Australian Broker Call

Morgan Stanley rates APT as No Rating (-1) -

Morgan Stanley notes US app downloads of BNPL players reached all-time highs in December.

Afterpay's app downloads are up 20% year-on-year though the analyst points out they were up 130% in December of 2020.

Downloads of competitor Affirm's apps were up 90% and that company has now attained similar US downloads as Afterpay.

The broker has no rating or target at present. Industry view: In-Line.

Current Price is $88.00. Target price not assessed.

Current consensus price target is $141.68, suggesting upside of 58.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Macquarie rates BOE as Initiation of coverage with Outperform (1) -

Macquarie initiates coverage of uranium producer Boss Energy with an Outperform rating and $3 target price.

The company owns the Honeymoon restart project in South Australia, which has a near-term path to production.

Macquarie notes spot and contract uranium prices have meandered over the past decade but expects ESG catalysts, combined with supply discipline and physical purchases from investment-funds in the spot market, will continue to support the metal.

A resulting jump in utility contracting from current low levels, creating a supply crunch, should provide further supprt, says the broker.

Target price is $3.00 Current Price is $2.08 Difference: $0.92
If BOE meets the Macquarie target it will return approximately 44% (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

Macquarie rates CMM as Upgrade to Neutral from Underperform (3) -

Macquarie adds a development scenario to its calculations for Capricorn Metals after tenure was granted for the Mt Gibson project, and upgrades to Neutral from Underperform.

The broker believes Mt Gibson represents a big growth opportunity and should diversify operational risk.

EPS forecasts fall -3%, -1% and -4% across FY22, FY23 and FY24, to reflect heightened exploration and development costs; but are upgraded to the tune of 57% and 93% in FY25 and FY26. 

Macquarie says this increases the net asset value, justifying a 31% increase in the target price to $3.40.

Target price is $3.40 Current Price is $3.18 Difference: $0.22
If CMM 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:

Forecast for FY23:

Market Sentiment: 0.0

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

Macquarie rates CRN as Outperform (1) -

Coronado Global Resources has downgraded production guidance -5% to -10% and guides to higher cash costs after the suspension of operations at Curragh following a fatality, and above-average La Nina rainfall.

Macquarie cuts EPS forecasts -16% for CY21; -11% for FY22; and -1% for FY23.

Coal prices remain strong and management says it can continue to draw on stockpiles, reducing the impact of the production hit, and reiterates that it will be in a net cash position by the end of CY21.

Outperform rating retained, Macquarie expecting the company will continue to enjoy strong metallurgical coal prices and that free cash flow yields will rise to more than 80% at spot from CY22. Target price falls -10% to $1.80.

Target price is $1.80 Current Price is $1.13 Difference: $0.67
If CRN meets the Macquarie target it will return approximately 59% (excluding dividends, fees and charges).

Current consensus price target is $1.88, suggesting upside of 64.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Morgans rates CSL as Add (1) -

Funded via a combination of a private placement, a shareholder purchase plan and a mixture of cash and debt, CSL will pay -US$11.7bn for Switzerland-based specialty drug company Vifor Pharma.

The broker doesn't agree the deal suggests the core plasma business is ex-growth, but rather provides a defensible specialty product portfolio with strong market positions and growth opportunities. Add rating is maintained. Target price rises to $334.7 from $324.4.

Target price is $334.70 Current Price is $298.31 Difference: $36.39
If CSL meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $320.45, suggesting upside of 17.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Citi rates CTD as Buy (1) -

Citi ponders whether -$175m may have been better spent by Corporate Travel Management than on the Corporate business of Helloworld Travel ((HLO)). There's considered to be no clear strategic benefits or opportunistic pricing.

While the deal effectively doubles the share of Corporate Travel’s A&NZ business and eliminates a key competitor, much of the total transaction value (TTV) springs from one Whole of Australian Government (WoAG) contract.

Citi retains its Buy rating and lowers its target price to $27.11 from $27.78.

Target price is $27.11 Current Price is $22.29 Difference: $4.82
If CTD meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $25.21, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Macquarie rates CTD as Upgrade to Outperform from Neutral (1) -

Corporate Travel Management has entered a binding agreement to buy Helloworld Travel's ((HLO)) A&NZ corporate and entertainment business for $175m, via a $100m placement and $75m of the company's shares.

