Australian Broker Call

Citi rates ALU as Neutral (3) -

Visits to Altium's Octopart website declined a further -3% month-on-month in October, with average site visits now down -10% half-on-half according to Citi. Time spent on the site also declined -7% month-on-month. 

Despite this demand remains strong, and while remaining cautious Citi expects cost-per-click could benefit from improving supply. 

The Neutral rating and target price of $35.40 are retained.

Target price is $35.40 Current Price is $34.29 Difference: $1.11
If ALU meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $33.95, suggesting upside of 0.6% (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: 0.6

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

Citi rates BSL as Buy (1) -

Citi continues to see a value case in BlueScope Steel, if investors are willing to look past some short-term earnings correction. According to the broker, a stronger medium-term outlook should support earnings from FY24.

US steel consumption declined -14% in the September quarter, and Citi expects further downside is ahead. The broker also anticipates Australian steel demand to retreat as house prices decline. Citi lowers its earnings estimates -5% and -12% in FY23 and FY24. 

The Buy rating is retained and the target price decreases to $20.00 from $20.60.

Target price is $20.00 Current Price is $16.18 Difference: $3.82
If BSL meets the Citi target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $20.41, suggesting upside of 25.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Citi rates CCX as Upgrade to Buy from Neutral (1) -

While acknowledging the current consumer environment is likely to challenge City Chic Collective's top line and margin results, Citi remains positive on the company's long-term international growth prospects.

According to the broker, City Chic Collective has "significant room to expand" in the global plus size women's clothing market, which it estimates to have a worth of US$180bn. 

The rating is upgraded to Buy from Neutral and the target price decreases to $1.74 from $2.09.

Target price is $1.74 Current Price is $1.25 Difference: $0.49
If CCX meets the Citi target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $2.45, suggesting upside of 98.2% (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

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

Credit Suisse raises its forecasts for Computershare as trends in aggregate for cash rates, FX movements and activity will be positive for US dollar earnings, and even more so for Australian dollar earnings.

The analyst feels the current share price neglects the up to $6/share of excess capital available courtesy of future debt headroom and proceeds from the potential exit from mortgage servicing in the US and UK. It's thought funds may be used for buybacks/M&A.

The rating is upgraded to Outperform from Neutral and the broker's target rises to $29 from $25.

Target price is $29.00 Current Price is $25.86 Difference: $3.14
If CPU meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $29.77, suggesting upside of 14.5% (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: 0.9

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

Citi rates CQR as Upgrade to Buy from Neutral (1) -

Upgrading on Charter Hall Retail REIT, Citi has indicated a preference for defensive convenience retail exposures over discretionary retail at this stage in the consumer cycle. 

The broker remains relatively constructive on underlying demand for consumption, but expects rising rates will start to play a larger role in consumer spending. Citi found commentary from Charter Hall Retail REIT to present a relatively stable outlook. 

The rating is upgraded to Buy from Neutral and the target price of $4.30 is retained.

Target price is $4.30 Current Price is $3.92 Difference: $0.38
If CQR meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $4.19, suggesting upside of 4.4% (ex-dividends)

The company's fiscal year ends in June.

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 DHG as Buy (1) -

After a first glance at today's 1Q results for Domain Holdings Australia, UBS expects downgrades to consensus forecasts. While trading for the quarter was considered strong, a significant deterioration occurred in October.

The broker plans to review its forecasts, but stays with its $4.00 target and Buy rating for now.

Digital revenue rose by 24% year-on-year in Q1, with total revenue climbing by 13% ex acquisitions. New listing volumes increased by 4%.

As a result of a worsening economic backdrop, management anticipates its FY23 earnings (EBITDA) margin will experience a low-single-digit percentage point reduction compared to FY22.

Target price is $4.00 Current Price is $3.20 Difference: $0.8
If DHG meets the UBS target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $4.04, suggesting upside of 33.4% (ex-dividends)

The company's fiscal year ends in June.

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 DOW as Buy (1) -

Back on November 3, Downer EDI's AGM included a 1Q trading update and reiteration of FY23 guidance for 10-20% profit (UNPATA) growth, despite wet weather headwinds.

