Australian Broker Call

Credit Suisse rates AMC as Neutral (3) -

Credit Suisse estimates that Amcor would have around US$1.0bn of acquisition capacity after the merger with Bemis. The broker observes the two companies have capability in developing recyclable films which could be converted into market share gains.

If half the balance sheet could be deployed to drive earnings in FY21, this would add 3% to the broker's estimates. The broker suspects tuck-ins, rather than further top tier North American consolidation, are more likely in the near term.

Neutral rating and $14.90 target maintained.

Target price is $14.90 Current Price is $15.37 Difference: minus $0.47 (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 $15.59, suggesting upside of 1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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 CCP as Add (1) -

The company has raised $125m via a placement and launched a share purchase plan to raise a further $10m. The debt facility has increased to $350m, providing $250m of funding capacity.

The capital will be used to accelerate the company's expansion and provide flexibility on the balance sheet. Morgans believes this signals confidence in the pipeline of opportunities.

Morgans continues to view the 3-5 year growth path as attractive, with potential upside from an acquisition or a faster-than-forecast return to increased domestic PDL market share.

Add rating maintained. Target is reduced to $23.70 from $24.10.

Target price is $23.70 Current Price is $22.16 Difference: $1.54
If CCP meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Citi rates CQR as Sell (5) -

Charter Hall Retail intends to acquire 100% of Rockdale Plaza, which is seen as consistent with the REIT's strategy, at a reasonable price and Citi analysts believe the chosen funding structure ($150m in new equity) seems "sensible".

There is no direct accretion, however, as the REIT also made changes to its hedges and one compensates for the other. This will be a disappointment to some, suggest the analysts. They see a positive in that it allows the REIT to delever and also improve the portfolio quality (though the latter might be a subjective assessment).

Despite the positives, Citi analysts cannot get past the premium valuation that is currently being awarded to Charter Hall Retail, hence why the Sell rating remains in place. Price target improves to $3.71 from $3.68.

Target price is $3.71 Current Price is $4.51 Difference: minus $0.8 (current price is over target).
If CQR meets the Citi target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.15, suggesting downside of -8.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.6

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

Credit Suisse rates CQR as Neutral (3) -

The company will acquire Rockdale Plaza for $142m, to be funded via a fully underwritten placement of $150m. The company will also undertake a unit purchase plan, expected to raise up to $10m. Proceeds will be used to reduce debt.

FY20 will be the first year the company receives the full benefit of ownership and there should be an incremental $9m in rental income. Maintaining low gearing has also left the company with flexibility to pursue future acquisitions.

Credit Suisse maintains a Neutral rating and raises the target to $4.22 from $4.17.

Target price is $4.22 Current Price is $4.51 Difference: minus $0.29 (current price is over target).
If CQR meets the Credit Suisse target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.15, suggesting downside of -8.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.6

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

Macquarie rates CQR as Underperform (5) -

The company is acquiring Rockdale Plaza for $142m. The transaction will be fully funded by a $150m institutional placement and $10m in a unit purchase plan at $4.51 a share.

Macquarie finds the stock a relatively defensive proposition, with around 50% of income underpinned by covenants to Woolworths ((WOW)), Wesfarmers ((WES)) and Coles ((COL)).

However, as the stock is trading at a 6% premium to net tangible assets the broker finds it difficult to be more constructive. Underperform rating maintained. Target rises to $4.11 from $4.07.

Target price is $4.11 Current Price is $4.51 Difference: minus $0.4 (current price is over target).
If CQR meets the Macquarie target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.15, suggesting downside of -8.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.6

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

Ord Minnett rates CQR as Lighten (4) -

The company has acquired Rockdale Plaza for $142m. The acquisition will be funded with a $150m placement. Ord Minnett considers a full equity funding of the acquisition opportunistic.

The company is acquiring a sub-regional shopping centre on a capitalisation rate of 6.25% which implies an internal rate of return of 8%, with a full equity funding at an implied capitalisation rate of 5.85%.

