Australian Broker Call

Morgans rates ADT as Add (1) -

The operational update by Adriatic Metals was better-than-feared by Morgans as the Vares (silver-lead-zinc) project in Bosnia steadily ramps-up toward full capacity in early-2025.

While management trimmed 2024 ore production guidance, 2025 production guidance was reaffirmed offering good comfort for investors, suggests the analyst.

While costs are trending around 20% above definitive feasibility study (DFS) expectations, they are in line with the broker's expectations, and support first quartile, high-margin cash flows at full production.

The target falls to $5.30 from $5.80. Add.

Target price is $5.30 Current Price is $3.52 Difference: $1.78
If ADT meets the Morgans target it will return approximately 51% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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 CCR as Buy (1) -

Shaw and Partners draws the comparison between the current valuation ascribed to Credit Clear against an unlisted peer which obtained $60m in capital, valuing the company at 7 times run-rate sales or $350m.

The broker emphasises Credit Clear is valued at $110m enterprise value of 2x sales and attributes the difference to the unlisted company because it is a debt collection partner of a buy-now-pay-later business with around $50m in US sales.

Shaw and Partners believes Credit Clear has scope to double its market share in Australia to 20%, generating FY30 revenues of $120m versus FY25 guidance of $50m.

Buy rating. High risk and 44c target price unchanged.

Target price is $0.44 Current Price is $0.28 Difference: $0.155
If CCR meets the Shaw and Partners target it will return approximately 54% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Morgan Stanley rates CHC as Overweight (1) -

Morgan Stanley reverses bearish assumptions previously applied to forecasts for Charter Hall and now expects further share price upside over the next 12-18 months due to ongoing global interest rate cuts.

Overweight rating. The target rises to $18.50 from $15.80. Industry view: In-Line. 

The analysts believe the current PE multiple of 20x times is more than justified and alters favourably the blend of Bull/Bear/Base case scenarios for the stock. The broker's earnings forecasts are unchanged.

Target price is $18.50 Current Price is $16.12 Difference: $2.38
If CHC meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $15.16, suggesting downside of -4.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.5

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

Morgans rates CYL as Add (1) -

As the gold price remains near all-time highs, Morgans expects capital will flow to mid-cap producers and developers, as well as to advanced exploration projects.

The analyst highlights mid-cap miners like Catalyst Metals and Regis Resources have underperformed the gold price
index by -30% since mid-2022.

Over the same period, senior producers such as Northern Star Resources ((NST)) have fared better with around -8% underperformance.

The Add rating (Speculative) and $1.32 target are retained for Catalyst Metals.

Target price is $1.32 Current Price is $2.83 Difference: minus $1.51 (current price is over target).
If CYL meets the Morgans target it will return approximately minus 53% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

UBS rates FBU as Neutral (3) -

Fletcher Building announced a NZ$700m capital raise including an institutional placement of NZ$282m and a NZ$418m rights issue at NZ$2.40.

UBS believes the raising is pre-emptive to remove any risks around debt covenant breaches while alleviating pressure to divest assets at discounted prices.

Management's trading update for July/August met the broker's expectations and guidance.

UBS suggests the company might be approaching the bottom of the cycle as the balance sheet is de-geared and lower interest rates support consumer and business confidence.

Target price of NZ$3.45 (post equity raising NZ$3.16) with a Neutral rating maintained.

Current Price is $2.72. Target price not assessed.

Current consensus price target is $2.48, suggesting downside of -8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

This company reports in NZD. 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

Morgans rates HLS as Hold (3) -

Healius has sold Lumus Imaging to Affinity Equity Partners for $965m creating a simpler, well-capitalised operating structure, highlights Morgans.

Sale proceeds will help refinance and right-size debt facilities, explains the broker, with management intending to “prioritise the distribution of surplus proceeds to shareholders in a tax efficient manner”.

Morgans cautions broad-based structural change continues, making translation into sustainable earnings growth both challenging and difficult to predict.

Hold rating maintained and target is increased to $1.53 from $1.48.

Target price is $1.53 Current Price is $1.70 Difference: minus $0.165 (current price is over target).
If HLS meets the Morgans target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.50, suggesting downside of -11.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.5

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

Ord Minnett rates IDX as Buy (1) -

Ord Minnett notes the Scheme Booklet for the Integral Diagnostics, Capitol Health ((CAJ)) deal has been released.

Post the announcement of Healius' ((HLS)) sale of Lumus imaging, the analyst stresses the disconnect in pricing between the public market's valuation on Integral Diagnostics versus the private market on Lumus.

Buy rating with Ord Minnett expecting the stock to re-rate over time. Target rises to $3.30 from $3.

Target price is $3.30 Current Price is $2.77 Difference: $0.53
If IDX meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Morgan Stanley rates JLG as Overweight (1) -

In addition to FY25 guidance, management at Johns Lyng now expects further revenue and earnings (EBITDA) of $100m and $9m, respectively, after announcing the acquisition of Keystone Financial Strategists.

Johns Lyng will pay -$47.7m up-front ($44.1m cash and $3.6m equity) for 87.5% of Keystone, and a further -$21.4m earn-out on FY25/ FY26 earnings thresholds.

The Overweight rating and $4.40 target are maintained. Industry view: In-Line.

Target price is $4.40 Current Price is $3.60 Difference: $0.8
If JLG meets the Morgan Stanley target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $4.63, suggesting upside of 25.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.6

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

Bell Potter rates LNW as Buy (1) -

Bell Potter considers the US District Court for Nevada's decision granting Aristocrat Leisure ((ALL)) a preliminary injunction relating to Light & Wonder's Dragon Game as disappointing.

