Australian Broker Call

Bell Potter rates A2M as Hold (3) -

A2 Milk has clarified its position following the guidance update from Synlait Milk ((SM1)). Revenue growth has slowed materially over the second half, to around 2%, and while FY23 guidance for double digits has been retained, Bell Potter points out it is at the lower end, i.e. around 10%.

While Synlait Milk's forecasts do not necessarily directly align with internal forecasts for a2 Milk the broker believes its forecasts for FY24-25 are consistent with the softer trends that are assumed by the company's largest supplier.

The broker downgrades EBITDA forecast by -2% for FY23 and -1% for FY24. Target is reduced to $5.95 from $6.80. Hold maintained.

Target price is $5.95 Current Price is $5.42 Difference: $0.53
If A2M meets the Bell Potter target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $5.71, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: -0.1

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

Macquarie rates A2M as Underperform (5) -

Responding to another profit downgrade by Synlait Milk ((SM1)), Macquarie applies only a small FY23 volume forecast reduction for a2 Milk Co.

While management at a2Milk noted no material change to its FY23 outlook, it now expects English label revenue growth to be down mid-single digits from flat on the previous corresponding period. A partial offset is expected via ongoing strong double-digit growth in Chinese Label.

The broker lowers its target to $4.65 from $5.00 on on lower near-term earnings estimates and softer comparative multiples. Underperform.

Target price is $4.65 Current Price is $5.42 Difference: minus $0.77 (current price is over target).
If A2M meets the Macquarie target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.71, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: -0.1

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

Morgans rates A2M as Hold (3) -

Things are not as bad as Morgans feared following another profit downgrade by Synlait Milk ((SM1)), with a2 Milk Co only slightly lowering sales guidance largely due to continued weakness in the A&NZ daigou market.

The broker felt uncertainty around the Chinese State Administration for Market Renewal (SAMR) approval and challenging market conditions may have led to a larger fall in sales guidance.

The analyst retains a Hold rating given shares look fully valued and earnings uncertainty remains heading into FY24 while industry participants await SAMR approval and China’s birth rate remains weak. 

The target falls to $6.05 from $6.45.

Target price is $6.05 Current Price is $5.42 Difference: $0.63
If A2M meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $5.71, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: -0.1

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

Morgans rates ANZ as Hold (3) -

Ahead of the 1H reporting season for the majority of the big four banks, Morgans highlights the key uncertainty is net interest margin (NIM).

While NIMs should be boosted by the rise in the average RBA cash rate, the trajectory should be monitored, explains the analyst. Price competition, deposit switching, higher wholesale funding costs, and weakening terminal cash rate expectations are expected to weigh.

In comparing the business-skewed banks, National Australia Bank has a higher return on equity (ROE) than ANZ Bank, but ANZ has greater valuation support, albeit with greater M&A risk, explains the broker.

A Hold rating is maintained for ANZ Bank as Morgans is cautious re M&A  due to non-operating holding co (NOHC) implications and technology transition to a digital bank. The target rises to $26.24 from $25.91.

Target price is $26.24 Current Price is $24.21 Difference: $2.03
If ANZ meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $26.95, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Macquarie rates AUB as Outperform (1) -

Key findings by Macquarie in an analysis of the Australian broker M&A market are the doubling of resourcing for insurance brokers over the last three years, while three new competitors have also entered the local market.

The broker undertook this analysis as the M&A pipeline has been a major contributor to EPS growth for Australian listed insurance brokers over recent years. It's was concluded there is minimal accretion for the brokers with acquisition multiples at current levels.

As Macquarie considers AUB Group to be more of an “investment company” in brokers, it may be financially savvy to consider
selling assets at these market peak multiples.

The Outperform rating and $29.40 target are maintained.

Target price is $29.40 Current Price is $27.45 Difference: $1.95
If AUB meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $29.35, suggesting upside of 7.5% (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

Morgans rates BCB as Speculative Buy (1) -

Following an in-line March quarter cashflow performance, Morgans suggests Bowen Coking Coal has now substantially advanced toward material free cash generation in FY24.

The next catalyst, according to the analyst, is the ramp-up of the Burton coal handling and processing plant (CHPP) in the 4Q, which is set to unlock materially higher product value from the Broadmeadow East (BME) mine.