Ord Minnett believes the transaction is neutral to earnings. Lighten rating maintained and target is raised to $4.40 from $4.30.

Target price is $4.40 Current Price is $4.51 Difference: minus $0.11 (current price is over target).
If CQR meets the Ord Minnett target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.15, suggesting downside of -8.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.6

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

UBS rates CQR as Neutral (3) -

The company will acquire Rockdale Plaza for $142m on a 6.25% capitalisation rate. This is a high-quality metro asset, UBS observes, with strong operating metrics.

The main drawback is uncertainty regarding whether the acquisition represents a good purchase or a capitalisation rate expansion. The broker maintains a Neutral rating and target of $4.31.

UBS also takes comfort in the knowledge that the company's five existing Big W stores ((WOW)) have a weighted average lease expiry of 18.5 years, which suggests that either the stores will not be closed or a substantial lease termination fee would be payable.

Woolworths intends to close around 30 Big W stores over the next three years.

Target price is $4.31 Current Price is $4.51 Difference: minus $0.2 (current price is over target).
If CQR meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.15, suggesting downside of -8.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.6

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

Deutsche Bank rates FMG as Upgrade to Hold from Sell (3) -

Deutsche Bank has upgraded its rating for Fortescue Metals to Hold from Sell, while lifting its price target to $7.70 from $4.90. The decision comes after more news about iron ore supply disruption from Rio Tinto.

Having been too sceptical about iron ore, the analysts readily admit they are hereby falling on their iron ore sword. Another positive concerns the dividend potential which, in Deutsche bank's words, is significant and near term tangible.

Target price is $7.70 Current Price is $7.64 Difference: $0.06
If FMG meets the Deutsche Bank target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $6.66, suggesting downside of -12.8% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

This company reports in USD. 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

Deutsche Bank rates FPH as Hold (3) -

The analysts have slightly pulled back on their growth assumptions, but still believe 20% growth looks achievable. With the share price trading in the vicinity of their intrinsic valuation for the stock, the Hold rating remains in place.

Current Price is $15.18. Target price not assessed.

Current consensus price target is N/A

Forecast for FY19:

Forecast for FY20:

This company reports in NZD. 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

Credit Suisse rates HUB as Neutral (3) -

Credit Suisse adjusts forecasts to reflect the benefit of the rebound in equity markets. The broker continues to believe the business will attract significant flows in coming years because of a superior offering and a shift to specialist platform providers.

Neutral rating maintained. Target rises to $14.00 from $13.50.

Target price is $14.00 Current Price is $14.96 Difference: minus $0.96 (current price is over target).
If HUB meets the Credit Suisse target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.80, suggesting downside of -14.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Credit Suisse rates IFL as Neutral (3) -

Credit Suisse observes the company is facing uncertainty from the potential impact of brand damage, remediation costs and proposed industry reforms. The broker cannot find an appropriate risk/reward trade at current levels.

Strong equity markets, nonetheless, should benefit earnings and estimates are upgraded by 4% across the forecast period. Neutral maintained. Target rises to $5.90 from $5.60.

Target price is $5.90 Current Price is $6.33 Difference: minus $0.43 (current price is over target).
If IFL meets the Credit Suisse target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.74, suggesting downside of -9.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

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

Jumbo Interactive is an online officially-sanctioned lottery re-seller in all Australian states other than Queensland. Morgan Stanley estimates the company currently sells around 20% of all online lottery tickets.

Volumes are processed on its proprietary platform that has now begun to license to lottery operators as a software-as-a-service solution. Morgan Stanley estimates 63% compound growth over FY18-21.

A near-term catalyst would be an entry into Queensland which, while the broker does not expect any change, would increase the company's addressable opportunity by 15-20%.

Morgan Stanley initiates coverage with a "High-Conviction" Overweight rating and $20 target. Industry view is In-Line.

