Australian Broker Call

Bell Potter rates AHL as Buy (1) -

Adrad's trading update was weaker-than-expected by Bell Potter following a softening of demand over the past few months for both businesses, Heat Transfer Solutions and Distribution.

FY24 pro forma earnings (EBITDA) are expected to be between $18-19m compared to the broker's prior forecast for $21.3m.

It still wasn't a bad update, all things considered, suggests Bell Potter, given most of the weakness appears to be in deferred or canceled projects within Heat Transfer Solutions.

The Buy rating is unchanged and the target is decreased to $1.15 from $1.25.

Target price is $1.15 Current Price is $0.82 Difference: $0.33
If AHL meets the Bell Potter target it will return approximately 40% (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

Morgans rates AHL as Add (1) -

Morgans lowers FY24-26 revenue and earnings (EBITDA) forecasts by between -5-13% and -13-16%, respectively, following a weak trading update. Demand was soft across the company's businesses, particularly in Heat Transfer Solutions (HTS).

Management downgraded FY24 revenue and EBITDA guidance, explaining there had been a deferral or cancellation of a number of projects in HTS. The company is confident revenue from the majority of these projects will be moved to FY25 from FY24.

The stock remains an attractive long-term investment opportunity, in the broker's view, and the Add rating is maintained. The target is reduced to $1.10 from $1.45.

Target price is $1.10 Current Price is $0.82 Difference: $0.28
If AHL meets the Morgans target it will return approximately 34% (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 AOF as Buy (1) -

Ord Minnett remains cautious on the REIT sector given volatile sentiment in interest rate markets, despite a slowing economy, though remains positive on service station REITs. These include Dexus Convenience Retail REIT and Waypoint REIT.

Among passive REITs,  Australian Unity Office Fund and Dexus Convenience Retail REIT reflect strong value, in the broker's view.

The Buy rating and $1.45 target price are unchanged for Australian Unity Office.

Target price is $1.45 Current Price is $1.34 Difference: $0.11
If AOF meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Market Sentiment: 1.0

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

Morgan Stanley rates ASX as Underweight (5) -

The ASX will hold an Investor Forum on June 13 and provide inaugural FY25 cost guidance.

Morgan Stanley suggests this guidance will prove disappointing against the consensus estimate as management is currently modernising critical technology, including the CHESS system and trying to satisfy regulatory requirements.

At the same time, the company is trying to develop new revenue opportunities, adding to the overall cost burden, explain the analysts.

Underweight. The $53.50 target is maintained. Industry view: In-Line.

Target price is $53.50 Current Price is $62.35 Difference: minus $8.85 (current price is over target).
If ASX meets the Morgan Stanley target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $62.68, suggesting downside of -0.8% (ex-dividends)

The company's fiscal year ends in June.

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

Macquarie rates AUB as Outperform (1) -

A recent AUB Group trading updated has prompted the Macquarie analyst to upgrade FY24 net profit forecasts to $171m, a  2.9% increase and  reaching the top end of the $161-171m guidance range. The FY25 EPS estimate is lifted 1.7%.

The earnings upgrade implies 22% growth in 2H24, including 17% organic growth, according to the broker.

Macquarie highlights the Pacific Indemnity acquisition, funded by a $200m equity raise, aligns with AUB's strategy to grow its Underwriting Agency segment.

Premium rate increases for SMEs averaged 12.2% in the March 2024 quarter, slightly lower than previous quarters, notes the analyst.

The target price has been raised to $33.84 from $33.34. Outperform rating unchanged.

Target price is $33.84 Current Price is $29.55 Difference: $4.29
If AUB meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $34.85, suggesting upside of 15.8% (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

UBS rates AUB as Buy (1) -

UBS attended the strata insurance industry panel session which highlighted key issues and growth prospects for the sector.

The analyst's main takeaway was strata insurance is expected to grow rapidly, driven by government housing targets due to the increasing preference for strata living.

Gross Written Premium (GWP) is approximately $2.4bn, representing 3-4% of the general insurance industry premium and 18% of home insurance and the market has grown at an estimated 14% compound rate over five years, outpacing the industry average of 8.2% according to APRA.

UBS forecasts strata generates 3%-4% of revenue to AUB Group. Target left intact at $34.50. Buy.