The Speculative Buy rating is maintained and the target slips to 40c from 42c.

Target price is $0.40 Current Price is $0.25 Difference: $0.15
If BCB meets the Morgans target it will return approximately 60% (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

Shaw and Partners rates BCB as Buy (1) -

Bowen Coking Coal has produced positive operating cash flow for the first time in March quarter report. Shaw and Partners notes this would have been even better but for a delayed $15m payment for coal sold during the quarter.

A steady trajectory of increasing production, sales and cash flow is envisaged. The broker marks to market coal prices and product mix for FY23 which reduces revenue forecasts by -8%. The broker retains a Buy rating and $0.49 target.

Target price is $0.49 Current Price is $0.25 Difference: $0.24
If BCB meets the Shaw and Partners target it will return approximately 96% (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

Morgans rates CBA as Hold (3) -

Ahead of the 1H reporting season for the majority of the big four banks, Morgans highlights the key uncertainty is net interest margin (NIM).

While NIMs should be boosted by the rise in the average RBA cash rate, the trajectory should be monitored, explains the analyst. Price competition, deposit switching, higher wholesale funding costs, and weakening terminal cash rate expectations are expected to weigh.

In comparing the retail-skewed banks, Morgans considers Westpac has a greater risk/reward profile compared to CommBank.

The broker retains its Hold rating for CommBank on caution over the largest fixed rate loan cliff exposure of the big four, weakest valuation support, and lowest dividend yield. The target rises to $97.87 from $96.11.

Target price is $97.87 Current Price is $99.89 Difference: minus $2.02 (current price is over target).
If CBA meets the Morgans target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $89.98, suggesting downside of -9.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.5

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

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

Morgan Stanley believes value is starting to emerge in Charter Hall, believing a further 10% fall in the share price to $10.40 (it has already fallen -25% in the past year) should reveal solid support.

The broker observes the company's "enviable" funds platform is trading at a -25% discount to the ASX200 Industrials, compared with a long-term "in-line" average.

While value exists now, says the broker (even going so far as to wonder if the share is in "deep-value territory"), UBS expects uncertainty around asset devaluations is likely to weigh in the near term, noting the company stock's long-term correlation with the Australian 10-year bond rate.

EPS forecasts fall -1% in FY23; -7% in FY24; and -0.5% in FY25. Target price is steady at $14.40. Equal-Weight rating retained.

Target price is steady at $14.40. Industry view: In Line.

Target price is $14.40 Current Price is $11.18 Difference: $3.22
If CHC meets the Morgan Stanley target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $14.77, suggesting upside of 33.4% (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

Morgans rates CHL as Add (1) -

The first full quarter contribution from PaulCamper helped Camplify Holdings turn in a broadly solid 3Q trading performance, observes Morgans.

The broker highlights positive momentum in the core platform/regions during the second consecutive quarter of positive operating cash flow.

While Morgans raises its forecasts on the stronger-than-anticipated gross transaction value (GTV) performance and broadly stable customer acquisition costs, the target remains at $2.60. The offset came from lower valuation multiples as the sector/peer set de-rates.

The Add rating is unchanged.

Target price is $2.60 Current Price is $1.90 Difference: $0.7
If CHL meets the Morgans target it will return approximately 37% (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 CXO as Sell (5) -

Core Lithium's March quarter result revealed the completion of the DMS plant as well as first concentrate production and the restart of open pit mining. Citi notes implied realised spodumene prices in April were ahead of estimates.

The broker models the commencement of sales into legacy contracts from the first quarter of FY24 and, while the price is not been disclosed, US$950/t for around 40% of additional volumes is anticipated. Sell rating and $0.75 target maintained.

Target price is $0.75 Current Price is $1.00 Difference: minus $0.245 (current price is over target).
If CXO meets the Citi target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.98, suggesting upside of 4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Macquarie rates CXO as Outperform (1) -

Core Lithium's 3Q report shows first spodumene concentrate production in February with the shipment scheduled in May.

Management plans to release its production guidance in the 1Q of FY24, which presents a near term catalyst in Macquarie's opinion.

The prepayments for the first and second parcel of concentrate shipments translate to realised prices of US$4,476/t and US$5,117/t, respectively, explains the broker.

