Australian Broker Call

Credit Suisse rates A2M as Neutral (3) -

a2 Milk Co has received necessary approvals to market its A2 Platinum infant formula in the US on an ongoing basis from the second half of FY23. While Credit Suisse expects this will support a breakeven of the company's US operations by FY25, it is cautious on significant valuation uplift. 

The broker finds the US market highly competitive, with 90% of the market held by four major players. Credit Suisse also warns lower pricing and higher costs will likely drive a lower earnings margin on US products. 

The Neutral rating is retained and the target price increases to $5.30 from $5.25.

Target price is $5.30 Current Price is $5.49 Difference: minus $0.19 (current price is over target).
If A2M meets the Credit Suisse target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.00, suggesting downside of -7.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: -0.5

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

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

Morgan Stanley lowers its target to $17.00 from $17.50 following evidence of softer volumes in Amcor 's key markets and a -4% downgrade to EPS guidance. The Equal-weight rating is maintained. Industry view: In Line.

The broker describes 1Q results as solid overall despite a large currency headwind. Net sales increased by 9% on the previous corresponding period with higher raw material costs and US$400m of price increases.

While the analyst is wary of volume impacts from channel de-stocking and the economic backdrop, the business is expected to remain relatively resilient.

Target price is $17.00 Current Price is $17.22 Difference: minus $0.22 (current price is over target).
If AMC meets the Morgan Stanley target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.05, suggesting upside of 5.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.1

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

Morgans rates AMC as Hold (3) -

On a constant currency basis, Amcor's 1Q result exceeded Morgans expectation with EBIT and EPS rising by 9% amd 10%, respectively. These outcomes compared to the broker's forecasts for 6% and 3%.

Management maintained FY23 constant FX underlying EPS guidance, however, due to a stronger US dollar, reported EPS guidance was lowered to between US77-81cps from US80-84cps.

Updates to foreign exchange assumptions sees the analyst's underlying EPS forecasts for FY23-25 fall by -3-6% and the target falls to $17.75 from $$18.75. Hold.

Target price is $17.75 Current Price is $17.22 Difference: $0.53
If AMC meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $18.05, suggesting upside of 5.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.1

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

Credit Suisse rates AUB as Outperform (1) -

AUB Group has completed its acquisition of Tysers earlier than expected, and delivered first quarter results ahead of Credit Suisse's expectations. The broker expects consensus upgrades will be forthcoming.  

The company reiterated its target for a synergy run-rate of $25m by the end of FY24, and Credit Suisse finds the cost synergy plan to be well thought through. 

The Outperform rating is retained and the target price increases to $25.65 from $25.30.

Target price is $25.65 Current Price is $21.19 Difference: $4.46
If AUB meets the Credit Suisse target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $25.24, suggesting upside of 22.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Ord Minnett rates AUB as Buy (1) -

AUB Group has lifted its net profit guidance to $90.0-92.0m from $86.5-91.0m, or $107.5-115.0m including initial guidance for Tysers. Ord Minnett has lifted its forecast to $111m from $102m, accounting for the earlier close of the Tysers acquisition and higher interest rates. 

The Buy rating is retained and the target price increases to $26.00 from $25.00.

Target price is $26.00 Current Price is $21.19 Difference: $4.81
If AUB meets the Ord Minnett target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $25.24, suggesting upside of 22.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Morgans rates BCB as Add (1) -

Morgans lowers its target for Bowen Coking Coal to 48c from 55c after allowing for a $85m capital raise for short and longer-term infrastructure access, growth and working capital.

The analyst feels the upcoming December quarter will be a major catalyst as the company transitions to material cash generation. Add.

Target price is $0.48 Current Price is $0.28 Difference: $0.205
If BCB meets the Morgans target it will return approximately 75% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Credit Suisse rates BLD as Underperform (5) -

Boral has indicated price rises and operational leverage may be unable to deliver the margin expansion perviously anticipated amid ongoing and significant inflation. Credit Suisse highlights the company had previously flagged that initiatives would more than offset inflationary impacts.

The broker lowers its earnings expectations -$40m and net profit -25%. While Credit Suisse sees scope for future margin recovery, it finds consensus forecasts optimistic. 

