Australian Broker Call

Macquarie rates AGY as Neutral (3) -

Argosy Minerals has been granted Environmental Impact Assessment approval for Rincon Stage 2, a key de-risking event, Macquarie believes, for the company to advance the planned 10ktpa lithium carbonate expansion project.

An update on stage 1 production remains critical, the broker suggests, with modification works underway. Updates on stage 2 capex and funding present key near-term catalysts.

Neutral and 16c target retained.

Target price is $0.16 Current Price is $0.14 Difference: $0.025
If AGY meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Bell Potter rates ALK as Buy (1) -

Third quarter gold production of 10.9koz for Alkane Resources fell short of Bell Potter's 14.9koz forecast as unfavourable ore type (now depleted) reduced gold recovery to 67.6%.

Management maintained FY24 guidance for 60koz to 65koz at a cost (AISC) of between $1,750/oz and $2,100/oz, though production
is expected to be at the lower end of guidance, and costs at the upper end.

The outcome for guidance is dependent upon ramp-up progress at the underground operations at Roswell, explain the analysts.

As Bell Potter raises its gold price forecasts across FY24-26 by 5%,14% and 11%, respectively, the target rises to $1.25 from $1.00. Buy.

Target price is $1.25 Current Price is $0.65 Difference: $0.605
If ALK meets the Bell Potter target it will return approximately 94% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

UBS rates ALX as Neutral (3) -

UBS found traffic and toll revenue weaker than expected across Atlas Arteria's portfolio in the first quarter, but does anticipate growth at a stronger rate through the remainder of the year as disruptions to APRR and Skyway resolve. 

Toll revenue increased was up 2.5% over the first quarter, following a 7% increase over the previous twelve months. By asset, toll revenue increased 9.9% year-on-year at ADELAC, 1.3% at Skyway, and 6.4% at Dulles Greenway.

The Neutral rating is retained and the target price decreases to $5.60 from $5.70.

This report was published on Friday, April 26.

Target price is $5.60 Current Price is $5.16 Difference: $0.44
If ALX meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $5.66, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Shaw and Partners rates BKT as Buy, High Risk (1) -

Commenting after 3Q results, Shaw and Partners explains ultimate funding for Black Rock Mining's Mahenge Gragphite Project in Tanzania will require both debt and equity.

A combination of lenders has provided key approvals for US$153m in term loans, notes the broker, while management is also advancing other financing options, including bringing in a partner at the project level.

The analysts highlight the company ended the 3Q with pro-forma cash of $12.9m.

The Buy, High Risk rating and target price of 46 cents are retained.

Target price is $0.46 Current Price is $0.07 Difference: $0.395
If BKT meets the Shaw and Partners target it will return approximately 608% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Shaw and Partners rates BMN as Buy, High Risk (1) -

Shaw and Partners gleaned from Bannerman Energy's 3Q activities report that management is advancing offtake agreements, paving the way for project financing solutions and the potential introduction of a strategic partner.

Management is also progressing front end engineering design (FEED) for its 95%-owned Etango project, which is expected to be completed in the current quarter, highlight the analysts.

The Buy, High Risk rating and $7.40 target are maintained.

Target price is $7.40 Current Price is $3.51 Difference: $3.89
If BMN meets the Shaw and Partners target it will return approximately 111% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Bell Potter rates BPT as Buy (1) -

Beach Energy's 3Q operational report revealed slight misses on production, sales and revenue against Bell Potter's forecasts.

Management lowered FY24 guidance to 18.0-18.5mmboe from 18.0-20.0mmboe on the year-to-date performance and weather risks in the Cooper Basin, explain the analysts. Variability of customer nominations in the Victorian Otway Basin also negatively impacted.

The company will update the market in mid-2024 on the outcomes of its strategic review, which Bell Potter expects will focus on key growth projects (Victorian Otways and the Perth Basin) and organisational simplification/agility.

The Buy rating and $1.80 target are retained.

Target price is $1.80 Current Price is $1.59 Difference: $0.21
If BPT meets the Bell Potter target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $1.94, suggesting upside of 20.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

UBS rates BPT as Buy (1) -

A softer than expected March quarter result from Beach Energy, says UBS, with production of 4.5m barrels of oil equivalent a miss to the broker's forecast. The company refined full year production guidance to 18-18.5m barrels of oil equivalent. 