Macquarie considers the acquisition comlimentary, and notes Helloworld's customers include blue-chip clients, and that Corporate Travel's trading update met the broker's estimates.

The broker expects a strong recovery in FY22 and raises EPS forecasts 5%, 7% and 10% for FY22, FY23 and FY24.

Macquarie upgrades to Outperform from Neutral. Target price rises 3% to $24.70. 

Target price is $24.70 Current Price is $22.29 Difference: $2.41
If CTD meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $25.21, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Morgan Stanley rates CTD as Overweight (1) -

Corporate Travel Management intends to acquire Helloworld Travel's ((HLO)) A&NZ corporate operations for -$175m ($100m cash and $75m scrip). The analyst feels the company is now reaping the reward of resilience during covid and enjoys a strong balance sheet.

The fact Helloworld Travel is taking $75m of equity in Corporate Travel Management indicates to Morgan Stanley confidence in the combined business, synergy targets and the prospects for a rebound.

The broker says a normalisation of conditions and further opportunistic M&A should be reflected in a higher trading multiple.

Overweight rating is maintained. Target price rises to $24 from $23.50. Industry view: In line.

Target price is $24.00 Current Price is $22.29 Difference: $1.71
If CTD meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $25.21, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

UBS rates CTD as Buy (1) -

UBS likes the complimentary synergies and the attractive pricing of Corporate Travel Management's acquisition of the Corporate business of Helloworld Travel. It's thought the deal will build further scale in the core Australian operations.

The broker estimates EPS accretion of about 6% over 2019 pro-forma earnings and a circa 4% lift to UBS' FY24 recovered earnings estimate. 

As valuation remains appealing, UBS retains its Buy rating and lifts its target price to $27.75 from $26.80.

Target price is $27.75 Current Price is $22.29 Difference: $5.46
If CTD meets the UBS target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $25.21, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Morgan Stanley rates FMG as Underweight (5) -

In an analysis of ASX-listed iron ore miners under coverage, Morgan Stanley finds Fortescue Metals Group is the most sensitive to a fall in the short term iron ore price as well as the long-term iron ore price forecast.

Underweight rating and $14.05 target price retained. Industry view: In-Line.

Target price is $14.05 Current Price is $18.64 Difference: minus $4.59 (current price is over target).
If FMG meets the Morgan Stanley target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.79, suggesting downside of -10.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

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

Morgan Stanley's checks reveal Iluka Resources' current rutile price is US$1800/t, in-line with the broker's March-quarter forecast. There's considered potential for a further rise due to tight global raw materials supply.

Equal-weight rating and $8.80 target price are unchanged. Industry view: In-Line.

Target price is $8.80 Current Price is $9.98 Difference: minus $1.18 (current price is over target).
If ILU meets the Morgan Stanley target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.70, suggesting downside of -2.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Macquarie rates IRE as Neutral (3) -

Macquarie reinstates its rating for IRESS at Neutral and applies a $12.75 target price after the lifting of research restrictions.

Company guidance skews to the second half. The broker believes IRESS will hit this year's target but considers FY25 targets to be optimistic.

Private-equity suitors have evaporated and management intends to sell the IRESS's mortgage software business in the first half, a near-term catalyst, notes the broker.

EPS forecasts rise 0.3% in FY21, 9.1% in FY22 and 8.8% in FY23. Neutral rating reflects the company's in-line trading multiple.

Target price is $12.75 Current Price is $12.54 Difference: $0.21
If IRE meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $13.60, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Macquarie rates KLS as Neutral (3) -

Kelsian Group has renewed its Kangaroo Island contract, as Macquarie expected.

The company plans fare reductions and new ferry (low emissions) capacity, resulting in an increase in capital expenditure.

FY22 EPS forecasts are steady but ease -0.6% in FY23 and -2.2% in FY24 to reflect higher capex.

Neutral rating and $6.45 target price retained.

