Australian Broker Call
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December 06, 2021
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1).
Last Updated: 05:00 PM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
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Today's Upgrades and Downgrades
FMG - | Fortescue Metals | Downgrade to Hold from Buy | Ord Minnett |
IAG - | Insurance Australia | Downgrade to Underweight from Equal-weight | Morgan Stanley |
RIO - | Rio Tinto | Downgrade to Hold from Buy | Ord Minnett |
RMD - | ResMed | Upgrade to Outperform from Neutral | Macquarie |
ANZ AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
Banks
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Overnight Price: $27.03
Morgans rates ANZ as Add (1) -
Morgans retains its Overweight stance on the major banks given robust dividend yields and potential for further capital management. Medium-term cost efficiency is also on the up, and considered attractive.
The analyst expects a rising interest rate environment will support earnings, the only negative being intense mortgage competition. However, the aforementioned tailwinds should largely offset this.
The broker maintains an Add rating and $31 target price for ANZ Bank. Westpac Bank ((WBC)) is Morgans preferred exposure in the sector.
Target price is $31.00 Current Price is $27.03 Difference: $3.97
If ANZ meets the Morgans target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $29.46, suggesting upside of 8.9% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY22:
Morgans forecasts a full year FY22 dividend of 147.00 cents and EPS of 226.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 214.2, implying annual growth of -1.3%. Current consensus DPS estimate is 146.3, implying a prospective dividend yield of 5.4%. Current consensus EPS estimate suggests the PER is 12.6. |
Forecast for FY23:
Morgans forecasts a full year FY23 dividend of 164.00 cents and EPS of 252.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 232.1, implying annual growth of 8.4%. Current consensus DPS estimate is 157.5, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 11.7. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $9.75
Citi rates APX as Buy (1) -
At first glance, Citi says Amazon’s entry into the fully managed data-labeling service space appears negative for Appen in terms of additional required investment and overall competition.
However, Citi says Amazon's entry also indicates continuing demand for Appen's services, despite concerns about self-learning systems.
While there may be more competition in the Enterprise space, competition with the company's major technology customers shouldn't be impacted, according to Citi. Buy rating and $17.10 target price are retained.
Target price is $17.10 Current Price is $9.75 Difference: $7.35
If APX meets the Citi target it will return approximately 75% (excluding dividends, fees and charges).
Current consensus price target is $12.78, suggesting upside of 38.3% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY21:
Citi forecasts a full year FY21 EPS of 37.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 33.4, implying annual growth of -19.6%. Current consensus DPS estimate is 9.6, implying a prospective dividend yield of 1.0%. Current consensus EPS estimate suggests the PER is 27.7. |
Forecast for FY22:
Citi forecasts a full year FY22 EPS of 49.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 42.2, implying annual growth of 26.3%. Current consensus DPS estimate is 9.9, implying a prospective dividend yield of 1.1%. Current consensus EPS estimate suggests the PER is 21.9. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $40.23
Macquarie rates BHP as Outperform (1) -
The collapse of BHP Group's dual listing looks set to progress, following a final decision from the company's board.
Macquarie notes the company will unify under the BHP Group Limited banner, increasing BHP Group's ASX200 weighting to about 9.5%.
Macquarie maintains an Outperform rating. Target price decreases to $51.00 from $52.00.
Target price is $51.00 Current Price is $40.23 Difference: $10.77
If BHP meets the Macquarie target it will return approximately 27% (excluding dividends, fees and charges).
Current consensus price target is $43.55, suggesting upside of 10.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 377.83 cents and EPS of 438.42 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 519.9, implying annual growth of N/A. Current consensus DPS estimate is 396.6, implying a prospective dividend yield of 10.0%. Current consensus EPS estimate suggests the PER is 7.6. |
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 281.06 cents and EPS of 324.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 409.1, implying annual growth of -21.3%. Current consensus DPS estimate is 301.3, implying a prospective dividend yield of 7.6%. Current consensus EPS estimate suggests the PER is 9.7. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates BHP as No Rating (-1) -
BHP's board has decided that BHP Limited shares will replace BHP PLC shares upon unification, pending UK court and National Treasury of South Africa approval.
