Australian Broker Call

Citi rates AGL as Sell (5) -

Citi suspects the market has misjudged the quantum of the step down in the earnings trajectory in FY19. FY20 net profit guidance of $780-860m has missed the broker's estimates.

With earnings structurally lower than forecast and continuing to decline, Citi believes the benefit from a sector rotation into utilities should unwind. The broker downgrades FY20 and FY21 estimates for earnings per share by -6% and -3% respectively.

On the question of dividend yield support, the broker argues that, for FY20 to trade at the 6.2% yield achieved in FY19, the share price would need to fall to around $16. Citi maintains a Sell rating and reduces the target to $16.46 from $17.82.

Target price is $16.46 Current Price is $19.23 Difference: minus $2.77 (current price is over target).
If AGL meets the Citi target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.19, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.6

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

Credit Suisse rates AGL as Neutral (3) -

FY19 underlying net profit was slightly ahead of Credit Suisse estimates but FY20 guidance for $780-860m disappointed.

Higher depreciation explains most of the difference in guidance versus forecasts, which Credit Suisse calculates implies an operating earnings (EBITDA) downgrade of -1.5%.

The broker maintains a Neutral rating and decreases the target to $18.40 from $19.20.

Target price is $18.40 Current Price is $19.23 Difference: minus $0.83 (current price is over target).
If AGL meets the Credit Suisse target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.19, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.6

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

Macquarie rates AGL as Underperform (5) -

FY19 results slightly beat Macquarie's estimates. The broker believes the valuation is yet to become compelling for investors as the risks are to the downside in the electricity market, as government policy aims to lower prices.

Subsidies such as the LREC and legacy gas/coal contracts are also diminishing. Hence, the company will face structural pressure, which Macquarie suspects underpins its desire to diversify into telecommunications.

Macquarie maintains an Underperform rating and reduces the target to $19.11 from $19.50.

Target price is $19.50 Current Price is $19.23 Difference: $0.27
If AGL meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $18.19, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.6

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

Morgan Stanley rates AGL as Underweight (5) -

FY19 net profit was ahead of estimates, although FY20 net profit guidance is lower than expected at $780-860m. The broker attributes the miss versus expectations to a $50m investment in the customer, e.g. loyalty discounts in line with peers.

Morgan Stanley believes AGL is positioned for the market headwinds. The broker estimates earnings per share is likely to decline at around -10% per annum over the forecast period.

The broker considers the growth strategies measured and rational, including data convergence and geographic expansion in the energy transition. The energy transition is considered the largest opportunity.

Underweight maintained. Target is reduced to $18.68 from $19.23. Industry view is Cautious.

Target price is $18.68 Current Price is $19.23 Difference: minus $0.55 (current price is over target).
If AGL meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.19, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.6

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

Morgans rates AGL as Downgrade to Reduce from Hold (5) -

FY19 results were slightly better than Morgans expected. However, guidance for FY20 underlying net profit has missed forecasts. The broker believes the fundamentals paint a bleak picture over the long-term.

Risks from regulation and the increasing age of the generation fleet are expected to weigh on the stock, despite the short-term support from the buyback.

The company has announced a share buyback of up to 5% of outstanding capital. The broker suspects AGL will need to increase its debt to pay for the buyback as well as its expansion plans.

Rating is downgraded to Reduce from Hold and the target reduced to $16.86 from $18.33.

Target price is $16.86 Current Price is $19.23 Difference: minus $2.37 (current price is over target).
If AGL meets the Morgans target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.19, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.6

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

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

FY19 results were slightly ahead of Ord Minnett's estimates. The broker's concerns were confirmed, nonetheless, as FY20 guidance implies earnings are set to decline -17-25%.

The broker notes there is some evidence of share gains, with electricity retail customer numbers increasing in FY19. Rating is upgraded to Hold from Lighten as the stock is now in line with the revised valuation.

