Australian Broker Call

Citi rates BHP as Downgrade to Neutral from Buy (3) -

BHP Group’s strong iron ore production in the June quarter was offset by weakness in coal and the Latin America region, reports Citi.

The group expects to achieve full year unit cost guidance at Western Australia Iron Ore (WAIO), Queensland Coal and NSW Energy Coal. Petroleum and Escondida unit costs are expected to be slightly better than guidance.

The group listed a number of FY20 financial impacts like an increase in closure and rehab provisions along with exceptional post-tax charges, reports Citi. FY21 production guidance for all except nickel and iron ore are lower as compared to FY20.

Looking at the FY20 production and financial impacts, the broker revises down its net profit by -10%.

Citi downgrades its rating to Neutral from Buy with a target price of $40.

Target price is $40.00 Current Price is $38.80 Difference: $1.2
If BHP meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $38.95, suggesting upside of 3.8% (ex-dividends)

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: 0.5

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

Credit Suisse rates BHP as Neutral (3) -

After a solid (if expected) end to FY20, FY21 guidance across most divisions was lower than expected by Credit Suisse. For some cases like petroleum and met coal, this can be explained by a tough market backdrop, explains the broker.

All capital expenditure and exploration guidance will be updated in the August result, notes the broker.

While the broker assumes a 50% payout which comes out to be US$0.43, it believes there is capacity to pay more.

Credit Suisse retains its Neutral rating with a target price of $37.

Target price is $37.00 Current Price is $38.80 Difference: minus $1.8 (current price is over target).
If BHP meets the Credit Suisse target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $38.95, suggesting upside of 3.8% (ex-dividends)

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: 0.5

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

Macquarie rates BHP as Outperform (1) -

BHP Group's June quarter report was mixed against the broker's forecast, with iron ore production in line and copper an 8% beat, offset by a -5% miss in oil and -6% in coal. FY21 production guidance is weak, falling -8-15% below the broker's forecast for oil, met coal and copper.

Outperform retained, noting 10% free cash flow at current iron ore prices and 19% and 53% higher earnings in FY22-23 if current spot prices were used in the broker's model. Target rises to $39 from $38.

Target price is $39.00 Current Price is $38.80 Difference: $0.2
If BHP meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $38.95, suggesting upside of 3.8% (ex-dividends)

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: 0.5

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

Morgan Stanley rates BHP as Overweight (1) -

June quarter production and sales for BHP Group are broadly in line. Copper production was more than expected driven by Escondida’s performance while petroleum production lagged due to weaker demand.

FY21 guidance by BHP Group has iron ore volumes in-line with the broker’s estimate while the rest – petroleum, copper, met coal and thermal coal – are below the broker’s estimates.

The group expects one-offs related to impairments from PPE of circa -US$450-500m and deferred taxes and covid-19 costs of about -US$100-$150m.

Full year unit cost guidance is expected to be achieved at Western Australia Iron Ore (WAIO), Queensland Coal and New South Wales Energy Coal. Petroleum and Escondida unit costs are expected to be slightly better than the guidance.

Morgan Stanley retains its Overweight rating with a target price of $37.45. Industry view: Attractive.

Target price is $37.45 Current Price is $38.80 Difference: minus $1.35 (current price is over target).
If BHP 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 $38.95, suggesting upside of 3.8% (ex-dividends)

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: 0.5

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

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

BHP Group released a strong 4Q20 operational result, with only petroleum falling short of FY20 production guidance, according to Morgans. The broker downgrades its recommendation to a Hold due to recent share price strength.

The company flagged a -US$450m-US$500m impairment against Cerritos Colorado at the upcoming result. Direct covid-19 costs have been estimated at -US$100m-US$150m.

The broker highlights disappointing FY21 guidance, with production of several commodities (iron ore, copper and coal) below the broker's forecasts.

The rating is downgraded to Hold from Add. The target price increased to $37.20 from $36.70.

Target price is $37.20 Current Price is $38.80 Difference: minus $1.6 (current price is over target).
If BHP 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 $38.95, suggesting upside of 3.8% (ex-dividends)

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: 0.5

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

Ord Minnett rates BHP as Accumulate (2) -

June quarter iron ore production and shipments were ahead of Ord Minnett’s forecasts with realised prices lower than expected. Petroleum missed the broker’s estimate while coal and copper were strong.

