Australian Broker Call

Ord Minnett rates 4DX as Buy (1) -

Ord Minnett estimates an initial US revenue opportunity of around US$300m following the announced signing with Philips (after a year-long process) of a reseller agreement for US distribution of 4DMedical and Imbio products (recent acquisition).

The broker anticipates US volumes will build in the medium-term. The partnership also increases the likelihood of a more significant screening program across the US Department of Veterans Affairs, suggest the analysts.

Target rises to $1.10 from $1.05. The Speculative Buy rating is retained.

Target price is $1.10 Current Price is $0.63 Difference: $0.47
If 4DX meets the Ord Minnett target it will return approximately 75% (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

Citi rates A2M as Buy (1) -

Citi points to media reports China is planning more fiscal support including a possible circa CNY800 allowance per child to all households with two or more children, excluding the first child.

There are limited details at this stage, but the analyst believes the policy measures could be positive for the China birth rate after a period of declines. 

Citi views any measures which possibly boost birth rates as a tailwind for a2 Milk Co.

Buy rated with a $7.04 target.

Target price is $7.04 Current Price is $6.25 Difference: $0.79
If A2M meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $6.25, suggesting downside of -0.0% (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: 0.4

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

Citi rates AIA as Buy (1) -

Citi assesses the sale of a 74.25% stake in Queensland Airports to a consortium including KKR and Skip Capital for $3bn which equates to an estimated valuation of around 29x EV/EBITDA, above the 24x valuation ascribed to Sydney Airport's takeover.

The broker believes this is a positive indicator for the valuation of Auckland International Airport which is estimated to currently trade around 20x EV/EBITDA, post capital raising with a forecast 10%-plus EBITDA compound average growth rate out to 2030.

The stock remains Buy rated with an NZ$8.70 target price.

Current Price is $6.81. Target price not assessed.

Current consensus price target is N/A

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

Macquarie rates AMP as Neutral (3) -

Following the sale of AMP Capital, management at AMP is nearing the end of its buyback, as part of the last stage of the $1.1bn capital return program. 

Macquarie expects the focus will turn to re-establishing a dividend payout ratio at the FY24 result next February.

The Neutral rating and $1.26 target are maintained.

Target price is $1.26 Current Price is $1.34 Difference: minus $0.08 (current price is over target).
If AMP meets the Macquarie target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.33, suggesting upside of 0.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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 AW1 as Buy (1) -

Shaw and Partners observes the assay results from American West Metals at the Storm Copper project. 

The broker notes drilling has found further evidence of high-grade copper some 75m south of the current mineral resource indicating expansion potential.

A maiden mineral resource for the Storm Copper project includes 17.5mt at 1.2% Cu and 3.4g/t Ag or 1.3% Cu equivalent in January 2024.

Buy. 32c target. High Risk

Target price is $0.32 Current Price is $0.12 Difference: $0.2
If AW1 meets the Shaw and Partners target it will return approximately 167% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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

Morgans rates BKW as Hold (3) -

Following Brickworks' FY24 result, Morgans has an unchanged view: the short-to medium-term outlook remains relatively soft, which will see group strategy shifting to cashflow generation from investment.

For the longer-term, the broker believes the business remains well positioned to capitalise on improved market conditions. It's felt margins are set to benefit from recent plant investment, portfolio rationalisation and restructuring.

A fully franked final dividend of 43 cents was declared, a 1 cent increase on the previous corresponding period.

The target falls to $28.75 from $30.00 after Morgans adopts a -10% discount to net tangible assets (NTA) for the investment in WH Soul Pattinson ((SOL)). Hold.

Target price is $28.75 Current Price is $28.53 Difference: $0.22
If BKW meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $30.46, suggesting upside of 4.6% (ex-dividends)

The company's fiscal year ends in July.

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

Macquarie rates COL as Outperform (1) -

Macquarie believes increasing regulation and reputational impacts on Australian supermarkets are likely to be an overhang for the sector ahead of the ACCC reporting its findings, due on February 28, 2025.