UBS now decides to reduce its target to $6.15 from $6.40 on lower assumptions for the Transport and Utilities segments, as these are most exposed to weather-related work deferrals. Buy.

Target price is $6.15 Current Price is $4.85 Difference: $1.3
If DOW meets the UBS target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $5.94, suggesting upside of 22.3% (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

Morgan Stanley rates IAG as Underweight (5) -

Higher investment yields and ongoing price increases, which should cover rising input costs, prompt Morgan Stanley to raise Insurance Australia Group's target price to $4.20 from $3.90. Industry View: In-Line. Capital is on the improve while CAT costs are being held at bay.

The analyst points out the recent business interruption (BI) court decision aides capital flexibility and Insurance Australia Group has released $360m of BI provisions ($615m left) to start a buyback.

Ongoing elevated inflation and rising reinsurance rates are allowed for in forecasts, explains the broker.

Overweight-rated QBE Insurance is preferred by Morgan Stanley in the space.

Target price is $4.20 Current Price is $4.96 Difference: minus $0.76 (current price is over target).
If IAG meets the Morgan Stanley target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.17, suggesting upside of 4.0% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates JHX as Buy (1) -

After a a weaker than expected second quarter from James Hardie Industries, Citi feels the market is anticipating further downgrades.

The key negative of the quarter, according to Citi, was the -5-8% volume outlook decline and the broker has lowered its full year estimates -7%.

The broker expects a -30% decline in new construction in the second half, and a further -15% decline over FY24. Citi has lowered its expectations for FY24 by -21%. 

The Buy rating is retained and the target price decreases to $37.00 from $41.90.

Target price is $37.00 Current Price is $28.81 Difference: $8.19
If JHX meets the Citi target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $40.57, suggesting upside of 42.4% (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 JHX as Neutral (3) -

Credit Suisse's target for James Hardie Industries slides by -$10.00 to $29.10 following 2Q results. Group profit was in line with consensus, but earnings (EBIT) were an -11% miss.

Management downgraded FY23 profit guidance by -10% and replaced the ordinary dividend with a buyback going forward, that only approximates a 2% dividend yield.

The broker believes volume was the main driver of the profit downgrade. FY23 sales guidance in North America was cut to 13% from 18%, with 2H volume down -5-8%, new construction down -30% and R&R "flattish".

The Neutral rating is unchanged, with Credit Suisse noting an attractive valuation offset by downside margin-reversion risk.

Target price is $29.10 Current Price is $28.81 Difference: $0.29
If JHX meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $40.57, suggesting upside of 42.4% (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

Macquarie rates JHX as Outperform (1) -

James Hardie Industries' September quarter result fell short of Macquarie. A rapid reversal in new construction demand led to a lowering in FY23 profit guidance.

Macquarie suspects exposure to larger inventory-driven new construction business models could explain the big change since the September investor day. R&R demand is holding up relatively well, but here too the company sees moderation to flat second half volumes.

The broker still sees R&R exposure at 65% as a mitigant, but an elongation of expected recessionary conditions and a disorderly housing market are key concerns.

Outperform retained, target falls to $46.10 from $60.40.

Target price is $46.10 Current Price is $28.81 Difference: $17.29
If JHX meets the Macquarie target it will return approximately 60% (excluding dividends, fees and charges).

Current consensus price target is $40.57, suggesting upside of 42.4% (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

Morgan Stanley rates JHX as Overweight (1) -

Second quarter earnings (EBIT) and profit were -9% and -2% misses, respectively, versus Morgan Stanley's forecasts. The results and outlook were considered disappointing.

The broker fails to fully comprehend a sharp turnaround in outlook and lack of visibility. Revised guidance is thought to indicate the US housing environment has deteriorated more sharply than anticipated and expected R&R resilience has not eventuated.

The North American fibre cement (NAFC) earnings margin fell by -80bps to 28.4% compared to the 29.2% expected by the analyst.

More positively, robust margin guidance was maintained and 2H NAFC margins are expected to be in the range of 30-32%, according to management.

