Australian Broker Call

Ord Minnett rates ABG as Buy (1) -

High population growth remains the status quo, suggests Ord Minnett, following the Federal government's migration review, which will continue to buoy rents. Accordingly, fair value estimates and ratings are maintained for REITs under the broker's research coverage.

As an example, the Buy rating and $1.75 target are maintained for Abacus Group.

Ord Minnett explains population drives retail and residential demand, and indirectly influences industrial, office and self storage demand via economic activity.

Target price is $1.75 Current Price is $1.12 Difference: $0.635
If ABG meets the Ord Minnett target it will return approximately 57% (excluding dividends, fees and charges).

Current consensus price target is $1.52, suggesting upside of 35.4% (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

Bell Potter rates AGE as Buy (1) -

Alligator Energy has released an updated mineral resource estimate for the Blackbush deposit within the Samphire uranium project. This included a 21% increase in indicated resource, and a -5% decrease in indicated resource grade.

The company is looking to expand the resource over the coming calendar year, having announced an exploration plan that will see it target extensions to the east, south and north of the Blackbush deposit, estimating 58% of paleochannel systems are unexplored.

The Buy rating is retained and the target price increases to 10 cents from 8 cents.

Target price is $0.10 Current Price is $0.05 Difference: $0.046
If AGE meets the Bell Potter target it will return approximately 85% (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 AUT as Buy, High Risk (1) -

New results demonstrate exceptional high grade copper and gold intersections at the Green Bay copper-gold project in Newfoundland, according to Shaw and Partners, and point to rapid resource growth.

FireFly Metals (formerly known as AuTECO Minerals) will be newsflow rich as assays are returned and results released over coming
months, notes the broker.

Following a recent share consolidation, Shaw's revised target price is set at $1.20. The Buy, High Risk rating is unchanged.

Target price is $1.20 Current Price is $0.53 Difference: $0.67
If AUT meets the Shaw and Partners target it will return approximately 126% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Morgans rates AZJ as Hold (3) -

While expecting strong earnings (EBITDA) growth in FY24 (and slightly less for FY25-26), Morgans highlights an under-appreciated step-up in debt service for Aurizon Holdings.

Back in August, management guided to around $300m in net interest expense (which is also the consensus forecast), but the broker sees a range of $330-340m across FY24-26. It is noted the difference accounts for around 5% of profit.

Assuming declining growth capex requirements within the Bulk and Containerised Freight divisions from FY25, the analyst expects an increase in the dividend payout ratio to around 85% from 75%.

The target falls to $3.74 from $3.77. Hold.

Target price is $3.74 Current Price is $3.70 Difference: $0.04
If AZJ meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.92, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

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

Macquarie rates CGC as Downgrade to Neutral from Outperform (3) -

Macquarie believes the likelihood of the Paine Schwartz Partners transaction closing is high, after the independent expert concluded the Scheme Implementation Agreement is fair and reasonable.

A valuation range of $2.62-$3.28 per share for Costa Group was set by the expert, with the Scheme consideration of $3.20 falling within the that valuation range.

Costa Group confirmed the scheme booklet for the acquisition of all issued shares in Costa not already owned at $3.20 cash per share has been registered with ASIC.

The broker downgrades its rating to Neutral from Outperform and moves its target price to $3.20 (to align with the bid) from $3.19.

Based on trading since August and the outlook for the remainder of the year, notes the analyst, management expects 2023 EBITDA-S below 2022.

Target price is $3.20 Current Price is $2.96 Difference: $0.24
If CGC meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.11, suggesting upside of 2.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Ord Minnett rates CGC as Hold (3) -

Ord Minnett recommends Costa Group shareholders vote in favour of the proposed takeover by Paine Scwartz Partners. It's felt the $3.20 offer is relatively attractive on valuation grounds.

The broker feels the transaction is very likely to proceed, with unanimous director support and little chance of a higher bid.

The analyst lowers the FY23 underlying earnings (EBITDA) forecast by -13% as conditions have deteriorated, and due to management's latest outlook for the remainder of the year.

The Hold rating and $3.20 target are retained.

Target price is $3.20 Current Price is $2.96 Difference: $0.24
If CGC meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.11, suggesting upside of 2.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Bell Potter rates ERD as Downgrade to Hold from Buy (3) -

Having recently updated on Eroad following the company's first half results release last month, Bell Potter makes no changes to its forecasts. However, with the stock now trading modestly above the broker's target price, it downgrades its rating from Hold from Buy.