Target price is $34.50 Current Price is $29.55 Difference: $4.95
If AUB meets the UBS target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $34.85, suggesting upside of 15.8% (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

Morgans rates AVH as Add (1) -

In a significant milestone for Avita Medical, according to Morgans, FDA approval has been received for the company's automated product, Recell Go, for use in burns and full thickness skin defects.

Management expects this device will increase adoption of the technology among clinicians, and has units ready to be delivered immediately.

Given the long-term opportunity, Morgans is not perturbed by market speculation around risk to FY24 revenue guidance.

The Add rating and $5.60 target are unchanged.

Target price is $5.60 Current Price is $2.99 Difference: $2.61
If AVH meets the Morgans target it will return approximately 87% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Ord Minnett rates AVH as Accumulate (2) -

Ord Minnett is not surprised by the timing or receipt by Avita Medical of regulatory approval for an updated version of the Recell device, (Recell Go), which simplifies the user interface.

The company should be cash flow positive by FY26 and the broker is "fairly confident" a capital raise won't be required in the interim, despite 1Q revenue falling compared to the prior period and an increase in costs.

The Accumulate rating and $5.40 target are maintained.

Target price is $5.40 Current Price is $2.99 Difference: $2.41
If AVH meets the Ord Minnett target it will return approximately 81% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Bell Potter rates BKW as Upgrade to Buy from Hold (1) -

Due to the current implied discount for Brickworks' 26.1% holding in WH Soul Pattinson ((SOL)) and the attractive rent growth outlook elsewhere, Bell Potter upgrades its rating for Brickworks to Buy from Hold.

Building Products and near-term working capital reduction targets are the key risks, cautions the broker.

Despite some recent normalisation in market rent growth and vacancies, near-term supply in the company's precincts continue to remain heavily pre-committed, according to the analysts.

Target price is $29.00 Current Price is $26.10 Difference: $2.9
If BKW meets the Bell Potter target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $30.80, suggesting upside of 18.0% (ex-dividends)

The company's fiscal year ends in July.

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

Macquarie rates BRG as Outperform (1) -

Breville Group has shown outperformance against the Macquarie Kitchen Benchmark, with compound annual revenue growth of 13.7% compared to the benchmark's 1.6% from 2018 to 2023.

The Macquarie Kitchen Benchmark for the 1Qwas down -1.3% year-on-year with De'Longhi revenue index growth of 3.7% and Macquarie expects Breville to grow revenues 8.1% in the June half.

The broker points to the improvement in the company's gross profit margins to 23.4% in 1Q, due to lower product costs and a favourable product mix, 

No significant changes to financial forecasts were noted. Macquarie retains the Outperform rating and $28.60 target.

Target price is $28.60 Current Price is $26.65 Difference: $1.95
If BRG meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $27.48, suggesting upside of 2.8% (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

UBS rates CHC as Neutral (3) -

UBS re-assesses the outlook for Charter Hall and highlights the group is facing soft transaction volumes as real estate approaches a cyclical trough.

The broker stresses despite challenges such as limited gearing capacity in funds and redemption risks, Charter Hall has the opportunity to deploy capital ahead of the cycle turning, potentially facilitating new AUM growth and improved earnings.

UBS' earnings changes include a reduction in performance fees by -$5m and -$25m for FY24/FY25, respectively, which is partially offset by an assumption management will deploy an additional $140m of capital per half for the next 18 months.

Earnings estimates are tweaked by -1% in FY24 and 2% in FY25. UBS raises its target price to $12.20 from $11.25.

Target price is $12.20 Current Price is $12.12 Difference: $0.08
If CHC meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $14.48, suggesting upside of 17.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Citi rates CIA as Buy (1) -

The Citi analyst's first take on the FY24 earnings report for Champion Iron reveal EBITDA is 6% better than the broker's forecast and 1% ahead of consensus, reflecting stronger volumes and stable iron ore prices.

Reported net profit of CA$234m, a 17% YoY increase, met the broker's forecasts and the final dividend of CA$0.10 per share came in 7% above consensus.

Citi notes the Bloom Lake Phase II expansion continues to ramp up, with Champion Iron targeting further production capacity increases through de-bottlenecking, and aiming for 16-17mtpa.