The company announced a US$200m on-market buyback, in place of the existing dividend policy. The target falls to $41.00 from $43.00. Overweight. Industry View: In-Line.

Target price is $41.00 Current Price is $28.81 Difference: $12.19
If JHX meets the Morgan Stanley target it will return approximately 42% (excluding dividends, fees and charges).

Current consensus price target is $40.57, suggesting upside of 42.4% (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

Ord Minnett rates JHX as Buy (1) -

Following 2Q results for James Hardie Industries, Ord Minnett is surprised by the rate of deterioration in volume outlook and lack of visibility. The latter creates uncertainty for the broker on whether forecasts have been lowered enough.

As it is, the analyst's FY23 and FY24 forecasts are materially downgraded and the target falls to $42.80 from $49.00. The Buy rating is retained on an undemanding multiple.

North American fibre cement (NAFC) volume guidance for the 2H of FY23 was downgraded to a fall of -8% from a decline of -5%.

Management's internal targets for the order backlog have been reduced by a range of factors including ongoing interest rate rises. As a result, Ord Minnett notes a reduced buffer to contend with any cycle slowdown.

Target price is $42.80 Current Price is $28.81 Difference: $13.99
If JHX meets the Ord Minnett target it will return approximately 49% (excluding dividends, fees and charges).

Current consensus price target is $40.57, suggesting upside of 42.4% (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

UBS rates JHX as Buy (1) -

UBS lowers its FY23 and FY24 EPS forecasts by -10% and -16%, respectively, on changed housing assumptions and lower margin expectations, in the wake of 2Q results for James Hardie Industries. The target falls to $47.40 from $52.50.

Profits have declined earlier than the analyst expected due to fading backlogs and inventory management. The company cut FY23 profit guidance by -10%, with ongoing price/mix positives partially offsetting lower US volume guidance, notes the broker.

Despite these negatives and ongoing uncertainty, the analyst remains upbeat with a Buy rating and notes a wide guidance range provides an increased level of buffer for FY23. Margins are still considered resilient and were thought to be the silver lining in the 2Q update.

Target price is $47.40 Current Price is $28.81 Difference: $18.59
If JHX meets the UBS target it will return approximately 65% (excluding dividends, fees and charges).

Current consensus price target is $40.57, suggesting upside of 42.4% (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

Morgan Stanley rates JIN as Overweight (1) -

Following the announcement by Lottery Corp ((TLC)) of a refresh for the Powerball game in late FY23, Morgan Stanley now assumes Jumbo Interactive lifts its mark-up by 5cents/game, driving 10-11% EPS forecast upgrades.

The analyst considers a 10 cent/game price hike is also realistic, which would result in EPS forecast upgrades of 32-35%.

The broker raises its target price to $19.00 from $17.40 and maintains an Overweight rating. Industry view is In-Line.

Target price is $19.00 Current Price is $14.17 Difference: $4.83
If JIN meets the Morgan Stanley target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $17.41, suggesting upside of 21.0% (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 KLS as Outperform (1) -

Kelsian Group has secured ten-year extensions to two ferrying contracts at the LNG hub of Gladstone. Macquarie notes the contracts maintain exposure to defensive, inflation-protected earnings.

The company's track record in contract retention is also reinforced by the news.

Outperform and $8.20 target retained.

Target price is $8.20 Current Price is $4.93 Difference: $3.27
If KLS meets the Macquarie target it will return approximately 66% (excluding dividends, fees and charges).

Current consensus price target is $7.91, suggesting upside of 58.5% (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

UBS rates KLS as Buy (1) -

UBS reduces its Australian Business forecasts for Kelsian Group and trims its International Business and Marine & Tourism earnings, resulting in EPS downgrades for FY23 and FY24 of -8% and -9%, respectively. The target falls to $8.00 from $8.80.

Despite the successful re-tender for the two Curtis Island contracts in Gladstone for a further 10 years, the broker sees headwinds from various sources in Australia including the end of the Gawler rail line replacement contract in South Australia.

The analyst expects a modest level of margin pressure from labour shortages, which should normalise in the 2H of FY23. Buy.