The broker retains it's full year forecast for revenue of NZ$179.8m, and earnings of NZ$4.4m. While this is towards the upper end of guidance, Bell Potter expects there may remain some conservatism in both its forecast and company guidance.

Target price of 95 cents is retained.

Target price is $0.95 Current Price is $0.98 Difference: minus $0.025 (current price is over target).
If ERD meets the Bell Potter target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. 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 EVN as Buy (1) -

Evolution Mining has acquired 80% of the Northparkes copper-gold mine from CMOC Group, with the purchase price comprised of a US$400m upfront payment and up to US$75m in contingent payments based on copper pricing.

UBS values Evolution Mining's stake of mine's future operations at around $570m, or -7% below the purchase price, but notes plenty of optionality and opportunity to optimise cost, recovery and schedule.

The Buy rating is retained and the target price decreases to $4.05 from $4.15.

Target price is $4.05 Current Price is $3.60 Difference: $0.45
If EVN meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $3.78, suggesting upside of 4.6% (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 FCL as Outperform (1) -

Macquarie considers the performance of US-based Guidewire is the best guide to the outlook for Fineos Corp.

Happily, 1Q results for Guidewire revealed annual recurring revenue (ARR) above the high-end of management's outlook, while margins significantly beat expectations, observes the broker.

The Outperform rating and $2.47 target are maintained.

Target price is $2.47 Current Price is $1.60 Difference: $0.87
If FCL meets the Macquarie target it will return approximately 54% (excluding dividends, fees and charges).

Current consensus price target is $2.96, suggesting upside of 89.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.9

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

Bell Potter rates IPG as Buy (1) -

IPD Group has announced its impending acquisition of CMI Operations, a leading electrical cable and industrial plug supplier, for an upfront cost of $92.1m and a further contingent consideration of up to $8.9m.

The company undertook a $65m equity raise to fund the purchase, and secured new $40m debt financing arrangements. Bell Potter expects a four month contribution from the acquisition in FY24, but assumes it to be 24% accretive to FY25.

The Buy rating is retained and the target price increases to $5.75 from $5.50.

Target price is $5.75 Current Price is $4.63 Difference: $1.12
If IPG meets the Bell Potter target it will return approximately 24% (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 MAF as Buy (1) -

It is likely that the impact on MA Financial from the Significant Investor Visa (SIV) will be less negative than initially feared, says UBS following the release of the Federal government's migration strategy.

It was noted the SIV has been the relative strong performer within the Business Innovation and Improvement program, and as such it will be used to design a visa product more sharply targeted at migrants with the ability to drive innovative investment.

It is UBS's view that MA Financial is the best placed investment manager to evolve and grow with this program. The Buy rating and target price of $6.10 are retained.

Target price is $6.10 Current Price is $5.64 Difference: $0.46
If MAF meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $6.62, suggesting upside of 15.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Macquarie rates MMS as Outperform (1) -

Despite the loss of an exclusive contract with the South Australian government for salary packaging and novated leasing provision, Macquarie believes conditions remain attractive for McMillan Shakespeare.

The broker highlights increased vehicle supply and policy driven demand, and retains an Outperform rating.

The lost contract represented 3.4% of the the company's normalised revenue in FY23, notes the analyst.

Macquarie lowers its FY25 and FY26 EPS  forecasts by -7.9% and -7.8%, respectively, to reflect the operating deleverage from an around -3.4% cut to revenue forecasts and general inflationary pressure.

The target falls to 19.02 from $23.94.

Target price is $19.02 Current Price is $16.42 Difference: $2.6
If MMS meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $20.16, suggesting upside of 22.7% (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

Morgan Stanley rates MMS as Overweight (1) -

McMillan Shakespeare has lost the sole South Australian government contract to Smartgroup Corp. The latter will now be the exclusive salary packaging and novated leasing services provider for five years.

The broker makes no changes to FY24 forecasts for McMillan Shakespeare, but anticipates a negative impact on group profit (NPATA) of around -10% in FY25.

Target $20.60. Overweight. Industry view: In-line.

Target price is $20.60 Current Price is $16.42 Difference: $4.18
If MMS meets the Morgan Stanley target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $20.16, suggesting upside of 22.7% (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

Morgan Stanley rates MQG as Overweight (1) -

The US gas price dispersion index is tracking moderately lower for the December 2023 and March 2024 quarters, observes Morgan Stanley.