Target price is $6.45 Current Price is $6.71 Difference: minus $0.26 (current price is over target).
If KLS meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.36, suggesting upside of 20.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Macquarie rates MCR as Outperform (1) -

Mincor Resources has drawn its first nickel ore from Durkin North, the ore quality signalling a potential increase in reserves, says Macquarie. 

The broker considers this is a significant derisking milestone for Mincor, and expects the company will return to producer status in 2022, providing upside risk.

Average grades were ahead of Macquarie's estimates, also presenting upside risk. 

Outperform rating and $1.55 target price retained. 

Target price is $1.55 Current Price is $1.29 Difference: $0.26
If MCR meets the Macquarie target it will return approximately 20% (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

Macquarie rates PDN as Outperform (1) -

Macquarie initiates coverage of Paladin Energy after an eight-year hiatus with an Outperform rating and $1 target price, noting the company is preparing to restart the Langer Heinrich uranium project.

The project is fully licensed and the uranium price is strong. It has a 17-year life with a large ore base, and Macquarie says that each additional year of production lifts the broker's valuation by 5%.

Target price is $1.00 Current Price is $0.76 Difference: $0.24
If PDN meets the Macquarie target it will return approximately 32% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Citi rates QUB as Buy (1) -

Following completion of Qube Holdings' Moorebank transaction, Citi sees potential capital management initiatives and positive earnings surprises in the first half of 2022. Low gearing and circa $400 million in available franking credits increases the likelihood of capital management.

Regarding earnings, the analyst likes the favourable agricultural conditions, multiple contract wins and acquisition contributions. The broker maintains its Buy rating and $3.59 target price.

Target price is $3.59 Current Price is $3.22 Difference: $0.37
If QUB meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $3.38, suggesting upside of 6.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

UBS rates RIO as Sell (5) -

While UBS is encouraged by progress over the Oyu Tolgoi copper/gold project, both Rio Tinto and Turquoise Hill ((TRQ)) are considered to be giving away significant value to the Mongolian government to move forward. The cost of progressing things is still considered unclear.

For example, how much the Mongolian government (which will build the new coal power plant at Tavan Tolgoi) will charge Oyu Tolgoi for power is not known, points out the analyst.

Sell rating for Rio Tinto and $80 target price are retained.

Target price is $80.00 Current Price is $98.34 Difference: minus $18.34 (current price is over target).
If RIO meets the UBS target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $107.21, suggesting upside of 9.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

This company reports in USD. 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

Macquarie rates SDF as Outperform (1) -

Arthur J. Gallagher's ((AJG)) investor day offered Macquarie a read-through to Steadfast, AUB Group ((AUB)) and PSC Insurance ((PSI)).

Arthur J. Gallagher enjoyed strong organic growth in the the fourth quarter, thanks to higher Australian renewal premium rates, modest rises in its Commercial Motor division and strong new business trends.

Arthur J. Gallagher's management expects continued organic growth and rate increases through 2022, says the broker.

Outperform rating and $5.40 target price retained for Steadfast.

Target price is $5.40 Current Price is $4.88 Difference: $0.52
If SDF meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $5.28, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Citi rates SHV as Buy (1) -

Citi estimates that almond-price weakness is temporary and anticipates an improvement in export demand in the March quarter, and expects the Californian drought will persist. 

This view comes as November data shows the analyst that US almond export volumes continue to be impacted by port logistical issues and softer year-on-year export demand.

Buy rating and $9 target price are retained for Select Harvests.

Target price is $9.00 Current Price is $5.95 Difference: $3.05
If SHV meets the Citi target it will return approximately 51% (excluding dividends, fees and charges).

The company's fiscal year ends in September.

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

UBS rates SWM as Buy (1) -

November data points to a year-on-year fall of -2.5% in metro TV advertising revenues (versus a -8% decline in October) though UBS notes the level was above pre-covid.

The analyst reminds investors that Seven West Media revealed in August that first-quarter revenue bookings were 60% higher year-on-year and second-quarter bookings were travelling about 5% ahead of the previous corresponding period.

Buy rating and 95c target retained.

Target price is $0.95 Current Price is $0.64 Difference: $0.31
If SWM meets the UBS target it will return approximately 48% (excluding dividends, fees and charges).

Current consensus price target is $0.83, suggesting upside of 27.7% (ex-dividends)

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