Target price is $20.00 Current Price is $15.14 Difference: $4.86
If JIN meets the Morgan Stanley target it will return approximately 32% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Credit Suisse rates MFG as Downgrade to Neutral from Outperform (3) -

Credit Suisse expects first quarter funds under management will benefit from strong markets and net inflows, as forecasts imply an 11% increase during the quarter.

The broker upgrades fund forecasts by 4%. The stock is up 50% in the year to date and the broker downgrades to Neutral from Outperform.

Magellan Financial remains the broker's top pick among asset managers. Target is raised to $35 from $33.

Target price is $35.00 Current Price is $37.31 Difference: minus $2.31 (current price is over target).
If MFG meets the Credit Suisse target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $32.96, suggesting downside of -11.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Credit Suisse rates NWL as Neutral (3) -

Credit Suisse adjusts forecasts to reflect the rebound in equity markets in the first quarter. The broker assesses Netwealth is making the most of the disruption in the wealth management industry and capturing significant market share.

The broker considers the medium term investment case is intact, although costs will remain high. The stock is judged well priced and a Neutral rating is maintained. Target is raised to $8.40 from $7.90.

Target price is $8.40 Current Price is $8.46 Difference: minus $0.06 (current price is over target).
If NWL 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 $7.86, suggesting downside of -7.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Credit Suisse rates PDL as Underperform (5) -

Credit Suisse marks to market for the quarter, leading to 1% upgrades to funds under management and earnings per share. The company has benefited from positive markets but the broker believes this is largely captured in forecasts.

The broker maintains an Underperform rating, envisaging near-term pressure on fund flows and earnings. Target is raised to $8.00 from $7.80.

Target price is $8.00 Current Price is $9.49 Difference: minus $1.49 (current price is over target).
If PDL meets the Credit Suisse target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.14, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.2

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

Ord Minnett rates PLS as Downgrade to Lighten from Hold (4) -

Ord Minnett was disappointed with the March quarter operating update as recoveries have fallen to less than 50% in March and realised prices are below current unit costs.

Costs should fall as the plant is optimised, although recoveries need to improve to provide operating leverage anywhere near market expectations.

As a result the broker downgrades to Lighten from Hold, believing the stock is overvalued. Target is reduced to $0.70 from $0.85.

Target price is $0.70 Current Price is $0.77 Difference: minus $0.07 (current price is over target).
If PLS meets the Ord Minnett target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.97, suggesting upside of 25.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Credit Suisse rates PPT as Neutral (3) -

Credit Suisse expects the company will benefit from strong equity markets in the first quarter. Although the stock offers some appeal fund performance is weak, suggesting that net outflows will remain a headwind.

Moreover, some of the growth opportunities bear execution risk, with the magnitude and scale of any expansion not yet known. Neutral rating maintained. Target rises to $36 from $35.

Target price is $36.00 Current Price is $39.18 Difference: minus $3.18 (current price is over target).
If PPT meets the Credit Suisse target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $36.30, suggesting downside of -7.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

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

A positive rebound in markets should mean the company benefited from fund flows in the first quarter, which Credit Suisse expects will be up 6%. However, fund performance remains weak and the third month of outflows emerged in February.

The broker is now forecasting net outflows in the second half of -$600m. Credit Suisse upgrades to Neutral from Underperform as the share price has fallen -15% during March. Target is reduced to $4.70 from $4.90.

Target price is $4.70 Current Price is $4.87 Difference: minus $0.17 (current price is over target).
If PTM 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 $4.36, suggesting downside of -10.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.8

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

Citi rates RIO as Buy (1) -

After Vale, Rio Tinto has now also informed investors it won't meet guidance on iron ore shipments due to fire and Cyclone Veronica. Citi analysts note both announcements come at a time when they believe Chinese steel demand is starting to improve.

The analysts have updated their modeling, noting the share price has performed well thus far into 2019. Citi does not believe the valuation for Rio Tinto shares is looking stretched just yet. Buy rating maintained, alongside an unchanged price target of $108.