The broker estimates the stock now offers a dividend yield in excess of 5% which compares favourably with most ASX-listed utilities and infrastructure stocks. Target is reduced to $18.90 from $19.75.

Target price is $18.90 Current Price is $19.23 Difference: minus $0.33 (current price is over target).
If AGL meets the Ord Minnett target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.19, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.6

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

UBS rates AGL as Upgrade to Neutral from Sell (3) -

FY19 net profit was ahead of UBS estimates. The broker expects there will be some support for the share price from the $650m buyback in FY20, although challenges will arise from retail regulation and lower forecast long-term wholesale electricity markets.

The broker believes the Perth Energy acquisition confirms some retail growth potential in the west but the company needs new material growth projects to fill the earnings gap that is expected to emerge by FY22.

Rating is upgraded to Neutral from Sell and the target raised to $18.50 from $18.35.

Target price is $18.50 Current Price is $19.23 Difference: minus $0.73 (current price is over target).
If AGL meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.19, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.6

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

Citi rates AMP as Sell (5) -

Citi lowers estimates for earnings per share by -24% in 2019 and by -28% for 2020. Although the capital raising is well supported and the stock is likely to trade above the issue price the broker believes the transformation of AMP will be long and arduous.

The broker believes AMP is likely to be constrained in its ability to provide future guidance, given it is also raising capital. The new deal for the sale of the life business is better than Citi anticipated, however it also implies lower underlying investment earnings.

Sell/High Risk rating maintained. Target is $1.70.

Target price is $1.70 Current Price is $1.94 Difference: minus $0.24 (current price is over target).
If AMP meets the Citi target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.83

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Morgan Stanley rates AMP as Upgrade to Equal-weight from Underweight (3) -

First half underlying profit was below Morgan Stanley's estimates. The $650m capital raising should fast-track the company's strategic overhaul, in Morgan Stanley's view, as it seeks to exit the life business, divest New Zealand and transform its wealth operations.

The revised deal with Resolution Life surprised the broker as it is a cleaner transaction - $2.5bn cash and 20% equity - expected to be completed in the first half of 2020. The proceeds will pay down debt and fund separation costs as well as provide funding for the company's strategy.

In wealth, the broker notes if successful, AMP will have a contemporary platform without the legacy overhang. The new 40-60% cash net profit pay-out ratio suggests AMP is seeking a more aggressive growth setting.

Rating is upgraded to Equal-weight from Underweight and the target is raised to $1.65 from $1.50. Industry view is In-Line.

Target price is $1.65 Current Price is $1.94 Difference: minus $0.29 (current price is over target).
If AMP meets the Morgan Stanley target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.83

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Morgans rates AMP as Hold (3) -

First half underlying profit was broadly in line with expectations, although large impairments drove a reported loss of -$2.3bn. The result was secondary to other issues, Morgans believes, namely the re-negotiated life business sale to Resolution Life and the unveiling of a detailed strategy.

Execution risk remains high and the broker finds it hard to be confident regarding earnings forecasts for the next few years. 2019 and 2020 estimates for earnings per share are downgraded by -2% and -28% respectively.

Hold rating maintained. Target is reduced to $1.86 from $2.25.

Target price is $1.86 Current Price is $1.94 Difference: minus $0.08 (current price is over target).
If AMP meets the Morgans target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.83

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Ord Minnett rates AMP as Hold (3) -

First half net profit was below expectations. The company has attempted several times to re-set strategy and its profit trajectory but the latest plan appears to be the most ambitious yet, in Ord Minnett's view.

The broker observes AMP is keen to leave all legacy business behind, but at a material cost, re-cutting a deal for the life insurance sale and focusing on the bank, AMP Capital and wealth management.

There is limited visibility as to how the cost savings and growth initiatives will impact on earnings. The broker maintains a Hold rating and reduces the target to $1.80 from $2.10.

