Australian Broker Call

Macquarie rates AVN as No Rating (-1) -

The company has announced a $215m equity raising to partly fund the acquisition of two centres in Castle Hill and Marsden Park.

Macquarie does not believe the deal is substantial for earnings in the near term but the transaction improves exposure to the Sydney market.

The broker is currently on research restrictions and cannot provide a rating or target at this stage.

Current Price is $2.52. Target price not assessed.

Current consensus price target is $2.50, suggesting upside of 4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.5

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

UBS rates DMP as Buy (1) -

UBS estimates two thirds of incremental store growth will occur as a split of stores. This has raised concern among investors given, on face value, co-locating stores creates a drag on overall sales.

From its analysis, the broker concludes that, while splits are riskier than greenfield expansion, the impact on the company is likely to be modest and attractive to franchisees.

On the whole, splits are beneficial to Domino's Pizza as it charges a 7% royalty and 3% margin on food costs. This will create an incremental drag on FY18 via cannibalisation but the broker believes this is more than factored in.

Buy rating retained, with Europe considered the main opportunity. Target is $77.

Target price is $77.00 Current Price is $58.38 Difference: $18.62
If DMP meets the UBS target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $67.60, suggesting upside of 16.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.5

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

Credit Suisse rates MYR as Upgrade to Neutral from Underperform (3) -

The share price has declined significantly over the last month and Credit Suisse upgrades to Neutral from Underperform. The broker believes, in the near term, the focus is likely to be on the downside risks from weak consumer conditions and the impact of Amazon.

 A more challenging structural outlook has the potential to harbour speculation regarding consolidation, the broker suspects, and potential synergies along with avoiding capital expenditure are likely to be a material component for any entity intent on acquisition. Target is $0.82.

Target price is $0.82 Current Price is $0.85 Difference: minus $0.025 (current price is over target).
If MYR meets the Credit Suisse target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.00, suggesting upside of 15.5% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

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

The ACCC has started court proceedings against the company, alleging it contravened the consumer law.

The company removed certain eye procedures as of August 2015 from the MediGap scheme, a scheme in which doctors and other in-hospital medical providers opt to receive a higher level of reimbursement subject to there being no "out-of-pocket" expense.

The ACCC alleges the company failed to notify members in advance of the removal of this service. The company rejects the position being taken by the ACCC.

Macquarie does not expect the outcome to have a material impact on growth or profitability. Rating is upgraded to Outperform from Neutral following the recent sell down of the stock. Target is raised to $5.60 from $5.50.

Target price is $5.60 Current Price is $5.14 Difference: $0.46
If NHF meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $5.34, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

Ord Minnett rates NHF as Accumulate (2) -

The ACCC has initiated legal proceedings over claims related to the health insurers actions in 2015, alleging some members were misled regarding changes to the company's MediGap scheme. Ord Minnett does not expect the proceedings to have a material impact on earnings.

The ACCC alleges that the decision to remove certain eye procedures from the MediGap scheme was not telegraphed in advance to members and that its failure to provide advance notice was unconscionable. Ord Minnett retains an Accumulate recommendation and $5.90 target.

Target price is $5.90 Current Price is $5.14 Difference: $0.76
If NHF meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $5.34, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

Morgans rates NXT as Add (1) -

The company has completed its third round of senior unsecured bonds, raising $300m at 6.625%. The funds will be used to extinguish $160m in existing notes, leaving additional capacity to fund growth.

Morgans takes the opportunity to roll through the larger debt position and lower its weighted average cost of capital estimate. Add rating retained. Target rises to $5.01 from $4.25.

Target price is $5.01 Current Price is $4.44 Difference: $0.57
If NXT meets the Morgans target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $4.68, suggesting upside of 4.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Morgan Stanley rates PSQ as Overweight (1) -

The company has downgraded guidance and pointed to lower growth in FY18. While Morgan Stanley observes the market has been forgiving, given strong economics and the long-term growth profile, it envisages less upside for a re-rating.

FY17 forecasts for earnings per share are reduced by -12% and FY18-19 by -20-22%.

The Overweight rating and In-Line industry view are maintained and the target is reduced to $2.25 from $2.60.