The broker also points to management  pursuing potential government funding and tax credits for the Kami project.

Citi EPS estimates are adjusted by -1.8% for FY25 and -2% for FY26. Buy rating unchanged and the target remains at $8.60.

Target price is $8.60 Current Price is $7.02 Difference: $1.58
If CIA meets the Citi target it will return approximately 23% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

This company reports in CAD. 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

Macquarie rates CIA as Neutral (3) -

Macquarie assesses the Champion Iron FY24 results were steady, with revenue at CA$1,524m and net profit at CA$234m, both in line with consensus. The dividend of CA$0.10ps beat consensus by 7%, notes tne analyst.

Rail disruptions impacted shipments, resulting in a -12% decline in cash operating margins to CA$40.0/t.

The ramp-up to Bloom Lake nameplate capacity remains a key catalyst for the company, according to the broker,

Updated forecasts include an increased total production assumption to 16mtpa for FY28 and beyond. The analyst adjusts EPS forecasts by 3% for FY25 and FY26.

Neutral rating unchanged. Target price lifted to $7.50 from $7.30.

Target price is $7.50 Current Price is $7.02 Difference: $0.48
If CIA meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

This company reports in CAD. 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

Ord Minnett rates CKF as Accumulate (2) -

Looking over the horizon beyond the current defensive pricing and elevated cost inflation, Ord Minnett believes the earnings margin for Collins Foods wil recover. It's thought the -20% share price fall in 2024 is overdone.

The broker notes the Fair Work Commission's fiscal 2025 is due out tomorrow. (It actually came out this morning). Wages are one of the largest costs of doing business for Collins Foods.

The Accumulate rating and $14.40 target are unchanged.

Target price is $14.40 Current Price is $9.20 Difference: $5.2
If CKF meets the Ord Minnett target it will return approximately 57% (excluding dividends, fees and charges).

Current consensus price target is $12.13, suggesting upside of 31.5% (ex-dividends)

The company's fiscal year ends in May.

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

Macquarie rates CNU as Outperform (1) -

The Information Disclosure Accounts for the year ended December 2023 for Chorus showed an increase in the regulated asset base (RAB) to NZ$5.9bn from NZ$5.7bn in 2022, driven by higher inflation, which is a point of interest for investors, notes Macquarie.

According to the broker, annual RAB movements do not impact the current regulatory period's maximum allowable revenue (MAR), the closing RAB value will serve as the basis for the next regulatory period starting January 2025.

On that basis, the analyst highlights Chorus under-earned its MAR for 2023, resulting in a NZ$54m wash-up balance carried forward to 2025, adding to the NZ$52m from 2022.

The Macquarie earnings forecasts are unchanged. The Outperform rating and target price of NZ$8.32 are retained.

Current Price is $6.91. Target price not assessed.

The company's fiscal year ends in June.

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: 0.3

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

UBS rates CNU as Neutral (3) -

The 2023 regulatory fibre RAB disclosure was slightly better than UBS estimates, with the PQ RAB at NZ$5.9bn, higher than the analyst's adjusted ID RAB of NZ$5.8bn, implying an RP2 starting PQ RAB of NZ$6bn, 2%-3% higher than expected.

The broker also points to fibre operating expenditure which was 4% higher than 2022 and infers a quicker copper withdrawal. UBS suggests the non-fibre EBITDA was -NZ$10m below forecasts.

No changes to earnings estimates. Unchanged Neutral rating and NZ$7.25 target.

Current Price is $6.91. Target price not assessed.

The company's fiscal year ends in June.

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: 0.3

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

Citi rates CSL as Neutral (3) -

Citi's Neutral rating and $305 target are unchanged as the broker notifies its clientele competition inside the market for Hereditary angioedema (HAE) is about to heat up (well, next year, probably).

As per the broker, HAE accounts for some US$700m in annual revenues for CSL, or circa 5%. Citi believes CSL's Garadacimab has the potential to replace Takeda's Takhzyro as the global standard-of-care for HAE.

If this assumption proves correct, the broker sees growth for this segment accelerating to 5% annualised, from a stagnant situation now. CSL is scheduled to launch its new product in early 2025.

But it will no longer be a two-horse race, as Ionis Pharma will join-in with its own product, donidalorsen, which Citi believes is also competitive against the market leader, but inferior to CSL's alternative. Ionis plans point to market launch in H2 2025.