The analyst highlights a report from Aristocrat where the court stated Light & Wonder must refrain from "any continued or planned sale, leasing or other commercialisation of Dragon Train' stopping further installation of the product in its installed base and sales globally.

Bell Potter understands the current installed base can use it, but the company might be at risk of damages payments. The analyst's EPS forecasts are cut by -5% in FY24 and -10% in FY25.

No change to Buy rating. Target price reduced to $161 from $186.

Target price is $161.00 Current Price is $134.53 Difference: $26.47
If LNW meets the Bell Potter target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $172.40, suggesting upside of 29.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Ord Minnett rates LNW as Accumulate (2) -

Ord Minnett notes Light & Wonder has been stopped from the "continued or planned sale, leasing or other commercialisation" of Dragon Train post a preliminary injunction from Aristocrat Leisure ((ALL)) by the US District Court of Nevada.

Aristocrat may pursue legal action in Australia while it will also continue to consider and "seek all appropriate remedies" against Light & Wonder.

Ord Minnett lowers EPS forecasts by -1% for 2024 and -4% for 2025. Target price falls to $166 from $176. Accumulate rating unchanged.

Target price is $166.00 Current Price is $134.53 Difference: $31.47
If LNW meets the Ord Minnett target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $172.40, suggesting upside of 29.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Morgans rates RRL as Add (1) -

As the gold price remains near all-time highs, Morgans expects capital will flow to mid-cap producers and developers, as well as to advanced exploration projects.

The analyst highlights mid-cap miners like Catalyst Metals and Regis Resources have underperformed the gold price
index by -30% since mid-2022.

Over the same period, senior producers such as Northern Star Resources ((NST)) have fared better with around -8% underperformance.

The Add rating and $2.01 target are retained for Regis Resources.

Regis Resources remains Morgans top pick from stocks under coverage in the Gold sector with positive upcoming catalysts for  McPhillamys and the rolling-off of a lower-price hedge book in FY24. The company also trades at a cheaper valuation than peers.

The Add rating and $2.01 target are retained.

Target price is $2.01 Current Price is $2.00 Difference: $0.01
If RRL meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $1.99, suggesting upside of 0.0% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Citi rates TUA as Buy (1) -

After further analysis of yesterday's FY24 result, Citi raises its target for Tuas to $5.55 from $5.25 and retains a Buy rating.

Summary of the broker's initial response on results day:

Citi's initial assessment of today's FY24 result for Tuas is that Broadband has gained solid traction, and the Mobile result was ahead of expectation. Compared to the broker's forecasts, revenue and earnings (EBITA) were beats of 5.5% and 13%, respectively.

Shares are expected to trade higher today given these strong beats and higher-than-expected subscriber growth in both Mobile (9% beat against the broker's forecast) and Broadband (more than 4,000; 1,200 forecast).

The analyst highlights early encouraging evidence of 10Gbps broadband take-up in the residential market. Despite the ramp-up associated with Broadband, the mid-point of capex guidance is only 4% ahead of FY24 capex of -$48m, notes Citi.

Target price is $5.55 Current Price is $4.81 Difference: $0.74
If TUA meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in August.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Morgan Stanley rates TUA as Overweight (1) -

FY24 earnings (EBITDA) for Tuas beat Morgan Stanley's forecast by 12% underpinned by mobile subscriber growth and margin expansion. It's felt the company is well positioned to continue disrupting the Singapore telco market.

The company added 234,000 subscribers to reach 1,053,000 in total, when the analysts were expecting a slowing, and management is aiming for more "broad-based" mobile subscriber growth in FY25.

In the only concern noted by the broker, first time FY25 capex was 9% higher-than-expected.

The target rises to $5.50 from $4.30. Overweight. Industry view is In-Line.

Target price is $5.50 Current Price is $4.81 Difference: $0.69
If TUA meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

The company's fiscal year ends in August.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Citi rates WEB as Buy (1) -

Following the demerger, and a trading update by management at Webjet (soon-to-be-called Web Travel Group), Citi launches a new set of financials for the stand alone B2B business (excluding B2C).

The broker sets an $8.25 target for the standalone B2B business and remains cautiously optimistic with a Buy rating.

The recent share price slide appears to be a reaction to slowing growth expectations, but the analysts are optimistic about a re-acceleration in August total transaction value (TTV).

Target price is $8.25 Current Price is $7.15 Difference: $1.1
If WEB meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $8.99, suggesting upside of 25.9% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.7

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

Morgans rates WEB as Add (1) -

Webjet, soon-to-be-called Web Travel Group, now centres around WebBeds -the global B2B travel marketplace- which has big growth ambitions over coming years, observes Morgans.

The broker maintains an Add rating with a new target of $8.60, down from $11.20 for the two businesses combined. Management has a strong track record of winning market share and this trend is expected to continue. 

The analysts are anticipating a subdued 1H result after the recent weaker-than-expected trading update and lower revenue margin guidance.

Target price is $8.60 Current Price is $7.15 Difference: $1.45
If WEB meets the Morgans target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $8.99, suggesting upside of 25.9% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.7

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

Morgans rates WJL as Initiation of coverage with Add (1) -

Having being spun out of Webjet (soon-to-be-called Web Travel Group), Webjet Group comprises Webjet OTA -A&NZ's leading online travel agency- and GoSee, which is a travel e-commerce group that specialises in global car and motorhome rentals, explains Morgans.

Webjet Group also owns Trip Ninja which is technology that automates complex international travel itineraries.

Research coverage by the broker is initiated with an Add rating and 95c target.

While the business is mature and relatively low growth, notes the analyst, it is a market leader with a well-recognised brand, a track record of technology innovation, high margins and generating strong cashflow.

Target price is $0.95

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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