The Underperform rating is retained and the target price decreases to $2.40 from $2.50.

Target price is $2.40 Current Price is $2.85 Difference: minus $0.45 (current price is over target).
If BLD meets the Credit Suisse target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.70, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.5

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

Macquarie rates BLD as Neutral (3) -

Boral's AGM and first quarter trading update suggested revenue growth is tracking to plan, on increased prices and volumes. But ongoing inflation casts uncertainty on whether operating leverage delivers any real margin improvement in FY23, Macquarie warns.

And then there's the weather. The broker assumes the first half is being markedly impacted, while the second half should improve if La Nina wanes as forecast. But cost pressures and labour availability constraints may push a catch-up further out.

The weather brings a target cut to $3.05 from $3.35. Neutral retained.

Target price is $3.05 Current Price is $2.85 Difference: $0.2
If BLD meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $2.70, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.5

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

Morgan Stanley rates BLD as Underweight (5) -

Morgan Stanley notes commentary on current trading and the outlook was scarce at Boral's AGM. 

The broker highlights a cautious earnings quote: "What remains unknown at this stage is whether price rises will be enough to cover for the significant inflation we are continuing to face...".

The Underweight rating and $2.20 target are unchanged. Industry view In-Line.

Target price is $2.20 Current Price is $2.85 Difference: minus $0.65 (current price is over target).
If BLD 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 $2.70, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.5

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

UBS rates BLD as Neutral (3) -

UBS points to a change in wording by Boral at its AGM to an "ongoing focus on price" rather than "strong price growth" previously. While the company expects FY23 revenue to outdo FY22, this is reliant upon the prior statement and increased volumes.

Further, management noted it remains "unknown" whether price will offset inflation to give real margin expansion.

The Neutral rating is unchanged and the target eases to $2.85 from $2.95 after the analyst lowers the FY23 EPS forecast by -16% due to ongoing inflationary and cost pressures.

Target price is $2.85 Current Price is $2.85 Difference: $0
If BLD meets the UBS target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $2.70, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.5

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

Citi rates BLX as Neutral (3) -

Citi is anticipating a -3% decline in Beacon Lighting's retail sales given strong comparables and a cooling housing market, and is concerned growth in other businesses may not be enough to offset the decline. 

The broker's 5% sales growth forecast for FY23 relies on 25% growth in trade sales and 10% growth in international sales. The company has suggested it will focus on expanding its trade offering over FY23, but Citi's analysis suggests trades continue to prefer wholesalers. 

The Neutral rating and target price of $2.53 are retained.

Target price is $2.53 Current Price is $2.05 Difference: $0.48
If BLX meets the Citi target it will return approximately 23% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Macquarie rates BVS as Downgrade to Neutral from Outperform (3) -

Bravura Solutions issued FY23 guidance significantly below Macquarie's expectations due mostly to far higher costs. The broker's revised forecasts for cost inflation materially reduce outer year earnings.

Client inactivity has been an issue since covid and given the economic outlook, the risk is the issue continues, Macquarie suggests. The balance sheet is not at risk at this point, but the broker will monitor.

Switching to a price/earnings valuation from discounted cash flow, target falls to 66c from $2.00. Downgrade to Neutral from Outperform.

Target price is $0.66 Current Price is $0.63 Difference: $0.03
If BVS meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Ord Minnett rates BVS as Buy (1) -

Bravura Solutions has materially downgraded earnings guidance, with operating earnings guidance of $10-15m materially lower than consensus assumptions of $43m and revenue guidance of $270-275m a miss on consensus assumptions of $279m. 

According to Ord Minnett, Bravura Solutions' update highlights a need for greater cost and product discipline in order to deliver on operational efficiencies. 

The Buy rating is retained and the target price decreases to $1.00 from $1.75. 

Target price is $1.00 Current Price is $0.63 Difference: $0.37
If BVS meets the Ord Minnett target it will return approximately 59% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Citi rates CSL as Buy (1) -

CSL has flagged it will continue to spend 10-11% of annual revenue on research and development, with its portfolio now including assets from Vifor. Citi considers CSL112 the primary asset of CSL's research and development portfolio. 

