Australian Broker Call

Morgans rates AGL as Add (1) -

Following the release of demerger scheme details, Morgans sees limited downside to AGL Energy's share price if the demerger doesn’t proceed. It's thought any potential multiple expansion of AGL Australia hasn't been priced-in by the market as yet.

The broker maintains its Add rating due to a strong wholesale electricity market which should materially lift earnings for the legacy generation assets. The target price is lowered slightly to $9.26 from $9.29.

Target price is $9.26 Current Price is $8.35 Difference: $0.91
If AGL meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $8.72, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Macquarie rates ALL as Outperform (1) -

Macquarie notes a recent North American slot survey which covered 47% of the North American installed base within casinos showed casino revenues were up 22% year-on-year in the 1Q of 2022. This is 10% ahead of pre-covid levels, estimates the broker.

According to Macquarie, Aristocrat Leisure continues to show gains across both the outright sales segment and within the
Class III premium participation segment. The Outperform rating and $46 target are maintained.

Target price is $46.00 Current Price is $32.14 Difference: $13.86
If ALL meets the Macquarie target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $46.58, suggesting upside of 48.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Ord Minnett rates AMS as Buy (1) -

Atomos has downgraded FY22 guidance to $80m-$90m from $95m and above; and has cut FY22 earnings (EBITDA) margin guidance to 6%-8% from 12%-15%.

Ord Minnett says the downgrade follows a change in promotional strategy at the beginning of the year, in which the company embarked on less discounting and peer collaboration.

The company also reports growing risk from the impact of Shanghai's lockdowns on supply chains. New products were unable to offset lost sales.

On the upside, management reaffirmed FY23 guidance but Ord Minnett suggests the market is unlikely to forgive the miss in a hurry.

Buy rating retained. Target price falls to $1.46 from $1.92.

Target price is $1.46 Current Price is $0.31 Difference: $1.15
If AMS meets the Ord Minnett target it will return approximately 371% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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

Macquarie rates BHP as Outperform (1) -

Macquarie believes BHP Group's valuation multiples could expand after the planned Petroleum demerger. It's thought previous investor interest was suppressed due to strict ESG mandates. The analyst estimates the group's dividend franking rate of 100% will remain.

The broker likes the company's organic opportunities with a bias to the future facing commodities, such as copper and nickel, and maintains its Outperform rating. The target price of $60 is unchanged.

Target price is $60.00 Current Price is $46.80 Difference: $13.2
If BHP meets the Macquarie target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $52.66, suggesting upside of 14.2% (ex-dividends)

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.6

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

Macquarie rates BWX as Outperform (1) -

Following lower FY22 profit guidance by BWX, Macquarie lowers its FY22 EPS forecast by -38%. As lower sales for FY22 will provide a lower base for growth, and as cost assumptions also increase, the broker lowers FY23 and FY24 EPS estimates by -24% and -19%.

After also adjusting for lower valuation multiples, the analyst lowers the target price to $2.40 from $5.00.

Nonetheless, the Outperform rating is maintained for the longer-term margin benefits from the new manufacturing facility and the potential  of the brands within the portfolio.

Target price is $2.40 Current Price is $1.35 Difference: $1.05
If BWX meets the Macquarie target it will return approximately 78% (excluding dividends, fees and charges).

Current consensus price target is $2.67, suggesting upside of 106.7% (ex-dividends)

The company's fiscal year ends in June.

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 COF as Downgrade to Equal-weight from Overweight (3) -

Morgan Stanley downgrades Centuria Office REIT to Equal-weight from Overweight and lowers the target price to $2.30 from $2.60, preferring Dexus ((DXS)).

The broker admires Centuria's sector-topping 7.8% FY23 DPS yield but casts a cautious eye to lease expiries in high-vacancy markets and the relatively higher risk of cap rate expansions given the metropolitan office rate spread vs the 10-year bond yield has fallen more than 100 basis points.

Funds from operations forecasts fall -3% and -5% in FY23 and FY24 to reflect a forecast high cost of debt and lower occupancies.

Target price is $2.30 Current Price is $2.13 Difference: $0.17
If COF meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $2.41, suggesting upside of 19.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

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

Corporate Travel Management's market update has flagged a weaker FY22 second-half, management downgrading earnings guidance.

Ord Minnett's sheets the move back to a worsening global economic outlook, growing market-share competition as clients put accounts out to tender post covid, and rising costs (the company is leveraged to rising wages).

While management reports the company's recovery is outpacing consensus and peers, the broker perceives the problem as sectoral, disruption and costs combining to create negative jaws.

EPS forecasts fall -40% in FY22. -8% in FY23 and -6% in FY24. 