If its current performance can be sustained, the group’s FY21 iron ore production guidance of 276-286mt may prove to be conservative, predicts the broker.

Guidance for copper, met coal and petroleum remain weak due to the impact from covid-19, notes the broker.

The group is expected to finish the year in a strong financial position with debt at the lower end of its target range, reports Ord Minnett.

Strength in iron ore price presents a potential upside to the broker’s FY21 earnings forecast.

The broker remains attracted to the group’s commodity mix, reasonable valuations and returns outlook.

Ord Minnett retains its Accumulate rating with a target price of $42.

Target price is $42.00 Current Price is $38.80 Difference: $3.2
If BHP meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $38.95, suggesting upside of 3.8% (ex-dividends)

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: 0.5

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

UBS rates BHP as Buy (1) -

 BHP Group released a quarterly activities report which, according to UBS, is expected to lower consensus earnings by -5%.

The company met full year guidance for iron ore, metallurgical coal and its operated copper and thermal assets. However, Petroleum, Antamina and Cerrejon were impacted by covid-19.

The broker expects a final dividend of US60c, unless the Board acts conservatively as in February 2020.

BHP provided FY21 guidance which fell short of both the market and the broker's expectations. Escondida was the driver of a lower copper production guidance. Petroleum also was lower than expected.

As a result, UBS lowers FY21 earnings by -6%. Buy rating maintained. Target is $40.

Target price is $40.00 Current Price is $38.80 Difference: $1.2
If BHP meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $38.95, suggesting upside of 3.8% (ex-dividends)

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: 0.5

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

Ord Minnett rates CCP as Accumulate (2) -

Credit Corp Group released its unaudited FY20 result, announcing an impairment charge to purchased debt ledgers (PDL), along with provisioning for the consumer lending business of $90m. The company has guided to net profit of $75-80m.

The broker believes the company’s customer base will likely be one of the first affected by rising unemployment.

The near-term outlook has some uncertainties especially with respect to capital allocation. However, the broker remains confident in management’s ability to allocate capital to maximise shareholder returns.

Ord Minnett reaffirms its Accumulate rating with a target price of $20.

Target price is $20.00 Current Price is $17.55 Difference: $2.45
If CCP meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $19.47, suggesting upside of 10.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Credit Suisse rates DOW as Outperform (1) -

Downer EDI will be raising $400m to purchase Spotless' remaining shares, restructure its business and solidify its balance sheet.

Led by strong results in its transport and facilities segments, the company expects FY20 operating income to be in the range of $410-$420m, much ahead of Credit Suisse’s forecasted $388m.

The broker raises its net profit estimate for FY21 by 16% due to a less severe impact from the virus than expected.

Credit Suisse maintains its Outperform rating with the target price increasing to $4.70 from $4.

Target price is $4.70 Current Price is $4.24 Difference: $0.46
If DOW meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $4.63, suggesting upside of 7.1% (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 DOW as No Rating (-1) -

Downer EDI has pre-released FY20 financials in line with the broker's forecasts, and announced a $400m capital raising at a -12% discount to the last closing price.

The funds will be used to acquire the remaining 12% of Spotless ((SPO)) Downer EDI doesn't own, strengthen the balance sheet and provide opportunity for more acquisitions in the Urban Services space.

The broker is advising on the raising and as such is restricted from making a recommendation.

Current Price is $4.24. Target price not assessed.

Current consensus price target is $4.63, suggesting upside of 7.1% (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 DOW as Hold (3) -

Downer EDI has raised $400m to acquire the remaining shares of Spotless Group and strengthen its balance sheet, reports Ord Minnett. The company has guided to better than expected FY20 earnings.

While there is notable near to medium term execution risk, the broker notes the stock could see a significant re-rating if the company were to deliver on plans to reshape its businesses in line with the targeted urban services strategy.

The company’s hospitality division has been placed under review to determine which parts to sell or continue with, reports the broker.

Ord Minnett maintains its Hold rating with the target price increasing to $4.70 from $4.50.