Target price is $8.00 Current Price is $4.93 Difference: $3.07
If KLS meets the UBS target it will return approximately 62% (excluding dividends, fees and charges).

Current consensus price target is $7.91, suggesting upside of 58.5% (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 MGH as Outperform (1) -

During FY22, Maas Group’s operations were based primarily in regional areas that avoided the worst impacts of wet weather, however in FY23 the regional areas have been particularly hard hit with widespread flooding, Macquarie notes.

The BoM is currently forecasting above average rainfall through the first half, which could create further downside risk to earnings, before some easing of weather conditions in the second half.

Macquarie has revised down earnings and cut its target for Maas to $3.55 from $5.90. Outperform retained on valuation.

Target price is $3.55 Current Price is $2.34 Difference: $1.21
If MGH meets the Macquarie target it will return approximately 52% (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

Citi rates MIN as Buy (1) -

While acknowledging Mineral Resources' Lockyer deep gas discovery is very early stage, Citi estimates the discovery could be worth between $0.6-1.7bn having exceeded pre-drill expectations. 

Further drilling is required to firm up field volume and resource upside, but with gas having been discovered to 4560m deep, the potential is described as "large". 

The Buy rating and target price of $86.00 are retained.

Target price is $86.00 Current Price is $79.11 Difference: $6.89
If MIN meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $89.64, suggesting upside of 8.4% (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 MPL as Accumulate (2) -

Ord Minnett retains its Accumulate rating and $3.20 target following a further cyber attack update from Medibank Private.

The broker feels the main risk to the company is reputational, now that it appears credit card data has not been released by the cyber thieves. A loss of growth momentum and perhaps some loss of policies is considered the most likely outcome.

Management is following Australian government advice by not adhering to ransom demands.

Target price is $3.20 Current Price is $2.78 Difference: $0.42
If MPL meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $3.24, suggesting upside of 16.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Citi rates NAB as Buy (1) -

In a first assessment of todays FY22 result by National Australia Bank, Citi notes cash earnings of $7,104m were in line with it's own forecast and that of consensus. The 2H22 net interest margin (NIM) of 1.67% is also considered in line.

The analyst feels material cost revisions by the market are unlikely, as consensus is already factoring in around -5% cost worsening in FY23.

The broker points out business lending has been a key point of differentiation for National Australia Bank versus peers, but macro forecasts indicate a sharp slowdown. So, despite a strong result, it's felt this factor may be uppermost in investor's minds.

Citi places the FY22 result in context, by suggesting it lands between Westpac (targeting cost reductions) and ANZ (accelerating investment spend) for FY23.

The Buy rating and $32.75 target are unchanged.

Target price is $32.75 Current Price is $31.95 Difference: $0.8
If NAB meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $32.00, suggesting upside of 1.1% (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

Credit Suisse rates NAB as Neutral (3) -

At first glance, Credit Suisse assesses a clean, in-line FY22 result for National Australia Bank. Underlying profit of $10,022m was a -1% miss versus the consensus forecast for $10,077m.

The 78cps final dividend was a 2% beat compared to the consensus estimate. 

Net interest income (NII) rose by 9.6% in the 2H, driven by higher average lending volumes, higher earnings on deposits and lower term deposit costs, as well as higher earnings on capital, notes the broker.

Competitive pressures in housing lending margins, higher funding costs, and timing differences between interest rate and pricing changes were a partial offset for NII, explains Credit Suisse.

The broker retains its Neutral rating and $32.40 target.

Target price is $32.40 Current Price is $31.95 Difference: $0.45
If NAB meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $32.00, suggesting upside of 1.1% (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 NAB as Accumulate (2) -

Today's National Australia Bank's FY22 cash profit of $3,624bn was bang on the consensus forecast and a -3% miss compared to Ord Minnett's estimate. The 78cps dividend was 1cps better than consensus.

After a first look at results, the broker expects a limited change to consensus earnings expectations. Net interest margin (NIM) trends were considered subdued compared to prior reporting by ANZ Bank and Westpac, due to wholesale funding cost deterioration.