The Outperform rating and $1.20 target are unchanged.

Target price is $1.20 Current Price is $1.00 Difference: $0.205
If CXO meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $0.98, suggesting upside of 4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Bell Potter rates DRO as Buy (1) -

DroneShield has recorded $7m in cash receipts for the first quarter, the second-largest receipts for a quarter to date. The company has confirmed investment in inventory has begun and this will be reflected in a reduced cash balance once payment is made to suppliers.

Bell Potter makes no changes but assesses the update was positive, providing greater confidence in forecasts. The business is now well capitalised and there are significant revenue opportunities. Buy rating and $0.40 target maintained.

Target price is $0.40 Current Price is $0.31 Difference: $0.095
If DRO meets the Bell Potter target it will return approximately 31% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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 DXS as Neutral (3) -

Citi is on the lookout for presentations from Dexus the sector over the next week as quarterly updates are provided. Evidence of capitalisation rates will be key.

One issue which is topical is the potential sale of two assets, 1 Margaret Street and 44 Market Street, Sydney, both having buyers in due diligence.

As Dexus trades at a discount to NTA of -35%, Citi asserts the eventual outcome of any sale could be important for shareholders, in order to ascertain what a realistic physical valuation and NTA would be relative to that implied by the share price.

Neutral rating and $8 target maintained.

Target price is $8.00 Current Price is $7.74 Difference: $0.26
If DXS meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $9.11, suggesting upside of 18.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Morgans rates ELT as Speculative Buy (1) -

Morgans updates its forecasts for Elementos, the owner of the Oropesa Project in Spain which aims to become Europe’s first new significant tin mine by 2025.

In accord with cost inflation across the broader mining sector, the broker raises its operational cost estimates by 10% and applies a conservative 25% increase to pre-production capital costs.

The target falls to 70c from $1.02. Speculative Buy.

Target price is $0.70 Current Price is $0.17 Difference: $0.535
If ELT meets the Morgans target it will return approximately 324% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Shaw and Partners rates FCL as Buy (1) -

Fineos Corp reported cash receipts for the March quarter of EUR44.2m. This was a material sequential improvement, Shaw and Partners observes, reflecting underlying growth and the expected seasonal features.

Operating momentum was evident, with the first sale of the Absence product direct to an 40,000+ employer. The broker continues to envisage considerable value in the stock and substantial market opportunity, maintaining a Buy rating. Target is unchanged at $3.30.

Target price is $3.30 Current Price is $1.69 Difference: $1.61
If FCL meets the Shaw and Partners target it will return approximately 95% (excluding dividends, fees and charges).

Current consensus price target is $2.42, suggesting upside of 42.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

This company reports in EUR. 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 FPH as Neutral (3) -

A review of Fisher & Paykel Healthcare's recent operating trends suggests to Macquarie $1.6bn of operating revenue for FY23, which is at the top-end of guidance.

The Neutral rating is retained and the broker's target rises to NZ$27.82 from NZ$26.67 to reflect positive EPS revisions offset by a higher assumed risk free rate.

The EPS revisions across FY23-25 largely reflect revenue upgrades for Homecare, explains the analyst.

Current Price is $25.48. Target price not assessed.

Current consensus price target is $20.50, suggesting downside of -18.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: -0.3

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

Macquarie rates GL1 as Outperform (1) -

In a a key milestone for the development of the Manna project, according to Macquarie, the Manna mining lease application has been lodged with Department of Mines, Industry Regulation and Safety in WA.

The application by Global Lithium Resources covers the Manna project, land for the processing plants and nearby mineralisation.

The broker leaves its forecasts unchanged and retains its Outperform rating and $2.20 target.

Target price is $2.20 Current Price is $1.35 Difference: $0.855
If GL1 meets the Macquarie target it will return approximately 64% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Ord Minnett rates GNE as Hold (3) -

Genesis Energy produced a strong March quarter, driven by record hydroelectric generation and higher retail prices.

Ord Minnett forecasts EBITDA increasing 17% to $NZ517m in the current year before falling back to $NZ460m in FY24 as rainfall and hydroelectric generation normalises.

While there is a dividend yield of 6.5%, in the broker's view this is tempered by longer-term headwinds from the gradual depletion of the Kupe oil and gas field. Hold maintained. Target is $2.40.