Estimates have been lowered.

Target price is $108.00 Current Price is $98.24 Difference: $9.76
If RIO meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $93.95, suggesting downside of -4.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

Credit Suisse rates RIO as Neutral (3) -

Rio Tinto has updated on iron ore shipments for 2019, post the Cyclone Veronica, adjusting guidance to the lower end of the prior range of 338-350mt.

Credit Suisse believes, in the near term, iron ore is incredibly well supported, although there are concerns about the housing outlook in China.

Chinese steel mill inventory remains close to the lows not seen since 2015. Still, the broker considers the stock fair value and retains a Neutral rating. Target is $84.

Target price is $84.00 Current Price is $98.24 Difference: minus $14.24 (current price is over target).
If RIO meets the Credit Suisse target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $93.95, suggesting downside of -4.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

Macquarie rates RIO as Outperform (1) -

Rio Tinto has declared force majeure on contracts after Cyclone Veronica. This will affect 14mt of 2019 production. Damage has occurred to the Cape Lambert A jetty. Shipments are expected to come in at the bottom end of the 338-350mt guidance range.

Despite production and shipment issues, and potential downside to guidance, Macquarie assesses Rio Tinto is a net beneficiary of the rise in prices because of the global disruption to iron ore supply.

The broker maintains an Outperform rating and $106 target.

Target price is $106.00 Current Price is $98.24 Difference: $7.76
If RIO meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $93.95, suggesting downside of -4.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

UBS rates SHV as Neutral (3) -

Favourable market conditions have meant the company has achieved pricing for its almonds that is above prior guidance. The company has noted that, of the 25% of the crop processed, yields are currently 10% above industry benchmarks.

UBS upgrades volume estimates and notes a 20% upside risk to earnings estimates if a 10% yield uplift can be achieved across the whole acreage.

The broker also calculates that elevated water prices have had a -$6m negative impact on FY19. Neutral rating maintained. Target is raised to $6.40 from $5.85.

Target price is $6.40 Current Price is $6.68 Difference: minus $0.28 (current price is over target).
If SHV meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Morgan Stanley rates TAH as Overweight (1) -

Morgan Stanley questions whether the market is underestimating the potential for digital to deliver higher earnings. In evaluating Jumbo Interactive ((JIN)) Morgan Stanley believes that company's high growth should be viewed as a win-win for Tabcorp shareholders.

Tabcorp has the largest share of Australian lottery markets and innovation should serve as an acceleration of ticket sales. Jumbo Interactive only operates under a license agreement with Tabcorp and Tabcorp receives a commission from Jumbo Interactive.

Tabcorp is also a 12.5% shareholder in Jumbo Interactive. Overweight retained. Target is $5.10. Industry view: Cautious.

Target price is $5.10 Current Price is $4.86 Difference: $0.24
If TAH meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $5.03, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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

Credit Suisse rates WHC as Outperform (1) -

Credit Suisse believes too much operating risk has been priced into the stock. In isolation, the underperformance is not considered surprising because of soft first half numbers and operating challenges at Narrabri.

However, with limited calls on capital for the next year and the opportunity to demonstrate operating stability, Credit Suisse reiterates an Outperform rating.

High-energy thermal coal is the broker's most preferred bulk commodity and, with a softening Australian dollar amid the prospect of potential rate cuts, the broker believes the business still stacks up.

The broker believes those that can invest in Whitehaven Coal will be well rewarded over the next 12-24 months. Target is $5.10.

Target price is $5.10 Current Price is $4.15 Difference: $0.95
If WHC meets the Credit Suisse target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $5.18, suggesting upside of 24.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Citi rates WOW as Neutral (3) -

Citi analysts retain the Neutral rating and $29 price target, while reducing forecasts by -1% in FY20/FY21. On their estimate, the share buyback is creating some $1.80 of value for the average Woolworths shareholder.