The phase 3 trial for CSL112 continues, and the treatment is on track for launch in the fourth quarter of 2025. Citi accounts for a valuation of $20 per share for CSL112 in its target price. 

The Buy rating and target price of $340.00 are retained.

Target price is $340.00 Current Price is $278.34 Difference: $61.66
If CSL meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $323.95, suggesting upside of 17.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Credit Suisse rates CSL as Neutral (3) -

CSL is anticipating approval of its EtranaDez therapy by the end of November, for launch in the first quarter of the new year, and could be a first to market gene therapy haemophilia product. 

Credit Suisse feels conservative in expecting EtranaDez could take 5% of the global haemophilia B market within 10 years. Earnings accretion of 1-3% will be minor through to FY25, allowing for a slow ramp up, but the broker sees peak sales of US$1.1bn in FY33.

The Neutral rating and target price of $305.00 are retained.

Target price is $305.00 Current Price is $278.34 Difference: $26.66
If CSL meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $323.95, suggesting upside of 17.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Macquarie rates CSL as Outperform (1) -

CSL's R&D update highlighted the progression of key products within the pipeline, Macquarie notes, as well as increased breadth following the Vifor acquisition.

In the near term, the broker sees EtranaDez and garadacimab as potentially supplementing an assumed base-business recovery in FY24, with three other products key candidates in the longer term.

Outperform and $329.50 target retained.

Target price is $329.50 Current Price is $278.34 Difference: $51.16
If CSL meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $323.95, suggesting upside of 17.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Morgan Stanley rates CSL as Overweight (1) -

While acknowledging the primary importance of a plasma market recovery for CSL, Morgan Stanley sees several R&D catalysts for FY23.

These catalysts include the CSL112 trial, set to complete at the end of 2023, the EntranaDez launch and the garadacimab global submissions target for 2023.

The Overweight rating and $327 target are retained. Industry view: In-Line.

Target price is $327.00 Current Price is $278.34 Difference: $48.66
If CSL meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $323.95, suggesting upside of 17.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Ord Minnett rates CSL as Accumulate (2) -

CSL has highlighted the increasing breadth of its R&D programs, according to Ord Minnett, though guidance on total R&D spending was
unchanged at 10-11% of revenues.

The broker highlights management commentary of an uptick in demand for key therapies as diagnosis rates recover post the height of covid.

The analyst also sees clear signs that plasma collection is recovering and maintains an Accumulate rating and target price of $330.00.

Target price is $330.00 Current Price is $278.34 Difference: $51.66
If CSL meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $323.95, suggesting upside of 17.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

UBS rates CSR as Buy (1) -

CSR released interim financials earlier this morning and UBS, upon initial glance, reports it's a positive beat.

Building products performed very strongly, points out the broker, and is the main responsible for the better-than-expected performance, still accompanied by a solid pipeline of work.

The stand-out for Property is the fact that assets with development potential have increased in value by $1.5bn on an "as is"-basis.

The disappointment comes from the aluminium business, where costs inflation is leading to (significant) downward guidance for FY23.

All in all, management feels confident it can manage costs across the other parts of the business, comments the broker.

For now, Target unchanged at $6.50 with a Buy rating.

Target price is $6.50 Current Price is $4.53 Difference: $1.97
If CSR meets the UBS target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $5.53, suggesting upside of 18.0% (ex-dividends)

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Macquarie rates DOW as Outperform (1) -

Downer EDI's AGM indicated FY23 profit growth guidance of 10-20% remains unchanged. Macquarie is at the lower end of the range and sees downside risk posed by ongoing wet weather.

A review is underway to realise value of business not fully recognised in the current share price according to management. No decisions have been made, with further details to be announced during 2023.

Macquarie sees the stock as cheap on a 13.5x forward PE and 5.0% dividend yield. Outperform and $5.61 target retained.

Target price is $5.61 Current Price is $4.81 Difference: $0.8
If DOW meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $5.99, suggesting upside of 24.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Ord Minnett rates DOW as Upgrade to Buy from Accumulate (1) -

Downer EDI reiterated FY23 guidance for 10-20% growth in net profit at its AGM with “strategies to realise value for shareholders”
also to be articulated in 2023. Ord Minnett notes a 2H outlook will be provided at February's interim results.