Target price is $305.00 Current Price is $280.10 Difference: $24.9
If CSL meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $316.73, suggesting upside of 12.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Morgans rates CSR as Hold (3) -

Morgans increases its target for CSR to $9.00 (given a credible cash bid) from $6.90 with the Scheme Implementation Deed with Saint-Gobain set to be approved at the scheme meeting on Thursday, June 13. Hold.

The transaction remains subject to a number of approvals, most notably shareholder approval, which will be sought at the scheme meeting, explains the broker.

Target price is $9.00 Current Price is $8.90 Difference: $0.1
If CSR meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $8.60, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.2

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

Ord Minnett rates CTD as Accumulate (2) -

Ord Minnett suggests the key for Corporate Travel Management is to plan for a world of 10-12% compound EPS growth over the medium-to long-term compared to the greater than 20% numbers pre-pandemic. It's felt the company is well positioned to adapt.

The broker lowers EBITDA assumptions to reflect the deteriorating economic outlook and a more conservative approach to the UK asylum seeker contract. The effective tax rate forecast is also reduced and the acquisition amortisation component of D&A is increased.

The target falls to $14.91 from 17.16. Accumulate.

The broker highlights how the corporate travel segment is preparing for a world with a permanent reduction in business travel volumes of around -20%, while airline commissions and overrides have also declined.

Target price is $14.91 Current Price is $13.30 Difference: $1.61
If CTD meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $18.30, suggesting upside of 36.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Shaw and Partners rates DRO as Initiation of coverage with Buy (1) -

Shaw and Partners initiates research coverage on DroneShield, which specialises in advanced AI-driven counter-drone and electronic warfare solutions for terrestrial, maritime, and airborne platforms.

The company is the market leader and early mover in counter-drone (C-UAS) technology. Customers include the military, intelligence communities, government agencies, law enforcement, critical infrastructure operators and airports globally, notes the broker.

The military accounts for around 37% (with less than 1% saturation) of a total addressable market which exceeds US$10bn, points out the analyst.

The company's ten-year track record, certifications, product suite across mobile and fixed site C-UAS should facilitate sales growth in excess of market growth rates, in Shaw's opinion.

Buy rating and 1.40 target.

Target price is $1.40 Current Price is $1.13 Difference: $0.275
If DRO meets the Shaw and Partners target it will return approximately 24% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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 DUR as Initiation of coverage with Buy (1) -

Shaw and Partners initiates research coverage on Duratec with a Buy rating and $1.50 target price. Duratec is the domestic leader in asset maintenance services, specialising in prolonging the lifespan of various assets, particularly steel and concrete infrastructure. 

The analysts note a diversified source of earnings via assessment, protection, remediation, and refurbishment for various assets such as commercial, government, and residential buildings, marine infrastructure, heritage structures, and industrial plants. 

Proactive diagnosis of asset conditions and the development of tailored, cost-effective solutions sets the company apart, in the broker's view, as clients are provided with solutions backed by hands-on project delivery experience.

Target price is $1.50 Current Price is $1.06 Difference: $0.445
If DUR meets the Shaw and Partners target it will return approximately 42% (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 DXC as Accumulate (2) -

Ord Minnett remains cautious on the REIT sector given volatile sentiment in interest rate markets, despite a slowing economy, though remains positive on service station REITs. 

Among passive REITs, Australian Unity Office Fund and Dexus Convenience Retail REIT reflect strong value, in the broker's view.

The target for Dexus Convenience Retail REIT rises to $2.82 from $2.80. The Accumulate rating is unchanged.

Target price is $2.82 Current Price is $2.67 Difference: $0.15
If DXC meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $3.02, suggesting upside of 11.7% (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

UBS rates FPH as Buy (1) -

Fisher & Paykel Healthcare reported FY24 net profit in line with UBS' expectations, driven by stronger Hospital sales and gross margin improvement, offsetting lower Homecare sales.

Revenue for the Hospital division was 4% above UBS estimates due to better pricing and higher device sales. Homecare growth slowed to 9% in 2H24, -13% below the broker's forecast.

