Australian Broker Call

Morgans rates AGL as Add (1) -

Morgans assesses electricity markets remain extremely tight and keeps AGL Energy as its key pick among electricity stocks under coverage. A sustained medium-term earnings recovery is expected.

The broker lowers its forecasts for FY23, which results in its target for AGL Energy falling by -3% to $9.67, while the Add rating is retained.

The Bayswater and Loy Yang plants are well supplied with low-cost coal, notes the analyst, and are expected to underpin margin expansion.

Target price is $9.67 Current Price is $8.36 Difference: $1.31
If AGL meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $9.47, suggesting upside of 14.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Credit Suisse rates AMC as Neutral (3) -

Amcor's US dollar share price has rallied 15% since March, and its AU dollar share price subsequently 25%, driven by a price-earnings ratio re-rating. Noting valuation price is now above sector peers, Credit Suisse suggests the stock is fully valued.

The company has renewed its focus on organic growth, and intends to increase its capital expenditure by 10-15% annually until it reaches 4-5% of sales. 

The Neutral rating is retained and the target price increases to $17.85 from $17.00, largely accounting for the impact of the weaker Australian dollar.

Target price is $17.85 Current Price is $18.40 Difference: minus $0.55 (current price is over target).
If AMC 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 $18.76, suggesting upside of 2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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 ANZ as Accumulate (2) -

Banks fully passed through the June 50 basis point increase from the RBA to mortgage standard variable rates.

However, Ord Minnett points out most of the rise was held back from depositors, raising the prospect of positive net interest margin surprises at the August and November results.

CommBank appears to have the most interest rate leverage of the major banks, according the broker, closely followed by National Australia Bank.

Ord Minnett estimates ANZ Bank has the lowest leverage due to a greater weighting of institutional business, and retains its Accumulate rating and $28.30 target price.

Target price is $28.30 Current Price is $22.80 Difference: $5.5
If ANZ meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $27.66, suggesting upside of 21.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

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

Following a review of regional banks, Morgan Stanley leaves its target price for Bendigo & Adelaide Bank at $10.00, despite upgrading its EPS estimate for FY23 by around 13.5% to reflect higher margins.

The target remained unchanged because the broker also lowers its FY24 estimate by -6.5% to incorporate lower loan growth, higher expenses and an increase in loan losses.

While rising rates suit the Equal-weight-rated Bendigo & Adelaide Bank, Morgan Stanley prefers Bank of Queensland as its share price currently reflects a greater probability of a recession. Industry view: Attractive.

In a separate research note, the broker estimates low-single-digit EPS accretion from the bank's acquisition of ANZ Bank's ((ANZ)) investment lending portfolio for around -$715m.

Target price is $10.00 Current Price is $9.37 Difference: $0.63
If BEN meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $10.44, suggesting upside of 11.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Morgan Stanley rates BOQ as Overweight (1) -

While rising rates suit the Equal-weight-rated Bendigo & Adelaide Bank, Morgan Stanley prefers Bank of Queensland (Overweight) as its share price currently reflects a greater probability of a recession.

The broker likes Bank of Queensland's clear strategy, improving franchise performance and management of costs. Despite this, the target falls to $8.10 from $9.80 on the relatively lower leverage to interest rates and delays to benefits from the internal technology transformation.

Industry view: Attractive.

Target price is $8.10 Current Price is $6.93 Difference: $1.17
If BOQ meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $9.03, suggesting upside of 30.6% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Ord Minnett rates CBA as Hold (3) -

Banks fully passed through the June 50 basis point increase from the RBA to mortgage standard variable rates.

However, Ord Minnett points out most of the rise was held back from depositors, raising the prospect of positive net interest margin surprises at the August and November results.

CommBank appears to have the most interest rate leverage of the major banks, according the broker. The Hold rating and $83.80 target are retained.

Target price is $83.80 Current Price is $93.08 Difference: minus $9.28 (current price is over target).
If CBA meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $88.05, suggesting downside of -4.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.6

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

Macquarie rates CHN as Outperform (1) -

Chalice Mining's drilling program at its Julimar project has returned a 4.2 metre zone of higher grade matrix sulphides at the bottom of a wider 145 metre zone of disseminated sulphides at the Dampier prospect, a key positive for the company according to Macquarie.