Target price is $4.70 Current Price is $4.24 Difference: $0.46
If DOW meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $4.63, suggesting upside of 7.1% (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 ECX as Buy (1) -

Eclipx Group has entered into a binding agreement to sell Right2Drive (R2D) for up to $26.5m.

UBS believes the remaining corporate fleet and novated business (core) is now well-positioned to participate in sector consolidation, with $20m-$40m in synergies available under the broker's consolidation scenario.

UBS expects a strong used car market to be supportive and the company's net debt position to be materially improved compared to previous expectations.

The broker upgrades FY20 and FY21 earnings by 21% and 4%, respectively. Buy rating is maintained. The target price increases to $2.05 from $1.45.

Target price is $2.05 Current Price is $1.41 Difference: $0.64
If ECX meets the UBS target it will return approximately 45% (excluding dividends, fees and charges).

Current consensus price target is $1.63, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Credit Suisse rates KGN as Neutral (3) -

A fundamental change in consumer behaviour in the last few months has given Kogan the opportunity to accelerate growth and establish a material position in the retail market, comments Credit Suisse.

The June trading update was in-line with market expectations with the second half operating income up 74% year on year, notes the broker.

FY21 earnings forecast has been moderated as the broker assumes an increase in marketing spend to support growth. The broker highlights the company is well-positioned to benefit from ongoing growth in online sales.

Credit Suisse holds onto its Neutral rating with the target price increasing to $16.88 from $11.72.

Target price is $16.88 Current Price is $17.75 Difference: minus $0.87 (current price is over target).
If KGN meets the Credit Suisse 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: 0.0

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

UBS rates KGN as Neutral (3) -

Despite a strong June 2020 update, UBS sees growth already priced in at the current share price, leaving little margin of safety.

June 2020 sales increased by more than 80% and earnings by more than 100%. However, the broker points to an increasing competitive intensity and a potential normalisation of sales and gross margins from 2H21 onwards.

The Neutral rating is maintained. The price target is $12.10.

Target price is $12.10 Current Price is $17.75 Difference: minus $5.65 (current price is over target).
If KGN meets the UBS target it will return approximately minus 32% (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: 0.0

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

Morgans rates MAI as Add (1) -

Mainstream Group has released its 4Q20 quarterly Funds Under Administration (FUA) update.

The FUA of $197bn was up 5% on the previous quarter, driven by a $5.1bn lift from net inflows and assisted by a $4.4bn benefit from market movements.

For the full year, the company recorded net inflows of around $17bn, a 71% on the prior year.

Morgans sees this as a robust quarter and points to continued growth in higher margin businesses (US PE and custody).

The broker believes the company is well positioned to take advantage of structural growth and emerging opportunities in the third party fund administration space.

The Add rating is maintained. The target price is increased to $0.74 from $0.636.

Target price is $0.74 Current Price is $0.62 Difference: $0.12
If MAI meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Morgan Stanley rates NEC as Overweight (1) -

Second-quarter results for Netflix saw subscribers increase by 10m due to covid-19, taking the total to 193m. Morgan Stanley also obseved a lower churn rate for the entertainment company along with higher time spent during the pandemic.

Looking at Netflix’s second-quarter performance begs the question as to how much Nine Entertainment’s subscription-based video on demand (SVOD) business Stan is really worth, suggest the analysts.

The broker notes more users are switching to streaming TV and Stan has the advantage of being the only Australian player of size.

However, Stan’s valuation is materially less than that of Netflix’s, reveals the broker. One of the reasons could be the concern that Stan’s content will fall away if its studios go direct-to-consumer eventually, it explains.

The broker suggests securing more long-term deals and/or a content partner may help the situation.

Morgan Stanley retains its Overweight rating with a target price of $1.95. Industry view: Attractive.

Target price is $1.95 Current Price is $1.45 Difference: $0.5
If NEC meets the Morgan Stanley target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $1.88, suggesting upside of 31.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Citi rates ORI as Buy (1) -

Consistent with BHP Group’s ((BHP)) mixed June quarter production, Citi forecasts a decline of -7.5% in Orica’s second-half group volumes.