In terms of trend, the Q4 NIM was 5bps above the 2H FY22 NIM. The Accumulate rating and $33.70 target are retained.

Target price is $33.70 Current Price is $31.95 Difference: $1.75
If NAB meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $32.00, suggesting upside of 1.1% (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 NAB as Neutral (3) -

UBS assesses a clean 2H result for National Australia Bank (at first glance), which is in line with consensus expectations.

Net interest income was a 1% beat compared to consensus, rising by 10% to $7,767m, while the net interest margin (NIM) of 1.67% missed the consensus estimate of 1.69%.

Cash profit beat the forecasts of consensus and UBS by 1% and 3%, respectively, while the 78cps final dividend exceeded the 76cps estimate by the broker and consensus.

Guidance is for an additional investment spend of around -$100m (total -$1.5bn) in FY23, and management is targeting circa $400m of productivity savings in FY23.

UBS retains its Neutral rating and $33 target and notes a potential negative within the 2H results relates to costs. A slightly softer Q4 exit NIM was noted, along with management's guidance around funding mix/cost.

Target price is $33.00 Current Price is $31.95 Difference: $1.05
If NAB meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $32.00, suggesting upside of 1.1% (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

Macquarie rates NCM as Outperform (1) -

Newcrest Mining's board has approved the East Dome Stage 8 cutback at Telfer, which will extend mine life to early-FY25, Macquarie notes, and will dovetail with the Havieron satellite project.

The Havieron feasibility study has been extended beyond last June quarter to allow additional time to maximise value and de-risk the project. Newcrest also now has a further 432koz of hedging in place for FY23 and FY24 to shield margins.

Outperform and $23 target retained.

Target price is $23.00 Current Price is $18.16 Difference: $4.84
If NCM meets the Macquarie target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $20.96, suggesting upside of 8.0% (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: 0.6

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

UBS rates NWS as Buy (1) -

In an initial assessment, UBS considers today's News Corp's 1Q result is in line with both its own forecasts and that of consensus.

Revenue of $2,465m compared with the $2,534m expected by the analyst, while reported earnings (EBITDA) of $350m were shy of the
estimated $358m.

No forward looking guidance was provided and management made no further disclosures regarding the potential transaction with Fox.

Apart from the Fox deal, the impact of a soft macro environment on expectations for ad revenues and in digital real estate are considered key by UBS. It's felt the impact of recent negative currency movements are now mostly allowed for in the share price.

The Buy rating and $36.50 target are unchanged.

Target price is $36.50 Current Price is $25.93 Difference: $10.57
If NWS meets the UBS target it will return approximately 41% (excluding dividends, fees and charges).

Current consensus price target is $33.83, suggesting upside of 46.8% (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

Citi rates ORI as Neutral (3) -

In a first look at today's release of FY22 results for Orica, Citi notes a modest beat versus its forecasts and strong pricing across all regions. Earnings (EBIT) exceeded the consensus forecast by 6%.

Given the macroeconomic conditions, the broker considers management's FY23 outlook commentary was surprisingly constructive, with FY23 earnings expected to be ahead of FY22 on growth in global commodities demand.

The company noted inflation pressures, particularly from energy, are an ongoing challenge and cost-reduction initiatives will be introduced.

Guidance is for FY23 capex to be within $400-$420m, while gearing is expected to remain below the stated range of 30-40%.

Citi retains its $14.70 target and Neutral rating.

Target price is $14.70 Current Price is $14.09 Difference: $0.61
If ORI meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $15.96, suggesting upside of 5.9% (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

Citi rates REA as Neutral (3) -

In a first glace at REA Group's 1Q results, Citi notes revenue growth was a slight miss versus expectations, due to higher costs (a short-term phase) and a weaker Financial Services, India and Developer Display performance.

The analyst believes the consensus listings outlook could be revised lower, after management lowered FY23 cost growth guidance. It's felt the reduction pertains to a more cautious outlook, rather than being related to currency movements or India.

REA India’s 1Q 47% year-on-year growth compares to Citi and consensus 1H FY23 forecasts of 48% and 45%, respectively. While currency is thought to be a headwind, it does look like growth is tracking lower than expectations.

