target price is $12.75 Current Price is $11.49 Difference: $1.26
If BSL meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $13.24, suggesting upside of 15.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 13.00 cents and EPS of 88.11 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.9, implying annual growth of -22.7%. Current consensus DPS estimate is 11.9, implying a prospective dividend yield of 1.0%. Current consensus EPS estimate suggests the PER is 11.9. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 13.00 cents and EPS of 96.79 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 100.7, implying annual growth of 3.9%. Current consensus DPS estimate is 14.4, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 11.4. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates BTT as Neutral (3) -
September quarter funds under management were up 1.5% and in line with Credit Suisse forecasts.
Credit Suisse lowers forecasts for earnings per share by -7% for FY18 on lower JO Hambro performance fees. To be more positive the broker needs to witness diversification flows away from soft closed products, which appear at risk of drying up.
Neutral maintained. Target is reduced to $11.00 from $11.20.
Target price is $11.00 Current Price is $11.41 Difference: minus $0.41 (current price is over target).
If BTT 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 $11.79, suggesting upside of 3.1% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Credit Suisse 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 46.4, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 20.4. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 52.00 cents and EPS of 61.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 63.0, implying annual growth of 12.3%. Current consensus DPS estimate is 52.3, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 18.1. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates BTT as Overweight (1) -
Annualised fee increases from the September quarter inflows of $5.1m demonstrate that inflows are coming from higher margin JO Hambro products.
Overall, Morgan Stanley estimates the base fee rate on net inflows for the quarter was around 60 basis points, compared with the current 50 basis points margin, so the company should be on track for margin expansion.
Overweight and $13.50 target retained. Industry view In-Line.
Target price is $13.50 Current Price is $11.41 Difference: $2.09
If BTT meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $11.79, suggesting upside of 3.1% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 49.50 cents and EPS of 62.00 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 46.4, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 20.4. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 61.50 cents and EPS of 73.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 63.0, implying annual growth of 12.3%. Current consensus DPS estimate is 52.3, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 18.1. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates BTT as Hold (3) -
Ord Minnett notes flows to the global subsidiary JO Hambro were unable to offset substantial outflows from the Australian business in the September quarter. However, the asset mix led to higher annualised management fee income.
The broker retains Hold rating and target is raised to $11.00 from $10.50.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $11.00 Current Price is $11.41 Difference: minus $0.41 (current price is over target).
If BTT meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $11.79, suggesting upside of 3.1% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 45.00 cents and EPS of 57.00 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 46.4, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 20.4. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 52.00 cents and EPS of 70.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 63.0, implying annual growth of 12.3%. Current consensus DPS estimate is 52.3, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 18.1. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
FPH FISHER & PAYKEL HEALTHCARE CORPORATION LIMITED
Medical Equipment & Devices
Overnight Price: $11.93
Credit Suisse rates FPH as Downgrade to Underperform from Neutral (5) -
Credit Suisse observes the company has distinguished itself over the last five years with leading products in hospital and significant gains in OSA masks.
The broker believes the business is now operating from a position of scale and has a better-resourced R&D program amid a competitive environment that is arguably more benign than previously expected.
The main near-term risk, patent litigation, appears unlikely to affect news flow this year. However, the stock is trading at 16% above the broker's valuation and now considered stretched.
Rating is downgraded to Underperform from Neutral. Target rises to NZ$12.00 from NZ$10.50.
Current Price is $11.93. Target price not assessed.
Current consensus price target is N/A
The company's fiscal year ends in March.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 20.70 cents and EPS of 31.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.2, implying annual growth of N/A. Current consensus DPS estimate is 20.9, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 38.5. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 23.89 cents and EPS of 35.69 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 35.0, implying annual growth of 15.9%. Current consensus DPS estimate is 25.0, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 33.3. |
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
Deutsche Bank rates IPH as Hold (3) -
Deutsche Bank considers the acquisition of AJ Park, an NZ IP firm, as a positive. The company will acquire the business for NZ $66.1m, funded by cash and scrip.
The broker notes potential for the AJ Park margins to trend towards IPH margins over time via increased automation, cost synergies and scale benefits.
The broker retains a Hold rating. Target is raised to $5.30 from $5.10.
Target price is $5.30 Current Price is $5.15 Difference: $0.15
If IPH meets the Deutsche Bank target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $5.66, suggesting upside of 4.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 26.00 cents and EPS of 31.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.7, implying annual growth of 36.7%. Current consensus DPS estimate is 24.9, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 17.7. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 28.00 cents and EPS of 35.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 34.7, implying annual growth of 13.0%. Current consensus DPS estimate is 27.7, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 15.6. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates IPH as Neutral (3) -
The company will acquire NZ IP firm, AJ Park. Macquarie estimates annualised accretion to be around 5%, excluding synergies.
