Australian Broker Call

Morgan Stanley rates AD8 as Overweight (1) -

Morgan Stanley came away from Audinate Group's investor day positively surprised by the extent of video OEM relationships and the overall competitive dynamics for video.

Because management noted unchanged trading conditions, the analyst suggests supply momentum has likely been sustained.

The broker reaffirms the long-term growth potential and notes an acceleration in product development. The Overweight rating and $10.50 target are maintained. Industry view is In-Line.

Target price is $10.50 Current Price is $6.84 Difference: $3.66
If AD8 meets the Morgan Stanley target it will return approximately 54% (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

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

Following the release of 1H results for Aristocrat Leisure on May 19, Morgan Stanley raises its earnings and free cash flow assumptions, which also elevates its target price to $43.00 from $40.84.

The forecast earnings increase derives mainly from 1H trends and a favourable outlook for Digital and Americas. The Equal-Weight rating is maintained. Industry View: In-Line.

Target price is $43.00 Current Price is $33.81 Difference: $9.19
If ALL meets the Morgan Stanley target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $43.11, suggesting upside of 26.9% (ex-dividends)

The company's fiscal year ends in September.

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

Credit Suisse rates ANN as Downgrade to Underperform from Neutral (5) -

With little protection from material price increases, Credit Suisse anticipates raw material costs to become a headwind for Ansell. With raw materials accounting for around 55% of Ansell's cost of goods sold, the broker lowers earnings -5% through to FY24.

The rating is downgraded to Underperform from Neutral and the target price decreases to $24.00 from $25.00.

Target price is $24.00 Current Price is $26.90 Difference: minus $2.9 (current price is over target).
If ANN meets the Credit Suisse target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $30.35, suggesting upside of 16.8% (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: 0.3

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

Ord Minnett rates ASX as Hold (3) -

Following announced delays to ASX's CHESS replacement project, Ord Minnett maintains its Hold rating and $84.41 target, despite a recent litany of woes. These include system glitches, expense pressures and management turnover.

The analyst explains the stock provides defensive exposure in volatile markets. Forecasts are also updated to reflect April volumes, which showed a strong cash market, a bounce back in (fixed income) derivatives and some capital raising softness.

Target price is $84.41 Current Price is $80.65 Difference: $3.76
If ASX meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $81.54, suggesting upside of 0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.4

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

Macquarie rates CIP as Outperform (1) -

Centuria Industrial REIT has announced several transactions, including the acquisition of two development sites, the acquisition of an asset in Derrimut  (VIC) and the divestment of an Eastern Creek (NSW) asset. All up Macquarie estimates 0.5% ultimate earnings accretion.

Despite downgrades and risk from rising rates, the broker remains positive on industrial REIT fundamentals. There is also a risk of a slower economy impacting goods demand, but with Centuria Industrial trading at a -19% discount to net tangible asset value, the broker sticks with Outperform.

An increase in the assumed risk-free rate cuts the target to $3.94 from $4.27.

Target price is $3.94 Current Price is $3.41 Difference: $0.53
If CIP meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $4.01, suggesting upside of 18.3% (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 COE as Upgrade to Neutral from Underperform (3) -

Macquarie notes Cooper Energy has materially underperformed peers recently, even as Orbost processing rates have improved. Orbost is almost at nameplate capacity, increasing exposure to current elevated spot prices.

With the stock now trading in line with net asset valuation, the broker upgrades to Neutral from Underperform, but warns establishing balance sheet capacity for pending commitments remains key.

Target rises to 28c from 26c.

Target price is $0.28 Current Price is $0.27 Difference: $0.01
If COE meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $0.29, suggesting upside of 4.3% (ex-dividends)

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

Ord Minnett rates CPU as Upgrade to Hold from Lighten (3) -

Ord Minnett increases its earnings forecasts for Computershare in recognition of the company's leverage to sharp rises in cash interest rates over the last two months.

The broker raises its rating to Hold from Lighten and lifts its target price to $25.00 from $23.67.