Target price is $1.80 Current Price is $1.94 Difference: minus $0.14 (current price is over target).
If AMP meets the Ord Minnett target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.83

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Ord Minnett rates ASX as Hold (3) -

Ord Minnett observes listing volumes in the June quarter fell -32% while cash market volumes increased 10% and derivatives grew 17%. The broker will assess the background to revenue trends at the results on August 15.

Ord Minnett maintains a Hold rating and raises the target to $80 from $65 as the model is rolled forward to June 2020.

Target price is $80.00 Current Price is $86.92 Difference: minus $6.92 (current price is over target).
If ASX meets the Ord Minnett target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $66.78, suggesting downside of -23.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.7

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

UBS rates CBA as Sell (5) -

FY19 results were weak with revenue falling and costs rising. UBS does not believe the outlook will become much easier. The bank has guided to interest margin pressure from June and July rate reductions but the broker believes a rapid contraction in the BBSW/OIS will largely offset this.

Nevertheless, banks could be under even greater pressure to pass through official rate cuts to borrowers given the contraction in swap rates.

UBS also notes Commonwealth Bank significantly increased its reliance on the broker channel, to 48% of flow in the second half. Sell rating maintained. Target is reduced to $70 from $72.

Noteworthy: UBS has broken ranks with colleagues and peers elsewhere and now expects CBA to cut the dividend by -14% to $3.72 in FY21.

Target price is $70.00 Current Price is $79.48 Difference: minus $9.48 (current price is over target).
If CBA meets the UBS target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $72.44, suggesting downside of -8.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.6

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

Citi rates COL as Neutral (3) -

Citi believes Coles is heading for its first negative like-for-like sales result in 12 years, forecasting a contraction of -0.4% in the first quarter of FY20.

This is based on the cycling of the Little Shop promotion and the competing Lion King Ooshies collectables. The broker downgrades FY20 net profit estimates by -1% and maintains a Neutral rating and a $13.50 target.

Target price is $13.50 Current Price is $13.52 Difference: minus $0.02 (current price is over target).
If COL meets the Citi target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.75, suggesting downside of -5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

Citi rates IAG as Neutral (3) -

As suspected, the rising cost of business is affecting the company, which is now suggesting regulatory and compliance costs will rise by up to $50m per annum.

Citi lowers estimates for earnings per share in FY20 by -12% and FY21 by -7%. The broker believes lower yields are pressuring future earnings, including investment income on shareholders' funds.

Regardless, Citi continues to expect expansion in underlying margins. Neutral rating and $8.20 target maintained.

Target price is $8.20 Current Price is $7.68 Difference: $0.52
If IAG meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $7.59, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Credit Suisse rates IAG as Underperform (5) -

FY19 results were in line with expectations. Management has guided to a flat FY20 insurance margin of 16-18%. Credit Suisse suspects risks are skewed to the downside.

Costs are increasing and bond yields are falling, while premium rate increases have been squeezed hard, so the company's ability to offset pressures is becoming more difficult, in the broker's view.

Underperform maintained. Target is reduced to $7.50 from $7.80.

Target price is $7.50 Current Price is $7.68 Difference: minus $0.18 (current price is over target).
If IAG meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.59, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Macquarie rates IAG as Underperform (5) -

FY19 results missed expectations. Macquarie was surprised by no excess capital return and delays forecasts for this to the second half of FY20.

The broker believes the stock may trade poorly in the short term as investors seek higher yielding alternatives. Challenges continue to be posed from a weak premium growth outlook.

Target is reduced to $6.95 from $7.05. Underperform rating retained.

Target price is $6.95 Current Price is $7.68 Difference: minus $0.73 (current price is over target).
If IAG meets the Macquarie target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.59, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

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

Morgan Stanley continues to envisage group margins will increase into FY21, supported by the rolling through of earned rates and cost benefits.

The underlying performance in FY19 was in line with the broker's estimates and continuing momentum suggests underlying margins will peak at around 18.0% in FY21.

Equal-weight. Target is reduced to $8.00 from $8.20. Industry view: In Line.

