Australian Broker Call

Macquarie rates AIZ as Underperform (5) -

Air New Zealand has higher fuel prices added to its cost challenges which Macquarie suspects will put pressure on the recovery.

The airline has made initial capacity adjustments, mostly to domestic and trans-Tasman routes for coming months, and will further review the schedule to consolidate demand into fewer frequencies.

Commentary explains earnings pressure in the second half will come from the spike in unhedged crack spreads and a lagged recovery through pricing.

The airline will prioritise flying on the most fuel-efficient aircraft as it works through its network optimisation, yet the broker suggests this will be a tough ask.

Macquarie now forecasts a pre-tax loss of -NZ$268m in FY26. Underperform. Target is reduced to NZ$0.42 from NZ$0.51.

Current Price is $0.36. Target price not assessed.

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

This company reports in NZD. 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 ANZ as Lighten (4) -

Ord Minnett has reviewed the banking sector outlook in the wake of the war in the Middle East and the subsequent boost to inflation expectations and bond yields. No changes are made to estimates at this stage given the large number of variables.

The outlook for banks remains positive amid strong lending volumes, rising interest rates and widening 3-5 year swap spreads. Still, the broker points out a prolonged energy shock could hurt global and domestic economic activity, and the longer war continues the greater risk of a material sell down in a sector that was overvalued prior to the war.

ANZ Bank is likely to be the main beneficiary among the banks from any increased activity as a result of clients reducing business risk exposure because of geopolitical uncertainty and volatility, Ord Minnett observes. Lighten rating and $33 target.

Target price is $33.00 Current Price is $36.89 Difference: minus $3.89 (current price is over target).
If ANZ meets the Ord Minnett target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $35.96, suggesting downside of -1.9% (ex-dividends)

Forecast for FY26:

Forecast for FY27:

Market Sentiment: -0.2

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

Ord Minnett rates CBA as Sell (5) -

Ord Minnett has reviewed the banking sector outlook in the wake of the war in the Middle East and the subsequent boost to inflation expectations and bond yields. No changes are made to estimates at this stage given the large number of variables.

The outlook for banks remains positive amid strong lending volumes, rising interest rates and widening 3-5 year swap spreads. Still, the broker points out a prolonged energy shock could hurt global and domestic economic activity, and the longer war continues the greater risk of a material sell down in a sector that was overvalued prior to the war.

CommBank, Ord Minnett suggests, has the most upside exposure to the benefits from increasing three-year and five-year yields and the tight bank bill swap rate.

An increase in wholesale funding costs could deliver competition for deposits that would, in turn, reduce the benefits to net interest margin from higher rates in FY27. Sell rating and $120 target.

Target price is $120.00 Current Price is $172.17 Difference: minus $52.17 (current price is over target).
If CBA meets the Ord Minnett target it will return approximately minus 30% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $127.58, suggesting downside of -26.4% (ex-dividends)

Forecast for FY26:

Forecast for FY27:

Market Sentiment: -1.0

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

Macquarie rates MPL as Neutral (3) -

Macquarie maintains a Neutral rating on Medibank Private, noting the first two months of the second half have been favourable for health insurers although remains cautious about annualising higher hospital indexation.

Margins are forecast to improve in the second half (a 50 basis points margin expansion equates to an EPS impact of 4%-5%) but may deteriorate again heading into FY27, the broker assesses from its proprietary index monitoring hospital claims. Target is $4.80.

Target price is $4.80 Current Price is $4.48 Difference: $0.32
If MPL meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $5.13, suggesting upside of 15.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.3

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

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

Macquarie Group is selling a portfolio of 7m late-generation smart meters. Morgan Stanley estimates a $700m gain on sale and continues to envisage support from structural growth options emerging from the energy transition and demand for energy from new AI-oriented data centre developments.

The company has recently upgraded its commodities outlook, being well-placed to benefit from the structural rising demand for gas as its commodities division ships gas on 69% of the major US interstate gas pipelines.

Morgan Stanley retains an Equal-weight rating with a $223 price target. Industry view: In-Line.

Target price is $223.00 Current Price is $205.00 Difference: $18
If MQG meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $229.30, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.4

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

Ord Minnett rates MYR as Hold (3) -

Myer's first-half result missed Ord Minnett's expectations, with weaker sales growth and margin pressure driven by mix and promotional activity.

Based on the result, and due to a new analyst's view, the 12-month price target is slashed to 32c from 67c and the Hold rating is retained.

Sales growth in the first seven weeks of the second half slowed to 1.7%, down from 2.1% in the first half. The broker explains this reflects a -0.4% decline in Apparel Brands sales, partially offset by 2.2% growth in Myer retail.

Commentary notes management is executing well and potential exists for margin recovery as clearance activity ends, though structural industry challenges and macro pressures persist.

Target price is $0.32 Current Price is $0.29 Difference: $0.03
If MYR meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Market Sentiment: 0.5

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

Ord Minnett rates NAB as Sell (5) -

Ord Minnett has reviewed the banking sector outlook in the wake of the war in the Middle East and the subsequent boost to inflation expectations and bond yields. No changes are made to estimates at this stage given the large number of variables.

The outlook for banks remains positive amid strong lending volumes, rising interest rates and widening 3-5 year swap spreads. Still, the broker points out a prolonged energy shock could hurt global and domestic economic activity, and the longer war continues the greater risk of a material sell down in a sector that was overvalued prior to the war.

National Australia Bank has the largest exposure to the agricultural sector, which is feeling the impact, although the loans are fully secured, which suggests write-offs and losses are unlikely. Sell rating and $37 target.