Morgan Stanley expects the deal, combined with the potential petroleum demerger and sale of thermal coal operations, will boost BHP's ESG credentials and simplify its structure.
The company plans to publish a prospectus for new LTD shares for PLC shares most likely on December 8, along with a Petroleum proforma release.
General meetings will be held on January 20, and it is expected January 28 will be the last day of PLC share trading prior to unification on January 31.
Management expects the shift should increase BHP's weighting in the S&P/ASX200.
Morgan Stanley is unable to provide a rating or target price on BHP Group. Industry view: In-Line.
Current Price is $40.23. Target price not assessed.
Current consensus price target is $43.55, suggesting upside of 10.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Morgan Stanley forecasts a full year FY22 dividend of 296.96 cents and EPS of 441.47 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 519.9, implying annual growth of N/A. Current consensus DPS estimate is 396.6, implying a prospective dividend yield of 10.0%. Current consensus EPS estimate suggests the PER is 7.6. |
Forecast for FY23:
Morgan Stanley forecasts a full year FY23 dividend of 218.75 cents and EPS of 315.52 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 409.1, implying annual growth of -21.3%. Current consensus DPS estimate is 301.3, implying a prospective dividend yield of 7.6%. Current consensus EPS estimate suggests the PER is 9.7. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates BHP as No Rating (-1) -
Ord Minnett has made material reductions to its China steel production assumptions. As a result, the strategists have lowered iron ore price forecasts by -12% to US$92/t in 2022 and by -10% to US$90/t in FY23.
The broker is under rating restriction for BHP Group so offers no target price or rating.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Current Price is $40.23. Target price not assessed.
Current consensus price target is $43.55, suggesting upside of 10.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Ord Minnett forecasts a full year FY22 dividend of 396.39 cents and EPS of 495.82 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 519.9, implying annual growth of N/A. Current consensus DPS estimate is 396.6, implying a prospective dividend yield of 10.0%. Current consensus EPS estimate suggests the PER is 7.6. |
Forecast for FY23:
Ord Minnett forecasts a full year FY23 dividend of 379.16 cents and EPS of 473.29 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 409.1, implying annual growth of -21.3%. Current consensus DPS estimate is 301.3, implying a prospective dividend yield of 7.6%. Current consensus EPS estimate suggests the PER is 9.7. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $96.61
Morgans rates CBA as Reduce (5) -
Morgans retains an Overweight stance on the major banks, citing robust dividend yields, potential for further capital management, and better medium-term cost efficiency.
The analyst expects a rising interest rate environment will support earnings, the only negative being intense mortgage competition, which should be largely offset by the aforementioned tailwinds.
The broker maintains its Reduce rating and $73 target price for Commonwealth Bank. Westpac Bank ((WBC)) is Morgans preferred exposure in the sector.
Target price is $73.00 Current Price is $96.61 Difference: minus $23.61 (current price is over target).
If CBA meets the Morgans target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $87.25, suggesting downside of -10.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Morgans forecasts a full year FY22 dividend of 382.00 cents and EPS of 509.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 493.2, implying annual growth of -14.2%. Current consensus DPS estimate is 374.6, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 19.7. |
Forecast for FY23:
Morgans forecasts a full year FY23 dividend of 419.00 cents and EPS of 557.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 521.3, implying annual growth of 5.7%. Current consensus DPS estimate is 397.8, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 18.7. |
Market Sentiment: -0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
CSL CSL LIMITED
Pharmaceuticals & Biotech/Lifesciences
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Overnight Price: $297.67
Citi rates CSL as Neutral (3) -
While CSL neither confirmed nor denied recent press speculation about a potential bid for Switzerland-listed Vifor Pharma, Citi estimates any transaction would likely be EPS accretive given CSL's significantly higher multiple to Vifor.