UBS explains weather continued to impact at Cooper basin, while the Kupe South-9 well in New Zealand remained impacted by sub-surface issues.

Completion of the drilling program in the Perth basin adds discoveries at Redback Deep-1, Tarantula Deep-1 and Trigg Northwest-1, and the broker expects the market will be updated in June.

The Buy rating and target price of $1.85 are retained.

This report was published on Friday, April 26.

Target price is $1.85 Current Price is $1.59 Difference: $0.26
If BPT meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $1.94, suggesting upside of 20.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Macquarie rates CMM as Underperform (5) -

Capricorn Metals had previously released key metrics for a March Q impacted by adverse weather. Production guidance had been downgraded and costs are tracking above guidance, Macquarie notes.

Capricorn released updated reserves/resources for Mt Gibson along with an updated pre-feasibility study post the quarter. While reserves saw a boost, the broker has back its first gold assumption.

Macquarie is cautious on environmental approval timing and development start at Mt Gibson, which remain important. Underperform and $4.70 target retained.

Target price is $4.70 Current Price is $4.92 Difference: minus $0.22 (current price is over target).
If CMM meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

UBS rates COL as Neutral (3) -

Ahead of Coles Group's third quarter reporting, UBS remains marginally above consensus expectations forecasting $10.1bn in sales. The broker anticipates $9.1bn in total supermarket sales despite further declines in food inflation.

The forecast result, points out UBS, suggests 5.0% growth year-on-year. Having delivered 5.8% growth in the first eight weeks of the period, the broker points out this strength is derived from improved execution.

The Neutral rating is retained and the target price increases to $17.50 from $17.00.

This report was published on Friday, April 26.

Target price is $17.50 Current Price is $16.42 Difference: $1.08
If COL meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $17.37, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Shaw and Partners rates CY5 as Buy, High Risk (1) -

Drill results from Cygnus Metals' Pegasus discovery at Auclair highlight the project's potential to host a substantial resource, notes Shaw and Partners, commenting after the release of 1Q results.

The first drilling program at Auclair during the quarter identified three large spodumene bearing pegmatites, notes the broker. The width and grade of the result is considered comparable to major lithium deposits in James Bay and other globally significant lithium deposits.

Cygnus finished the quarter with $6.2m cash and cash equivalents, highlight the analysts.

The Buy, High Risk rating and target price of 50 cents are retained.

Target price is $0.50 Current Price is $0.10 Difference: $0.405
If CY5 meets the Shaw and Partners target it will return approximately 426% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Shaw and Partners rates EM2 as Buy, High Risk (1) -

Following Eagle Mountain Mining's 3Q results, Shaw and Partners highlights work has begun on a Scoping Study at the Oracle Ridge Copper Project in Arizona, which is expected to complete in the September quarter.

The company had pro-forma cash $4.5m at the end of March, highlight the analysts.

The broker reiterates that copper’s inclusion on the US Critical Materials list allows Eagle Mountain to pursue US Government funding under the "enormous" Inflation Reduction Act.

The Buy, High Risk rating and 30c target price retained.

Target price is $0.30 Current Price is $0.06 Difference: $0.24
If EM2 meets the Shaw and Partners target it will return approximately 400% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

UBS rates FMG as Sell (5) -

While Fortescue reported in line shipments for its March quarter, UBS notes it was unsurprising that the company revised its full year guidance to the lower end of its range. 

Following disruptions in the third quarter, the broker points out a strong June quarter result would be needed to meet full year guidance. The broker anticipates Fortescue delivering record June quarter shipments, but that this will still see the company miss guidance by -1.5m tonnes.

The Sell rating is retained and the target price decreases to $22.30 from $22.90.

This report was published on Friday, April 26.

Target price is $22.30 Current Price is $25.59 Difference: minus $3.29 (current price is over target).
If FMG meets the UBS target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.16, suggesting downside of -21.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: -0.7

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

Bell Potter rates IMM as Speculative Buy (1) -

Following initial data from Immutep's single-arm cohort of the Phase 2b trial in first-line head and neck squamous cell carcinoma, Bell Potter highlights a remarkable 27% of patients achieved an Overall Response Rate.