While assay results for the discovery are expected in the next six weeks, the broker notes early indications suggest both copper and steel are present. Macquarie expects Chalice Mining will continue exploration drilling to better define the discovery in coming weeks. 

The Outperform rating and target price of $7.30 are retained.

Target price is $7.30 Current Price is $4.00 Difference: $3.3
If CHN meets the Macquarie target it will return approximately 83% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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' preliminary fourth quarter results have revealed solid gold production of 32,000 ounces, at the upper end of guidance, and strong cash generation according to Macquarie. The quarterly result brings full year production to 118,400 ounces. 

Closing out the year in a net cash position, the broker also highlighted the company repaid $15m of its loan facility during the quarter, and restructured its outstanding debt to improve balance sheet and cash flow flexibility. 

The Neutral rating is retained and the target price decreases to $3.50 from $3.60.

Target price is $3.50 Current Price is $3.04 Difference: $0.46
If CMM meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -1.0

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

Macquarie rates CPU as Outperform (1) -

With Computershare yet to release full year results Macquarie is already looking ahead, with the broker predicting 5.9% growth in the coming financial year despite the impacts of the current inflationary environment. 

The broker anticipates cost out synergies and volume recovery will support growth in FY23, and expects the company will additionally deliver margin income of $431m. Macquarie highlights its forecasts leave room for further upside in the year ahead. 

The Outperform rating is retained and the target price decreases to $35.00 from $36.00.

Target price is $35.00 Current Price is $24.28 Difference: $10.72
If CPU meets the Macquarie target it will return approximately 44% (excluding dividends, fees and charges).

Current consensus price target is $26.47, suggesting upside of 8.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.5

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

Morgans rates CTD as Add (1) -

Morgans suggests ASX-listed Travel sector shares now represent a buying opportunity after a global derating of the sector on macroeconomic concerns.

Locally, some negatives for the sector have been a longer-than-expected return of A&NZ international airline capacity and China's lockdown slowing volume in the Asia region, explain the analysts.

While FY22 forecasts for Corporate Travel Management are unchanged, the broker downgrades FY23 and FY24 forecasts. The stock remains the preferred sector exposure and the Add rating is maintained. The target falls to $25.85 from $29.25

Target price is $25.85 Current Price is $19.16 Difference: $6.69
If CTD meets the Morgans target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $26.47, suggesting upside of 34.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Morgans rates DXC as Add (1) -

Morgans updates its financial model for Dexus Convenience Retail REIT in light of positive (preliminary) June revaluations and adjustments to shares on issue from an ongoing share buyback. Higher interest cost assumptions and recent asset sales are also incorporated.

The target falls to $3.78 from $4.11 and the Add rating is maintained.

Target price is $3.78 Current Price is $2.99 Difference: $0.79
If DXC meets the Morgans target it will return approximately 26% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Macquarie rates FBU as Outperform (1) -

Following Fletcher Building's investor day, Macquarie has lifted its earnings per share forecasts for the company 3-7% through to FY23.

Looking ahead, Macquarie notes Fletcher Building's guidance appears to account for a -10% mid-cycle sales decline to impact in FY24, largely in line with the broker's anticipated decline. Macquarie notes the company appears structurally improved since the last cycle peak, which could support higher earnings through the cycle. 

The Outperform rating is retained and the target price increases to NZ$7.85 from NZ$7.70.

Current Price is $4.59. Target price not assessed.

Current consensus price target is $7.50, suggesting upside of 61.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Morgans rates FLT as Hold (3) -

Morgans suggests ASX-listed Travel sector shares now represent a buying opportunity after a global derating of the sector on macroeconomic concerns.

Locally, some negatives for the sector have been a longer-than-expected return of A&NZ international airline capacity and China's lockdown slowing volume in the Asia region, explain the analysts.

While FY22 forecasts for Flight Centre Travel Group are unchanged, the broker downgrades FY23 and FY24 forecasts. The target price falls to $19.60 from $20.34, while the Hold rating is maintained.