Target price is $25.00 Current Price is $23.23 Difference: $1.77
If CPU meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $26.14, suggesting upside of 12.0% (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: 0.4

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

Macquarie rates CSL as Outperform (1) -

Macquarie notes foot traffic for over 100 of CSL’s US-based plasma collection centres has shown improved trends over March-May 2022. Management has indicated collection volumes are now largely in line with pre-covid levels.

The broker believes the earnings growth profile for CSL to be attractive to FY24, supported by an assumed recovery in plasma collections, benefits from the Rika platform and earnings contributions from Vifor.

Outperform and $327.50 target retained.

Target price is $327.50 Current Price is $268.62 Difference: $58.88
If CSL meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $319.02, suggesting upside of 18.6% (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: 0.9

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

Citi rates CTD as Neutral (3) -

In exploring where the recovery trade generally is heading, Citi notes it’s becoming apparent revenue will lag activity and the post-pandemic environment doesn't match that of FY19.

The broker explains lagging revenue for Corporate Travel Management is being impacted by slow outbound from international and elevated business class tickets. Nonetheless, the lag is expected to close quickly with increased exposure to the busier US.

As high margin project revenue unwinds and is replaced by lower economic business-as-usual trading, the analyst remains cautious and retains the Neutral rating. The target price falls to $24.09 from $25.49.

Target price is $24.09 Current Price is $21.84 Difference: $2.25
If CTD meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $27.20, suggesting upside of 22.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Citi rates DMP as Buy (1) -

In anticipation of an investor day for Domino's Pizza Enterprises, Citi reiterates its Buy rating and $108.42 target. After cycling abnormal comparisons, a rebound for sales momentum is expected later in 2022.

The long-term store rollout opportunity remains, explains the analyst, despite greater short- to medium-term costs and challenges than were previously forecast.

Target price is $108.42 Current Price is $69.06 Difference: $39.36
If DMP meets the Citi target it will return approximately 57% (excluding dividends, fees and charges).

Current consensus price target is $96.27, suggesting upside of 44.3% (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 DMP as Buy (1) -

Domino's Pizza Enterprises has scheduled an investor briefing in Japan for June 6th and UBS has, in advance, reduced forecasts because of FX movements.

In addition, the broker is now assuming slower growth in new stores, in new store sales and in sales and growth in general for the country. Costs are rising too, the analysts highlight.

UBS maintains its Buy rating while the changes made have pulled back the price target to $90 from $110.

Target price is $90.00 Current Price is $69.06 Difference: $20.94
If DMP meets the UBS target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $96.27, suggesting upside of 44.3% (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

Citi rates FLT as Sell (5) -

In exploring where the recovery trade generally is heading, Citi notes it’s becoming apparent revenue will lag activity and the post-pandemic environment doesn't match that of FY19.

Flight Centre Travel is the broker's least preferred exposure in the sector and faces slowing Australian international volumes. Also, VFR travel is increasing which is a headwind. This pertains to overseas travelers visiting friends and relatives as opposed to leisure/sightseeing.

The Sell rating and $15.55 target are retained.

Target price is $15.55 Current Price is $20.15 Difference: minus $4.6 (current price is over target).
If FLT meets the Citi target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.24, suggesting downside of -11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.4

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

UBS rates IEL as Buy (1) -

Having re-considered all inputs and considerations regarding its investment thesis and projections for IDP Education, UBS acknowledges there could be some impact from slowing visa processing and slower student placements, but the broker emphatically emphasises the positive growth trajectory for this company.

Further underpinning its view, UBS mentions IDP Education's market leadership position, combined with continued technology tailwinds and exposure to strong structural thematics.

Despite the shares looking "expensive" at face value (high PE multiple), UBS sees an attractive entry point, also reflected in its Buy rating. Target $34.60 (was $35.90).

Target price is $34.60 Current Price is $24.33 Difference: $10.27
If IEL meets the UBS target it will return approximately 42% (excluding dividends, fees and charges).

Current consensus price target is $35.18, suggesting upside of 43.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Macquarie rates MCR as Neutral (3) -

Mincor Resources has released further drilling results from the Golden Mile discovery which has increased confidence in the project. Macquarie has already incorporated 300kt (2.5% Ni) into production forecasts but believes total mineralisation could exceed 500kt.