The Buy rating and $137.50 target are retained.

Target price is $137.45 Current Price is $119.20 Difference: $18.25
If REA meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $131.36, suggesting upside of 15.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Macquarie rates RIO as Neutral (3) -

Macquarie has updated earnings forecasts for Rio Tinto to incorporate material increases in the broker's updated lithium market outlook. Last year Rio approved a small-scale plant to produce battery-grade lithium carbonate, with commercial production targeted in 2024.

Macquarie continues to view free cash flow as a proxy for shareholder returns and notes that Rio is trading on a 2022-24 free cash flow yield of 8-10%.

Neutral and $95 target retained.

Target price is $95.00 Current Price is $96.35 Difference: minus $1.35 (current price is over target).
If RIO 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 $105.29, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in December.

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

Credit Suisse rates SGM as Downgrade to Neutral from Outperform (3) -

Credit Suisse slashes its target price for Sims to $12.20 from $19.40 and downgrades its rating to Neutral from Outperform.

These changes follow an AGM trading update where management revealed maiden 1H FY23 earnings (EBIT) guidance of $65-75m compared to the $168m expected by consensus and the $182m forecast by the broker.

The company noted slower economic activity has led to lower scrap volumes, while gross margins fell as competitors bid for feed to maintain volumes to cover fixed costs. Also, cost initiatives only partially offset inflationary pressure.

Of greatest concern to the analyst is the gross margin decrease from the 2H of FY22 to 18.5% from a consistent five-year range of 21-22%. It's felt weak industry scrap volumes will persist for over two years.

Target price is $12.20 Current Price is $11.55 Difference: $0.65
If SGM meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $13.18, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

Macquarie rates SGM as Underperform (5) -

While Macquarie had expected a slowing in volumes and margin compression, Sims' downgraded first half earnings guidance of $65-75m is a lot weaker than the broker expected. Macquarie already had a materially weaker second half forecast in anticipation.

Economic conditions and cost pressures are weighing on volumes, while falling metal prices and competitive pressures are weighing on metal margins. Visibility is poor, the broker suggests.

Underperform retained, target falls to $9.60 from $10.80.

Target price is $9.60 Current Price is $11.55 Difference: minus $1.95 (current price is over target).
If SGM meets the Macquarie target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.18, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

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

Morgan Stanley was somewhat prescient in lowering its target price for Sims to $13 from $19 earlier this week. Difficult trading conditions are now confirmed by Q1 results including 1H earnings guidance around -50% below the consensus forecast.

The broker points out softer conditions have continued with lower volumes, tighter margins and resiliently higher inflation. Management acknowledges cost mitigation initiatives have only partially offset inflation.

Morgan Stanley retains its Equal-weight rating and $13.00 target. Industry view: In-Line.

Target price is $13.00 Current Price is $11.55 Difference: $1.45
If SGM meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $13.18, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

Ord Minnett rates SGM as Hold (3) -

First half FY23 earnings (EBIT) guidance by Sims of $65-75m marked a material miss compared to forecasts by Ord Minnett and consensus for $232m and $360m, respectively.

The wide range of prior forecasts shows the unpredictability of Sims’s earnings, notes the analyst. The target falls to $12.80 from $15.40.

The broker attributes the miss to lower volumes across all regions, compressed trading margins and higher-than-expected costs due to inflation.

Ord Minnett has no line of sight on when trading margins will improve and lowers its FY23 earnings forecast by -64%, and feels a catalyst to lift shares may be some time away. Hold.

Target price is $12.80 Current Price is $11.55 Difference: $1.25
If SGM meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $13.18, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

Macquarie rates SQ2 as Upgrade to Outperform from Neutral (1) -

Macquarie notes Block's cash app deposits had a record September quarter and Square is seeing some success in the large seller cohort, although Afterpay remains uncertain.

The shares have fallen -20% since the broker downgraded to Neutral in July on market and earnings risk.

With Block shares now de-rated and operating leverage flowing through, Macquarie upgrades to Outperform on improved upside/downside positioning across shares and fundamentals.