Target price is $2.40 Current Price is $2.53 Difference: minus $0.13 (current price is over target).
If GNE meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Macquarie rates HAS as Outperform (1) -

Following a 3Q report by Hastings Technology Metals, the impact of a weaker earnings outlook, equity dilution (as part of the funding requirement) and higher capital costs drives a -25% cut in Macquarie's price target to $2.70 from $3.60.

The report showed further progress on Yangibana and Onslow early works.

The broker increases its project capex forecast by around 20% to circa -$1bn to reflect the likely fixed-cost Engineering Procurement and Construction (EPC) contracting, which is broadly 50% higher than guidance.

The Outperform rating is unchanged, despite currently soft NdPr prices.

Target price is $2.70 Current Price is $2.00 Difference: $0.7
If HAS meets the Macquarie target it will return approximately 35% (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

Morgan Stanley rates IFL as Overweight (1) -

Insignia Financial's March-quarter Platform outflows missed Morgan Stanley's forecasts but Asset Management inflows outpaced, leading to a 1% beat for overall FUM, says the broker.

Morgan Stanley considers Insignia Financial to be its favourite pick in the wealth segment, appreciating the company's scale and cost performance, and expects it should be a beneficiary from regulation. Adviser numbers continued to retreat.

Buy rating and $3.85 target price retained. Industry view: In-line.

Target price is $3.85 Current Price is $3.02 Difference: $0.83
If IFL meets the Morgan Stanley target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $3.68, suggesting upside of 25.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Ord Minnett rates IFL as Accumulate (2) -

Insignia Financial is progressing its turnaround yet net platform outflows during the third quarter exceeded Ord Minnett's expectations, due to events that were not fully accounted for in its prior forecast.

The broker now assesses it is long-term flow forecasts were too aggressive and more gradual wins for the business are expected. Nevertheless, the shares are considered undervalued and the underlying progress of the company "laudable".

The broker continues to expect Insignia Financial will regain some lost share in the platform market and return to net inflows in FY25. Target is reduced to $3.90 from $4.20 and an Accumulate rating is maintained.

Target price is $3.90 Current Price is $3.02 Difference: $0.88
If IFL meets the Ord Minnett target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $3.68, suggesting upside of 25.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

UBS rates IFL as Neutral (3) -

Insignia Financial's March-quarter trading update missed UBS platform flow forecasts again, but the broker observes FUM flows for the financial year to date are outpacing guidance thanks to large inflows during the quarter.

The broker now awaits the company's Master Trust simplification cost-out plans, due before the FY23 results.

Neutral rating retained. Target price falls to $3.20 from $3.40.

Target price is $3.20 Current Price is $3.02 Difference: $0.18
If IFL meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $3.68, suggesting upside of 25.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Shaw and Partners rates KED as Buy (1) -

Keypath Education International's March quarter revenue of $33m increased 10%, taking year to date growth in revenue to 9%. Shaw and Partners was encouraged by the reiteration of FY23 guidance with a target of being profitable on EBITDA from the second quarter of FY24.

The broker now assesses there is considerable value in the current share price and retains a Buy rating. In FY24 the business is expected to sustain attractive growth and approach break even with a healthy balance sheet. Target is steady at $2.50.

Target price is $2.50 Current Price is $0.53 Difference: $1.97
If KED meets the Shaw and Partners target it will return approximately 372% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Ord Minnett rates KGN as Buy (1) -

Ord Minnett notes, generally, Kogan.com improved its operating metrics during the March quarter. Adjusted EBITDA stabilised at profitable levels against gross sales which are still sharply declining.

The broker still expects the business to be close to break even on adjusted net profit in FY23. A conservative balance sheet has prompted the business to announce an on-market buyback of up to 10% of outstanding shares to May 2024.

Ord Minnett excludes the potential impact of the buyback in its numbers. Target is steady at $10.70 and a Buy rating is maintained.

Target price is $10.70 Current Price is $3.86 Difference: $6.84
If KGN meets the Ord Minnett target it will return approximately 177% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Citi rates MIN as Buy (1) -

Citi observes shares in Mineral Resources have lost almost -10% on lithium downgrades and pricing that indicates Mount Marion has struggled to make cash. The contract with Ganfeng will not be renegotiated until the end of 2023.