Rating downgraded to Accumulate from Buy, the broker expecting numerous opportunities to buy the dips. Target price falls to $25.86 from $28.10.

Target price is $25.86 Current Price is $23.10 Difference: $2.76
If CTD meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $27.58, suggesting upside of 27.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Ord Minnett rates HLS as Accumulate (2) -

Ord Minnett readjusts forecasts for Healius. 

Despite expecting a record FY22 profit courtesy of covid testing, demand for other health remains stubbornly weak post covid and the broker cuts earnings forecasts for the day hospital and diagnostic divisions.

The broker expects the sustainability and cost program will be delayed in the face of rising inflation.

FY22 EPS forecasts fall -3.6% and FY23 EPS forecasts fall -4.8% to reflect the delay in cost savings from the Sustainability Improvement Program.

Accumulate rating retained. Target price eases to $4.80 from $5.

Target price is $4.80 Current Price is $4.30 Difference: $0.5
If HLS meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $5.14, suggesting upside of 22.8% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates MQG as Downgrade to Neutral from Buy (3) -

Citi has described Macquarie Group's full year results as "extraordinary", with the company delivering 56% year-on-year cash earnings growth to a record $4,706m, with commodities volatility and record merger and acquisition activity supporting the strong result.

Despite this, the broker has downgraded the rating and target price for Macquarie Group, anticipating a lower trajectory in coming years will see cash earnings drop to $3,800m by FY25 as commodities revenue normalises. The broker expects FY22 results will be the peak of a ten-year upward earnings cycle.

The rating is downgraded to Neutral from Buy and the target price decreases to $187.00 from $226.00.

Target price is $187.00 Current Price is $186.90 Difference: $0.1
If MQG meets the Citi target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $202.50, suggesting upside of 11.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Credit Suisse rates MQG as Downgrade to Underperform from Neutral (5) -

Macquarie Group's FY21 result's guidance disappointed the broker, and Credit Suisse downgrades the company to Underperform from Neutral, believing earnings have peaked.

The broker notes the bank has been a big beneficiary from a low-interest rate environment and that is all about to change. 

Credit Suisse notes guidance was conservative, the macroeconomic outlook is deteriorating (raising the prospect of stagflation), which in turn threatens investment values upon realisation.

On the upside, Credit Suisse appreciates the group's stronger commodities trading income; M&A-driven rises in fee and commission income; strong loan growth and an improvement in loan balances.

FY23-FY24 earnings forecasts fall -14% to -16%. Target price falls to $150.00 from $210.00

Target price is $150.00 Current Price is $186.90 Difference: minus $36.9 (current price is over target).
If MQG meets the Credit Suisse target it will return approximately minus 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $202.50, suggesting upside of 11.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Morgan Stanley rates MQG as Overweight (1) -

Macquarie Group's FY22 record full-year result beat Morgan Stanley and consensus forecasts by roughly 5%, save for the dividend, which disappointed by -5%.

Strength in commodity revenues, equity investment, green energy investment and private capital markets drove the result.

Impairments proved a positive surprise, charges landing at $509m, compared with the broker's forecast $698m, due to loan-provision releases.

Divisional commentary pointing to a strong pipeline, higher base fees, and weaker commodity revenues and lower M&A fees conspired to boost the broker's confidence in its earnings forecasts. 

Management plans to reinvest for growth, which resulted a lower dividend repayment, but the broker appreciates this strategy noting global ructions have exposed cheap M&A opportunities in the alternative asset managers market.

Morgan Stanley also considers Macquarie to be well positioned to benefit from the green theme, a flood of capital possibly driving a re-rating for the company.

Overweight rating retained. Target price steady at $245.

Target price is $245.00 Current Price is $186.90 Difference: $58.1
If MQG meets the Morgan Stanley target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $202.50, suggesting upside of 11.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Morgans rates MQG as Upgrade to Add from Hold (1) -

Morgans upgrades its rating for Macquarie Group to Add from Hold as FY22 results beat the consensus forecast by 7% after strong performances in the Commodities and Global Markets division and within Macquarie Capital.

After the broker increases its FY23 and FY24 EPS forecasts by 4% and 6%, the target price rises to $215 from $209.60. As this lift in target price suggests greater than 10% upside to the current share price, the rating rises to Add from Hold.

The result was hard to fault, in Morgans view, though the second half dividend of $3.50/share was a slight miss versus the consensus forecast of 3.66/share.

Target price is $215.00 Current Price is $186.90 Difference: $28.1
If MQG meets the Morgans target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $202.50, suggesting upside of 11.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Ord Minnett rates MQG as Accumulate (2) -

Macquarie Group's FY22 full-year result outpaced Ord Minnett's forecast, although the dividend fell slightly shy. No guidance was provided.