Target rises to $145 from $130.

Target price is $145.00 Current Price is $97.21 Difference: $47.79
If SQ2 meets the Macquarie target it will return approximately 49% (excluding dividends, fees and charges).

Current consensus price target is $145.00, suggesting upside of 51.1% (ex-dividends)

The company's fiscal year ends in December.

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: 0.8

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

Citi rates STO as Buy (1) -

Santos' shares have tumbled -5% in one day following its investor day, with the company's FY23 production guidance of 91-98m barrels equivalent disappointing the market and Citi's assumptions. The company has also announced a step up in capital expenditure.

Citi highlights the lower than expected production was impacted by end of life at Bayu-Undan, while declines from Western Australian fields including Reindeer and Spar have been steeper than expected as they also approach their end of life.

The Buy rating and target price of $10.70 are retained.

Target price is $10.70 Current Price is $7.57 Difference: $3.13
If STO meets the Citi target it will return approximately 41% (excluding dividends, fees and charges).

Current consensus price target is $9.36, suggesting upside of 22.5% (ex-dividends)

The company's fiscal year ends in December.

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

Morgans rates STO as Add (1) -

Guidance for 2023 production and capex announced at the Santos investor day missed the forecasts of both Morgans and consensus. The target falls to $9.00 from $9.40. Add.

The broker attributes the majority of the production miss to an expected drop in WA gas production next year, as the Reindeer field nears depletion and the Spar field underperforms.

Morgans feels the lower production guidance will not have a lasting impact or alter investment views, and lost production from Spar should be offset by an acceleration of drilling for the Spartan well.

In reaction to the capex miss, the analyst adjusts the timing of spend for the Papua FEED, Pikka/Barossa development and for Santos Energy Solutions.

Target price is $9.00 Current Price is $7.57 Difference: $1.43
If STO meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $9.36, suggesting upside of 22.5% (ex-dividends)

The company's fiscal year ends in December.

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

Ord Minnett rates STO as Buy (1) -

Ord Minnett highlights the investment thesis for Santos has altered, going by investor day commentary regarding a slow transition to
capture opportunities in the energy transition.

The broker feels the key message was the transition from a traditional oil and gas company to one facilitating carbon emissions reductions. 

Separately, management provided FY23 production guidance below expectations and capital expenditure higher than Ord Minnett's  estimates.

The analyst remains positive on Santos with a Buy rating though lowers the target price to $8.60 from $9.00.

Target price is $8.60 Current Price is $7.57 Difference: $1.03
If STO meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $9.36, suggesting upside of 22.5% (ex-dividends)

The company's fiscal year ends in December.

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 SUN as Upgrade to Equal-weight from Underweight (3) -

Higher investment yields and ongoing price increases, which should cover rising input costs, prompt Morgan Stanley to upgrade Suncorp Group's rating to Equal-weight from Underweight. Capital is on the improve while CAT costs are being held at bay.

The broker also raises its target to $11.30 from $10.20. Industry View: In-Line. Ongoing elevated inflation and rising reinsurance rates are allowed for in forecasts.

The analyst points out the recent business interruption court decision aides capital flexibility and notes better margin prospects for the bank.

Overweight-rated QBE Insurance is preferred by Morgan Stanley in the space.

Target price is $11.30 Current Price is $11.76 Difference: minus $0.46 (current price is over target).
If SUN meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.33, suggesting upside of 11.7% (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 SUN as Buy (1) -

After a recent update by Suncorp Group  on natural hazards costs, Ord Minnett notes only a portion of the company's earnings relate to general insurance this year and policy prices should rise in response to the events.

The broker increases its expected losses from perils by a further $126m in the 1H and retains its Buy rating and $13.25 target.

Target price is $13.25 Current Price is $11.76 Difference: $1.49
If SUN meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $13.33, suggesting upside of 11.7% (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

Credit Suisse rates TAH as Outperform (1) -

Credit Suisse sees a reduction in new equity risk for Tabcorp Holdings now that the WA government has terminated the tender for the WA TAB.