UBS adjusts EPS forecasts by 2% for FY25 ad 1% for FY26. The target is lifted to NZ$32.80 from NZ$28.75. Buy rating retained.

Current Price is $27.20. Target price not assessed.

Current consensus price target is $23.06, suggesting downside of -15.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

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 IAG as Neutral (3) -

UBS attended the strata insurance industry panel session which highlighted key issues and growth prospects for the sector.

The analyst's main takeaway was strata insurance is expected to grow rapidly, driven by government housing targets due to the increasing preference for strata living.

Gross Written Premium (GWP) is approximately $2.4bn, representing 3-4% of the general insurance industry premium and 18% of home insurance and the market has grown at an estimated 14% compound rate over five years, outpacing the industry average of 8.2% according to APRA.

Strata remains a small component for underwriters and UBS estimates around 2-3% for Insurance Australia Group. Neutral, $6.50 target.

Target price is $6.50 Current Price is $6.20 Difference: $0.3
If IAG meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $6.21, suggesting downside of -1.4% (ex-dividends)

The company's fiscal year ends in June.

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 LOV as Downgrade to Neutral from Buy (3) -

Citi downgrades Lovisa Holdings to Neutral from Buy after a share price rally and unexpected news the CEO will depart in May next year.

The broker is surprised by the announcement and hints at the board not offering enough for CEO Victor Herrero to stay the course.

As Herrero will still be with the retailer until May next year (just before FY24 incentives vest, the broker highlights) relative stability should remain with the business, the broker suggests. Target is $31.65.

Target price is $31.65 Current Price is $33.91 Difference: minus $2.26 (current price is over target).
If LOV meets the Citi target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $30.36, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in June.

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

Bell Potter rates LRS as Speculative Buy (1) -

Latin Resources is progressing permitting, offtake and financing to support a final investment decision (FID) at the Salinas Lithium Project located in Minas Gerais, Brazil, by the end of 2024, observes Bell Potter.

Helping to support this FID, notes the broker, the mineral resource estimate (MRE) has been upgraded. The Salinas global MRE is now
77.7Mt grading 1.24% Li2O compared with the December 2023 estimate of 70.3Mt at 1.27% Li2O.

Importantly, according to the analysts, the measured and indicated component of the Colina deposit (within the global MRE) is now 67.3Mt grading 1.27% Li2O, up from 41.0Mt at 1.36% Li2O.

The Speculative Buy rating and 40c target are unchanged for Latin Resources.

Target price is $0.40 Current Price is $0.26 Difference: $0.14
If LRS meets the Bell Potter target it will return approximately 54% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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 MEZ as Lighten (4) -

Ord Minnett increases its target for Meridian Energy by 15% to NZ$5.50 after the company signed a 20-year agreement to supply electricity to New Zealand Aluminium Smelters.

The new contract is significantly better than the broker anticipated in terms of price, tenure and flexibility. The latter saves Meridian during periods of low rainfall when generation needs to be curtailed, explains the analyst.

The stock remains overvalued, in Ord Minnett's opinion, and the Lighten rating is kept.

Current Price is $6.24. Target price not assessed.

The company's fiscal year ends in June.

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: -1.0

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

Morgan Stanley rates PWR as Downgrade to Equal-weight from Overweight (3) -

Morgan Stanley downgrades its rating for Peter Warren Automotive to Equal-weight from Overweight given uncertainties around margins and profitability into FY25 and FY26. Impacts from the leadership transition are also expected to weigh.

The target is also reduced to $1.90 from $3.00. Industry View: In-Line.

The leadership transition announced in March leaves the company without a successor and will potentially increase the timeline for a business turnaround, in the broker's view.

Management recently lowered FY24 profit before tax guidance. The analysts believe the largest profit detractor are gross margins, as improved car supply has overshot requirements. A weaker consumer also implies to the broker more discounting.

Target price is $1.90 Current Price is $1.79 Difference: $0.11
If PWR meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $2.01, suggesting upside of 13.7% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates QBE as Buy (1) -

UBS attended the strata insurance industry panel session which highlighted key issues and growth prospects for the sector.

The analyst's main takeaway was strata insurance is expected to grow rapidly, driven by government housing targets due to the increasing preference for strata living.