Target price is $8.00 Current Price is $7.68 Difference: $0.32
If IAG meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $7.59, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Ord Minnett rates IAG as Hold (3) -

FY19 profit was below Ord Minnett's forecasts. The company has guided for no material margin expansion from second-half levels as peril allowances and interest rates offset a stronger cycle and savings.

Ord Minnett lowers estimates by around -10% for FY20 and FY21 to take into account softer revenue trends in margin. The broker considers the stock fully valued and maintains a Hold rating. Target is reduced to $7.30 from $8.20.

Target price is $7.30 Current Price is $7.68 Difference: minus $0.38 (current price is over target).
If IAG meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.59, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

UBS rates IAG as Neutral (3) -

Cash net profit in FY19 fell short of UBS estimates. Reported insurance profits were in line. The broker believes FY20 premium growth guidance for low single digits reflects a weaker volume outlook, coupled with few increases in premium rates outside of commercial lines.

The company has indicated that reserve releases will return to the long-term normalised view of 1.0% of net earned premium, maintaining FY20 returns guidance flat at 16-18%. Neutral rating maintained. Target is reduced to $7.60 from $8.15.

Target price is $7.60 Current Price is $7.68 Difference: minus $0.08 (current price is over target).
If IAG meets the UBS target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.59, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Credit Suisse rates KMD as Outperform (1) -

The company has provided guidance for earnings (EBIT) of NZ$82.5-84.0m and net profit of NZ$55.5-57.0m. At the mid points, Credit Suisse calculates this is 9-10% ahead of market expectations.

Solid earnings growth has been achieved in a challenging Australian consumer environment amid warm NZ weather during the critical winter sales period. Given the company is also cycling a record earnings result, the broker is even more impressed with guidance.

Outperform rating maintained. Target is raised to NZ$3.00 from NZ$2.75.

Current Price is $2.40. Target price not assessed.

Current consensus price target is $2.48, suggesting upside of 3.1% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY19:

Forecast for FY20:

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 KMD as Neutral (3) -

The trading update exceeded Macquarie's expectations. Better margins delivered a 9% beat for earnings (EBIT) and net profit versus the broker's forecast.

The broker raises the target to $2.35 from $2.30 and maintains a Neutral rating.

Target price is $2.35 Current Price is $2.40 Difference: minus $0.05 (current price is over target).
If KMD meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.48, suggesting upside of 3.1% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY19:

Forecast for FY20:

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

Citi rates MGR as Neutral (3) -

There were few surprises in the FY19 result and FY20 guidance as these were pre-announced. FY19 earnings were in line with estimates.

Citi suspects guidance is conservative as it implies a -22% decline in masterplanned community volumes despite an improved backdrop, given interest-rate reductions, a lowering of the serviceability test and political stability.

The broker maintains a Neutral rating and raises the target to $3.41 from $3.31.

Target price is $3.41 Current Price is $3.28 Difference: $0.13
If MGR meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $3.14, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.2

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

Macquarie rates MGR as Outperform (1) -

FY19 results were in line with expectations. While the market is focused on an earnings decline in FY21, Macquarie suggests this may not occur.

A shift in mix in the earnings profile means the distribution continues to grow, on the broker's forecasts, and a move to passive earnings warrants a higher valuation than active earnings.

Macquarie maintains an Outperform rating and raises the target 6% to $3.66.

Target price is $3.66 Current Price is $3.28 Difference: $0.38
If MGR meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $3.14, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.2

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

Ord Minnett rates MGR as Lighten (4) -

FY19 results were in line with expectations. Ord Minnett observes the market is supporting the move to more passive assets, although development earnings contributed 40% of the FY19 earnings (EBIT) and this is likely to be a headwind going forward.

The broker considers the stock fully valued and maintains a Lighten rating. The target is raised to $2.90 from $2.85.