An increase in iron ore production (which forms 5% of Orica’s revenues) in the June quarter for both BHP Group and Rio Tinto ((RIO)) indicates strong explosives demand continues in Western Australia. BHP has guided for FY21 iron ore production volumes to be similar to FY20.

On the flip side, BHP has guided towards flat coal production and falling volumes in Latin America for FY21 which, points out the broker, will hit Orica’s performance.

The broker considers Orica to enjoy a dominant position in the global explosives sector due to its intellectual property (notably in wireless blasting systems).

Earnings are globally diversified and underpinned by multi-year contracts with major miners, highlights the broker. Citi retains its Buy rating with a target price of $18.30.

Target price is $18.30 Current Price is $17.12 Difference: $1.18
If ORI meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $18.07, suggesting upside of 8.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Citi rates OSH as Neutral (3) -

From various sources including Oil Search’s reported figures, Citi infers the first-half net profit to be US$35-$73m. The broker also expects an interim dividend of $0.01.

Second-quarter production was 20% above Citi’s estimate due to stronger Papua New Guinea LNG volumes and operated oil fields. Operating revenue was -18% below the broker’s estimate due to weaker realised LNG pricing.

This weaker realised LNG pricing appears to be a one-off and will likely normalise in the fourth quarter, expects the broker. 2020 earnings forecast downgraded by -25% due to weaker LNG prices and higher exploration costs.

Citi maintains its Neutral rating with the target price decreasing slightly to $3.76 from $3.77.

Target price is $3.76 Current Price is $3.14 Difference: $0.62
If OSH meets the Citi target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $3.49, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in December.

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: 0.4

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

Credit Suisse rates OSH as Neutral (3) -

Credit Suisse notes oil prices have stabilised since its last update on the stock (in April) leading to concerns over Oil Search’s balance sheet dissipating.

The broker notes the company has sailed through write-down announcements relatively unscathed, with its share price regaining some of the lost ground versus peers.

The second quarter was messy but this should be treated as a one-off, comments the broker.

There is a risk of growth projects not gaining traction, fears the broker who prefers other companies where it has more confidence in the growth trajectory.

The biggest upside risk stems from the possibility of a bullish oil price from 2022 which could see Oil Search outperform its peers.  

Credit Suisse retains its Neutral rating with the target price increasing to $3.20 from $2.45.

Target price is $3.20 Current Price is $3.14 Difference: $0.06
If OSH meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.49, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in December.

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: 0.4

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

Macquarie rates OSH as Outperform (1) -

Oil Search reported stronger than expected oil & gas production in the June quarter and better than expected realised LNG prices. Production guidance is maintained for 2020 with the closure of the Hides project offset by stronger output at PNG LNG and deferred maintenance.

Oil Search remains the broker's top pick in the energy sector. The sell-down of the company's 15% stake in Alaska Oil will be a key catalyst for the second half and the broker notes sector consolidation is picking up. Outperform retained, target rises to $3.90 from $3.80.

Target price is $3.90 Current Price is $3.14 Difference: $0.76
If OSH meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $3.49, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in December.

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: 0.4

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

Morgans rates OSH as Hold (3) -

Oil Search released steady 2Q20 production results, according to Morgans.

The broker believes PNG LNG T1 and T2 continues to perform strongly. 

In the short-term the company faces restructuring costs, as it moves to push added layers out of its business, states the broker.

After a recent resumption, the company confirmed ongoing talks between the PNG government and operator Exxon.

Morgans retains a Hold rating and increases the target to $2.80 from $2.75.

Target price is $2.80 Current Price is $3.14 Difference: minus $0.34 (current price is over target).
If OSH meets the Morgans target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.49, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in December.

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: 0.4

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

Ord Minnett rates OSH as Accumulate (2) -

Oil Search delivered a mixed June quarter, reports Ord Minnett, with oil production in-line with the last quarter. Revenue was lower than expected because of a combination of lower sales, a higher proportion of spot LNG cargoes and a decline in commodity prices, elaborates the broker.

Recovery is expected in oil production volumes in the fourth quarter of 2020 due to remediation works at the NW Moran oilfield.