On valuation grounds, the broker upgrades its rating to Buy from Accumulate and trims its target to $5.90 from $6.10 after reducing its FY23 profit growth forecast to 15% from 23% year-on-year. The latter change results from softer assumptions for Transport and Utilities.

Ord Minnett remains positive on Downer’s longer-term prospects.

Target price is $5.90 Current Price is $4.81 Difference: $1.09
If DOW meets the Ord Minnett target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $5.99, suggesting upside of 24.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Macquarie rates GL1 as Outperform (1) -

Global Lithium Resources has acquired the remaining 20% of the Manna project. A $121.5m equity raise will fund the acquisition, further exploration, and study work at both Manna and Marble Bar, Macquarie notes.

The consolidation of the ownership of Manna simplifies the miner's investment case in the broker's view. The transaction was earnings-accretive, and an updated resource estimate for Manna presents a key near term catalyst.

Outperform retained, target rises to $3.20 from $3.00.

Target price is $3.20 Current Price is $2.25 Difference: $0.95
If GL1 meets the Macquarie target it will return approximately 42% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Macquarie rates GQG as Initiation of coverage with Outperform (1) -

Macquarie has initiated coverage of GQG Partners with an Outperform recommendation and a $1.95 price target.

The broker explains GQG Partners is a boutique funds management business specialising in Global, US and Emerging Market equity strategies and follows a “quality” investment strategy.

GQG positions itself outside of the more traditional ‘value-growth’ investment style framework and has historically delivered relative outperformance in down-markets and reasonable participation in up-markets, Macquarie notes.

Competitive pricing and limited performance fees reduce earnings volatility.

Target price is $1.95 Current Price is $1.37 Difference: $0.58
If GQG meets the Macquarie target it will return approximately 42% (excluding dividends, fees and charges).

Current consensus price target is $2.03, suggesting upside of 40.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Ord Minnett rates IFL as Buy (1) -

Insignia Financial's first quarter platform flows were slightly better and investment management flows slightly worse than Ord Minnett had anticipated. The company reported net positive platform flows of $136m, a $1bn improvement on the previous comparable period.  

A further thirty advisors left the company during the quarter, but Ord Minnett feels the rate of exits is slowing.

The Buy rating is retained and the target price decreases to $3.83 from $4.10.

Target price is $3.83 Current Price is $3.18 Difference: $0.65
If IFL meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $3.90, suggesting upside of 24.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Ord Minnett rates IVC as Hold (3) -

Ord Minnett found InvoCare's strategy and targets largely unchanged at its recent strategy day, but digital strategy was further progressed than the broker had expected. 

The digital strategy focuses on experiences to convert customers, empowering customers over the lifecycle, and providing a gateway for connecting with the broader community. 

The Hold rating and target price of $12.00 are retained.

Target price is $12.00 Current Price is $10.38 Difference: $1.62
If IVC meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $11.65, suggesting upside of 12.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Macquarie rates JHX as Outperform (1) -

Ahead of James Hardie Industries' quarterly result next week, Macquarie has increased its target to $60.40 from $59.50, Outperform retained.

Broader trading conditions remain firm, the broker suggests, with activity underpinned by prior sales, disrupted supply chains and firm R&R.

Having said this, Macquarie notes risks are building in new construction, with recent rate moves putting even more pressure on market dynamics.

Generally the broker expects input cost pressures to subside from here.

Target price is $60.40 Current Price is $33.05 Difference: $27.35
If JHX meets the Macquarie target it will return approximately 83% (excluding dividends, fees and charges).

Current consensus price target is $47.65, suggesting upside of 44.8% (ex-dividends)

The company's fiscal year ends in February.

Forecast for FY23:

Forecast for FY24:

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

Credit Suisse rates LLC as Outperform (1) -

In a recent strategy update Lendlease Group tightened its group return on equity target to 8-10%, but retained segment targets, and updated its earnings mix target, now targeting increased Investment earnings but decreased Construction earnings.

Lendlease Group's FY23 outlook is weaker than Credit Suisse had anticipated, but still reflects an improved earnings result. The broker's earnings per share forecasts are updated -20.7%, -2.2% and 1.0% through to FY25.

The Outperform rating is retained and the target price decreases to $11.75 from $12.00.