Target price is $2.25 Current Price is $1.91 Difference: $0.34
If PSQ 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 FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

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

Australian port container volumes were up 1.5% in the March quarter, Morgan Stanley observes.

Fremantle port experienced a -1.8% contraction but the broker anticipates growth to normalise into next year.

Equal-weight rating, Attractive industry view and $2.20 target retained.

Target price is $2.20 Current Price is $2.64 Difference: minus $0.44 (current price is over target).
If QUB meets the Morgan Stanley target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.68, suggesting upside of 1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.4

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

Citi rates SEK as Downgrade to Sell from Neutral (5) -

Citi has downgraded to Sell as it takes the view the growth outlook (single digit percentages only) doesn't sit well with the premium valuation for the shares. The analysts also believe that a downturn in housing construction is going to affect the jobs market in Australia.

Despite efforts to diversify, Seek still is very much reliant on jobs and job applications in Australia, point out Citi analysts. According to their research, some 22% of job ads in Australia are housing related. Target declines to $15.30 from $16.20.

Target price is $15.30 Current Price is $17.17 Difference: minus $1.87 (current price is over target).
If SEK meets the Citi target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $15.92, suggesting downside of -6.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Citi rates SFR as Neutral (3) -

Citi analysts report the released updated mine plan and reserve for DeGrussa, including the Monty satellite orebody, looks much as expected. Hence the broker's view remains unchanged. Neutral. Price target has lifted to $6.80 from $6.60.

The analysts remain of the view this company is starting to run low on copper and, short of making a discovery or returning cash to shareholders, Sandfire will
have to invest in buying or building a new mine, state the analysts.

Target price is $6.80 Current Price is $6.16 Difference: $0.64
If SFR meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $6.86, suggesting upside of 11.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.4

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

Credit Suisse rates SFR as Underperform (5) -

The company has published its reserve and resource statement for 2016 inclusive of Monty along with a revised life-of-mine plan. The outcome is in line with Credit Suisse's assumptions and does not alter valuation or investment view.

Credit Suisse retains an Underperform rating and $4.65 target.

Target price is $4.65 Current Price is $6.16 Difference: minus $1.51 (current price is over target).
If SFR meets the Credit Suisse target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.86, suggesting upside of 11.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.4

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

Credit Suisse rates SUL as Upgrade to Neutral from Underperform (3) -

Credit Suisse massages its forecast to assume pre-emptive action is taken to improve price positioning ahead of  Amazon entering the automotive retailing marketplace. The broker has set a long-term margin for operating earnings of 8%, compared with the 12% outlined in the company's long-term targets.

The broker upgrades to Neutral from Underperform following a significant decline in the share price. Target is reduced to $7.56 from $8.68. The changes stem from a reduction in store growth and margin expectations for the automotive division.

Target price is $7.56 Current Price is $7.60 Difference: minus $0.04 (current price is over target).
If SUL meets the Credit Suisse target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $10.44, suggesting upside of 35.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.6

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

Morgans rates SYD as Hold (3) -

The AGM has reaffirmed 2017 distribution guidance and confidence in the outlook. Morgans forecasts the business could grow distributions by around 8% per annum over 2017-19. There is also upside to this estimate if international traffic growth runs stronger than forecast.

Furthermore, the broker's view on the long-term impact of the Western Sydney Airport has turned from negative to cautiously optimistic. Sydney Airport stands to benefit from domestic airlines utilising the second airport, and thereby freeing up capacity at Kingsford Smith to sell into the more valuable international market.

Hold rating retained. Target rises to $7.18 from $6.77.

Target price is $7.18 Current Price is $7.46 Difference: minus $0.28 (current price is over target).
If SYD 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 $6.83, suggesting downside of -8.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Morgans rates TGA as Hold (3) -

FY17 net profit was in line with recent guidance. While no formal guidance was provided for FY18 the company stated the outlook is likely to be subdued.

Radio Rentals faces several earnings headwinds and Morgans expects earnings from that division to decline by -20%. This should largely be offset by other business, the broker believes.

The broker suspects the potential for corporate interest in the stock is increasing, given the valuation, but this is a fairly low probability while the company is defending a class action. Hold rating retained. Target is reduced to $1.34 from $1.75.

Target price is $1.34 Current Price is $1.20 Difference: $0.14
If TGA meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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