Gross Written Premium (GWP) is approximately $2.4bn, representing 3-4% of the general insurance industry premium and 18% of home insurance and the market has grown at an estimated 14% compound rate over five years, outpacing the industry average of 8.2% according to APRA.

UBS estimates QBE Insurance has around a 4% contribution from strata, Buy. $21.00 target.

Target price is $21.00 Current Price is $17.80 Difference: $3.2
If QBE meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $18.80, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.4

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

Morgan Stanley rates RIO as Overweight (1) -

Rio Tinto has secured the full electricity needs for the Tiwai Point smelter in New Zealand through to at least 2044, observes Morgan Stanley, after signing a 20-year renewable electricity supply agreement.

While the announcement will improve the economics for this particular business, it has limited impact on the broker's valuation for Rio Tinto.

The Overweight rating and $139 target are unchanged. Industry view is Attractive.

Target price is $139.00 Current Price is $128.96 Difference: $10.04
If RIO meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $128.33, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

UBS rates SDF as Buy (1) -

UBS attended the strata insurance industry panel session which highlighted key issues and growth prospects for the sector.

The analyst's main takeaway was strata insurance is expected to grow rapidly, driven by government housing targets due to the increasing preference for strata living.

Gross Written Premium (GWP) is approximately $2.4bn, representing 3-4% of the general insurance industry premium and 18% of home insurance and the market has grown at an estimated 14% compound rate over five years, outpacing the industry average of 8.2% according to APRA.

UBS estimates Steadfast Group has the highest exposure with strata revenue contribution of around 15%. Buy. $6.70 target.

Target price is $6.70 Current Price is $5.52 Difference: $1.18
If SDF meets the UBS target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $6.45, suggesting upside of 16.4% (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 SGP as Overweight (1) -

Stockland's acquisition of Lendlease Group's ((LLC)) communities business is now unlikely to close in FY24, suggests Morgan Stanley, after the ACCC announced a revised provisional date for its review of the transaction.

The deal was not included in management's FY24 EPS guidance but the deferral has the potential to impact the consensus forecast for FY25, notes the broker.

Overweight rating. Target $5.30. In-Line Industry view.

Target price is $5.30 Current Price is $4.50 Difference: $0.8
If SGP meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $5.05, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Bell Potter rates SHV as Hold (3) -

Select Harvests' 1H operating net loss of -$2.1m compares to the -$52.8m loss in the 1H last year and was better than the loss of -$3.1m forecast by Bell Potter.

The broker is cautious on the potential development of a La Nina weather pattern in 2024, an event that would typically adversely impact almond yields in Australia.

The Hold rating is maintained and the target reduced to $3.75 from $4.10 on higher corporate charges and capex within the broker's net present value calculation for orchards.

Target price is $3.75 Current Price is $3.27 Difference: $0.48
If SHV meets the Bell Potter target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $4.38, suggesting upside of 37.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Ord Minnett rates SHV as Buy (1) -

There has been a return to financial stability in the 1H for Select Harvests, according to Ord Minnett, following two consecutive
poor crops.

The 1H result release held little import given the recent trading update in April, explains the analyst.

The broker is confident net debt has peaked at $237.9m with management guiding to a year end net debt of between $160-170m.

Target falls to $5.15 from $5.25. Buy. The broker's positive investment thesis still requires a positive catalyst to get the share price moving upwards.

Target price is $5.15 Current Price is $3.27 Difference: $1.88
If SHV meets the Ord Minnett target it will return approximately 57% (excluding dividends, fees and charges).

Current consensus price target is $4.38, suggesting upside of 37.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

UBS rates SHV as Buy (1) -

Select Harvests' 1H24 earnings before interest and tax missed UBS expectations due to higher costs and timing issues, though 2H is expected to benefit from profits out of third-party processing, hull, and the value-added business, notes the analyst.

The company increased FY24 guidance for almond crop volumes to 29.5-30kmt (previously 28.5-30kmt) and price to $7.57/kg (previously $7.30-7.50/kg), noting strengthening prices in recent weeks.

However, FY24 almond cost guidance of circa -$199m (-1% YoY) was above UBS' expectations of -$193m.

Accordingly, UBS has reduced EPS forecasts by -67% for FY24 and -23% for FY25. The target is lowered to $4.25 from $4.70. Buy rating retained.