The company delivered a strong return on equity of 19% - the highest since the global financial crisis, notes the broker.

Ord Minnett sheets the retreat in the share price back to an earnings skew to the Commodities and Global Markets and Macquarie Capital Divisions, overblown expectations heading into the result, uncertainty around FY23 earnings, and a reduction in the payout ratio, as management appeared to point to future reinvestment in growth.

But the broker believes the retreat represents a good entry price and retains an Accumulate recommendation. Target price falls to $218 from $227.

Target price is $218.00 Current Price is $186.90 Difference: $31.1
If MQG meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $202.50, suggesting upside of 11.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

UBS rates MQG as Neutral (3) -

Following FY22 results for Macquarie Group, UBS hasn't been dissuaded from its Neutral rating due to the potential for a valuation de-rating (currently high multiple) and lower future earnings.

The broker cuts its FY22-25 EPS forecasts by -5-10% and lowers its target price to $200 from $205. It's thought the outlook is increasingly uncertain with higher inflation, rising interest rates and a market correction for bonds and equities.

Target price is $200.00 Current Price is $186.90 Difference: $13.1
If MQG meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $202.50, suggesting upside of 11.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

UBS rates NAB as Downgrade to Neutral from Buy (3) -

Following 1H results for National Australia Bank, UBS slightly upgrades cash EPS forecasts due to stronger forecast revenue growth and lower credit impairment charges. Despite this, the broker's rating falls to Neutral from Buy, after a strong recent share price rally.

The analyst sees strong operational and financial momentum in the business. This momentum is supported by above-system business lending growth and inorganic opportunities for retail banking. The target price rises to $35 from $33.

Target price is $35.00 Current Price is $31.62 Difference: $3.38
If NAB meets the UBS target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $33.42, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Credit Suisse rates NHF as Neutral (3) -

The highligh of nib Holdings' market update for Credit Suisse appears to be the guidance. Australian residential health insurance growth guidance was reaffirmed at 3% and FY23 and FY24 is expected to grow 3% to 4%, then 6% to 7%.

The 6% to 7% net margin target was retained for the long term but the broker expects there may be a near-term upward blip as businesses recover post covid.

The company upgraded NZ FY22 policyholder growth forecasts to 4%-6% from 3%-5%; Travel is now 80% of pre-covid levels and international inbound health insurance (iihi) is running apace.

Credit Suisse raises earnings forecasts based on the strength in NZ, travel, iihi and solid cost management; and raises its investment income assumptions based on the 25-basis-point rise in the cash rate.

Neutral rating retained. Target price rises to $6.86 from $6.46.

Target price is $6.86 Current Price is $7.20 Difference: minus $0.34 (current price is over target).
If NHF meets the Credit Suisse target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.89, suggesting downside of -2.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.1

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

Credit Suisse rates NWS as Outperform (1) -

News Corp's March-quarter headline earning (EBITDA) missed Credit Suisse's forecasts due to higher than anticipated costs after the OPIS transaction at Dow Jones, but the result broadly met consensus.

The broker considers the post-result sell-off to be unwarranted given favourable trends in revenue and given the company was able to convert Google and Facebook payments into an operational recovery. 

Credit Suisse expects growth will continue apace into FY23 and raises earnings (EBITDA) forecasts 13%. 

Outperform rating retained. Target price falls to $39 from $42.

Target price is $39.00 Current Price is $26.60 Difference: $12.4
If NWS meets the Credit Suisse target it will return approximately 47% (excluding dividends, fees and charges).

Current consensus price target is $39.63, suggesting upside of 64.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 1.0

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

Macquarie rates NWS as Outperform (1) -

Macquarie assesses the News Corp 3Q result was in-line with the broker's forecasts. When comparing the result against two compilations of a consensus estimate, one was met while the other missed, the latter causing a negative share price reaction, believes the analyst.

Despite an upgrade to EPS estimates (mainly due to lower-than-expected News Media costs), Macquarie lowers its target price by -10% to $45 to reflect softer Dow Jones multiples in-line with peers.

Target price is $45.00 Current Price is $26.60 Difference: $18.4
If NWS meets the Macquarie target it will return approximately 69% (excluding dividends, fees and charges).

Current consensus price target is $39.63, suggesting upside of 64.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 1.0

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

Morgan Stanley rates NWS as Overweight (1) -

News Corp's March-quarter result fell a touch shy of Morgan Stanley's forecasts as growth slowed from 30% to 20% (2% shy of the broker's estimate).