While the broker anticipates 2H commodities income for Macquarie Group will fall by -50% year-on-year, income from this source is expected to stabilise with a 1% year-on-year rise in FY25.

The analysts also point out EU gas price volatility is substantially down from a record FY23, yet believe 2H commodities income will be better versus a subdued 1H.

The $202 target and Overweight rating are maintained. Industry view: In-Line.

Target price is $202.00 Current Price is $169.11 Difference: $32.89
If MQG meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $180.16, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in March.

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 NEM as Neutral (3) -

Despite wanting to get positive on Newmont, UBS says it remains difficult ahead of a fourth quarter report and announcements on combined Newmont/Newcrest production guidance and tech studies on key assets, and a more conservative view on assets.

Having reviewed the company's Boddington and Tanami mines, the broker believes consensus estimates appear too high for the former for FY24 and FY25, as do estimates for the Newcrest assets.

The broker lowers its 2024-2025 production estimates by -20-25% to 633,000 ounces. The Neutral rating is retained and the target price decreases to $60.00.

Target price is $60.00 Current Price is $59.00 Difference: $1
If NEM meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $70.33, suggesting upside of 19.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Bell Potter rates PTM as Sell (5) -

Platinum Asset Management has appointed Jeff Peters its new CEO. According to Bell Potter, the appointment of Peters, who brings with him a strong asset management industry background, signals a new dawn for the company.

He takes on the role amid the ongoing challenges of declining funds under management and revenues, alongside an increasing cost base, says Bell Potter.

The broker believes the challenge with be to diversify revenue streams, improve client outcomes, and stabilise the revenue base, while controlling costs.

The Sell rating and target price of 84 cents are retained.

Target price is $0.84 Current Price is $1.30 Difference: minus $0.455 (current price is over target).
If PTM meets the Bell Potter target it will return approximately minus 35% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.28, suggesting downside of -3.2% (ex-dividends)

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

Morgan Stanley rates QBE as Overweight (1) -

For QBE Insurance to re-rate higher, Morgan Stanley believes management needs to deliver stable earnings growth and remediate the North America book.

Lower inflation and a reduction in catastrophe exposure should assist a re-rate, suggests the broker, despite slowing commercial pricing, lower yields and lower gross written premium growth.

The Overweight rating is unchanged and the target falls to $18.20 from $18.30. Industry View: In-Line.

Target price is $18.20 Current Price is $14.49 Difference: $3.71
If QBE meets the Morgan Stanley target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $17.29, suggesting upside of 19.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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) -

Regis Resources has announced the closure of its gold hedge book, following the buyback of 63,000 forward-sold ounces at a cost of $98m. With a final hedge book delivery made in the December quarter, Bell Potter notes the company is now fully unhedged.

As per the broker, this leaves all Regis Resources' sales exposed to spot pricing. If gold pricing remains above the broker's estimated net close price of $3,120 per ounce through FY24, Regis Resources should come out ahead of its $98m outlay.

Bell Potter expects operating margin expansion will appeal to investors "seeking unhedged gold exposure in a rising gold price environment".

The Buy rating is retained and the target price increases to $2.37 from $2.31.

Target price is $2.37 Current Price is $1.90 Difference: $0.475
If RRL meets the Bell Potter target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $2.02, suggesting upside of 4.8% (ex-dividends)

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

Citi rates SIG as Neutral (3) -

Sigma Healthcare has entered into a merger agreement with the Chemist Warehouse Group, making the latter a publicly traded company,and will raise $400m in equity to fund the working capital required to deliver on Chemist Warehouse's pharmacy contract.

Sigma Healthcare will pay $700m in cash and assume $300m in debt. Alongside issuing 9.9bn shares, Citi estimates total consideration at $8.5bn, with Sigma Healthcare's shareholders to own 14.25% of the merged company, and Chemist Warehouse shareholders 85.75%.

The Neutral rating and target price of 80 cents are retained.

Target price is $0.80 Current Price is $0.77 Difference: $0.035
If SIG meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $0.82, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in January.

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 SIQ as Buy (1) -

Following Smartgroup Corp's substantial contract win with the South Australian government, which Citi estimates to be worth $12m to revenue and $6m to earnings, the broker feels momentum for the company continues to move in the right direction.

Smartgroup Corp has now provided full year guidance 3% ahead of consensus expectations. Citi notes comments around investing for future demand signals the company is anticipating sizeable novated volumes growth.

The Buy rating is retained and the target price increases to $10.20 from $9.70.