Target price is $2.90 Current Price is $3.28 Difference: minus $0.38 (current price is over target).
If MGR meets the Ord Minnett target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.14, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.2

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

UBS rates MGR as Sell (5) -

FY19 results were in line with UBS expectations. FY20 guidance has been updated to reflect the Tuckerbox transaction not proceeding. Distribution growth guidance is maintained at 5%.

UBS believes the company is well-positioned for a solid growth profile in distributions over the medium term. Headline earnings, nevertheless, are likely to underwhelm as residential pre-sales are now down -70% from their peak.

Sell rating maintained. Target rises to $2.90 from $2.64.

Target price is $2.90 Current Price is $3.28 Difference: minus $0.38 (current price is over target).
If MGR meets the UBS target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.14, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.2

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

Citi rates NCK as Sell (5) -

FY19 net profit was ahead of Citi's estimates. Downside risk to earnings is envisaged for FY20 as sales momentum has turned negative and the higher store base means upside from roll-outs is likely to be smaller.

Downward pressure on gross margins is also emerging from the weaker Australian dollar. Citi forecasts first half like-for-like sales to decline by -2.5%. These declines are likely to moderate to -1% in the second half on the assumption that the housing market starts to improve.

Sell rating maintained. Target is raised to $5.97 from $5.35.

Target price is $5.97 Current Price is $6.50 Difference: minus $0.53 (current price is over target).
If NCK meets the Citi target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.5

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

Macquarie rates NCK as Neutral (3) -

FY19 results were mixed versus Macquarie's estimates. Still, the broker finds the results commendable given the subdued retail backdrop.

The broker's estimates imply a minor contraction in earnings, with a healthy dividend yield and balance sheet providing valuation support.

Neutral maintained. Target is raised to $6.15 from $5.70.

Target price is $6.15 Current Price is $6.50 Difference: minus $0.35 (current price is over target).
If NCK meets the Macquarie 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 FY20:

Forecast for FY21:

Market Sentiment: -0.5

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

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

FY19 results were in line with the recent trading update. Macquarie observes the outlook is stabilising and the risk has shifted to the upside.

The company continues to invest in a proprietary platform and management is progressing with marketing, confident in its opportunity and product offering.

Hence, the broker upgrades to Outperform from Neutral and raises the target to $3.63 from $3.62.

Target price is $3.63 Current Price is $3.65 Difference: minus $0.02 (current price is over target).
If NGI meets the Macquarie target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Ord Minnett rates NGI as Buy (1) -

FY19 results were broadly in line with Ord Minnett's expectations. The broker expects FY20 will involve the consolidation of Lighthouse while some minor outflow is still expected from the Mesirow business.

The broker considers the stock cheap from both a valuation and multiple standpoint. Buy rating maintained. Target is raised to $4.10 from $4.00.

Target price is $4.10 Current Price is $3.65 Difference: $0.45
If NGI meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

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

Distribution guidance and growth targets were well flagged and the move to full ownership of the M5 is in line with Morgan Stanley's expectations. FY19 proportional operating earnings (EBITDA) were slightly below forecasts.

The broker expects toll growth should accelerate ahead of the CPI and the focus is now on the traffic flow. Traffic growth slowed markedly in the fourth quarter.

Equal-weight rating and Cautious industry view maintained. Target is $15.28.

Target price is $15.28 Current Price is $15.13 Difference: $0.15
If TCL meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $14.50, suggesting downside of -4.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Morgans rates TCL as Hold (3) -

Morgans is comfortable with the predictability of the company's earnings, with results in line with forecasts and close to market expectations.

However, the quality of cash flow support for the distribution has deteriorated.

The broker was surprised by the capital raising of up to $700m, which will be used to fund the buy-out of the remaining M5 West investors.

Hold maintained. Target is reduced to $14.01 from $14.13.

Target price is $14.01 Current Price is $15.13 Difference: minus $1.12 (current price is over target).
If TCL meets the Morgans target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.50, suggesting downside of -4.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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