This outcome means the patient's tumour(s) shrank by at least -30%, explains the broker. For context, first-line pembro monotherapy is not approved for these patients as they historically only achieve an Overall Response Rate of around 5%, highlight the analysts.

Hence, patients are achieving a around five-fold higher rate of tumour response when Efti is added to pembro compared to historical results in a similar patient group, explains Bell Potter.

The Speculative Buy rating is maintained and the target rises to 80c from 65c.

Target price is $0.80 Current Price is $0.42 Difference: $0.38
If IMM meets the Bell Potter target it will return approximately 90% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

UBS rates KGN as Neutral (3) -

Particularly given the strong outlook commentary with the last result, UBS has found it difficult to see the positives in Kogan.com's third quarter update. Gross sales declined -10% year-on-year off easy comps and marketplace sales continued to deteriorate. 

Kogan First member growth has slowed sequentially, and a key question for UBS remains the sustainability and growth of the Kogan First business. While the company has indicated the business could run at breakeven, the broker notes it is difficult to gauge if customers value the proposition without disclosure of customer churn.

The Neutral rating is retained and the target price decreases to $6.00 from $7.00.

This report was published on Friday, April 26. 

Target price is $6.00 Current Price is $5.07 Difference: $0.93
If KGN meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $7.17, suggesting upside of 45.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Bell Potter rates LRS as Speculative Buy (1) -

A final investment decision (FID) for the Salinas Lithium Project in Brazil is expected by the end of 2024, enabling asset development over 2025 and first production in mid-2026, summarises Bell Potter.

Commenting after the 3Q activities report for Latin Resources, the broker expects a mineral resource estimate update in Q4 after 3Q drilling from 16 rigs on site identified a third major spodumene discovery.

The Speculative Buy rating is unchanged for Latin Resources and the target falls to 40c from 43c.

Target price is $0.40 Current Price is $0.21 Difference: $0.19
If LRS meets the Bell Potter target it will return approximately 90% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Bell Potter rates LYC as Buy (1) -

Third quarter production for Lynas Rare Earths beat management guidance and Bell Potter's forecast, and the average realised basket price of $43.8/kg far exceeded the broker's $32/kg estimate.

FY24 capex guidance remains at $600m despite an increase of capex requirements at Kalgoorlie to $800m from $730m, notes the broker.

The analysts feel the current NdPr price is close to the bottom of the cost curve, and the risks of stronger medium-term pricing outweigh near-term risks of weaker pricing.

The Buy rating is retained and the target price increases to $7.55 from $7.20.

Target price is $7.55 Current Price is $6.19 Difference: $1.36
If LYC meets the Bell Potter target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $6.35, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

UBS rates LYC as Buy (1) -

Lynas Rare Earths has exceeded its previously guided run-rates in the March quarter, reporting a successful ramp up at its LAMP processing facility following upgrade works in the previous quarter.

Headline revenue of $110m missed UBS's expectations, with the broker left disappointed by the decision to withhold sales in a low price environment. UBS anticipates Lynas Rare Earths can recover revenue if rare earth pricing continues to improve.

The Buy rating and target price of $6.90 are retained.

This report was published on Friday, April 26. 

Target price is $6.90 Current Price is $6.19 Difference: $0.71
If LYC meets the UBS target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $6.35, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Macquarie rates NEM as Outperform (1) -

Newmont's March Q gold production was 7% better than Macquarie expected and costs were a 7% beat. Net debt was softer than excepted, while free cash flow was impacted by a stamp duty payment relating to the recent Newcrest acquisition.

With a stronger second half to come, and confidence from management in the asset sale process, Macquarie suspects Newmont is edging closer to the $1bn buyback.

Newmont plans to host a capital markets day in the second half, when Macquarie expect to get even more colour on the medium-term outlook of the former Newcrest assets and potential for a ten-year outlook.

Target rises to $71 from $68, Outperform retained.

Target price is $71.00 Current Price is $65.70 Difference: $5.3
If NEM meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.6

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

Ord Minnett rates NEM as Accumulate (2) -

Newmont's 1Q results were in line with Ord Minnett's forecasts as higher prices and increased sales volumes more than offset higher unit costs. Management reiterated FY24 guidance.

While the US25cps dividend payable in June is down from the US40cps last year, it was in line with management's updated quarterly dividend policy.The broker forecasts US$1/share for 2024.