Target price is $10.20 Current Price is $8.95 Difference: $1.25
If SIQ meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $9.49, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Macquarie rates SIQ as Outperform (1) -

The South Australian government has appointed Smartgroup Corp as its exclusive salary packaging and novated leasing administrator.

Macquarie expects earnings growth due to the contract win and a positive trading update by management, along with increasing novated lease electric vehicle volumes.

The broker's profit (NPATA) forecast of $63m and revenue forecast of $249m are in line with company guidance.

Macquarie's target rises to $9.48 from $9.25 and the Outperform rating is maintained.

Target price is $9.48 Current Price is $8.95 Difference: $0.53
If SIQ meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $9.49, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

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

Smartgroup Corp has won the sole South Australian government contract from McMillan Shakespeare, and will now be the exclusive salary packaging and novated leasing services provider for five years.

Management also provided 2023 guidance for revenue and profit (NPATA) of $249m and $63m, respectively. Revenue was a 4% beat against the broker's forecast while profit was in line.

Equal-weight rating. Target is $8.30. Industry view: In-line.

Target price is $8.30 Current Price is $8.95 Difference: minus $0.65 (current price is over target).
If SIQ meets the Morgan Stanley target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.49, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

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

Morgans raises its FY25 EPS forecast for Smartgroup Corp by 7.4% following a large contract win with the South Australian government. The target rises to $9.70 from $9.00, while the rating is downgraded to Hold from Add on valuation.

The company has been appointed as the exclusive administrator of salary packaging services and novated leasing services under an initial five-year agreement.

Based upon management's trading update, the broker notes revenue has benefited from strong industry deliveries. The company is guiding to FY23 revenue and profit (NPATA) of around $249m and $63m, respectively.

The company noted electric vehicle orders have increased by 60% from the 1H of FY23 and now comprise 40% of total orders.

Target price is $9.70 Current Price is $8.95 Difference: $0.75
If SIQ meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $9.49, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Ord Minnett rates SIQ as Buy (1) -

Ord Minnett notes a significant achievement by Smartgroup Corp in winning the South Australian government contract for salary
packaging and novated leasing from McMillan Shakespeare.

Management now expects $63m of profit (NPATA) in 2023, a 5% beat compared to the broker's forecast. Electric vehicle (EV) penetration rates continue to rise and new car deliveries have likely increased, note the analysts.

EV penetration is now more than 40% of all orders for the five-months to November 30 and remains a key driver of sustained organic growth, in Ord Minnett's view.

The target rises to $9.75 from $8.80. Buy.

Target price is $9.75 Current Price is $8.95 Difference: $0.8
If SIQ meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $9.49, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Morgans rates SLC as Add (1) -

As interest rates potentially peak in mid-2024, Morgans believes investors may move out of defensives and into growth stocks, and the Telco sector could become a funding source for other more profitable investments.

From stocks under coverage, the broker sees the most upside potential for Superloop given its impressive growth trajectory, under-geared balance sheet and substantial operating leverage.

The analysts make no changes to forecasts and the Add rating and $1.00 target are unchanged.

The broker recently moved to a mildly Underweight view on the Telecommunications sector.

Target price is $1.00 Current Price is $0.67 Difference: $0.33
If SLC meets the Morgans target it will return approximately 49% (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

Ord Minnett rates STO as Accumulate (2) -

Ord Minnett sees considerable merit in the potential merger of Santos and Woodside Energy. It's felt Santos CEO Kevin Gallagher will extract a premium if the deal is to proceed or other interested parties in Santos may come forward.

The broker has long thought a merger between the two companies makes sense, as a larger scale would ensure ongoing relevance, and cost synergies may underpin greater opportunities in liquefied natural gas.

The Accumulate rating and $12.30 target are unchanged.

Target price is $12.30 Current Price is $7.29 Difference: $5.01
If STO meets the Ord Minnett target it will return approximately 69% (excluding dividends, fees and charges).

Current consensus price target is $9.17, suggesting upside of 25.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

UBS rates SUN as Buy (1) -

Providing detail on the impacts of the new AASB17 accounting standard applied from the beginning of the current financial year, Suncorp Group notes an immaterial raw financial impact to the company.

UBS points out primary concerns for investors remain around DAC treatment, onerous contracts, treatment of claims discounting and timing of DAC and profit release, the net financial impact of which was a $122m increase to opening net assets and a -$83m impact on net profit.

The Buy rating and target price of $15.00 are retained.