Neutral rating and $325 target are maintained.
Target price is $325.00 Current Price is $297.67 Difference: $27.33
If CSL meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $311.23, suggesting upside of 5.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Citi forecasts a full year FY22 dividend of 324.80 cents and EPS of 666.31 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 696.2, implying annual growth of N/A. Current consensus DPS estimate is 321.0, implying a prospective dividend yield of 1.1%. Current consensus EPS estimate suggests the PER is 42.4. |
Forecast for FY23:
Citi forecasts a full year FY23 dividend of 353.97 cents and EPS of 876.44 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 843.6, implying annual growth of 21.2%. Current consensus DPS estimate is 365.9, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 35.0. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates CSL as Neutral (3) -
The press is speculating CSL will take over Swiss pharma company Vifor. Neither company has commented, but Vifor shares jumped 21%.
Vifor Pharma is one of the largest Swiss pharmaceutical companies and a global leader in the treatment of iron deficiency. It has established a presence in the nephrology market and seeks to attain global leadership in the segment of cardiorenal therapies.
While Vifor is a market leader in IV iron therapy and focuses on rare diseases, iron deficiency, nephrology and cardio-renal are very different therapeutic areas from CSL's, the broker notes. If CSL were to pursue such an acquisition, it would be a significant shift from its core competency and core therapeutic areas.
Hence little room for synergies, making CSL's rationale unclear. Neutral and $315 target retained.
Target price is $315.00 Current Price is $297.67 Difference: $17.33
If CSL meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $311.23, suggesting upside of 5.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Credit Suisse forecasts a full year FY22 dividend of 300.94 cents and EPS of 646.96 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 696.2, implying annual growth of N/A. Current consensus DPS estimate is 321.0, implying a prospective dividend yield of 1.1%. Current consensus EPS estimate suggests the PER is 42.4. |
Forecast for FY23:
Credit Suisse forecasts a full year FY23 dividend of 369.88 cents and EPS of 756.99 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 843.6, implying annual growth of 21.2%. Current consensus DPS estimate is 365.9, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 35.0. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $17.10
Ord Minnett rates FMG as Downgrade to Hold from Buy (3) -
Ord Minnett has made material reductions to its China steel production assumptions. As a result, the strategists have lowered iron ore price forecasts by -12% to US$92/t in 2022 and by -10% to US$90/t in FY23.
The broker lowers its target price for Fortescue Metals Group to $20 from $22 and downgrades to Hold from Buy given the company is trading near the broker's net-present-value estimate.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $20.00 Current Price is $17.10 Difference: $2.9
If FMG meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $16.06, suggesting downside of -6.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Ord Minnett forecasts a full year FY22 dividend of 112.69 cents and EPS of 153.79 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 240.9, implying annual growth of N/A. Current consensus DPS estimate is 203.9, implying a prospective dividend yield of 11.9%. Current consensus EPS estimate suggests the PER is 7.1. |
Forecast for FY23:
Ord Minnett forecasts a full year FY23 dividend of 137.88 cents and EPS of 175.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 191.6, implying annual growth of -20.5%. Current consensus DPS estimate is 160.7, implying a prospective dividend yield of 9.4%. Current consensus EPS estimate suggests the PER is 9.0. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $4.47
Morgan Stanley rates IAG as Downgrade to Underweight from Equal-weight (5) -
Morgan Stanley downgrades IAG to non-consensus Underweight and cuts the target price to $3.75 from $4.80, listing 10 contributing factors that should increase the company's capital costs and hurt the company's ESG prospects.
The broker cites IAG's skew to CAT-prone short-tail lines, NZ reform risks, higher catastrophe-cost volatility; higher reinsurance pricing and tighter access; quota share reinsurance renewal risks; regulatory risk on personal reinsurance pricing; capital regulatory risk; consumer data right concerns; CDR regulation; reserving risk; and a remuneration report strike.