Recent gold prices suggest to the analyst a good price outcome for the sale of six smaller (generally higher-cost) mines management is targeting over the next few years to raise around US$2bn.

The Accumulate rating and $78 target are unchanged.

Target price is $78.00 Current Price is $65.70 Difference: $12.3
If NEM meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.6

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

Morgan Stanley rates NXL as Overweight (1) -

Based on the recent takeover bid from private equity for Nuix's cybersecurity peer Darktrace, the Nuix share price would be just over double last Friday's closing price, notes Morgan Stanley.

The broker's $3.50 bull case scenario for Nuix is bolstered as both Darktrace and Nuix operate in the broader digital investigation and cybersecurity ecosystem.

However, Darktrace has a higher forecast revenue compound annual growth rate (CAGR) over 2023-27 of 19% compared to 11% for Nuix, concede the analysts.

The Overweight rating and $2.50 target are maintained. Industry view is Attractive.

Target price is $2.50 Current Price is $2.11 Difference: $0.39
If NXL meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Bell Potter rates PBH as Buy (1) -

Bell Potter assesses a "strong" 3Q for PointsBet Holdings, with the total net win rising by 24% on the previous corresponding period to $70.6m, compared to the 14% increase in the 1H of FY24.

Management is expecting positive cash flow in Q4, after recording $2m in Q3, which is a first-time positive outcome.

FY24 guidance was reconfirmed, with the company tracking toward the lower end of the range for a normalised group earnings (EBITDA) loss of between -$9-14m.

The Buy rating is retained and the target falls to $1.02 from $1.08 after the broker allows for (the now known) second capital return of 39c (prior forecast 41.5c) and the recent increase in the number of shares on issue.

Target price is $1.02 Current Price is $0.84 Difference: $0.18
If PBH meets the Bell Potter target it will return approximately 21% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Bell Potter rates PPT as Buy (1) -

Following 3Q results, Bell Potter believes Perpetual is delivering on the integration of Pendal Group and should be well placed to grow as conditions improve.

Assets under management (AUM) in the Asset Management division increased by 6% to $227bn, aided by investment returns of $11.9bn and favourable currency movements of $6.8bn, explain the analysts.

Outflows of -$5.2bn were largely concentrated in a couple of strategies at J.O Hambro, notes Bell Potter.

As a result of higher asset values, the broker's EPS forecasts across FY24-26 increase by 1.3%, 2.1% and and 1.8%, respectively. The target price increases to $27.60 from $27.15.

The broker's Buy rating is retained with a strategic review (due by May 8) expected to close the valuation discount. A possible outcome is the sale or demerger of the Corporate Trust and Wealth Management businesses, explain the analysts.

Target price is $27.60 Current Price is $23.30 Difference: $4.3
If PPT meets the Bell Potter target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $26.83, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

UBS rates PPT as Neutral (3) -

Perpetual has reported net outflows of -$6.8bn in the March quarter, despite headline assets under management being supported by stronger equity markets during the period. The net result, notes UBS, was well below market expectations. 

The company has lifted expense growth guidance to 32-34%, from a previous 27-31%, on foreign exchange headwinds.

The company remains in the final stages of a strategic review, with a detailed updated expected in early May, and the broker sees room for a more constructive update post third quarter. 

The Neutral rating and target price of $25.00 are retained.

This report was published on Friday, April 26.

Target price is $25.00 Current Price is $23.30 Difference: $1.7
If PPT meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $26.83, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Citi rates RMD as Buy (1) -

Gross margin improvements were the headline surprise of ResMed's third quarter result says Citi, up 240 basis points year-on-year and well in excess of market expectations. The company reported revenue of $1.197bn for the period. 

The broker explains the margin result derives from both manufacturing efficiencies and reductions in freight costs, and ResMed anticipates further gross margin improvement in the coming year.

Issues at Philips, which Citi now anticipates will only re-enter the market from July 2026, continues to create a limited opportunity for ResMed, while the uptake of GLP-1s is expected to bring attention to healthy sleep and increase potential patients. 

The Buy rating is retained and the target price increases to $36.00 from $34.00.

Target price is $36.00 Current Price is $31.50 Difference: $4.5
If RMD meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $35.73, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.8

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

Macquarie rates RMD as Outperform (1) -

ResMed's March Q result was ahead of Macquarie and consensus, driven by better than expected revenue and operating leverage. Device revenue rose 5% in the quarter, up on a strong prior period.