The company concluded its informal discussions with Papua New Guinea in relation to the P’nyang gas agreement. Post this, the broker notes ExxonMobil re-engaged in discussions with Papua New Guinea over the gas agreement.

Ord Minnett maintains its Accumulate rating with the target price decreasing to $3.70 from $3.80.

Target price is $3.70 Current Price is $3.14 Difference: $0.56
If OSH meets the Ord Minnett target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $3.49, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in December.

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: 0.4

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

UBS rates OSH as Buy (1) -

UBS reports that despite a beat in production from the Oil Search second quarter report, sales volumes were -3% below the broker's  forecast.

UBS reduces FY20 earnings estimates by -$65m, due to a higher exploration expense and factors in lower forecast output for Hides to reflect suspension of operations at the Porgera mine. This sees the broker forecast earnings for FY20 revert to a loss.

Buy rating and $4.30 target maintained.

Target price is $4.30 Current Price is $3.14 Difference: $1.16
If OSH meets the UBS target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $3.49, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in December.

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: 0.4

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

Ord Minnett rates PDL as Accumulate (2) -

Pendal Group’s June quarter revealed funds under management (FUM) to be up 4% quarter on quarter although down -12% year on year.

The performance was driven by the market recovery, offset somewhat by net fund outflows. Performance fees were up materially, the highest earned by the business since FY15, states the broker.

The near-term flow outlook remains uncertain but the broker believes the current share price offers an attractive risk reward proposition as compared to other ASX-listed asset managers.

Ord Minnett reiterates its Accumulate rating with the target price increasing to $7.30 from $7.

Target price is $7.30 Current Price is $6.03 Difference: $1.27
If PDL meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $6.59, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Citi rates PRU as Neutral (3) -

Perseus Mining's June quarter wasn’t Edikan Gold mine’s (Ghana) finest yet, comments Citi. Performance at the Sissingue gold project (Ivory Coast) was along expected lines, while the third mine at Yaoure (Ivory Coast) was also on track, reports Citi.

June quarter production at 64.7koz fell short of the broker’s estimated 71koz. Costs were better than expected. The broker notes the company has ample cash reserves to fund the circa US$100m needed for Yaoure.

Yaoure’s first production is expected in March 2021. Citi maintains its Neutral rating with a target price of $1.60.

Target price is $1.60 Current Price is $1.48 Difference: $0.12
If PRU meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $1.38, suggesting downside of -7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.7

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

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

Perseus Mining’s June quarter production numbers take its FY20 production to 258koz, below the company’s original guidance and also below Credit Suisse’s estimate.

The broker considers the quarter to be “modestly disappointing” due to a challenging Edikan. Sissingue and Yaoure continue to do well. 

First production from Yaoure may be in December 2020, ahead of the expected January 2021, states the broker. Major upside opportunity to the broker’s value lies in Sissingue's life extension.

Credit Suisse downgrades its rating to Underperform from Neutral with the target price increasing to $1.30 from $1.11.

Target price is $1.30 Current Price is $1.48 Difference: minus $0.18 (current price is over target).
If PRU meets the Credit Suisse target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.38, suggesting downside of -7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.7

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

Macquarie rates PRU as Downgrade to Underperform from Neutral (5) -

Perseus Mining 's June quarter featured sales and costs 13% and 4% better than Macquarie's forecast but production -6% lower. First half FY21 guidance is below expectation, although management cited conservatism in the face of covid, given growing case-counts in operating countries.

Otherwise, commentary suggests first production at Yaoure may be sooner than the broker assumed. On recent share price strength the broker downgrades to Underperform from Neutral. Target unchanged at $1.25.

Target price is $1.25 Current Price is $1.48 Difference: minus $0.23 (current price is over target).
If PRU meets the Macquarie target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.38, suggesting downside of -7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.7

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

Credit Suisse rates RMD as Neutral (3) -

With sleep labs closed during covid-19 lockdowns, Credit Suisse expects a sharp decline in new patient CPAP set-ups in the June quarter for ResMed.

Revenue growth for the fourth quarter is expected to be 13% with operating income up 29%.

The broker expects risk to earnings for the second half of FY21 due to potential ventilator oversupply and competitive bidding pricing pressure (rates to be announced over the next one to two months).