But wait, there's more.
Morgan Stanley casts a nervous eye to margin headwinds and market share losses; and expects an extended $1.8bn capital buffer may be required to offset reduced capital flexibility - although the release of business interruption combined with the liberation of tax assets could be another option.
Target price is $3.75 Current Price is $4.47 Difference: minus $0.72 (current price is over target).
If IAG meets the Morgan Stanley target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $5.20, suggesting upside of 20.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Morgan Stanley forecasts a full year FY22 dividend of 3.00 cents and EPS of 17.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 20.6, implying annual growth of N/A. Current consensus DPS estimate is 15.0, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 21.0. |
Forecast for FY23:
Morgan Stanley forecasts a full year FY23 dividend of 12.00 cents and EPS of 26.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.1, implying annual growth of 41.3%. Current consensus DPS estimate is 21.7, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 14.9. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $3.32
Ord Minnett rates LGL as Initiation of coverage with Buy (1) -
Ord Minnett initiates coverage on Lynch Group with a Buy rating and $4.70 target price. The company is a floral supplier within Australia and to China.
The broker is more effusive about the China opportunity, citing a return on invested capital (ROIC) hurdle of more than 25% in a market that is 13 times the size of Australia. Geopolitical risk is thought lessened as 80% of China production is sold domestically.
Ord Minnett says the opportunity in China's highly-fragmented market lies in providing a service that removes various wholesale layers.
Meanwhile, the company is expected to continue gaining Australian retail share as supermarkets garner a greater proportion of sales.
Target price is $4.70 Current Price is $3.32 Difference: $1.38
If LGL meets the Ord Minnett target it will return approximately 42% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY22:
Ord Minnett forecasts a full year FY22 EPS of 31.82 cents. |
Forecast for FY23:
Ord Minnett forecasts a full year FY23 EPS of 35.80 cents. |
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
MGH MAAS GROUP HOLDINGS LIMITED
Building Products & Services
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Overnight Price: $5.30
Morgans rates MGH as Add (1) -
Following Maas Group's investor day, Morgans continues to see organic upside potential in the Residential Real Estate business over FY23/24. The Commercial Property pipeline is also expected to generate solid value.
While the analyst's forecasts are unchanged, the Commercial Property opportunity outweighs the effect of a reduction in peer multiples, and Citi raises its target price to $5.85 from $5.65. Add rating is retained.
Target price is $5.85 Current Price is $5.30 Difference: $0.55
If MGH meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY22:
Morgans forecasts a full year FY22 dividend of 6.00 cents and EPS of 22.00 cents. |
Forecast for FY23:
Morgans forecasts a full year FY23 dividend of 7.40 cents and EPS of 26.00 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $44.78
Ord Minnett rates MIN as Hold (3) -
Ord Minnett has made material reductions to its China steel production assumptions. As a result, the strategists have lowered iron ore price forecasts by -12% to US$92/t in 2022 and by -10% to US$90/t in FY23.
The broker lowers its target price for Mineral Resources to $40 from $47. Hold rating retained despite the company being the most expensive iron ore stock under Ord Minnett's coverage.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $40.00 Current Price is $44.78 Difference: minus $4.78 (current price is over target).
If MIN meets the Ord Minnett target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $51.43, suggesting upside of 16.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Ord Minnett forecasts a full year FY22 dividend of 104.00 cents and EPS of 109.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 193.1, implying annual growth of -71.3%. Current consensus DPS estimate is 121.3, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 22.8. |
Forecast for FY23:
Ord Minnett forecasts a full year FY23 dividend of 138.00 cents and EPS of 376.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 324.5, implying annual growth of 68.0%. Current consensus DPS estimate is 152.3, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 13.6. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $27.96
Morgans rates NAB as Hold (3) -
Morgans retains its Overweight stance on the major banks, citing robust dividend yields, potential for further capital management, and better medium-term cost efficiency.