The broker prefers Outperform-rated Coles Group over Woolworths Group (Neutral) due to a better value proposition for customers in the current economic backdrop.

Coles also has major automation programs coming online which should underwrite medium-term earnings growth, suggests the broker.

The $20.20 target is unchanged for Coles Group.

Target price is $20.20 Current Price is $18.12 Difference: $2.08
If COL meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $20.11, suggesting upside of 11.1% (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

Citi rates EDV as Neutral (3) -

Citi observes the "surprising" exit of Endeavour Group's CEO Steve Donohue. The analyst highlights Mr Donohue presented at a sell side briefing a few weeks back with no suggestion he was leaving.

The broker points to some comments made previously by Bruce Mathieson who owns 15% of Endeavour Group in the media around Oct 24 he was not happy with the company's performance.

Neutral rating unchanged. Target price $5.18.

Target price is $5.18 Current Price is $4.99 Difference: $0.19
If EDV meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $5.47, suggesting upside of 9.2% (ex-dividends)

The company's fiscal year ends in June.

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 FBU as Upgrade to Buy from Sell (1) -

Citi has turned "cautiously optimistic" on the outlook for Fletcher Building boosted by a stronger balance sheet.

An expected repricing of 60%-70% of outstanding NZ mortgage loans is anticipated over the next 12 months at lower interest rates according to the forward rate pricing curve, the analyst notes. This is a noticeably higher level than the pre-covid levels of 40%-50%.

For Fletcher Building this creates a potentially positive activity level tailwind from rate cuts, mortgage repricing.

Citi lowers EPS forecasts post the equity raising by -23% and -27% for FY25/FY26, respectively.

The stock is upgraded to Buy from Sell. Target price rises to NZ$3.30 from NZ$2.88.

Current Price is $2.50. Target price not assessed.

Current consensus price target is $2.48, suggesting downside of -6.4% (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: 0.0

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

Citi rates GMG as Buy (1) -

Citi flags the upcoming 1Q25 quarterly update for Goodman Group in advance of the November 14 AGM as potentially a good news event for the group with guidance upgrades anticipated.

The analyst suggests a possible better-than-expected performance from industrial and potential upgrades to work-in-progress for data centre developments.

Goodman Group recently signed an urban development agreement on a German data centre with 100 mega-volt amp (MVA capacity), the second data centre in the Frankfurt area as part of a brownfield site redevelopment of the previous Frankfurter Rundschau printing plant.

Buy rating and $40 target unchanged.

Target price is $40.00 Current Price is $35.93 Difference: $4.07
If GMG meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $36.19, suggesting downside of -1.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.2

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

Citi rates IPL as Neutral (3) -

Incitec Pivot announced at last week's investor presentations the strategy to rename the company Dyno Nobel Ltd with the aim of separating its fertiliser business and to focus on making the company the world's leading explosives business, Citi notes.

The analyst anticipates a further update on the fertiliser sale at the upcoming FY24 results in November with the deal possibly up to 12 months away.

Target price is lifted to $3.10 from $3 with Neutral rating unchanged.

Target price is $3.10 Current Price is $3.13 Difference: minus $0.03 (current price is over target).
If IPL meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.13, suggesting upside of 0.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Morgan Stanley rates LFS as Underweight (5) -

Morgan Stanley refreshes forecasts for Latitude Group and lowers its target to 95c from 97c. An Underweight rating is maintained as the broker awaits a return on equity (ROE) recovery and support from dividends, which are expected to resume in FY25.

The analysts lower the cash earnings forecasts by around -12% across FY24-25 on modestly softer net interest margin (NIM) trends and charge-offs normalising at higher levels than previously expected. Better costs and higher fee income provide a partial offset.

Industry View: In-Line.

Target price is $0.95 Current Price is $1.15 Difference: minus $0.2 (current price is over target).
If LFS meets the Morgan Stanley target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.5

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

Macquarie rates MTS as Outperform (1) -

Macquarie believes increasing regulation and reputational impacts on Australian supermarkets are likely to be an overhang for the sector ahead of the ACCC reporting its findings, due on February 28, 2025.