Morgan Stanley spies a more challenging environment for revenue and earnings as rates rise, believing this amplifies the pressure to simplify the corporate structure.

Overweight rating and US$32 target price retained.

Target price is $32.00 Current Price is $26.60 Difference: $5.4
If NWS meets the Morgan Stanley target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $39.63, suggesting upside of 64.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 1.0

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

Credit Suisse rates ORA as Neutral (3) -

Credit Suisse upgrades EPS estimates for Orora roughly 1% to 4% across FY22 to FY24 after a tour of the company's glass operations.

The broker also upgrades North America Orora Packaging Solutions' earnings (EBIT)/sales margin, noting continued paper price inflation, digital upgrades, operational efficiencies, process automation, a shift to higher margin products and optimisation of customer margins.

Estimates exclude M&A, where the broker expects targets are likely to include upstream corrugate manufacturers or companies offering geographical spread in box distribution.

Last week, Orora announced the Revesby multi-sized canning line, and Credit Suisse expects this will continue to drive Australasian earnings in FY24 to FY25, noting tight domestic supply means achieving scale should be swift. The lift of China tariffs on Treasury Wine Estates ((TWE)) was also considered a boon.

Target price rises to $4 from $3.75. Neutral rating retained.

Target price is $4.00 Current Price is $3.90 Difference: $0.1
If ORA meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $3.97, suggesting upside of 2.4% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates REA as Buy (1) -

Amid declining listing volumes REA Group has recently launched its Premiere+ platform, which Citi notes is reflective of the company's ability to adapt its offering and features to continue to drive yield growth in a changing environment.

The broker notes while there has been strong interest in Premiere+, a lack of vendor leads has driven Citi to lower its depth growth assumption for the second half of FY22 and FY23. The broker highlights declining listing volumes were anticipated, and the company continues to guide to positive jaws in FY23.

The Buy rating is retained and the target price decreases to $153.50 from $166.00.

Target price is $153.50 Current Price is $112.15 Difference: $41.35
If REA meets the Citi target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $151.10, suggesting upside of 40.6% (ex-dividends)

The company's fiscal year ends in June.

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

Credit Suisse rates REA as Upgrade to Outperform from Neutral (1) -

REA Group's March-quarter results disappointed Credit Suisse most likely due to a geographic mix shift and lower Developer revenues.

Management guided to weaker fourth-quarter volumes as listings come off the boil, but expects this will be more than offset by the deferral of March volumes into the fourth quarter, stronger commercial and residential yields and growth in Data and India.

While slightly weaker, the broker still expects EPS growth in the low teens over the forecasts period, and considers the company's multiple to be looking more attractive.

Rating upgraded to Outperform from Neutral. Target price falls to $142.80 from $157.10.

Target price is $142.80 Current Price is $112.15 Difference: $30.65
If REA meets the Credit Suisse target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $151.10, suggesting upside of 40.6% (ex-dividends)

The company's fiscal year ends in June.

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 REA as Neutral (3) -

In the wake of a 3Q update by REA Group, Macquarie feels the long-term strength of the business is unchanged though downside risks for the share price come from elevated valuation multiples. It's thought multiples are correlated to residential market sentiment.

Despite listing volume headwinds, management expects continued yield growth, depth penetration, data and the Indian-based Elara Technologies to underpin positive revenue growth into the 4Q. 

The Neutral rating is maintained, while the target falls by -18% to $130 on a higher assumed risk free rate and a lower earnings forecast from lower listings and depth penetration forecasts.

Target price is $130.00 Current Price is $112.15 Difference: $17.85
If REA meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $151.10, suggesting upside of 40.6% (ex-dividends)

The company's fiscal year ends in June.

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

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

REA Group's March-quarter result broadly met consensus' and Morgan Stanley's forecasts.

But the broker believes the company is cycling into a period where pricing power will combine with new products to become the key drivers of revenue as listing volumes fall in the June quarter, potentially weakening again in FY23.

Interest rates and election uncertainty remain a risk to near-term consensus forecasts, opines the broker, while admiring the company's medium-term growth outlook.

EPS forecasts fall -5% to -10% across FY23 and FY24 to reflect cyclical weakness. The broker sits -10% to -15% below consensus and expects things will worsen before getting better, possibly offering a reasonable entry point.

Rating falls to Equal-weight from Overweight. Target price falls to $130 from $178. Industry view: Attractive.

Target price is $178.00 Current Price is $112.15 Difference: $65.85
If REA meets the Morgan Stanley target it will return approximately 59% (excluding dividends, fees and charges).

Current consensus price target is $151.10, suggesting upside of 40.6% (ex-dividends)

The company's fiscal year ends in June.