Target price is $11.75 Current Price is $7.84 Difference: $3.91
If LLC meets the Credit Suisse target it will return approximately 50% (excluding dividends, fees and charges).

Current consensus price target is $11.65, suggesting upside of 50.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Macquarie rates LLC as Outperform (1) -

Lendlease has guided to the lower end of divisional return targets for FY23, driven by a combination of the macro environment and asset-specific delays, with particular concern being the lowering of expectations in the more resilient investments division, Macquarie notes.

Given the near-term downside risks facing the company, a short-term re-rate may be difficult. The broker will be looking for continued evidence of new starts, ramp-up in investment capital and introduction of 3rd party capital to the platform to shore up earnings expectations.

With the stock trading on 0.8x book value, Outperform retained. Target falls to $10.03 from $13.33.

Target price is $10.03 Current Price is $7.84 Difference: $2.19
If LLC meets the Macquarie target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $11.65, suggesting upside of 50.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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) -

A strategy briefing by Lendlease Group also included a downgrade to FY23 profit guidance. All targets for return on invested capital (ROIC) and margin were pushed to the lower-end of ranges provided in August.

In addition, the payout ratio for dividends will be lowered to 30-50% from 40-60%, which confirms the broker's previous commentary on a tight balance sheet position.

More positively, Morgan Stanley highlights FY24 is on-track to meet return targets for each of the three company segments (albeit at the lower-end).

The Equal-weight rating and $11.20 target are retained. Industry View: In-Line.

Target price is $11.20 Current Price is $7.84 Difference: $3.36
If LLC meets the Morgan Stanley target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $11.65, suggesting upside of 50.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Ord Minnett rates LLC as Buy (1) -

Lendlease Group has prioritised its balance sheet over dividends, according to Ord Minnett, in lowering is payout ratio to 30-50% from 40-50%. 

During a strategy update, the company lowered its interim FY23 targets to the lower end of the previous guidance ranges, while the return on equity (ROE) target was narrowed to 8-10% from 8-11%. 

The broker lowers its FY23 earnings forecast by -17% for FY23 and for FY24-26 by -8% due to higher debt costs and lower assumed construction margins and realised revenue. The target falls to $11.50 from $12.50. Buy.

Target price is $11.50 Current Price is $7.84 Difference: $3.66
If LLC meets the Ord Minnett target it will return approximately 47% (excluding dividends, fees and charges).

Current consensus price target is $11.65, suggesting upside of 50.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Ord Minnett rates MAF as Buy (1) -

An update from MA Financial demonstrated good flow momentum in Asset Management according to Ord Minnett, with net flows of $510m for the first four months of the second half on track to meet the broker's forecast $700m for the half. 

The company reiterated underlying earnings per share growth guidance of 30-40%, and Ord Minnett remains at the lower end of this range. 

The Buy rating is retained and the target price decreases to $8.00 from $10.00.

Target price is $8.00 Current Price is $4.75 Difference: $3.25
If MAF meets the Ord Minnett target it will return approximately 68% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

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

Morgan Stanley forecasts 2H pre-provision profit of around $5,444m and cash profit ex notable items of circa $3,712m when National Australia Bank reports on November 9.

The analyst feels investors will be disappointed should these two profit measures come in below consensus forecasts for $5,284m and $3,637m.

The Equal-weight rating and $29.60 target are unchanged. Industry view is In-Line.

Target price is $29.60 Current Price is $32.15 Difference: minus $2.55 (current price is over target).
If NAB meets the Morgan Stanley target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $32.00, suggesting downside of -0.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

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

UBS believes Orica's upcoming FY22 result has been de-risked by a previous trading update. The broker upgrades its rating to Buy from Neutral on valuation and after raising FY23 and FY24 EPS forecasts by 4% and 11%, respectively.

The analyst points out global ammonium nitrate prices have increased significantly over the past 12 months and looks forward to evidence of increasing contract prices during the company's upcoming earnings update.

The target rises to $18.00 from $17.00.

Target price is $18.00 Current Price is $14.08 Difference: $3.92
If ORI meets the UBS target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $16.26, suggesting upside of 14.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Ord Minnett rates PDL as Accumulate (2) -

Ord Minnett points out the future direction of the Pendal Group share price is reliant on current takeover activity though still updates forecasts for 4Q funds under management (FUM) figures, prior to FY22 results.