The analysts expect a rising interest rate environment will support earnings, the only negative being intense mortgage competition, which should be largely offset by the aforementioned tailwinds.
The broker maintains its Hold rating and $28.50 target price for National Australia Bank. Westpac Bank ((WBC)) is Morgans preferred exposure in the sector.
Target price is $28.50 Current Price is $27.96 Difference: $0.54
If NAB meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $29.47, suggesting upside of 5.1% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY22:
Morgans forecasts a full year FY22 dividend of 136.00 cents and EPS of 209.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 197.8, implying annual growth of 2.5%. Current consensus DPS estimate is 137.2, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 14.2. |
Forecast for FY23:
Morgans forecasts a full year FY23 dividend of 153.00 cents and EPS of 235.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 216.5, implying annual growth of 9.5%. Current consensus DPS estimate is 149.3, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 13.0. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $14.47
Macquarie rates NCK as Outperform (1) -
Macquarie notes Nick Scali has retained sales and margins in line with expectations in the September quarter despite lockdown-induced shipping delays, rising freight costs and sourcing challenges.
Despite more than 55% of the total store network being affected by closures, the sales order bank is largely at the same level as last year given delays.
Incorporating the Plush acquisition, EPS forecasts rise 5%, 16% and 17% through to FY24.
Macquarie resumes coverage with an Outperform rating and a target price of $15.50.
Target price is $15.50 Current Price is $14.47 Difference: $1.03
If NCK meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 64.00 cents and EPS of 80.30 cents. |
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 74.00 cents and EPS of 92.40 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $26.41
Macquarie rates OZL as Outperform (1) -
Development at the Oz Minerals' Carrapateena project continues, the company starting work on the Block Cave decline, which, when completed, will enable the project to move forward with first Block Cave production in 2026, says Macquarie.
Block Cave is estimated to increase annual copper production at the site to more than 120,000 tonnes per annum by 2029, from a current approximate 80,000 tonnes per annum.
Outperform rating and $32 target price retained.
Target price is $32.00 Current Price is $26.41 Difference: $5.59
If OZL meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $24.83, suggesting downside of -6.5% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 58.00 cents and EPS of 175.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 164.1, implying annual growth of 151.6%. Current consensus DPS estimate is 36.8, implying a prospective dividend yield of 1.4%. Current consensus EPS estimate suggests the PER is 16.2. |
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 33.00 cents and EPS of 224.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 168.0, implying annual growth of 2.4%. Current consensus DPS estimate is 31.2, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 15.8. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $95.52
Ord Minnett rates RIO as Downgrade to Hold from Buy (3) -
Ord Minnett has made material reductions to its China steel production assumptions. As a result, the strategists have lowered iron ore price forecasts by -12% to US$92/t in 2022 and by -10% to US$90/t in FY23.
The broker lowers its target price for Rio Tinto to $102 from $113.
Ord Minnett downgrades the rating to Hold from Buy, expecting continuing operational challenges may prompt marginal investors to prefer other stocks in the sector.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $102.00 Current Price is $95.52 Difference: $6.48
If RIO meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $105.71, suggesting upside of 12.5% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 1382.74 cents and EPS of 1749.97 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 1907.2, implying annual growth of N/A. Current consensus DPS estimate is 1464.8, implying a prospective dividend yield of 15.6%. Current consensus EPS estimate suggests the PER is 4.9. |
Forecast for FY22:
Ord Minnett forecasts a full year FY22 dividend of 955.85 cents and EPS of 1187.86 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 1240.6, implying annual growth of -35.0%. Current consensus DPS estimate is 897.9, implying a prospective dividend yield of 9.6%. Current consensus EPS estimate suggests the PER is 7.6. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $36.09
Macquarie rates RMD as Upgrade to Outperform from Neutral (1) -
Although semiconductor shortages are creating near-term pressure on device supply for ResMed and peers, Macquarie notes industry commentary suggests a backlog of new patient diagnoses will be addressed by 2026.