There is also scope for material margin improvement. The broker remains attracted to the business model and strong cash flow. Rating is upgraded to Outperform from Neutral. Target is raised to $5.75 from $5.37.
Target price is $5.75 Current Price is $5.15 Difference: $0.6
If IPH meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $5.66, suggesting upside of 4.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 25.70 cents and EPS of 31.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.7, implying annual growth of 36.7%. Current consensus DPS estimate is 24.9, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 17.7. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 29.00 cents and EPS of 35.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 34.7, implying annual growth of 13.0%. Current consensus DPS estimate is 27.7, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 15.6. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates IPH as Add (1) -
The company has acquired AJ Park, an NZ IP group with around 20% market share. Morgans upgrades margin assumptions and believes there is scope for further growth in margin.
Earnings estimates are raised by 3.9% and 5.3% for FY18 and FY19 respectively.
Add retained. Target rises to $5.93 from $5.48.
Target price is $5.93 Current Price is $5.15 Difference: $0.78
If IPH meets the Morgans target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $5.66, suggesting upside of 4.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 23.00 cents and EPS of 30.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.7, implying annual growth of 36.7%. Current consensus DPS estimate is 24.9, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 17.7. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 26.00 cents and EPS of 34.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 34.7, implying annual growth of 13.0%. Current consensus DPS estimate is 27.7, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 15.6. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates MGR as Sell (5) -
Citi asks whether FY19 estimates are too conservative. Consensus forecasts imply the company's earnings growth hits a wall in FY19, with forecast declines in the -1-2% range.
Citi acknowledges a case for the upside but retains a Sell rating, given auction clearance rates and sales volumes indicate downside risks are building and softening house price growth has historically been a catalyst for a de-rating.
Target is $2.16. Sell rating retained.
Target price is $2.16 Current Price is $2.35 Difference: minus $0.19 (current price is over target).
If MGR meets the Citi target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $2.38, suggesting upside of 0.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 11.00 cents and EPS of 15.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.5, implying annual growth of -50.6%. Current consensus DPS estimate is 11.0, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 15.2. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 11.10 cents and EPS of 15.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.7, implying annual growth of -5.2%. Current consensus DPS estimate is 11.0, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 16.0. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates ORA as Hold (3) -
The company is a beneficiary of the recent decline in the China old corrugated containers (OCC) import price, as this is the primary input for the B9 containerboard mill.
The price is now down -US$14/t year-on-year and the broker estimates the earnings impact will be neutral in FY18 after the company incurred higher OCC costs in the September quarter.
Hold rating retained. Earnings estimates are raised by 4% for FY18 and 1% for FY19. Target is raised to $3.00 from $2.90.
Target price is $3.00 Current Price is $3.22 Difference: minus $0.215 (current price is over target).
If ORA meets the Deutsche Bank target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $3.28, suggesting upside of 1.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 12.00 cents and EPS of 16.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 16.6, implying annual growth of 16.1%. Current consensus DPS estimate is 11.8, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 19.4. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 12.00 cents and EPS of 17.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.9, implying annual growth of 7.8%. Current consensus DPS estimate is 12.6, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 18.0. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates PPH as Buy (1) -
The company surprised with a solid second quarter and Ord Minnett now forecasts a lower rate of cash burn in FY18 and FY19.
However, to justify further upside on the share price, the broker needs to witness more evidence that the pivot to larger customers will be successful.
Until such time, the broker lowers its rating to Hold from Buy. Target is raised to $2.86 from $2.38.
Target price is $2.86 Current Price is $2.75 Difference: $0.11
If PPH meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).
The company's fiscal year ends in March.
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 9.44 cents. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 2.89 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates RCR as Initiation of coverage with Buy (1) -
The company is in the early stages of a multi-year growth trajectory, Citi believes.
The broker envisages further upside given the stock trades at a modest PE premium on FY18 estimates to its peers, despite a stronger growth outlook. An improved balance sheet provides opportunities to win and deliver larger projects.
Citi initiates coverage with a Buy rating and $5.02 target.
Target price is $5.02 Current Price is $4.28 Difference: $0.74
If RCR meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $4.91, suggesting upside of 14.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 8.50 cents and EPS of 23.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 25.8, implying annual growth of 41.0%. Current consensus DPS estimate is 9.3, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 16.7. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 12.50 cents and EPS of 35.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 34.1, implying annual growth of 32.2%. Current consensus DPS estimate is 12.5, implying a prospective dividend yield of 2.9%. Current consensus EPS estimate suggests the PER is 12.6. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates S32 as Downgrade to Neutral from Outperform (3) -
Credit Suisse observes all the company's commodity exposures are above original forecasts, although partly offset by unfavourable currency.
