Australian Broker Call

Morgan Stanley rates ALD as Overweight (1) -

Ampol has announced the Federal Court has dismissed claims by Chevron relating to the Ampol branded sites. The court found in favour of Chevron relating to restricting advertising of "StarCard".

Morgan Stanley considers the announcement positive for Ampol as it removes the risk of further expenditure associated with changing signs at its service stations.

Overweight rating. Target is $35. Industry view is Attractive.

Target price is $35.00 Current Price is $29.72 Difference: $5.28
If ALD meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $31.34, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Citi rates APT as Neutral (3) -

Recent data points to slowing growth in user metrics for the BNPL sector, which reflects cycling of strong comparisons and slowing e-commerce growth as economies open up, explains Citi.

While the broker's forecasts do assume a slowdown, the data-to-date suggests downside risks to Afterpay’s US gross merchandise volume (GMV), while the UK is slightly ahead and A&NZ is broadly in-line. The Neutral rating and $128.30 target are unchanged.

Target price is $128.30 Current Price is $98.84 Difference: $29.46
If APT meets the Citi target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $120.90, suggesting upside of 21.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Morgans rates AX1 as Hold (3) -

Morgans now expects store rollout velocity to remain elevated as new concepts and favourable rental agreements take hold. It's felt the group’s scale and covid impacts in general, position the company well to secure more attractive rental deals. 

The analyst lifts EPS forecasts by 2.4% in FY21 and around 6% in FY22 and FY23, largely due to higher store rollout assumptions and gross margins (FX tailwinds). The target price is increased to $2.85 from 2.55 and the Hold rating is unchanged.

The broker estimates an around -$6m sales and -$3m earnings (EBIT) impact from the two week Victorian lockdown.

Target price is $2.85 Current Price is $2.73 Difference: $0.12
If AX1 meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $2.92, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Citi rates BKW as Buy (1) -

After an investor day and trading update, Citi highlights cap rate revaluations continue to surprise to the upside and will continue to play-out across the sector for at least another 12 months. 

The broker sees tangible upside in the extra 336,900sqm of unused space across existing sites. While sales have been slow to ramp for domestic bricks, the cycle is considered to remain supportive. Buy retained and target rises to $27.20 from $23.00.

Target price is $27.20 Current Price is $23.40 Difference: $3.8
If BKW meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $24.55, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Macquarie rates BKW as Neutral (3) -

Brickworks has guided to FY21 Property earnings (EBIT) of $240-260m versus Macquarie's expectation of $145.6m. The earnings update included a $100m revaluation gain in 2H21. The Neutral rating is unchanged and the target price is increased to $22.40 from $20.30.

The broker explains cap rate compression driven by strong demand for industrial property continues to underpin a valuation uplift. FY21-23 EPS forecasts are lifted by 53%, 33% and 52%, respectively, to reflect the Property revaluation and potential development profits.

In the US, Building Products activity is recovering, with the 40% non-residential exposure starting to improve, while residential volumes have rebounded strongly, explains the analyst. Meanwhile, sales momentum is estimated to be gaining in the Australian division.

Target price is $22.40 Current Price is $23.40 Difference: minus $1 (current price is over target).
If BKW 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 $24.55, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Morgans rates BKW as Downgrade to Hold from Add (3) -

Following a strong share price performance, Morgans moves to a Hold from an Add rating and lifts the target price to $23.50 from $21.60. The company provided a stronger-than-expected FY21 guidance for its Property segment.

This was due to the recognition of a further $100m (Brickworks 50% share) in revaluation gains in its Property Trust, explains the broker. FY21 earnings (EBIT) for both Building Products Australia (BPA) and Building Products North America (BPNA) are expected to be higher.

The analyst continues to see a cyclical recovery in the Building Products businesses over FY21-23 and scope for further bolt-on M&A in North America.

Target price is $23.50 Current Price is $23.40 Difference: $0.1
If BKW meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $24.55, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Ord Minnett rates BKW as Buy (1) -

Ord Minnett observes Brickworks is benefiting from an acceleration in housing activity in Australia, while in the US non-residential construction, previously subject to a significant decline in the first half, is now slowly improving.

The main area of upside for the business are the property operations, in the broker's view, amid strong demand for industrial property.

In Australia, building product sales are particularly strong in Queensland and Western Australia and Ord Minnett forecasts a 49% increase in FY21 EBIT.

The broker retains a Buy rating and raises the target to $26.00 from $25.50.

Target price is $26.00 Current Price is $23.40 Difference: $2.6
If BKW meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $24.55, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Macquarie rates CHN as Outperform (1) -

Early-stage surface sampling has identified new potential drill targets within the Julimar complex, and drill testing of the Hartog prospect is expected to commence by September.

Macquarie highlights ongoing drilling results, ahead of the release of the maiden resource for the Gonneville discovery, presents key near-term catalysts for Chalice Mining.