Macquarie expects an increase in industry device volume growth from 2023 leading to potential share gains for ResMed. The broker is forecasting earnings per share 18% and 12% ahead of consensus for FY23 and FY24.
The rating is upgraded to Outperform from Neutral and the target price increases to $39.00 from $38.00.
Target price is $39.00 Current Price is $36.09 Difference: $2.91
If RMD meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $39.10, suggesting upside of 6.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 22.67 cents and EPS of 85.91 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 89.9, implying annual growth of N/A. Current consensus DPS estimate is 24.2, implying a prospective dividend yield of 0.7%. Current consensus EPS estimate suggests the PER is 40.7. |
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 24.26 cents and EPS of 108.05 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 104.9, implying annual growth of 16.7%. Current consensus DPS estimate is 26.0, implying a prospective dividend yield of 0.7%. Current consensus EPS estimate suggests the PER is 34.9. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $1.45
Macquarie rates RMS as Outperform (1) -
Ramelius Resources has bought a 91% stake in Apollo Consolidated ((AOP)), triggering compulsory acquisition of the remaining shares. Macquarie notes shareholders were offered $0.34 cash and 0.1778 Ramelius Resources share for each Apollo Consolidated share.
Macquarie cuts long-term EPS estimates -6% to -8% EPS to account for the acquisition, citing a reduced closing cash balance and additional shares. However, the broker notes primary asset Lake Rebecca has the potential to address longer term production gaps.
Outperform rating and $1.90 target price are retained.
Target price is $1.90 Current Price is $1.45 Difference: $0.45
If RMS meets the Macquarie target it will return approximately 31% (excluding dividends, fees and charges).
Current consensus price target is $2.00, suggesting upside of 35.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 1.00 cents and EPS of 8.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.7, implying annual growth of -25.2%. Current consensus DPS estimate is 2.5, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 12.6. |
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 4.00 cents and EPS of 6.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.7, implying annual growth of N/A. Current consensus DPS estimate is 3.1, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 12.6. |
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $42.62
Citi rates SHL as Neutral (3) -
Citi upgrades its forecasts in light of the omicron variant and after taking into account global vaccination/booster rates. Target price rises to $44 from $42.50 on ongoing elevated PCR testing. Neutral rating retained.
Should the omicron variant became the dominant global strain over the next six months but result in a significantly less severe illness, forecast earnings numbers may be in jeopardy, cautions the analyst.
Target price is $44.00 Current Price is $42.62 Difference: $1.38
If SHL meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $45.13, suggesting upside of 5.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Citi forecasts a full year FY22 dividend of 105.00 cents and EPS of 311.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 270.6, implying annual growth of -1.8%. Current consensus DPS estimate is 103.4, implying a prospective dividend yield of 2.4%. Current consensus EPS estimate suggests the PER is 15.8. |
Forecast for FY23:
Citi forecasts a full year FY23 dividend of 110.00 cents and EPS of 195.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 166.8, implying annual growth of -38.4%. Current consensus DPS estimate is 106.9, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 25.6. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates TRP as Initiation of coverage with a Speculative Buy (1) -
Morgans initiates coverage on Tissue Repair with a Speculative Buy rating and $1.43 target price.
The newly listed drug development company is developing advanced wound-healing products for applications in the chronic wound and aftercare of cosmetic procedures.
The broker derives confidence from efficacy measures across numerous trials, and believes recent share-price weakness presents an opportunity. There's thought to be considerable upside should regulatory clearances be achieved.
Morgans says the company will launch its cosmetic product in 2022 in Australia, where a significantly lower burden of proof is required.