Operating cash flow in the September quarter should be strong and the broker expects metallurgical coal and alumina have the most near-term downside pricing risk versus spot.
Rating is downgraded to Neutral from Outperform, given recent share price strength. Target is raised to $3.20 from $2.95.
Target price is $3.20 Current Price is $3.26 Difference: minus $0.06 (current price is over target).
If S32 meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $3.23, suggesting upside of 0.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 9.64 cents and EPS of 24.28 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 23.6, implying annual growth of N/A. Current consensus DPS estimate is 11.7, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 13.6. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 7.90 cents and EPS of 19.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.3, implying annual growth of -5.5%. Current consensus DPS estimate is 12.0, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 14.3. |
This company reports in USD. 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
Macquarie rates STO as Outperform (1) -
QCLNG has shut down its two trains and Macquarie had previously highlighted that GLNG and APLNG will be the primary beneficiaries.
The broker now expects sales will hit the high end of guidance and is confident Santos will easily beat consensus expectations and deliver a strong 2017 result. The broker suggests the market has underestimated the value of the gas sales and swaps that the company has concluded.
Macquarie retains an Outperform rating and raises the target to $4.60 from $4.40.
Target price is $4.60 Current Price is $4.07 Difference: $0.53
If STO meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $4.07, suggesting downside of -1.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 0.00 cents and EPS of 22.82 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 13.5, implying annual growth of N/A. Current consensus DPS estimate is 1.5, implying a prospective dividend yield of 0.4%. Current consensus EPS estimate suggests the PER is 30.5. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of 14.56 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 19.9, implying annual growth of 47.4%. Current consensus DPS estimate is 5.0, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 20.7. |
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
Summaries
| AIZ - | AIR NEW ZEALAND | Outperform - Macquarie | Overnight Price $3.14 |
| ANN - | ANSELL | Upgrade to Accumulate from Hold - Ord Minnett | Overnight Price $23.20 |
| AOG - | AVEO | Accumulate - Ord Minnett | Overnight Price $2.35 |
| ASX - | ASX | Hold - Deutsche Bank | Overnight Price $53.40 |
| BAP - | BAPCOR LIMITED | Outperform - Macquarie | Overnight Price $5.25 |
| Overweight - Morgan Stanley | Overnight Price $5.25 | ||
| BBN - | BABY BUNTING | Neutral - Citi | Overnight Price $1.66 |
| Neutral - Macquarie | Overnight Price $1.66 | ||
| Overweight - Morgan Stanley | Overnight Price $1.66 | ||
| BSL - | BLUESCOPE STEEL | Outperform - Credit Suisse | Overnight Price $11.49 |
| BTT - | BT INVEST MANAGEMENT | Neutral - Credit Suisse | Overnight Price $11.41 |
| Overweight - Morgan Stanley | Overnight Price $11.41 | ||
| Hold - Ord Minnett | Overnight Price $11.41 | ||
| FPH - | FISHER & PAYKEL HEALTHCARE | Downgrade to Underperform from Neutral - Credit Suisse | Overnight Price $11.93 |
| IPH - | IPH | Hold - Deutsche Bank | Overnight Price $5.15 |
| Neutral - Macquarie | Overnight Price $5.15 | ||
| Add - Morgans | Overnight Price $5.15 | ||
| MGR - | MIRVAC | Sell - Citi | Overnight Price $2.35 |
| ORA - | ORORA | Hold - Deutsche Bank | Overnight Price $3.22 |
| PPH - | PUSHPAY HOLDINGS | Buy - Ord Minnett | Overnight Price $2.75 |
| RCR - | RCR TOMLINSON | Initiation of coverage with Buy - Citi | Overnight Price $4.28 |
| S32 - | SOUTH32 | Downgrade to Neutral from Outperform - Credit Suisse | Overnight Price $3.26 |
| STO - | SANTOS | Outperform - Macquarie | Overnight Price $4.07 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 10 |
| 2. Accumulate | 2 |
| 3. Hold | 9 |
| 5. Sell | 2 |
Thursday 12 October 2017
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Disclaimer:
The content of this information does in no way reflect the opinions of
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the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe
and comment on. By doing so we believe we provide intelligent investors
with a valuable tool that helps them in making up their own minds, reading
market trends and getting a feel for what is happening beneath the surface.
This document is provided for informational purposes only. It does not
constitute an offer to sell or a solicitation to buy any security or other
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base their work on information believed to be reliable and accurate, though
no guarantee is given that the daily report is accurate or complete. Investors
should contact their personal adviser before making any investment decision.
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