Target price is $15.00 Current Price is $13.89 Difference: $1.11
If SUN meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $15.23, suggesting upside of 9.4% (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

Morgans rates TLS as Hold (3) -

As interest rates potentially peak in mid-2024, Morgans believes investors may move out of defensives and into growth stocks, and the Telco sector could become a funding source for other more profitable investments.

Should Telstra Group revert to its long-term average price/earnings ratio, the broker explains either earnings need to lift by circa 40% or the share price needs to decline by around -30%.

The analysts make a higher FY24 capex assumption for Telstra following the recent mobile spectrum auction, and Morgans' target price falls to $4.00 from $4.20. Hold rating retained.

The broker recently moved to a mildly Underweight view on the telecommunications sector.

Target price is $4.00 Current Price is $3.83 Difference: $0.17
If TLS meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.37, suggesting upside of 13.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Morgans rates TPG as Add (1) -

As interest rates potentially peak in mid-2024, Morgans believes investors may move out of defensives and into growth stocks, and the Telco sector could become a funding source for other more profitable investments.

The broker believes TPG Telecom will benefit from ongoing rational mobile pricing, an improving return on invested capital and increased market share.

The analysts make a higher FY24 capex assumption for the group following the recent mobile spectrum auction, and increase the assumed risk-free rate to 4.2% from 3.6%. Morgans target price falls to $5.50 from $6.00. Add rating retained.

The broker recently moved to a mildly Underweight view on the telecommunications sector.

Target price is $5.50 Current Price is $4.80 Difference: $0.7
If TPG meets the Morgans target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $5.61, suggesting upside of 16.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Morgan Stanley rates TPW as Overweight (1) -

Morgan Stanley believes Temple & Webster is on track to reach its targeted $1bn in revenue by FY26-28, after a further review of the "strong" AGM trading update back in late-November.

Scale benefits should lead to margin improvement over time, in the broker's view, and the target is increased to $9.25 from $7.00, while the Overweight rating is maintained.

The analysts now expect $1bn in revenue by FY28 (previously FY29), up from around $400m in FY23. Increased market share is anticipated via consumers trading down and higher reinvestment, which includes a greater marketing spend.

Target price is $9.25 Current Price is $8.39 Difference: $0.86
If TPW meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $7.66, suggesting downside of -12.4% (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 VUK as Upgrade to Outperform from Neutral (1) -

Macquarie upgrades its rating for Virgin Money UK to Outperform from Neutral on valuation following recent FY23 results showing stable margins and a strong capital position. More negatively, the broker observed subdued loan growth and elevated cost growth.

FY24 guidance was conservative, in the analyst's opinion. Management expects a net interest margin (NIM) of 1.90-1.95% and common equity Tier 1 (CET1) within the targeted 13.0-13.5% range.

The broker's target rises to $3.45 from $3.20 with increased forecasts for revenue and buy-backs partially offset by increased costs.

Target price is $3.45 Current Price is $2.94 Difference: $0.51
If VUK meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $3.73, suggesting upside of 23.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

This company reports in GBP. 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 WDS as Accumulate (2) -

Ord Minnett sees considerable merit in the potential merger of Santos and Woodside Energy. It's felt Santos CEO Kevin Gallagher will extract a premium if the deal is to proceed or other interested parties in Santos may come forward.

The broker has long thought a merger between the two companies makes sense, as a larger scale would ensure ongoing relevance, and cost synergies may underpin greater opportunities in liquefied natural gas.

The broker retains an Accumulate rating and $45 target.

Target price is $45.00 Current Price is $30.26 Difference: $14.74
If WDS meets the Ord Minnett target it will return approximately 49% (excluding dividends, fees and charges).

Current consensus price target is $34.40, suggesting upside of 13.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.1

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

Morgans rates WTC as Initiation of coverage with Hold (3) -

Global software company WiseTech Global should see accelerated adoption and expanding functionality over the medium-term for its CargoWise platform, according to Morgans.

The broker initiates coverage with a Hold rating, given a current full valuation, and target price of $73.20.

CargoWise is a single platform that centralises and streamlines data across various logistics processes and operations such as international freight forwarding, customs/compliance and warehousing.

Increasing adoption by large global freight forwarders indicates to Morgans the benefits of the platform, while ongoing product development is expanding the total addressable market.

Target price is $73.20 Current Price is $68.00 Difference: $5.2
If WTC meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $76.39, suggesting upside of 9.4% (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