Target price is $37.00 Current Price is $42.70 Difference: minus $5.7 (current price is over target).
If NAB meets the Ord Minnett target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $41.55, suggesting downside of -2.4% (ex-dividends)

Forecast for FY26:

Forecast for FY27:

Market Sentiment: -0.5

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

Macquarie rates NHF as Underperform (5) -

Macquarie maintains an Underperform rating on nib Holdings, noting the first two months of the second half have been favourable for health insurers although remains cautious about annualising higher hospital indexation.

Margins are forecast to improve in the second half (a 50 basis points margin expansion equates to an EPS impact of 4%-5%) but may deteriorate again heading into FY27, the broker assesses from its proprietary index monitoring hospital claims. Target is $6.05.

Target price is $6.05 Current Price is $6.36 Difference: minus $0.31 (current price is over target).
If NHF meets the Macquarie target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.32, suggesting upside of 15.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.2

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

Morgans rates NWH as Accumulate (2) -

Morgans notes stocks within the Developers and Contractors sector have sold off sharply since the Iran conflict, reflecting concerns around a global slowdown and potential fuel-related disruptions.

Assuming conditions stabilise in the near term, the broker's preferred exposures are ALS Limited ((ALQ)), Imdex ((IMD)), Civmec ((CVL)), NRW Holdings and SRG Global ((SRG)).

For a more prolonged recovery, the analyst notes Ventia Services ((VNT)) stands out given its inflation-linked contracts and defensive non-mining exposure, despite a Hold rating.

For NRW Holdings, the Accumulate rating and $6.60 target are unchanged.

All ratings and targets under the broker's coverage of the sector are equally maintained.

Target price is $6.60 Current Price is $5.61 Difference: $0.99
If NWH meets the Morgans target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $6.76, suggesting upside of 21.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.9

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

Citi rates QAN as Buy (1) -

Qantas Airways' capacity is growing year-on-year, notes Citi, though early signs of fuel mitigation are emerging through domestic available seat kilometre (ASK) adjustments.

Fleet optimisation is underway, highlights the analyst, with older A330s and some narrow body flying reduced in favour of more efficient aircraft.

The broker highlights capacity reductions alongside pricing increases could support double-digit growth in revenue per available seat kilometre (RASK) in 4Q26.

Buy rating. Target of $12.10.

Target price is $12.10 Current Price is $8.70 Difference: $3.4
If QAN meets the Citi target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $12.12, suggesting upside of 42.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 1.0

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

Macquarie rates RHC as Outperform (1) -

Macquarie highlights Ramsay Health Care’s North Shore Private Hospital (in Sydney) acquisition adds a high-acuity, underutilised asset with clear scope to lift utilisation, case mix and margins.

The asset is seen as offering strong revenue growth potential, supported by operational improvements without significant capex.

Commentary points to synergies and efficiency gains built over time, noting the transaction has only a modest impact on leverage.

The analyst's earnings revisions reflect FX impacts rather than the acquisition, with ongoing upside from portfolio improvements and private health insurance dynamics.

Target price falls to $43.30 from $45.10 taking into account both EPS changes and a higher assumed risk-free interest rate. Outperform retained.

Target price is $43.30 Current Price is $40.21 Difference: $3.09
If RHC meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $40.37, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: -0.2

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

Morgan Stanley rates SGH as Initiation of coverage with Overweight (1) -

Morgan Stanley initiates coverage of SGH Ltd with an Overweight rating and $50 target, assessing the company is positioned to benefit from structural capital expenditure in Australia.

The company has leading platforms across mining equipment, equipment hire and construction materials and is not only exposed to these segments but also competitively advantaged within its markets.

Morgan Stanley believes the ability to translate stable market share into margin expansion and cash flow underpins a positive view and there is an attractive risk/reward with the stock trading on 15x FY27 PE for around 10% compound growth in EPS and a 6.4% free cash flow yield. Industry view is In-Line.

Target price is $50.00 Current Price is $41.67 Difference: $8.33
If SGH meets the Morgan Stanley target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $53.43, suggesting upside of 27.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.7

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

Morgan Stanley rates TUA as Overweight (1) -

Morgan Stanley raises its estimates following the strong first half result from Tuas and expects a positive reaction to organic growth will be somewhat offset by uncertainty about the M1 acquisition completion.

Revenue and gross profit beat the broker's estimates, having not previously incorporated the equity raising and increased share count in its numbers.

The broker suggests there is a range of incremental synergy opportunities if the M1 deal is completed, and the catalyst will be the timing and completion of it, following a lengthy process.

Overweight. Target is $10. Industry View: In-line.

Target price is $10.00 Current Price is $6.20 Difference: $3.8
If TUA meets the Morgan Stanley target it will return approximately 61% (excluding dividends, fees and charges).

The company's fiscal year ends in July.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 1.0

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

Ord Minnett rates WBC as Sell (5) -

Ord Minnett has reviewed the banking sector outlook in the wake of the war in the Middle East and the subsequent boost to inflation expectations and bond yields. No changes are made to estimates at this stage given the large number of variables.

The outlook for banks remains positive amid strong lending volumes, rising interest rates and widening 3-5 year swap spreads.

Still, the broker points out a prolonged energy shock could hurt global and domestic economic activity, and the longer war continues the greater risk of a material sell down in a sector that was overvalued prior to the war.

Ord Minnnett retains a Sell rating and $31 target for Westpac.

Target price is $31.00 Current Price is $40.38 Difference: minus $9.38 (current price is over target).
If WBC meets the Ord Minnett target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $35.50, suggesting downside of -12.1% (ex-dividends)

Forecast for FY26:

Forecast for FY27:

Market Sentiment: -0.7

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