Golden Mile is located close to existing underground infrastructure, which should enable development of the deposit to be brought forward with a short lead time.

Neutral and $2.40 target retained.

Target price is $2.40 Current Price is $2.36 Difference: $0.04
If MCR meets the Macquarie target it will return approximately 2% (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

Morgans rates MGH as Add (1) -

Following an investor day, Morgans highlights Maas Group remains leveraged to expanding regional infrastructure spend, private regional investment and consequent population growth. It's estimated the business is trading on undemanding multiples and the Add rating is kept.

The relative dearth of Tier 1 contractors in regional locations leaves the company well placed to win contracts and grow market share, according to the analyst. The target price is lowered to $5.60 from $5.90.

Target price is $5.60 Current Price is $4.64 Difference: $0.96
If MGH meets the Morgans target it will return approximately 21% (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

Citi rates MYX as Neutral (3) -

Following a 3Q update by Mayne Pharma, Citi points to an an improvement across all metrics, and prescription volumes are also on the rise.

The broker concludes the Nextstellis launch continues to progress and new products are boosting prescription volumes for Dermatology.

The target price rises to $0.30 from $0.25 on a multiple adjustment and the Neutral rating is maintained.

Target price is $0.30 Current Price is $0.30 Difference: $0
If MYX meets the Citi target it will return approximately 0% (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

Citi rates OZL as Buy (1) -

While Citi is structurally bullish on copper it is also becoming increasingly positive on the developing West Musgrove nickel/copper project in WA, despite a murky macroeconomic outlook.

The broker now includes the project in its forecasts including a debt/equity funding package and the target price rises to $28.20 from $27.50. The Buy rating is maintained. The potential to extend the 26 year mine life of the project is also noted.

Target price is $28.20 Current Price is $23.65 Difference: $4.55
If OZL meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $25.14, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in December.

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

Morgans rates PME as Add (1) -

Pro Medicus has now won five major integrated delivery network (IDN) contracts over the last month, after yesterday announcing a seven year $28m contract with US-based Alina Health. The contract was for the workflow and viewer products.

Morgans highlights ongoing momentum for the company's cloud-based offering that has a distinct advantage versus many of the legacy systems.

In a period of weak market sentiment, the broker prefers the exposure Pro Medicus has to enterprises (as opposed to consumers) and maintains its Add rating and $56.20 target price.

Target price is $56.20 Current Price is $41.14 Difference: $15.06
If PME meets the Morgans target it will return approximately 37% (excluding dividends, fees and charges).

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

Citi rates QAN as Neutral (3) -

In exploring where the recovery trade generally is heading, Citi notes it’s becoming apparent revenue will lag activity and the post-pandemic environment doesn't match that of FY19.

The broker feels Qantas Airways has greater pricing power in International rather than domestic (the larger profit centre). Despite rising fuel prices, it's estimated pricing power will continue to be constrained domestically.

The Neutral rating is retained while the target slips to $5.47 from $5.51.

Target price is $5.47 Current Price is $5.41 Difference: $0.06
If QAN meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $6.23, suggesting upside of 13.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Credit Suisse rates REA as Outperform (1) -

REA Group targets double digit through the cycle earnings growth, with Credit Suisse noting earnings growth should be driven by double-digit yield growth as company commentary suggests the FY23 6% price increase should not be viewed as a cap on future price increases.

The broker noted REA Group management seems to retain a positive view on the near-term listing environment, with the company acknowledging uncertainty but expecting a strong economy and increased home owner-equity to offset and support listing volumes.

The Outperform rating is retained and the target price decreases to $141.50 from $142.80.

Target price is $141.50 Current Price is $109.65 Difference: $31.85
If REA meets the Credit Suisse target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $133.43, suggesting upside of 18.7% (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

Macquarie rates REA as Underperform (5) -

REA Group hosted an inaugural investor day at which it announced aspirations of yield growth in the low double digits in FY23 and beyond. Management also outlined medium term opportunites Macquarie found interesting, but long-dated.

At this stage the broker remains cautious of a property cycle downturn. Valuation multiples are at mid-point of their ranges but the broker expects downside risk from here.

Underperform and $90 target retained.