Nevertheless, the broker suspects the end of the de-stocking cycle is nigh. Meanwhile, shortages of labour and delays in permits remain an industry-wide issue.

The company has trimmed FY23 guidance to 245-255mt for mining services while Mount Marion volumes are now expected to be at the lower end of 160-180,000t.

Citi expects lithium will account for 80% of FY24 earnings and around 65% of net asset valuation and retains a Buy rating. Target is reduced to $86 from $89.

Target price is $86.00 Current Price is $72.59 Difference: $13.41
If MIN meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $93.57, suggesting upside of 29.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

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

Mineral Resources' March-quarter production missed Morgan Stanley's forecasts, but the broker says the impact was offset by higher realised prices at Mt Marion.

Meanwhile, costs at Mt Marion have increased 40% so far in FY23, and the ramp-up has been delayed to FY24 and mining services volumes fell -9% in the quarter. It was a similar story at Wodgina.

The broker expects costs to continue to fall at the upper end of guidance but strong pricing is the one relief.

Morgan Stanley says FY24 will be a critical year for the company, citing concerns about the company's growing leverage levels and capital expenditure program.

EPS forecasts are sharply downgraded for FY23 and FY24, the broker noting the company's heavy reliance on commodity prices given operational disappointments.

Equal-Weight rating. Target price falls to $72 from $81.90. Industry view: Attractive.

Target price is $72.00 Current Price is $72.59 Difference: minus $0.59 (current price is over target).
If MIN meets the Morgan Stanley target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $93.57, suggesting upside of 29.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Morgans rates MIN as Add (1) -

Third quarter results for Mineral Resources were softer than Morgans expected due to disapponting volume from lithium (sales) and mining services, along with weaker lithium prices. Delays to growth at Mt Marion and Wodgina also impacted.

Management reduced FY23 guidance for Mt Marion (volumes/costs) and mining services (tonnes), while iron ore unit costs are now expected to be at the upper end of guidance.

None of the above alters the broker's longer-term investment view and the Add rating is maintained. The target falls to $103 from $106.

Target price is $103.00 Current Price is $72.59 Difference: $30.41
If MIN meets the Morgans target it will return approximately 42% (excluding dividends, fees and charges).

Current consensus price target is $93.57, suggesting upside of 29.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Morgans rates NAB as Hold (3) -

Ahead of the 1H reporting season for the majority of the big four banks, Morgans highlights the key uncertainty is net interest margin (NIM).

While NIMs should be boosted by the rise in the average RBA cash rate, the trajectory should be monitored, explains the analyst. Price competition, deposit switching, higher wholesale funding costs, and weakening terminal cash rate expectations are expected to weigh.

In comparing the business-skewed banks, National Australia Bank has a higher return on equity (ROE) than ANZ Bank, but ANZ has greater valuation support, albeit with greater M&A risk, explains the broker.

Morgans retains its Hold rating for National Australia Bank on caution over a step-up in costs and weaker valuation support. The target falls to $28.78 from $30.63 on a lower assumed earnings and dividend outlook than consensus, mainly due to a lower NIM outlook.

Target price is $28.78 Current Price is $28.84 Difference: minus $0.06 (current price is over target).
If NAB meets the Morgans target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.88, suggesting upside of 0.5% (ex-dividends)

The company's fiscal year ends in September.

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 PSI as Outperform (1) -

Key findings by Macquarie in an analysis of the Australian broker M&A market are the doubling of resourcing for insurance brokers over the last three years, while three new competitors have also entered the local market.

The broker undertook this analysis as the M&A pipeline has been a major contributor to EPS growth for Australian listed insurance brokers over recent years. It's was concluded there is minimal accretion for the brokers with acquisition multiples at current levels.

For PSC Insurance, the broker's Outperform rating and $5.65 target are retained.

Target price is $5.65 Current Price is $4.79 Difference: $0.86
If PSI meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $5.63, suggesting upside of 19.5% (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

Morgan Stanley rates PSQ as Overweight (1) -

Pacific Smiles' year-to-date trading report (to April 24) appears to have met Morgan Stanley's expectations, and guidance was reiterated as was management's intent to focus on margin expansion and free-cash flow at the expense of the rollout.

Overweight rating and $2 target price retained.