It is the buyback that is partially responsible for the share price being where it is, argue the analysts. The decision to reduce the overall footprint of Big W is occurring alongside a similar shrinking of Target's store numbers, while Kmart is expanding and will be responsible for half of discount department stores industry floor space by FY23, point out the analysts.

Target price is $29.00 Current Price is $30.85 Difference: minus $1.85 (current price is over target).
If WOW meets the Citi target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.37, suggesting downside of -8.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Credit Suisse rates WOW as Neutral (3) -

The company has announced a $1.7bn off-market buyback, as Credit Suisse expected. Woolworths will also close 30 Big W stores and two distribution centres, which the broker assesses will whittle away the lease liability and reduce ongoing losses.

Guidance for an earnings (EBIT) loss of -$80-100m in FY19 at Big W compares with -$110m in FY18, signalling to the broker that only a net $20m improvement was achieved over the year.

Credit Suisse maintains a Neutral rating and raises the target to $28.53 from $27.84.

Target price is $28.53 Current Price is $30.85 Difference: minus $2.32 (current price is over target).
If WOW meets the Credit Suisse target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.37, suggesting downside of -8.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Deutsche Bank rates WOW as Downgrade to Hold from Buy (3) -

Deutsche Bank has downgraded its rating for Woolworths to Hold from Buy, while leaving the price target untouched at $31. The broker notes the slimming down of the Big W footprint, and the share buyback, but maintains Supermarkets will be the primary driver of share performance from here.

Deutsche Bank remains comfortable with the outlook for Supermarkets and explains the downgrade in reference to the share price trading above its price target. Woolworths shares have had a good run into 2019, the analysts observe.

Target price is $31.00 Current Price is $30.85 Difference: $0.15
If WOW meets the Deutsche Bank target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $28.37, suggesting downside of -8.0% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Macquarie rates WOW as Underperform (5) -

Woolworths has announced the closure of 30 Big W stores and two distribution centres after the completion of its petrol sale. The company will also undertake a $1.7bn off-market share buyback.

Macquarie believes this removes potential uncertainty from Big W and the structure of the buyback is also attractive. The broker finds the payback on the store closures is uncertain as they will occur in FY21/22.

The broker is unclear on the operating leverage in the food/drinks business and retains an Underperform rating. Target is raised to $26.84 from $26.26.

Target price is $26.84 Current Price is $30.85 Difference: minus $4.01 (current price is over target).
If WOW meets the Macquarie target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.37, suggesting downside of -8.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Ord Minnett rates WOW as Hold (3) -

Following the sale of its petrol division, Woolworths will make a $1.7bn off-market buyback. The company has also flagged -$370m in one-off charges for Big W following its network review.

The company will close 30 Big W stores over the next three years and two distribution centres at the end of leases. Ord Minnett finds the turnaround for Big W uncertain, although a recovery in long-term earnings is more likely following the closures.

The stock incorporates a premium for the capital management and its market leadership position and the broker maintains a Hold rating. Target is $30.

Target price is $30.00 Current Price is $30.85 Difference: minus $0.85 (current price is over target).
If WOW meets the Ord Minnett target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.37, suggesting downside of -8.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

UBS rates WOW as Buy (1) -

Woolworths has announced a $1.7bn off-market buyback following completion of the sale of its petrol business. The company has also reported stronger trading for Big W in the third quarter. The company will close 30 Big W stores and two distribution centres over the next 3-4 years.

UBS estimates the buyback will be around 3% accretive to estimates of earnings per share. The broker believes the closures of the Big W stores is a positive step as many were loss-making.

The risk/reward balance is now looking better, UBS assesses, and a positive surprise in food could be the next catalyst. Buy rating and $30.80 target maintained.

Target price is $30.80 Current Price is $30.85 Difference: minus $0.05 (current price is over target).
If WOW meets the UBS target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.37, suggesting downside of -8.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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