Target price is $90.00 Current Price is $109.65 Difference: minus $19.65 (current price is over target).
If REA meets the Macquarie target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $133.43, suggesting upside of 18.7% (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

Morgans rates REA as Add (1) -

Morgans walked away from REA Group's investor day feeling the main theme was an ongoing focus on digitisation throughout the property value chain. In addition, the group's large pool of property data is expected to lead to adjacent revenue opportunities in the medium term.

The broker feels the strategy of attaining adjacent revenue opportunities makes sense given the potential for a softer listings environment.

The Add rating is maintained, while the target price eases to $144 from $145.40 on higher cost assumptions around the investment for market share at REA India.

Target price is $144.00 Current Price is $109.65 Difference: $34.35
If REA meets the Morgans target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $133.43, suggesting upside of 18.7% (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

Ord Minnett rates REA as Buy (1) -

Following an investor day, Ord Minnett retains its Buy rating for REA Group though notes listing headwinds will likely remain, with a key offset provided by double-digit yield growth. The target price falls to $145 from $153.

Additional investment spending will be required, estimates the analyst, to fund the growth potential for the residential business and a number of market and geographical adjacencies.

Management increased capital expenditure guidance, largely attributable to scale-up costs for the Indian franchise.

Target price is $145.00 Current Price is $109.65 Difference: $35.35
If REA meets the Ord Minnett target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $133.43, suggesting upside of 18.7% (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

Morgan Stanley rates TAH as Initiation of coverage with Equal-weight (3) -

Morgan Stanley "initiates" coverage of 'new' Tabcorp with an Equal-weight rating and $0.95 target price, following the de-merger of its Lotteries and Keno assets on May 24. Industry view is In-Line.

Apart from the group's Gaming Services business, the monopoly retail wagering licenses remain. These are held in all domestic states and territories except WA. Nonetheless, online competition comes from corporate bookmakers, explains the analyst.

By comparison to this online competition, Tabcorp suffers from a higher cost structure and lack of global scale, in the broker's view.

Target price is $0.95 Current Price is $0.95 Difference: $0
If TAH meets the Morgan Stanley target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $1.05, suggesting upside of 10.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Morgans rates TAH as Downgrade to Hold from Add (3) -

Morgans lowers its rating for Tabcorp to Hold from Add. This comes after allowing for the demerger of the Lotteries and Keno business and cautioning investors around impending licence renewals and competition for the Wagering & Media and Gaming Services businesses.

As a result of these adjustments, the broker's FY23 earnings (EBITDA) forecast falls by -64%, and the target price falls to $0.95 from $6.12. The removal of a source of largely predictable cash flows is expected to result in more volatile earnings. 

Target price is $0.95 Current Price is $0.95 Difference: $0
If TAH meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $1.05, suggesting upside of 10.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

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

Morgans initiates coverage on "one of the highest performing lotteries businesses in the world" the Lottery Corp with an Add rating and $5.40 target price. The business has recently been demerged from Tabcorp Holdings ((TAH)).

The broker expects the company to deliver a fully franked dividend at a high payout ratio. The opportunity for future capital management is expected to arise as debt should be progressively paid off.

The company has licences to operate lotteries in every state and territory (except WA) for an average period of 21 years until expiry. There is no major renewal until Victoria in 2028.

Target price is $5.40 Current Price is $4.55 Difference: $0.85
If TLC meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $5.18, suggesting upside of 16.7% (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

Citi rates WEB as Buy (1) -

In exploring where the recovery trade generally is heading, Citi notes it’s becoming apparent revenue will lag activity and the post-pandemic environment doesn't match that of FY19.

In this environment, the analyst has a preference for Webjet, where the inherent business model is expected to track closer to activity out to FY23. 

The broker is optimistic on the B2B segment, which is the larger contributor to earnings and retains its Buy rating, while increasing its target price to $6.94 from $6.75.

Target price is $6.94 Current Price is $5.93 Difference: $1.01
If WEB meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $6.41, suggesting upside of 5.8% (ex-dividends)

The company's fiscal year ends in March.

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

Citi rates WES as Sell (5) -

While Citi can see the opportunity from the digital strategy outlined by Wesfarmers during its investor day, it's thought better value can be obtained elsewhere within the sector.