Target price is $2.00 Current Price is $1.36 Difference: $0.64
If PSQ meets the Morgan Stanley target it will return approximately 47% (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 PWH as Buy (1) -

Citi is disappointed that the Defence Strategic Review intends to reduce the number of vehicles in the Land 400 phase 3 to 129 from 450. Still there is a growth opportunity within aerospace and defence that should help PWR Holdings establish its brand.

Revenue forecasts are reduced slightly between FY28-32. Target is reduced to $11.55 from $11.60. Citi remains attracted to the growth potential outside of motorsports and retains a Buy rating.

Target price is $11.55 Current Price is $9.89 Difference: $1.66
If PWH meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $11.28, suggesting upside of 12.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Macquarie rates RIO as Neutral (3) -

Following a meeting with the CEO of Rio Tinto, Jakob Stausholm, the analyst at Macquarie notes the Simandou project continues to make progress though the timing remains uncertain.

Management noted a lack of skilled labour in the region to support this large-scale mining operation, while the broker points out the harbour is the limiting factor for the project’s production capacity.

Separately, Mr Stausholm stated it was difficult for Rio to acquire large-scale projects or companies for value. The company remains interested in smaller-scale targets or organic growth from its existing portfolio.

The Neutral rating and $122 target are retained.

Target price is $122.00 Current Price is $111.94 Difference: $10.06
If RIO meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $113.07, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in December.

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: 0.0

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

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

Key findings by Macquarie in an analysis of the Australian broker M&A market are the doubling of resourcing for insurance brokers over the last three years, while three new competitors have also entered the local market.

The broker undertook this analysis as the M&A pipeline has been a major contributor to EPS growth for Australian listed insurance brokers over recent years. It's was concluded there is minimal accretion for the brokers with acquisition multiples at current levels.

Given lower returns, the analyst finds having public targets for the Trapped Capital initiative may not be in Steadfast Group's best interest over the medium term.

The initiative provides the company's network brokers the opportunity to unlock trapped capital by partial sale to Steadfast.

The rating for Steadfast Group is downgraded to Neutral from Outperform and the target falls to $6.30 from $6.50.

Target price is $6.30 Current Price is $6.04 Difference: $0.26
If SDF meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $6.23, suggesting upside of 5.5% (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

Macquarie rates SGP as Neutral (3) -

Macquarie believes the residential sales environment has bottomed following 3Q results by Stockland, albeit the timing of a material
recovery is uncertain. It's felt the longer-term outlook is buoyed by a demand/supply imbalance and prospects for cash rate cuts.

The analyst also highlights the Commercial portfolio continues to perform strongly with leasing strong across industrial and retail.

The broker's target rises to $4.45 from $3.81 and the Neutral rating is unchanged on a lack of valuation support. There's considered to be material upside risk if Stockland can execute on its transition to a capital-light model and scale key businesses.

Target price is $4.45 Current Price is $4.38 Difference: $0.07
If SGP meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $4.40, suggesting upside of 0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Morgan Stanley rates SGP as Overweight (1) -

At first glance, Stockland's March-quarter result appears to have met Morgan Stanley's forecasts and management reiterated funds from operations guidance and residential settlements of 5,500 lots (allaying market concerns of a decline).

The broker says the result confirms that residential sales are now on the up, with both sales and inquiries rising, and management expects an uptick in conversion rates.

Morgan Stanley believes a re-rating could now be on the cards, but says settlements and mortgage defaults remain key risks.

Overweight rating and $4.30 target price retained. Industry view: In line.

Target price is $4.30 Current Price is $4.38 Difference: minus $0.08 (current price is over target).
If SGP meets the Morgan Stanley target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.40, suggesting upside of 0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

UBS rates SGP as Buy (1) -

Stockland's March-quarter update appears to have met UBS's forecasts and management retains FY23 guidance.

UBS observes a slight recovery in Residential from the division's June half low but says the run rate is still well below the five-year average. 

The broker notes MHE sales continue to lag, the company embarking on limited releases to allow production to clear up, but UBS says this has been the strategy for some time now, and the market will be seeking confirmation that systemic production issues are not dogging the company.

Commercial Property performance matched peers, and in Logistics, occupancy and releasing spreads rose. UBS appreciate's the latter's short weighted average lease expiry and development completions timeline, and believes the company is in a good place to manage macro challenges.