The Outperform rating is maintained, while the target price rises to $9.90 from $9.20. This stems from a modest increase in the regional exploration valuation to reflect the new Drummond target and a change in project funding assumptions.

Target price is $9.90 Current Price is $8.40 Difference: $1.5
If CHN meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Credit Suisse rates COL as Outperform (1) -

While Credit Suisse acknowledges there is reasonable visibility regarding sales revenue there is more uncertainty pertaining to costs for Coles going forward as companies enter more normal periods of trading.

Revenue growth in the industry has been below expectations to date and low rates of migration are flagged as a potential downside risk for 2021 and 2022. The broker retains an Outperform rating and $18.19 target.

Target price is $18.19 Current Price is $16.76 Difference: $1.43
If COL meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $18.03, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Morgan Stanley rates DXS as Overweight (1) -

Dexus has taken a 7% stake in Australian Unity's Healthcare Trust at a cost of $180m. Morgan Stanley observes, financially, Dexus will collect a 3.5-4.0% distribution yield for its investment and this will be marginally accretive when funded by a 2-3% marginal cost of debt.

The trust has a $1bn development pipeline and could partner with another Dexus fund (DWPF) going forward, the broker suggests. Dexus also has first option to acquire the management rights to the trust should it be sold.

Overweight rating with a target of $11.70. Industry View: In-line.

Target price is $11.70 Current Price is $10.63 Difference: $1.07
If DXS meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $10.42, suggesting downside of -4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Ord Minnett rates EXP as Buy (1) -

Ord Minnett considers the recent decision to increase exposure to nature/experience for domestic customers is a sound move, given the outlook for international travel.

While the broker concedes the federal government's border restrictions could change at any time, at face value international travel appears unlikely to commence until mid 2022.

The broker remains comfortable that, post the restructuring, the traditional skydiving and adventure divisions can return to pre-pandemic levels on a like-for-like basis.

Estimates are updated to account for the likely delay in border re-opening. Buy rating and $0.33 target maintained.

Target price is $0.33 Current Price is $0.27 Difference: $0.06
If EXP meets the Ord Minnett target it will return approximately 22% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates JHC as Hold (3) -

Morgans has lifted the target price for Japara Healthcare to $1.20 from $1.04 to align with the revised non-binding indicative proposal from Calvary. The analyst expects the transaction has a few months to play out and there can be no certainty that a transaction will result.

Following a recent trading update, the broker adjusts forecasts to arrive at a valuation of $1.12, which is -7% shy of the target price. The Hold rating is maintained.

Target price is $1.20 Current Price is $1.18 Difference: $0.02
If JHC meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $1.00, suggesting downside of -15.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Morgans rates NSR as Hold (3) -

National Storage REIT has announced a capital raising to provide balance sheet flexibility. It is a 1-for-6.27 entitlement issue raising approximately $325m at $2. Morgans highlights pro-forma gearing moves to 24% from 35%, including recent acquisitions.

The new securities will be eligible for the June distribution and the broker estimates the trust will pay a final dividend of around 4.3c.

Management also announced a positive trading update with occupancy and pricing at record highs. This is considered driven by stronger macro-economic factors and improved operational enhancements. Hold rating and target increased to $2.04 from $1.90 from $1.89.

Target price is $2.04 Current Price is $2.03 Difference: $0.01
If NSR meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $2.04, suggesting downside of -1.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

UBS rates SDF as Buy (1) -

UBS observes there is little impact from the cessation of JobKeeper and the recent return of mobility restrictions in Victoria, so far. Commercial premium rates are expected to hold at current levels above 6% through FY22.

The broker upgrades earnings estimates towards the top of FY21 guidance, to $264.5m.

UBS also suggests Steadfast Group may look to explore an offshore roll-out of SCTP which could increase the focus on the external value of this platform. Buy rating retained. Target is raised to $4.70 from $4.38.

Target price is $4.70 Current Price is $4.15 Difference: $0.55
If SDF meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $4.67, suggesting upside of 9.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Citi rates Z1P as Buy (1) -

Recent data points to slowing growth in user metrics for the BNPL sector, which reflects cycling of strong comparisons and slowing e-commerce growth as economies open up, explains Citi.

While Quadpay continues to have the strongest growth in the US, user metrics are tracking below the broker's expectations. It's felt the company requires a strong June in A&NZ. The Buy rating is unchanged and the target price falls to $10.90 from $11.30.

Despite website visits in the US pointing to downside risk to total transaction volume (TTV), the analyst sees potential for an increase in ‘Shop Anywhere’  as an offset. The company's website visits and app downloads in Australia are also considered below expectations.

Target price is $10.90 Current Price is $6.82 Difference: $4.08
If Z1P meets the Citi target it will return approximately 60% (excluding dividends, fees and charges).

Current consensus price target is $8.82, suggesting upside of 28.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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