The gross margin rose 250 basis points, driven by reduced freight and manufacturing cost improvements, with less material impacts from price and mix.

The broker's forecasts imply strong earnings growth for FY25, driven by solid revenue growth as well as incremental margin expansion. Macquarie continues to see ResMed as attractive at current levels, offering a favourable earnings growth outlook, balance sheet position, and valuation appeal.

Outperform retained, target rises to $34.85 from $34.30.

Target price is $34.85 Current Price is $31.50 Difference: $3.35
If RMD meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $35.73, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.8

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

Morgan Stanley rates RMD as Overweight (1) -

Morgan Stanley raises its target for ResMed to $33.70 from $31.80 following 3Q results. The Overweight rating is maintained. Industry View: In-Line.

Gross margin was the biggest surprise for the broker, due to better price, manufacturing efficiencies, stable component costs and lower freight, which combined to drive the 90bps beat versus the broker's forecast.

Last Friday, Morgan Stanley's initial commentary was summarised as follows:

ResMed's 3Q gross profit margin of 58.5% was a 160bps rise on the previous quarter, eclipsing forecasts by Morgan Stanley and consensus for rises of 90bps and 100bps, respectively, due to improvements in freight and manufacturing.

Due to strength in margins and a lower interest expense, explains the broker, diluted EPS rose by 27% to US$2.13 compared to forecast rises of 10% and 8% by consensus and the analyst, respectively.

The highlight, according to Morgan Stanley, was US device sales growth of 7.3% on the previous corresponding period, compared to estimates by consensus and the broker of 5% and 3%, respectively, indicating a limited negative impact from obesity drugs.

Management provided no FY24 guidance or outlook commentary.

Target price is $33.70 Current Price is $31.50 Difference: $2.2
If RMD meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $35.73, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.8

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

Morgans rates RMD as Add (1) -

ResMed's 3Q gross profit margin (GPM) and operating profit margin surprised Morgans to the upside, as inventory levels were reduced to the lowest level in years to better match demand, and manufacturing efficiencies increased.

Double-digit bottom line gains were achieved on the improving GPM, operating leverage, and strong cash flow, explains the broker. Masks grew above market on new patient set-ups and resupply, while devices met the broker's expectations despite softer ex-US sales.

Management flagged Red Sea headwinds, while investments are needed in marketing and demand generation.

The Add rating is maintained and the target price rises to $34.11 from $32.82 after Morgans raises FY24-26 earnings forecasts by around 3%.

Target price is $34.11 Current Price is $31.50 Difference: $2.61
If RMD meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $35.73, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.8

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

Ord Minnett rates RMD as Accumulate (2) -

Ord Minnett raises its target for ResMed to $40 from $39 following "strong" 3Q results and maintains an Accumulate rating.

The potential negative impact from weight loss drugs is not apparent, highlights the analyst. Management data gathered on a sample of patients prescribed these drugs, and who also have a sleep apnea diagnosis, backs the broker's assessment.

Sales increased by 3% on the prior quarter largely due to new patient demand, while gross margins expanded materially thanks to reduced freight as well as manufacturing cost improvements, explains the analyst.

The broker anticipates further margin expansion as the sales mix shifts to higher-margin masks and cost inefficiencies cease (related to the simultaneous production of the older AirSense 10 device).

Target price is $40.00 Current Price is $31.50 Difference: $8.5
If RMD meets the Ord Minnett target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $35.73, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.8

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

Bell Potter rates RRL as Buy (1) -

While 3Q operational results for Regis Resources fell below Bell Potter's expectations (due to rainfall events), $31m of cash was added to the balance sheet, which helps vindicate the recent closure of the hedge book.

The analysts feel the low end of FY24 production guidance and the high end of cost guidance are achievable. Management maintained FY24 guidance for production of 415-455koz at a cost (AISC) of between $1,995/oz and $2,315/oz.

Bell Potter's earnings forecasts across FY24-26 rise by 28%, 20% and 7%, respectively, on higher gold price forecasts. The Buy rating is maintained and the target rises to $2.80 from $2.60.