Low gearing, a strategic shift to growth sectors and a strong logistics pipeline, non-core asset disposals and growing capital partnerships lead UBS to retain Stockland as a favoured pick.

Buy rating and $4.31 target price retained.

Target price is $4.31 Current Price is $4.38 Difference: minus $0.07 (current price is over target).
If SGP meets the UBS target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.40, suggesting upside of 0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Morgans rates SHL as Add (1) -

Morgans expects the acquistion by Sonic Healthcare of Medical Laboratories Duesseldorf for around $300m will be EPS and return on invested capital (ROIC) accretive. The transaction will be funded via existing cash and debt.

Medical Laboratories Duesseldorf is one of the leading clinical laboratories in Duesseldorf, Germany, and has several branch and hospital sites across the metropolitan region.

While the deal is not material, the analyst points out it is a strategic expansion of the German division.

The Add rating is unchanged and the target falls to $38.47 from $38.80.

Target price is $38.47 Current Price is $35.73 Difference: $2.74
If SHL meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $35.24, suggesting downside of -1.2% (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

Bell Potter rates SM1 as Buy (1) -

Synlait Milk has downgraded FY23 guidance again amid further declines in advanced nutrition volumes from one of its customers. FY23 guidance has been reduced to a potential loss of -$NZ5m to a net profit of just NZ$5m.

Most of the downgrade reflects demand reductions with the remainder higher financing and supply chain costs. Bell Potter observes the stock is now in a three-year earnings downgrade cycle and not without risk.

Yet, if success is achieved on the new Pokeno nutritionals customer and new base powder customers are added there is material operating leverage beyond FY23, the broker adds.

Bell Potter is aware of the undemanding value in the assets and retains a Buy rating. Target is reduced to $1.90 from $2.55.

Target price is $1.90 Current Price is $1.44 Difference: $0.46
If SM1 meets the Bell Potter target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $1.90, suggesting upside of 31.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.3

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

Macquarie rates SM1 as Underperform (5) -

While outside management's control, given weaker demand, Macquarie was disappointed by a further profit downgrade by Synlait Milk.

FY23 profit guidance is now for between -$5m to $5m, from $15-25m, which was already materially downgraded on March 17, points out the analyst.

Management attributed the new guidance range to lesser demand for Advanced Nutrition and additional financing and supply chain costs.

Underperform rating retained. The broker's target price falls to NZ$1.53 from NZ$2.10 on the profit downgrade and after applying a -15% discount for balance sheet risk.

Current Price is $1.44. Target price not assessed.

Current consensus price target is $1.90, suggesting upside of 31.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.3

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

UBS rates SM1 as Buy (1) -

UBS reiterates its Buy call on Synlait Milk amidst a $20m profit warning, stressing the company is trading at a record -55% discount to book value.

The broker acknowledges FY23 has been a tough year, which the profit warning and production delays, but expects a big earnings recovery in FY25, as high-margin nutritional sale flows through.

While operating risks and debt remain high, likely limiting short-term gains, UBS appreciates the company's long-run pre-tax return on investment capital of more than 12%.

EPS forecasts fall sharply in FY23 and FY24 to reflect the company's profit warning. No dividends are forecast for FY23 or FY24.

Target price falls to NZ$3.95 from NZ$4.30.

Current Price is $1.44. Target price not assessed.

Current consensus price target is $1.90, suggesting upside of 31.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.3

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

Shaw and Partners rates SMP as Buy (1) -

SmartPay has signed a letter of intent with processing partner in Australia, Cuscal, to unlock the value of its NZ fleet of more than 30,000 terminals. Shaw and Partners considers this a material announcement that is yet to be reflected in the share price.

A significant opportunity awaits the business upon successful execution in New Zealand over the near and medium-term.

Despite expecting significantly higher revenue and margins in the NZ business after the transition to an acquiring model, the broker awaits execution prior to factoring in the numbers to estimates.

A Buy rating is maintained with high conviction and the target is raised to $2.20 from $1.69.