FUM at September fell to $104.5bn from the $111bn in June, as expected by the analyst, due to weaker markets. Apart from the US, net inflows for Europe, the UK and Asia beat expectations.

The target slips to $5.10 from $5.35. Accumulate.

Target price is $5.10 Current Price is $4.52 Difference: $0.58
If PDL meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $5.01, suggesting upside of 11.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

UBS rates PDL as Buy (1) -

Hot on the release of Pendal Group's FY22 results release, UBS has produced a quick response pointing out the financial performance marks a slight beat, underlying, by some 3%.

Operationally the result is in line and the broker lauds the good cost control. A large discrepancy seems on display between the announced final dividend of 3.5c and the 17c and 21c forecast by UBS and market consensus, respectively.

No guidance was provided and UBS observes the shares are trading some -22% below the bid announced by Perpetual ((PPT)), arguably now itself 'in play'.

Target $5.35. Buy.

Separately, Perpetual has rejected a $30/share cash bid by a consortium including Regal Partners (considered opportunistic by UBS) and intends to progress the Pendal Group acquisition.

The broker likes Perpetual's current strategic path, which, unlike the consortium, includes the retention of the Corporate Trust business.

However, UBS feels an improved consortium offer may present a conundrum for the board when comparing best interests of shareholders and completion of the Pendal Group acquisition.

Target price is $5.35 Current Price is $4.52 Difference: $0.83
If PDL meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $5.01, suggesting upside of 11.1% (ex-dividends)

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Ord Minnett rates PPE as Buy (1) -

With the Federal Budget allowing for an expansion of the Pacific Australia Labour Mobility scheme to 35,000 workers, from 24,000, by the end of FY23, Ord Minnett sees tailwind risk for PeopleIN. 

PeopleIN's recent acquisition of Food Industry People (FIP) accounts a little under 20% of scheme participants, and the improved funding sees Ord Minnett increase its forecast earnings contribution from FIP to $12.5m from $10.0m. 

The Buy rating is retained and the target price decreases to $4.52 from $4.67.

Target price is $4.52 Current Price is $3.12 Difference: $1.4
If PPE meets the Ord Minnett target it will return approximately 45% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Ord Minnett rates PPT as Buy (1) -

Ord Minnett still considers a takeover of Pendal Group by Perpetual is the most likely outcome, despite a non-binding indicative proposal by a consortium to acquire Perpetual.

The consortium's proposal undervalues the company, according to the board, and the broker feels a higher bid would be necessary for further engagement.

The Buy rating and $30 target are retained.

Target price is $30.00 Current Price is $28.82 Difference: $1.18
If PPT meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $29.84, suggesting upside of 2.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

UBS rates PPT as Neutral (3) -

Perpetual has rejected a $30/share cash bid by a consortium including Regal Partners (considered opportunistic by UBS) and intends to progress the Pendal Group acquisition.

The broker likes Perpetual's current strategic path, which, unlike the consortium, includes the retention of the Corporate Trust business.

However, UBS feels an improved consortium offer may present a conundrum for the board when comparing best interests of shareholders and completion of the Pendal Group acquisition.

The $26.60 target and Neutral rating are unchanged.

Target price is $26.60 Current Price is $28.82 Difference: minus $2.22 (current price is over target).
If PPT meets the UBS target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.84, suggesting upside of 2.5% (ex-dividends)

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Macquarie rates SGP as Neutral (3) -

Stockland hosted a logistics investor day, focusing on three projects in Sydney. The company is targeting some $600m of logistics development completions in each of FY23 and FY24, followed by a longer-term target of $400m-$500m pa thereafter.

If Stockland is successful in execution, Macquarie estimates this could drive additional funds from operations growth across the group of 1% in FY23-24 and 0.5% thereafter, while also benefiting from revaluations.

But the broker remains cautious on downside catalysts in residential near-term. Neutral and $3.32 target retained.