The broker cautions the market (and its own) expectation for Bunnings revenue is substantial, in an environment where house prices may fall.  The Sell rating and $42.00 target price are maintained.

Target price is $42.00 Current Price is $47.28 Difference: minus $5.28 (current price is over target).
If WES meets the Citi target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $50.90, suggesting upside of 8.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Credit Suisse rates WES as Neutral (3) -

Wesfarmers has introduced a number of new initiatives that Credit Suisse notes increases company complexity. The broker drew attention to the OneDigital initiative, expecting losses associated with OnePass to extend into the future.

Credit Suisse highlights changes to the OnePass subscription model has driven expected losses of -$100m in earnings in FY23, with the broker anticipating further losses in FY24 and FY25.

Further, setup costs are anticipated to extend beyond FY22, with the broker forecasting costs of -$100m in FY23.

In the nearer-term, the broker increased forecasts for the Home Improvement segment in the second half given strong retail data, but continues to expect a contraction in the segment in FY23.

The Neutral rating is retained, while the target decreases to $49.68 from $55.19.

Target price is $49.68 Current Price is $47.28 Difference: $2.4
If WES meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $50.90, suggesting upside of 8.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Macquarie rates WES as Neutral (3) -

Wesfarmers has updated on its strategy following its newly created Health and Digital divisions. The Bunnings acquisitions of Beaumont Tiles and Tool Kit Depot could help lift commercial sales from 40% of current total to 50% over time, Macquarie notes.

Management is not yet seeing any impact of inflation on Australian or NZ consumers, but remains focused on value to differentiate in tougher conditions.

The broker continues to believe Bunnings is one of the best retail assets in Australia but has increasing concerns on consumer discretionary spending in the face of rising interest rates and rising inflation. Neutral retained.

Target falls to $47.50 from $54.50 on lower sector PE multiples.

Target price is $47.50 Current Price is $47.28 Difference: $0.22
If WES meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $50.90, suggesting upside of 8.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Morgans rates WES as Add (1) -

Having received updates on strategy and growth opportunities at Wesfarmers strategy day, Morgans makes only minor changes to forecasts. The Add rating is unchanged, while the target price eases to $58.40 from $58.50.

The newly-established OneDigital platform will provide the retail businesses with broader insights, explains the analyst.

Meanwhile, management also highlighted the strong value proposition of its businesses that should appeal to consumers suffering from cost of living pressures.

Target price is $58.40 Current Price is $47.28 Difference: $11.12
If WES meets the Morgans target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $50.90, suggesting upside of 8.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Ord Minnett rates WES as Hold (3) -

Following Wesfarmers' investor day, Ord Minnett increases its sales forecasts for the Chemical, Energy and Fertilisers (CEF) division to incorporate a strong near-term outlook.

The broker also notes the retail businesses are showing resilience in the current macroeconomic environment. Nonetheless, management is cautious on the outlook, despite no existing signs of a consumer slowdown.

In terms of strategy, the analyst likes the opportunity to better utilise data across retail businesses to drive incremental revenue, via the build-out of the digital and data ecosystem. The Hold rating is maintained and the target slips to $51.80 from $52.40.

Target price is $51.80 Current Price is $47.28 Difference: $4.52
If WES meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $50.90, suggesting upside of 8.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Credit Suisse rates WGN as Outperform (1) -

Wagners Holding Co has won the Sydney Metro-Western Sydney Airport contract, and will supply precast concrete tunnel segments to the infrastructure project. Credit Suisse notes the project is set to deliver $140m in revenue over 20 months, commencing in late 2022.

The company has suggested the contract will significantly contribute to earnings, with the broker anticipating a $56m incremental revenue benefit in FY23. This reflects a sizable per-segment value uplift on previous contracts, with higher transport costs contributing to the high-value.

The Outperform rating is retained and the target price increases to $2.00 from $1.90.

Target price is $2.00 Current Price is $1.33 Difference: $0.67
If WGN meets the Credit Suisse target it will return approximately 50% (excluding dividends, fees and charges).

Current consensus price target is $2.02, suggesting upside of 51.6% (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