Target price is $2.20 Current Price is $1.30 Difference: $0.9
If SMP meets the Shaw and Partners target it will return approximately 69% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 1.0

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

Macquarie rates VEA as Outperform (1) -

While 1Q earnings for Viva Energy were strong and exceeded Macquarie's forecast, the 2Q should be impacted by weaker refining margins, a shutdown at the refinery and lower trading.

The analyst highlights Fuel volumes continue to recover, with ongoing growth in Commercial.

While the broker maintains its Outperform rating, Ampol ((ALD)) is preferred in the space. The target of $3.60 is unchanged. 

Macquarie reminds investors Refining margins are the largest swing factor for earnings, and these margins have been falling in April.

Target price is $3.60 Current Price is $3.13 Difference: $0.47
If VEA meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $3.37, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Ord Minnett rates VEA as Hold (3) -

Ord Minnett finds a lot to like about the Viva Energy business. First quarter group EBITDA was up 70% and ahead of expectations. Nevertheless, the broker reduces forecasts for earnings per share in 2023 by around -6%.

For the balance of the first half, the company expects commercial earnings will moderate because of seasonal factors and lower spot sales. In refining, regional refiner margins have declined in the first few weeks of April.

Ord Minnett assesses the shares are double the lows endured during the pandemic and approaching fair value. Hold maintained. Target is $3.35.

Target price is $3.35 Current Price is $3.13 Difference: $0.22
If VEA meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.37, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

UBS rates VEA as Buy (1) -

Viva Energy's March-quarter result outpaced UBS' forecasts thanks to an earnings beat from the retail and commercial divisions, which offset weakness in refining.

Commercial was the highlight in UBS's view, thanks to growth in aviation and gasoline over summer, specialty products and higher margins on spot sales.

UBS observes Viva Energy is outperforming Ampol ((ALD)) and sheets this back to the former's contracting strategies, and spies an 8% compound annual growth rate for the division between 2022 and 2025.

Major works are slated for the Geelong refinery in May, which is likely to drag on the June quarter result but UBS expects the government's extension of the $12GJ price cap on east-coast domestic gas take the edge off the pain.

EPS forecasts fall -2% in FY23 and rise 1% to 4% in 2024 to 2025.

Buy rating retained. Target price edges up to $3.55 from $3.50.

Target price is $3.55 Current Price is $3.13 Difference: $0.42
If VEA meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.37, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Macquarie rates WAF as Outperform (1) -

Macquarie suggests West African Resources' 2023 guidance is on track after reviewing 1Q production (pre-released) and the 11% beat for all-in sustaining costs (AISC).

Management retained 2023 production guidance of 210-230koz at an AISC of less than US$1,175/oz.

The first material capex spend for the Kiaka Gold project was made during the quarter, with the company noting the project remains on schedule (first gold in 2H of 2025) and budget.

Clearly, the broker's view of timing at Kiaka differed from management's current expectation, as the target falls to $1.60 from $1.70 on slower-than-expected first gold.

Target price is $1.60 Current Price is $1.01 Difference: $0.585
If WAF meets the Macquarie target it will return approximately 58% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Morgans rates WBC as Add (1) -

Ahead of the 1H reporting season for the majority of the big four banks, Morgans highlights the key uncertainty is net interest margin (NIM).

While NIMs should be boosted by the rise in the average RBA cash rate, the trajectory should be monitored, explains the analyst. Price competition, deposit switching, higher wholesale funding costs, and weakening terminal cash rate expectations are expected to weigh.

In comparing the retail-skewed banks, Morgans considers Add-rated Westpac has a greater risk/reward profile compared to CommBank (Hold).

The target increases to $25.98 from $25.80.

Target price is $25.98 Current Price is $22.31 Difference: $3.67
If WBC meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $25.06, suggesting upside of 12.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Macquarie rates WGX as Outperform (1) -

Westgold Resources' 3Q production was in line (released prior) with Macquarie's forecast while all-in sustaining costs (AISC) were a -4% miss.

The broker suggests Westgold remains comfortably on-track to meet FY23 guidance of 240-260koz at an AISC of $1,900-2,100/oz.

The company's cost-out strategy appears to be working as indicated by a healthy quarter-on-quarter cash build, notes the analyst.

The Outperform rating and $1.90 target are unchanged.

Target price is $1.90 Current Price is $1.49 Difference: $0.41
If WGX meets the Macquarie target it will return approximately 28% (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