Target price is $4.25 Current Price is $3.27 Difference: $0.98
If SHV meets the UBS target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $4.38, suggesting upside of 37.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Citi rates SMR as Buy (1) -

Citi has initiated coverage of Stanmore Resources with a Buy rating and $4 price target, suggesting here's an opportunity opening up for investors with the recent sell-off in met coal prices (and related share prices) seen as overdone.

The broker emphasises its in-house met coal price outlook remains "constructive" as it believes a persistent seaborn market deficit, driven by growing Indian demand, should support higher prices for longer.

Citi highlights the acquisition of the Eagle Downs project and the completion of the Poitrel Southern Levee Extension Project ahead of schedule and below budget.

Management's production and cash cost guidance for 2024 remains unchanged, with total saleable coal production forecast at circa 13.2mt and FOB cash costs of around US$100/t.

Buy rating as the stock is viewed as trading on a cheap valuation.

Target price is $4.00 Current Price is $3.28 Difference: $0.72
If SMR meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

This company reports in USD. 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

UBS rates SUN as Buy (1) -

UBS attended the strata insurance industry panel session which highlighted key issues and growth prospects for the sector.

The analyst's main takeaway was strata insurance is expected to grow rapidly, driven by government housing targets due to the increasing preference for strata living.

Gross Written Premium (GWP) is approximately $2.4bn, representing 3-4% of the general insurance industry premium and 18% of home insurance and the market has grown at an estimated 14% compound rate over five years, outpacing the industry average of 8.2% according to APRA.

UBS estimates Suncorp Group has 2%-3% exposure to the strata segment. Buy, $18.20 target.

Target price is $18.20 Current Price is $15.91 Difference: $2.29
If SUN meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $16.78, suggesting upside of 4.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Bell Potter rates TLX as Hold (3) -

Bell Potter raises its target for Telix Pharmaceuticals to $19 from $14.50 after clinical trial risk attached to future revenues from TLX591 were reduced by recent trial data.

The trial generated a large data set to inform investigators about the properties of this agent and confirm its suitability as a potential therapeutic agent for the treatment of metastatic prostate cancer, explains Bell Potter.

The rPFS (radiographic progression free survival) data from ProstACT Select is a phase I study investigating biodistribution,
dosimetry, safety and efficacy of TLX591.

The Hold rating is maintained.

Target price is $19.00 Current Price is $18.15 Difference: $0.85
If TLX meets the Bell Potter target it will return approximately 5% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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

Ord Minnett rates TSK as Hold (3) -

Ord Minnett assesses a "solid" FY24 result for Task Group with revenue and underlying earnings (EBITDA) beating the broker's forecasts by 2% and 5%, respectively.

PAR Technology's scheme implementation agreement continues to progress, notes the broker, with the company set to acquire 100% of Task Group's shares.

Hold rating retained. Target remains 81c.

Target price is $0.81 Current Price is $0.85 Difference: minus $0.04 (current price is over target).
If TSK meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

Ord Minnett rates WPR as Accumulate (2) -

Ord Minnett remains cautious on the REIT sector given volatile sentiment in interest rate markets, despite a slowing economy, though remains positive on service station REITs. These include Dexus Convenience Retail REIT and Waypoint REIT.

Among passive REITs, Australian Unity Office Fund and Dexus Convenience Retail REIT reflect strong value, in the broker's view.

The Accumulate rating and $2.51 target price are unchanged for Waypoint REIT.

Target price is $2.51 Current Price is $2.36 Difference: $0.15
If WPR meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $2.45, suggesting upside of 2.5% (ex-dividends)

The company's fiscal year ends in December.

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 XRO as Outperform (1) -

Macquarie assesses the updated pricing and plans for Xero's UK subscribers, effective 12 September 2024, which aims to simplify offerings and encourage adoption through bundling.

The broker views these changes mirror recent updates in Australia and are expected to benefit average revenue per user by the end of FY25.

Notably the pricing adjustments include discontinuation of the VAT Cashbook plan and the introduction of new plans with bundled features. 

Earnings and dividends forecasts from the broker are retained. Unchanged Outperform rating and $180.70 target price.

Target price is $180.70 Current Price is $135.00 Difference: $45.7
If XRO meets the Macquarie target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $140.82, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

This company reports in NZD. 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