Credit Suisse retains its Neutral rating with the target price increasing to $27.50 from $26.

Target price is $27.50 Current Price is $29.27 Difference: minus $1.77 (current price is over target).
If RMD meets the Credit Suisse target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $25.10, suggesting downside of -11.9% (ex-dividends)

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: 0.0

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

UBS rates RMD as Neutral (3) -

UBS has analysed the current penetration of the US obstructive sleep apnoea (OSA) market and assessed the sustainability of new patient flow generator set-up growth.

While the broker acknowledges reaching a definitive conclusion is difficult, the base case forecast suggests the US is around 60% penetrated. Assuming flow generator volume growth of 5% over the forecast period, full saturation is reached in FY28. However, this is extended out to FY36 when using a figure for disease prevalence of 20%.

UBS reveals feedback from US sleep physicians suggests no sign of slowdown in new patient diagnosis, with obesity and ageing being the key drivers.

The broker anticipates a robust 4Q20 result and forecasts sales growth of of 15% and non-GAAP EPS of US$1.33.

Neutral rating maintained. Target is raised to US$200 from US$183.

Current Price is $29.27. Target price not assessed.

Current consensus price target is $25.10, suggesting downside of -11.9% (ex-dividends)

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: 0.0

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

Morgans rates S32 as Add (1) -

Morgans describes the overall 4QFY20 performance of South32 as mostly ahead of the broker's expectations.

Cannington beat the broker's estimates on stronger mill throughput. Both Brazil alumina (increased output from de-bottlenecking and South African manganese ore came in above FY20 guidance.

After an 8% increase in Hermosa's resource tonnes, Morgans acknowledges an improved view of the project after recent steady upgrades.

Overall, the broker views the company as an attractive value proposition.

The Add rating is maintained. The target price increased to $2.96 from $2.82.

Target price is $2.96 Current Price is $2.20 Difference: $0.76
If S32 meets the Morgans target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $2.52, suggesting upside of 15.9% (ex-dividends)

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: 0.6

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

Citi rates SAR as Neutral (3) -

June quarter was positive for Saracen Mineral Holdings with operations working reliably. The Super Pit did well with total ex-pit tonnes mined from it rising 49% quarter on quarter.

FY21 outlook remains at 600koz boosted by a pending mill expansion to 3.2mtpa. Earnings forecasts downgraded for FY20-22 due to fx related headwinds.

Citi maintains its Neutral rating with the target price increasing to $6.20 from $6.10.

Target price is $6.20 Current Price is $6.13 Difference: $0.07
If SAR meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $5.69, suggesting downside of -8.2% (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

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

For the June quarter, Saracen Mineral Holdings released strong cost numbers for gold with AISC below Morgan Stanley’s estimates.

FY21 guidance is maintained at 600koz which is considered conservative by the broker seeing the company has been beating/meeting guidance for seven years.

The company will be releasing mine to mine outlooks in the September quarter. The broker thinks there is high exploration potential at all sites.

Morgan Stanley reaffirms its Equal-weight rating with the target price increasing to $5.25 from $4.85. Industry view: Attractive.

Target price is $5.25 Current Price is $6.13 Difference: minus $0.88 (current price is over target).
If SAR meets the Morgan Stanley target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.69, suggesting downside of -8.2% (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 SAR as Hold (3) -

June quarter FY20 report for Saracen Mineral Holdings notes net cash to be in-line. Revenue was lower with gold sales being capitalised. Net profit of $190-$200m is expected after the post-tax stamp duty one-off.

The broker considers the company to offer sector relative value and is interested in updates from three areas – Carouse Dam operations (August), Thunderbox operations (August) and Super Pit update (September).

FY21 earnings forecasts have been lowered by -5%.

Ord Minnett maintains its Hold rating with a target price of $5.30.

Target price is $5.30 Current Price is $6.13 Difference: minus $0.83 (current price is over target).
If SAR meets the Ord Minnett target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.69, suggesting downside of -8.2% (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 SAR as Neutral (3) -

Saracen Mineral Holdings released a report that revealed costs at the Superpit were lower than UBS forecasts.