Target price is $1.43 Current Price is $0.56 Difference: $0.87
If TRP meets the Morgans target it will return approximately 155% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY22:
Morgans forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 4.00 cents. |
Forecast for FY23:
Morgans forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 13.00 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
TWE TREASURY WINE ESTATES LIMITED
Food, Beverages & Tobacco
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Overnight Price: $11.79
Credit Suisse rates TWE as Neutral (3) -
Credit Suisse has rejigged its Treasury Wine Estates model to account for key forecasts and trends under the company's new divisional model. This has led to no material change to forecasts or valuation.
For Treasury Premium brands the broker sees room for a -20% reduction in FY23 costs on lower local grape prices. For Treasury Americas, the company has identified 3,000 key accounts and is increasing its focus on bricks-and-mortar distribution.
For Penfolds, the broker applies a 20x earnings multiple in line with historical luxury goods companies.
Neutral rating and $12.45 target retained.
Target price is $12.45 Current Price is $11.79 Difference: $0.66
If TWE meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $13.45, suggesting upside of 15.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Credit Suisse forecasts a full year FY22 dividend of 26.00 cents and EPS of 39.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 44.3, implying annual growth of 27.8%. Current consensus DPS estimate is 27.9, implying a prospective dividend yield of 2.4%. Current consensus EPS estimate suggests the PER is 26.2. |
Forecast for FY23:
Credit Suisse forecasts a full year FY23 dividend of 32.00 cents and EPS of 49.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 54.3, implying annual growth of 22.6%. Current consensus DPS estimate is 34.2, implying a prospective dividend yield of 2.9%. Current consensus EPS estimate suggests the PER is 21.4. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $20.70
Morgans rates WBC as Add (1) -
Morgans retains an Overweight stance on the major banks citing robust dividend yields, potential for further capital management, and better medium-term cost efficiency.
The analyst expects a rising interest rate environment will support earnings, the only negative being intense mortgage competition, which should be largely offset by the aforementioned tailwinds.
Westpac Bank is Morgans preferred exposure in the sector. The analysts conclude that despite appearances, the bank's net interest margin (NIM) underperformance relative to National Australia Bank ((NAB)) in the 2H21 is addressable.
Target price is $30.50 Current Price is $20.70 Difference: $9.8
If WBC meets the Morgans target it will return approximately 47% (excluding dividends, fees and charges).
Current consensus price target is $26.33, suggesting upside of 27.0% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY22:
Morgans forecasts a full year FY22 dividend of 123.00 cents and EPS of 182.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 155.4, implying annual growth of 4.0%. Current consensus DPS estimate is 123.0, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 13.3. |
Forecast for FY23:
Morgans forecasts a full year FY23 dividend of 162.00 cents and EPS of 231.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 187.7, implying annual growth of 20.8%. Current consensus DPS estimate is 136.8, implying a prospective dividend yield of 6.6%. Current consensus EPS estimate suggests the PER is 11.0. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
WOW WOOLWORTHS GROUP LIMITED
Food, Beverages & Tobacco
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Overnight Price: $39.59
UBS rates WOW as Sell (5) -
UBS feels there may be greater ACCC risk for Woolworths Group than for Wesfarmers ((WES)) in their competing bids for Australian Pharmaceutical Industries ((API)).
Woolworths has offered a cash consideration of $1.75/share, 13% higher than the Wesfarmers bid.
Management has allowed Woolworths Group to undertake confirmatory due diligence.
Target price is $37.00 Current Price is $39.59 Difference: minus $2.59 (current price is over target).