Target price is $19.60 Current Price is $17.87 Difference: $1.73
If FLT meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $18.10, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.4

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

Morgans rates GNX as Add (1) -

Morgans assesses electricity markets remain extremely tight, and Genex Power continues to benefit.

The Kidston solar farm can participate in sustained prices above its contracted price and Jemalong’s electricity and carbon certificates are fully uncontracted, explains the analyst.

The Add rating and $0.31 target price are retained.

Target price is $0.31 Current Price is $0.13 Difference: $0.18
If GNX meets the Morgans target it will return approximately 138% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Morgans rates HDN as Add (1) -

Morgans updates its forecasts for HomeCo Daily Needs REIT in light of positive June 2022 revaluations, an increase in development capex for FY23, and higher interest costs. As a result, the target price falls to $1.56 from $1.73.

Cash collection, occupancy and leasing metrics remain solid, according to the broker, and the Add rating is unchanged.

Target price is $1.56 Current Price is $1.33 Difference: $0.23
If HDN meets the Morgans target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $1.49, suggesting upside of 10.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Morgans rates HLO as Add (1) -

Morgans suggests ASX-listed Travel sector shares now represent a buying opportunity after a global derating of the sector on macroeconomic concerns.

Locally, some negatives for the sector include a longer-than-expected return of A&NZ international airline capacity and China's lockdown slowing volume in the Asia region, explain the analysts.

While FY22 forecasts for Helloworld Travel are unchanged, the broker downgrades FY23 and FY24 forecasts. The target price falls to $2.72 from $2.88. while the Add rating is maintained.

Target price is $2.72 Current Price is $1.65 Difference: $1.07
If HLO meets the Morgans target it will return approximately 65% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

UBS rates IFM as Buy (1) -

Infomedia continues to engage with both Solera Holdings and TA Consortium to progress towards binding offers, with UBS noting the company reconfirmed non-binding bids of $1.70 per share from each.

The company has confirmed Battery Ventures elected not to proceed with its $1.75 per share bid. The broker continues to see Infomedia's medium-term outlook as positive and expects it to continue from strong top line growth.

The Buy rating and target price of $2.15 are retained.

Target price is $2.15 Current Price is $1.59 Difference: $0.56
If IFM meets the UBS target it will return approximately 35% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Ord Minnett rates LNK as Accumulate (2) -

Dye & Durham has increased its proposal for a revised base scheme consideration to $4.57/share from $4.30/share for Link Administration under the scheme implementation deed.

This proposal still allows proceeds of up to 13cps from any sale of Link Adminstration’s banking and credit management business, notes Ord Minnett. The Accumulate rating and $4.80 target price are maintained.

While the Link board said it would review the offer, the broker points out the existence of other potential suitors for parts or the whole of the Link franchise. Ultimately, it's thought these potential bidders may provide a more lucrative deal for shareholders.

Target price is $4.80 Current Price is $4.07 Difference: $0.73
If LNK meets the Ord Minnett target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $4.96, suggesting upside of 23.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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 Accumulate (2) -

Banks fully passed through the June 50 basis point increase from the RBA to mortgage standard variable rates.

However, Ord Minnett points out most of the rise was held back from depositors, raising the prospect of positive net interest margin surprises at the August and November results.

CommBank appears to have the most interest rate leverage of the major banks, according the broker, closely followed by National Australia Bank. For the latter, the Accumulate rating and $30.50 target are retained.

Target price is $30.50 Current Price is $28.15 Difference: $2.35
If NAB meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $31.18, suggesting upside of 10.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Citi rates NCM as Neutral (3) -

Citi likes Newcrest Mining's strong balance sheet though will stay Neutral-rated until evidence that FY23 expectations are reset and until operations at Lihir improve. Lihir is expected to miss FY22 guidance.

The target price is slashed to $22 from $29 due to rising cost concerns and as consensus lowers copper price expectations. The target was also impacted by a marking-to-market of commodity prices, partially offset by a lower Australian dollar. 