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

Morgans rates REA as Upgrade to Add from Hold (1) -

Following a third quarter update, Morgans lowers its target price for REA Group to $145.40 from $156.30. As the amended target price is still more than 10% above the prevailing share price, the broker raises its rating to Add from Hold.

A mix of listings growth and contracted price rises resulted in a resilient performance for the core Australian residential business in the 3Q, in the broker's opinion. Nonetheless, a volatile 4Q is expected on broader macroeconomic impacts and due to the Federal election.

Target price is $145.40 Current Price is $112.15 Difference: $33.25
If REA meets the Morgans target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $151.10, suggesting upside of 40.6% (ex-dividends)

The company's fiscal year ends in June.

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

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

REA Group's March-quarter result missed Ord Minnett's forecast due to listings deferrals from holidays.

The broker notes management was upbeat about the impact of the federal election but doubts this will be enough to drive a fourth-quarter catch-up. Pressure continues on listing volumes and the broker spies positive operating jaws as per guidance.

Ord Minnett prefers REA Group to Domain Holdings ((DHG)), noting the relative premium has decreased to 20% from the traditional 30%.

Rating upgraded to Buy from Accumulate. Target price falls to $153 from $165.

Target price is $153.00 Current Price is $112.15 Difference: $40.85
If REA meets the Ord Minnett target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $151.10, suggesting upside of 40.6% (ex-dividends)

The company's fiscal year ends in June.

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

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

Ord Minnett downgrades Sonic Healthcare to Accumulate from Buy as covid pressure recedes. 

While the broker flags a -50% fall in FY23 earnings, Ord Minnett notes that testing has held up reasonably well and appreciates the company's defensive profile, expecting its core diagnostic imaging business will recover and be supplemented by M&A (the broker spies an underutilised balance sheet).

Cost pressure and pricing remain key areas to watch.

Rating downgraded to Accumulate from Buy in line with recent share price strength. Target price rises to $39 from $37.50.

Target price is $39.00 Current Price is $35.94 Difference: $3.06
If SHL meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $39.40, suggesting upside of 11.1% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates SKO as Buy (1) -

While industry indicators suggest strong corporate travel recovery Citi expects the Booking.com for Business partnership to be the focus of Serko's upcoming full year results, anticipating expansion into the unmanaged travel segment will drive solid earnings growth.

The broker's forecasts had assumed Serko's would achieve online booking volumes at 70% of FY19 levels in FY23, but noting a stronger than expected business travel rebound highlights booking volumes in line with FY19 levels would offer a NZ$9m revenue upside.

The Buy rating and target price of $5.75 are retained.

Target price is $5.75 Current Price is $4.58 Difference: $1.17
If SKO meets the Citi target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $6.84, suggesting upside of 53.7% (ex-dividends)

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: 1.0

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

Macquarie rates VCX as Neutral (3) -

Macquarie assesses a strong 3Q sales update for Vicinity Centres which implies potential upside risk to FY23 earnings via better-than-anticipated leasing spreads.

While sales are 14.5% above pre-covid levels, the analyst is cautious on the outlook for the consumer and stays Neutral-rated. The target price of $1.87 is maintained.

Management reaffirmed FY22 guidance for both funds from operations (FFO) and adjusted FFO.

Target price is $1.87 Current Price is $1.84 Difference: $0.03
If VCX meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $1.93, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.2

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

Citi rates WBC as Buy (1) -

Upon first assessment, Citi believes Westpac's H1 cash profit was no less than 10% above market consensus. Pre-provision the result beat consensus by some 5%.

An important contribution to the beat was delivered by lower costs. The broker notes, management at the bank has not walked away from its cost reduction commitment, contrary to peers at ANZ Bank ((ANZ)) and National Australia Bank ((NAB)).

Also, the new CET1 target ratio of 11.0-11.5% indicates buybacks may have ceased, suggests the broker.

Citi thinks the Net Interest Margin (NIM) of 1.85% will have pleased many. Target $29. Buy.

Target price is $29.00 Current Price is $23.83 Difference: $5.17
If WBC meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $24.64, suggesting upside of 0.4% (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 WBC as Buy (1) -

Upon first assessment, it appears Westpac's interim performance has beaten UBS and consensus forecast by some 6%. Interim dividend of 61c beat the 60c forecast.

UBS asks whether the market will trust management to deliver on its costs reduction target when others in the sector are abandoning theirs?

The share price is seen trading at a -20% discount to the ASX200. Buy and $27 target retained.

Target price is $27.00 Current Price is $23.83 Difference: $3.17
If WBC meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $24.64, suggesting upside of 0.4% (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