The broker's thoughts now turn to the Victorian licence renewal tender, which will likely be the next share price catalyst during the 2H of 2023, aside from earnings.

The Outperform rating and $1.15 target are unchanged.

Target price is $1.15 Current Price is $0.98 Difference: $0.175
If TAH meets the Credit Suisse target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $1.06, suggesting upside of 7.4% (ex-dividends)

The company's fiscal year ends in June.

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 TLC as Neutral (3) -

Credit Suisse raises its target for Lottery Corp to $4.10 from $3.85 after an AGM trading update revealed lotteries revenue rose by 9% for the four months July-October, when compared to the previous corresponding period.

The broker increases its EPS estimates by 10-12% over the forecast period though a higher weighted average cost of capital (WACC) assumption provides a partial offset.

The Neutral rating is unchanged.

Target price is $4.10 Current Price is $4.47 Difference: minus $0.37 (current price is over target).
If TLC meets the Credit Suisse target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.98, suggesting upside of 9.6% (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 TLC as Outperform (1) -

The Lottery Corp reported 11% revenue growth in the four months to October, with Lotteries up 9% (90% revenues) and Keno up 33% (10% revenues).

Macquarie is forecasting a 5% three-year compound earnings growth rate to FY25, with volatility impacting jackpot activity, as is currently the case.

Lotteries represent more than 85% of earnings, the broker notes, and there are several initiatives that support higher earnings, including price increases and higher commissions. Outperform retained, target rises to $4.90 from $4.70.

Target price is $4.90 Current Price is $4.47 Difference: $0.43
If TLC meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $4.98, suggesting upside of 9.6% (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 TLC as Overweight (1) -

In the first four months of FY23, Lottery Corp's group revenue rose by 11% versus the previous corresponding period, with Lotteries and Keno increasing by 9% and 33%, respectively.

Management is aiming to "maintain and grow" dividends and will target a strong credit rating.

Plans for the Powerball game change have been brought forward and the Powerball subscription price will rise to $1.20/game from $1.10 in the first change for five years, notes the analyst.

The Overweight rating and $5.00 target are unchanged. Industry view: In-Line.

Target price is $5.00 Current Price is $4.47 Difference: $0.53
If TLC meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $4.98, suggesting upside of 9.6% (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 TLC as Accumulate (2) -

Following a trading update showing 11% year-on-year growth for the four months to the end of October, Ord Minnett believes consensus growth forecasts will need to be upgraded.  

As Powerball game changes have been brought forward to the end of FY23, the broker expects a larger impact than previous Oz Lotto changes, given the relative size of Powerball in relation to group turnover.

The Accumulate rating and $4.95 target are unchanged.

Target price is $4.95 Current Price is $4.47 Difference: $0.48
If TLC meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $4.98, suggesting upside of 9.6% (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 TLC as Buy (1) -

UBS and consensus expectations were for FY23 underlying revenue growth of 1% year-on-year, yet Lottery Corp unveiled 11% growth in a FY23 trading update for July to October.

Lotteries rose by 9%, underpinned by a strong jackpot game performance, while Keno grew by 33% due to a normalisation in venue trading levels post covid, explains the analyst.

The target of $5.40 and Buy rating are unchanged.

Target price is $5.40 Current Price is $4.47 Difference: $0.93
If TLC meets the UBS target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $4.98, suggesting upside of 9.6% (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 WBC as Buy (1) -

In the wake of FY22 results, UBS leaves its $27 target price and Buy rating unchanged for Westpac. It's felt prior reporting by other majors had created an expectation for a net interest margin (NIM) beat, and the 2H NIM of 1.90% was considered a bit soft.

The analyst still sees room for near-term NIM expansion though notes the bank's FY24 cost target of $8.6bn, up from $8bn, still remains a stretch.

UBS suggests Westpac's valuation is attractive and retains a Buy rating. The $27 price target is unchanged after higher-than-expected costs are partly offset by higher net interest income and a lower bad debt outlook.

Target price is $27.00 Current Price is $23.66 Difference: $3.34
If WBC meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $25.87, suggesting upside of 9.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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