Target price is $22.00 Current Price is $19.75 Difference: $2.25
If NCM meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $25.65, suggesting upside of 29.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.6

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

Morgans rates NSR as Hold (3) -

National Storage REIT's 2H dividend of 5.4cpu was a beat versus the 4.9cpu expected by Morgans. Unfortunately, higher interest rate forecasts trumped the higher dividend, and the broker lowers its target to $2.16 from $2.35.

The broker looks forward to full year financial results in August, when management should issue FY23 guidance.

Target price is $2.16 Current Price is $2.19 Difference: minus $0.03 (current price is over target).
If NSR meets the Morgans target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.33, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Macquarie rates NWH as Neutral (3) -

NRW Holdings has announced an extension of its contract with Curragh through to 2026, valued at $1.2bn. Macquarie highlights this latest in a line of recently announced contract wins is filling up the company's book for FY23, but a renewed cycle of iron ore spending remains a key catalyst.

The broker remains cautious on NRW Holdings given labour constraints and costs are impacting the sector currently. 

The Neutral rating and target price of $1.80 are retained.

Target price is $1.80 Current Price is $1.78 Difference: $0.02
If NWH meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Morgans rates ORG as Hold (3) -

Morgans assesses electricity markets remain extremely tight, though suggests Origin Energy's generation portfolio is not well suited to a high energy price environment.

High electricity prices (and even higher prices for spot gas) have left the company exposed in FY22 and potentially for FY23, points out the analyst. Market share (and margins) may be lost should the company pass cost increases onto customers.

The target price falls to $5.21 from $6.17, while the Hold rating is maintained.

Target price is $5.21 Current Price is $5.57 Difference: minus $0.36 (current price is over target).
If ORG meets the Morgans target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.34, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Macquarie rates PNI as Outperform (1) -

Despite market conditions Pinnacle Affiliates' performance fees have beaten Macquarie's expectations, with realised performance fees of $57.1m in FY22 equating to a $16.4m take for Pinnacle Investment Management. 

Following a -$1.9m principal investment net loss in the first quarter, the company is also now guiding to a full year return of $0.1m. Despite positive second half results, marking to market the broker does downgrade earnings forecasts -9% and -15% for FY23 and FY24.

The Outperform rating and target price of $11.90 are retained.

Target price is $11.90 Current Price is $8.18 Difference: $3.72
If PNI meets the Macquarie target it will return approximately 45% (excluding dividends, fees and charges).

Current consensus price target is $11.16, suggesting upside of 34.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Ord Minnett rates PNI as Accumulate (2) -

While Ord Minnett leaves its $9.50 target price unchanged for Pinnacle Investment Management, its FY22 earnings forecast rises by 5% following a trading update.

The broker observes the result for performance fees was "decent" though partially offset by slightly weaker-than-expected returns on principal investments.

The Accumulate rating is unchanged.

Target price is $9.50 Current Price is $8.18 Difference: $1.32
If PNI meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $11.16, suggesting upside of 34.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Ord Minnett rates WBC as Hold (3) -

Banks fully passed through the June 50 basis point increase from the RBA to mortgage standard variable rates.

However, Ord Minnett points out most of the rise was held back from depositors, raising the prospect of positive net interest margin surprises at the August and November results.

CommBank appears to have the most interest rate leverage of the major banks, according the broker, closely followed by National Australia Bank.

Ord Minnett estimates Westpac has the second lowest leverage and retains its Hold rating and $23.90 target price.

Target price is $23.90 Current Price is $20.00 Difference: $3.9
If WBC meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $24.50, suggesting upside of 22.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Morgans rates WEB as Add (1) -

Morgans suggests ASX-listed Travel sector shares now represent a buying opportunity after a global derating of the sector on macroeconomic concerns.

Locally, some negatives for the sector have been a longer-than-expected return of A&NZ international airline capacity and China's lockdown slowing volume in the Asia region, explain the analysts.

The broker leaves forecasts for Webjet unchanged, and the target price of $6.55 and Add rating are also unchanged. 

Target price is $6.55 Current Price is $5.47 Difference: $1.08
If WEB meets the Morgans target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $6.58, suggesting upside of 19.8% (ex-dividends)

The company's fiscal year ends in March.

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