If WOW meets the UBS target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $38.17, suggesting downside of -6.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
UBS forecasts a full year FY22 dividend of 103.00 cents and EPS of 140.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 129.8, implying annual growth of -21.3%. Current consensus DPS estimate is 95.0, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 31.3. |
Forecast for FY23:
UBS forecasts a full year FY23 dividend of 110.00 cents and EPS of 148.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 143.1, implying annual growth of 10.2%. Current consensus DPS estimate is 104.0, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 28.4. |
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Today's Price Target Changes
Company | Last Price | Broker | New Target | Prev Target | Change | |
BHP | BHP Group | $39.51 | Macquarie | 51.00 | 52.00 | -1.92% |
FMG | Fortescue Metals | $17.15 | Ord Minnett | 20.00 | 22.00 | -9.09% |
IAG | Insurance Australia | $4.33 | Morgan Stanley | 3.75 | 4.80 | -21.87% |
MGH | Maas Group | $5.06 | Morgans | 5.85 | 5.65 | 3.54% |
MIN | Mineral Resources | $44.04 | Ord Minnett | 40.00 | 47.00 | -14.89% |
NCK | Nick Scali | $14.38 | Macquarie | 15.50 | N/A | - |
RIO | Rio Tinto | $94.00 | Ord Minnett | 102.00 | 113.00 | -9.73% |
RMD | ResMed | $36.57 | Macquarie | 39.00 | 38.00 | 2.63% |
SHL | Sonic Healthcare | $42.73 | Citi | 44.00 | 42.50 | 3.53% |
Summaries
ANZ | ANZ Bank | Add - Morgans | Overnight Price $27.03 |
APX | Appen | Buy - Citi | Overnight Price $9.75 |
BHP | BHP Group | Outperform - Macquarie | Overnight Price $40.23 |
No Rating - Morgan Stanley | Overnight Price $40.23 | ||
No Rating - Ord Minnett | Overnight Price $40.23 | ||
CBA | CommBank | Reduce - Morgans | Overnight Price $96.61 |
CSL | CSL | Neutral - Citi | Overnight Price $297.67 |
Neutral - Credit Suisse | Overnight Price $297.67 | ||
FMG | Fortescue Metals | Downgrade to Hold from Buy - Ord Minnett | Overnight Price $17.10 |
IAG | Insurance Australia | Downgrade to Underweight from Equal-weight - Morgan Stanley | Overnight Price $4.47 |
LGL | Lynch Holding | Initiation of coverage with Buy - Ord Minnett | Overnight Price $3.32 |
MGH | Maas Group | Add - Morgans | Overnight Price $5.30 |
MIN | Mineral Resources | Hold - Ord Minnett | Overnight Price $44.78 |
NAB | National Australia Bank | Hold - Morgans | Overnight Price $27.96 |
NCK | Nick Scali | Outperform - Macquarie | Overnight Price $14.47 |
OZL | OZ Minerals | Outperform - Macquarie | Overnight Price $26.41 |
RIO | Rio Tinto | Downgrade to Hold from Buy - Ord Minnett | Overnight Price $95.52 |
RMD | ResMed | Upgrade to Outperform from Neutral - Macquarie | Overnight Price $36.09 |
RMS | Ramelius Resources | Outperform - Macquarie | Overnight Price $1.45 |
SHL | Sonic Healthcare | Neutral - Citi | Overnight Price $42.62 |
TRP | Tissue Repair | Initiation of coverage with a Speculative Buy - Morgans | Overnight Price $0.56 |
TWE | Treasury Wine Estates | Neutral - Credit Suisse | Overnight Price $11.79 |
WBC | Westpac Banking | Add - Morgans | Overnight Price $20.70 |
WOW | Woolworths Group | Sell - UBS | Overnight Price $39.59 |
RATING SUMMARY
Rating | No. Of Recommendations |
1. Buy | 11 |
3. Hold | 8 |
5. Sell | 3 |
Monday 06 December 2021
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Disclaimer:
The content of this information does in no way reflect the opinions of
FNArena, or of its journalists. In fact we don't have any opinion about
the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe
and comment on. By doing so we believe we provide intelligent investors
with a valuable tool that helps them in making up their own minds, reading
market trends and getting a feel for what is happening beneath the surface.
This document is provided for informational purposes only. It does not
constitute an offer to sell or a solicitation to buy any security or other
financial instrument. FNArena employs very experienced journalists who
base their work on information believed to be reliable and accurate, though
no guarantee is given that the daily report is accurate or complete. Investors
should contact their personal adviser before making any investment decision.
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