The broker sees two key positive catalysts in coming months. An update at Carosue Dam/Thunderbox in August 2020 and an update on the Superpit in September 2020.

Despite offering sector-leading production growth, UBS believes the company is no longer trading at a material discount to peers 

Neutral rating is maintained. Target price is $6.30.

Target price is $6.30 Current Price is $6.13 Difference: $0.17
If SAR meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $5.69, suggesting downside of -8.2% (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 SGP as Hold (3) -

According to AFR, Stockland is selling two sub-regional retail assets to Haben Property Fund for a combined $257m.

The REIT has also sold a 50% interest in a Melbourne north residential estate for $52.5m, reports Ord Minnett.

These sales are part of Stockland’s ongoing capital management, comments the broker, and will allow it to absorb potential asset devaluations and re-weight its sector exposure.

Ord Minnett reiterates its Hold rating with a target price of $3.50.

Target price is $3.50 Current Price is $3.24 Difference: $0.26
If SGP meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.68, suggesting upside of 14.0% (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 SLR as Upgrade to Outperform from Neutral (1) -

Silver Lake Resources' June quarter production beat Macquarie by 26%, and costs by 12%. FY21 production guidance is also greater than the broker had forecast, with Mount Monger underground gaining traction over the year.

FY21 will also see investments in the high-grade Rothsay project and a plant upgrade at Deflector, pushing production to 275koz in FY22. Macquarie upgrades to Outperform from Neutral. Target rises to $2.60 from $2.40.

Target price is $2.60 Current Price is $2.44 Difference: $0.16
If SLR meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Morgan Stanley rates STO as Overweight (1) -

At -US$700-$800m, Santos notes modest impairments relative to its peers. These relate to pre-tax impairments mostly from the Gladstone LNG asset (in which Santos has a 30% stake) along with other exploration assets, notes Morgan Stanley.

The broker views this as mostly catching up with changing market valuations from its earlier lower oil price assumptions.

No changes were announced to reserves or operating assumptions. The broker considers Santos the best stock in its large-cap energy coverage.

Morgan Stanley reiterates its Overweight rating with a target price of $5. Industry view: Cautious.

Target price is $5.00 Current Price is $5.34 Difference: minus $0.34 (current price is over target).
If STO meets the Morgan Stanley target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.15, suggesting upside of 12.6% (ex-dividends)

The company's fiscal year ends in December.

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: 0.6

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

Morgans rates STO as Add (1) -

Santos announced a write down of -US$490m-US$560m from its upcoming August 23 result. This is largely due to GNLG, with a small amount written off the Cooper and Amadeus Basin operations.

The company also reduced its internal oil price forecasts to -US$45/bbl from US$65/bbl for 2020, and -US$49/bbl from US$70/bbl for 2021.

Morgans retains Santos as its top large-cap energy pick.

The rating of Add is maintained. The target price decreased to $6.00 from $6.30.

Target price is $6.00 Current Price is $5.34 Difference: $0.66
If STO meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $6.15, suggesting upside of 12.6% (ex-dividends)

The company's fiscal year ends in December.

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: 0.6

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

Ord Minnett rates SZL as Buy (1) -

Sezzle’s recent capital raising has put it on a path of accelerated growth, comments Ord Minnett, by giving it immense fire power to invest in its balance sheet, sales and marketing efforts and further product development.

The broker reveals Sezzle remains its preferred exposure in the buy now pay later sector.

With about 1.5m active customers, the company is well placed to deliver material growth as it continues to expand in North American e-commerce.

Ord Minnett retains its Buy rating with the target price increasing to $9 from $5.95.

Target price is $9.00 Current Price is $7.29 Difference: $1.71
If SZL meets the Ord Minnett target it will return approximately 23% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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

Macquarie rates WGX as Outperform (1) -

Westgold Resources as issued FY21 production and cost guidance softer than the broker had anticipated, despite the expectation of progressively improving production and costs during the year. The broker has now become more conservative on the outlook.

Big Bell's ramp-up is key to winding back capex and improving margins. Outperform retained, target falls to $2.70 from $3.00.

Target price is $2.70 Current Price is $2.35 Difference: $0.35
If WGX meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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