Target price is $2.80 Current Price is $2.21 Difference: $0.59
If RRL meets the Bell Potter target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $2.15, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

UBS rates RRL as Downgrade to Sell from Neutral (5) -

UBS anticipates tougher times are ahead for Regis Resources amid uncertainty around the McPhillamys development. 

The company reported March quarter gold production of 91,000 ounces at an all-in sustaining cost of $2,735 an ounce, with operations having been up and running since early April. 

In the absence of a clearer path ahead for McPhillamys, the broker assumes higher capital and operational expenditure for the project and has included this in its outlook. The broker does remain confident that value is to be gained from ongoing optimisation. 

The rating is downgraded to Sell from Neutral and the target price decreases to $1.80 from $2.15.

This report was published on Friday, April 26.

Target price is $1.80 Current Price is $2.21 Difference: minus $0.41 (current price is over target).
If RRL meets the UBS target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.15, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Citi rates RWC as Buy (1) -

Citi makes adjustments to its forecasts for Reliance Worldwide, accounting for the elimination of intercompany sales as manufacturing shifts to the US from Australia. 

The Buy rating and target price fo $5.45 are retained.

Target price is $5.45 Current Price is $5.11 Difference: $0.34
If RWC meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $5.43, suggesting upside of 4.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.8

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

Ord Minnett rates SBM as Hold (3) -

All key 3Q metrics for St. Barbara were pre-released apart from costs (AISC) which came in -48% worse than Ord Minnett was expecting.

The higher costs were due to higher C1 costs such as mining, processing, and general & administrative expenses, explain the analysts. Sustaining capital factors also increased including maintenance catch-up and fixed plant refurbishment.

Management revised F24 AISC guidance 14% higher.

Ord Minnett's Hold rating is unchanged and the target falls to 26c from 28c.

Target price is $0.26 Current Price is $0.28 Difference: minus $0.015 (current price is over target).
If SBM meets the Ord Minnett 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 FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Citi rates SDR as Buy (1) -

In a first look at today's 3Q results for SiteMinder, Citi notes underlying cash burn was as expected, and the company is on track to becoming free cash flow (FCF) positive. The Channels Plus product also continues to gain traction, highlights the broker.

More negatively, management attributed a miss for revenue growth (-3% lower than the broker's estimate) to the timing of the Easter break impacting upon the global distribution system (GDS) growth.

Moderating subscription average revenue per user (ARPU) growth also weighed on revenues because of lower price increases this year, noted the company. Citi sees potential for consensus revenue and EBITDA downgrades.

Operating cash flow was slightly better-than-expected due to lower administration/corporate costs, which was offset by higher capex related to higher product development spend, explains the broker.

Target $5.70. Buy.

Target price is $5.70 Current Price is $5.57 Difference: $0.13
If SDR meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $6.33, suggesting upside of 10.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Shaw and Partners rates TBN as Buy, High Risk (1) -

The way is paved for a further six wells and a 40TJ/d pilot plant, assesses Shaw and Partners, following the release of 90-day initial production flow tests at Shenandoah South 1H in the Beetaloo Basin.

The tests are a great result for Tamboran Resources, in the broker's view, and confirms the Mid-Velkerri shale intervals in the deep Beetaloo West are capable of flowing commercial quantities of gas.

The analysts feel the project has been significantly de-risked from a technical perspective.

While there is around $50m cash on hand (enough to fund the company's 38.75% share of the initial two wells in 2024), additional debt and equity will be needed to complete the drilling and pilot plant, explains the broker.

The Buy, High Risk rating and $0.37 target retained.

Target price is $0.37 Current Price is $0.17 Difference: $0.205
If TBN meets the Shaw and Partners target it will return approximately 124% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

UBS rates WOW as Neutral (3) -

Ahead of Woolworths Group's third quarter reporting, UBS remains above consensus expectations forecasting $16.6bn in sales.

While food inflation is forecast to have declined again in the third quarter, with UBS assuming inflation of 0.9%, the broker broker does not Australian food sales remain supported by elevated inflation levels. 

The broker anticipates online sales have risen 16.7% year-on-year to account for 12.0% of all sales. 

The Neutral rating is retained and the target price decreases to $33.50 from $36.00.

This report was published on Friday, April 26.

Target price is $33.50 Current Price is $31.59 Difference: $1.91
If WOW meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $33.62, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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