Target price is $3.32 Current Price is $3.46 Difference: minus $0.14 (current price is over target).
If SGP meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.02, suggesting upside of 15.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Citi rates WOW as Buy (1) -

Woolworths Group's first quarter supermarkets like-for-like sales growth of -1.1% was a weaker result than Citi had expected. While the result was a miss to competitor Coles Group's ((COL)) quarter, Woolworths Group remains ahead of Coles Group on a four-year stack.

The broker expects margin improvement through the remainder of FY23 with a return to predictable spending patterns allows for better cost management. 

The Buy rating is retained and the target price decreases to $39.50 from $40.70.

Target price is $39.50 Current Price is $32.05 Difference: $7.45
If WOW meets the Citi target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $34.44, suggesting upside of 5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Credit Suisse rates WOW as Upgrade to Neutral from Underperform (3) -

Woolworths Group delivered below-market sales growth in the first quarter, with Credit Suisse acknowledging the market was too optimistic on market share retention.

The broker notes Woolworths Group appears to have ceded the 60 basis point share gain from the first quarter lockdown of FY22 as market share normalised. 

The broker also found profit guidance for New Zealand operations of NZ$100-130m to be lower than anticipated, and expects the profit reset to have some permanence. 

A less demanding share price to valuation sees the broker increase its rating to Neutral from Underperform and the target price increases to $33.01 from $32.84.

Target price is $33.01 Current Price is $32.05 Difference: $0.96
If WOW meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $34.44, suggesting upside of 5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Macquarie rates WOW as Neutral (3) -

Woolworths provided a Sep Q trading update, with total group sales up 1.8%, but the core business is cycling tough comparables and losing share to Coles Group ((COL)), Macquarie notes.

It is unclear to the broker whether a shift in consumer behaviour is due to cost-of-living pressure or a normalisation in trading post-covid. Items per basket growth has declined in both Australia (-13.0%) and NZ (-14.3%).

The numbers suggest to the broker more frequent trips to stores. Management also flagged that performance in its Metro stores has improved as convenience shopping returns.

Target falls to $35.50 from $37.10, Neutral retained.

Target price is $35.50 Current Price is $32.05 Difference: $3.45
If WOW meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $34.44, suggesting upside of 5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Morgans rates WOW as Hold (3) -

Woolworths Group's 1Q sales came in slightly weaker than Morgans expected, which results in only modest adjustments to the broker's earnings forecasts. 

Overall sales growth suffered from supply challenges in fruit & vegetables and by comparison with elevated demand in the previous corresponding period (NSW and VIC lockdowns).

The target falls to $34.10 from $37.25 as the analyst applies a lower valuation multiple to reflect a recent decline in sector multiples and the uncertain cost backdrop. 

Hold-rated Morgans feels the stock is fully valued and still prefers Add-rated Coles Group ((COL)) in the sector.

Target price is $34.10 Current Price is $32.05 Difference: $2.05
If WOW meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $34.44, suggesting upside of 5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Ord Minnett rates WOW as Lighten (4) -

First quarter sales results have not disrupted Ord Minnett's view of ongoing downside risk for Woolworths Group's earnings and multiple. Aldi and Coles Group ((COL)) are preferred exposures.

The broker's target falls to $30.00 from $32.20 on -3-4% lower EPS forecasts, largely due to a -40% drop in New Zealand earnings that are unlikely to rebound to FY21 levels in the medium term. The Lighten rating is maintained.

The analyst points out the group is allowing previous and temporary market share gains to unwind, rather than invest in price to retain these customers.

Target price is $30.00 Current Price is $32.05 Difference: minus $2.05 (current price is over target).
If WOW meets the Ord Minnett target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $34.44, suggesting upside of 5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

UBS rates WOW as Neutral (3) -

Woolworths Group's 1Q sales of $16.4bn were below the $16.6bn forecast by UBS though in advance of the consensus estimate for $16.3bn.

The broker lowers its FY23 and FY24 EPS forecasts by -3.3% and -2.6% due to lower estimates for Australian Food and New Zealand Food. The latter was impacted in the 1Q by lower sales and higher wage inflation and 1H guidance is for "materially lower" earnings.

The target falls to $34.50 from $35.50.

Target price is $34.50 Current Price is $32.05 Difference: $2.45
If WOW meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $34.44, suggesting upside of 5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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