The broker prefers Outperform-rated Coles Group over Woolworths Group (Neutral) due to a better value proposition for customers in the current economic backdrop.

Coles also has major automation programs coming online which should underwrite medium-term earnings growth, suggests the broker.

Macquarie also has an Outperform rating for Metcash which is seen as better placed re the ACCC inquiry. Ongoing resilience in the Food and Liquor businesses is also expected. 

The Outperform rating and $4.20 target are maintained.

Target price is $4.20 Current Price is $3.59 Difference: $0.61
If MTS meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $4.05, suggesting upside of 13.3% (ex-dividends)

The company's fiscal year ends in April.

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

Citi rates RIO as Neutral (3) -

Rio Tinto is investing nearly US$2bn in the North American AP60 operations Citi highlights post the first visit since 2014 to the 484kt Alma AP40 smelter.

Management is investing in new technology, such as AP60 to increase efficiency with hydro power to boost capacity.

The broker highlight's Rio Tinto's positive stance on aluminum with the supply side expected to be limited, alongside limitations on new "green" supply and a 10% North American tariff as a tailwind.

Citi highlights the company's six "aging" hydro plants in Quebec supply 90%-95% of Quebec smelters with firming supply for wind.

Neutral rating and $123 target price maintained.

Target price is $123.00 Current Price is $127.45 Difference: minus $4.45 (current price is over target).
If RIO meets the Citi target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $127.42, suggesting downside of -1.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.7

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

Shaw and Partners rates SLH as Buy (1) -

The analyst at Shaw and Partners observes port data container volumes for August were stable on the previous corresponding period, with a pick-up in September expected because of a fall in shipping costs.

The broker highlights shipping rates have declined -36% since the end of July providing a potential tailwind for a rebound in twenty-foot equivalent unit volumes.

Shaw and Partners lowers EPS forecasts for higher estimates interest expenses (which were previously expected to fall) by -16% in FY25 and -14% in FY26.

Buy rating, High risk retained. Target is $2.10.

Target price is $2.10 Current Price is $1.31 Difference: $0.79
If SLH meets the Shaw and Partners target it will return approximately 60% (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

Citi rates WDS as Sell (5) -

Citi continues to believe consensus dividend per share forecasts for Woodside Energy are too high and a risk to the share price.

The analyst post speaking to the company lowers the depreciation/amortisation estimated charges on Sangomar unit which lifts EPS estimates by 3.8% in FY24 and 38.6% in FY25.

Sell rating unchanged. Target price declines to $23 from $24.50.

Target price is $23.00 Current Price is $24.36 Difference: minus $1.36 (current price is over target).
If WDS meets the Citi target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.10, suggesting upside of 15.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.2

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

Ord Minnett rates WGX as Initiation of coverage with Accumulate (2) -

Given potential for unforeseen operational challenges after the recent merger with Karora Resources, Ord Minnett suggests any resulting share price pullback for gold miner Westgold Resources would represent a good buying opportunity for investors.

For the time being, the broker initiates coverage with a Hold rating and $3.10 target. Optimism is also tempered by the analysts' near-term cash flow concerns given large cash outflows from working capital and transactions costs.

Ord Minnett sees upside risk given Westgold's growth outlook and the exploration appeal from Fletcher Zone at the Beta Hunt mine.

Target price is $3.10 Current Price is $2.72 Difference: $0.38
If WGX meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.8

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

Macquarie rates WOW as Neutral (3) -

Macquarie believes increasing regulation and reputational impacts on Australian supermarkets are likely to be an overhang for the sector ahead of the ACCC reporting its findings, due on February 28, 2025.

The broker prefers Outperform-rated Coles Group over Woolworths Group (Neutral) due to a better value proposition for customers in the current economic backdrop.

Coles also has major automation programs coming online which should underwrite medium-term earnings growth, suggests the broker.

The $37.00 target is unchanged for Woolworths Group.

Target price is $37.00 Current Price is $33.43 Difference: $3.57
If WOW meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $37.08, suggesting upside of 11.1% (ex-dividends)

The company's fiscal year ends in June.

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