Australian Broker Call

Ord Minnett rates A2M as Accumulate (2) -

China is a2 Milk Co's key battleground, Ord Minnett suggests, and there are hurdles leaving a2's shares as materially undervalued. The new registration process is weighing on the near term, and demographics and consumer trends are weighing on the long term.

The broker nevertheless expects a2 to continue to capture market share in a declining market as increasing premiumisation partially offsets China's falling birth rate.

Buy and $7.20 target retained.

Target price is $7.20 Current Price is $4.26 Difference: $2.94
If A2M meets the Ord Minnett target it will return approximately 69% (excluding dividends, fees and charges).

Current consensus price target is $5.32, suggesting upside of 23.7% (ex-dividends)

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: 0.6

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

Morgan Stanley rates ANZ as Overweight (1) -

At its AGM, ANZ Bank noted group revenue is "in line with" 2H23, while Markets income for 1Q24 to date is "in line with" the 1H23 average and "stronger than" 2H23.

This implies that total revenue is tracking 1% ahead of Morgan Stanley's forecast, Markets income is more than 10% above, and revenue ex-Markets is -1% below.

Productivity initiatives are "partially" offsetting inflationary pressures, which is consistent with the broker's expectations. There has been "no material increase" in loan losses in 1Q24, which is better than forecast.

Overweight and $26.30 target retained. Industry view: In-Line.

Target price is $26.30 Current Price is $25.83 Difference: $0.47
If ANZ meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $26.15, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in September.

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 BOE as Outperform (1) -

Boss Energy has signed its maiden sales contract for 1Mlb U3O8 over a 7-year period, which Macquarie had previously highlighted as a major near-term catalyst. First production at Honeymoon is imminent and Boss is now a multi-national producer following the Alta Mesa
acquisition.

Aside from having recently been included in the ASX200, Boss Energy offer catalysts from imminent production and an expansion study, the broker notes, while uranium price tailwinds remain strong.

Outperform and $5.00 target retained.

Target price is $5.00 Current Price is $4.08 Difference: $0.92
If BOE meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $4.76, suggesting upside of 9.0% (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 EHL as Outperform (1) -

Emeco Holdings has entered binding agreement with Macmahon Holdings ((MAH)) to exit its underground contract mining business, with completion expected in early 2024.

The agreement includes a five-year preferred supplier agreement giving Emeco first right to bid any of Mcmahon's equipment rental needs in surface and underground.

Exiting contracting is a good strategic outcome, Macquarie suggests, reducing contractual risk profile and avoiding direct competition with customers.

Outperform retained. Target falls to $1.03 from $1.08.

Target price is $1.03 Current Price is $0.65 Difference: $0.38
If EHL meets the Macquarie target it will return approximately 58% (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

Macquarie rates GEM as Neutral (3) -

G8 Education's has upgraded 2023 guidance, now expecting earnings of $99-102m compared to Macquarie 's prior $97m. G8 has also been able to grow earnings over the December half, the broker notes, despite occupancy declining an estimated -100 basis points.

Incorporating guidance drives Macquarie's 2023 EPS forecast up 4.1%. Greater confidence in cost control drives 5% upgrades to 2024/25 EPS.

Target rises to $1.16 from $1.09, Neutral retained.

Target price is $1.16 Current Price is $1.15 Difference: $0.01
If GEM meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Ord Minnett rates JBH as Downgrade to Sell from Lighten (5) -

E-commerce platforms have been outperforming physical stores lately, Ord Minnett notes. Data shows online sales rose 10% in October, with overall sales only up 1%.

As this structural shift marches on, retailers with greater online exposure should take market share, Ord Minnett believes.

The broker downgrades JB Hi-Fi to Sell from Lighten. $36.50 target retained.

Target price is $36.50 Current Price is $51.56 Difference: minus $15.06 (current price is over target).
If JBH meets the Ord Minnett target it will return approximately minus 29% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $44.65, suggesting downside of -13.7% (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

Ord Minnett rates LOV as Hold (3) -

E-commerce platforms have been outperforming physical stores lately, Ord Minnett notes. Data shows online sales rose 10% in October, with overall sales only up 1%.

As this structural shift marches on, retailers with greater online exposure should take market share, Ord Minnett believes.

The broker retains Hold and a $22.00 target for Lovisa Holdings.

Target price is $22.00 Current Price is $23.90 Difference: minus $1.9 (current price is over target).
If LOV meets the Ord Minnett target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $22.99, suggesting downside of -4.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Ord Minnett rates MEZ as Lighten (4) -

Meridian Energy's underlying earnings continue to grow strongly despite lower hydroelectric volumes, Ord Minnett notes. For 2024, the broker estimates 5% growth and would have been mid-teens but for some abnormally large hedge gains.

Ord Minnett has downgraded earnings forecasts mainly due to weaker hydroelectric volumes, with longer term forecasts largely unchanged.

Target falls to NZ$4.40 from NZ$4.60, Lighten retained.

Current Price is $4.90. 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

Macquarie rates MGH as Outperform (1) -

Macquarie has reviewed its forecasts and valuation for Maas Group, noting the recent AGM update highlighted improving earnings visibility. Updated guidance is a solid improvement from that provided at the FY23 results for FY24 to remain broadly consistent with the 2H23 run-rate.

The residential outlook remains subdued, the broker notes, but creates medium-term upside risk. The outlook for Construction Materials, Civil and Commercial remains strong.

Outperform retained, target rises to $4.55 from $3.50.

Target price is $4.55 Current Price is $3.83 Difference: $0.72
If MGH meets the Macquarie target it will return approximately 19% (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

Citi rates MP1 as Buy (1) -

The key focus from Citi's meeting with Megaport's CEO was the expanded product range, including the upgraded 400gig backbone/100G ports enabling cross-sell of WAN solutions to existing customers.

However, the broker expects the sales process to be long given customers will already have a WAN solution in place. Citi does not expect Megaport to report a significant improvement in Key metrics in Q2 but sees potential for monthly recurring revenue (MRR) growth to benefit from promotions.

The broker also notes earnings margins could benefit from closure of unprofitable data centres,

Target of $12.25 and Buy rating retained.

Target price is $12.25 Current Price is $9.06 Difference: $3.19
If MP1 meets the Citi target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $12.81, suggesting upside of 42.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Ord Minnett rates MTS as Accumulate (2) -

E-commerce platforms have been outperforming physical stores lately, Ord Minnett notes. Data shows online sales rose 10% in October, with overall sales only up 1%.

As this structural shift marches on, retailers with greater online exposure should take market share, Ord Minnett believes.

The broker retains an Accumulate rating and $4.00 target for Metcash.

Target price is $4.00 Current Price is $3.50 Difference: $0.5
If MTS meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $4.00, suggesting upside of 15.3% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Ord Minnett rates ORI as Hold (3) -

Ord Minnett forecasts Orica's newly acquired Terra Insights' revenue will grow on an 8% CAGR until FY27, underpinned by mining activity tailwinds from battery demand and government stimulus for infrastructure.

Orica will fund the $561m acquisition with cash and debt, but gearing will not exceed the 30-40% target range.

Hold and $16.50 target retained.

Target price is $16.50 Current Price is $15.97 Difference: $0.53
If ORI meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $17.77, suggesting upside of 13.2% (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 PMV as Sell (5) -

E-commerce platforms have been outperforming physical stores lately, Ord Minnett notes. Data shows online sales rose 10% in October, with overall sales only up 1%.

As this structural shift marches on, retailers with greater online exposure should take market share, Ord Minnett believes.

The broker retains a Sell and $19.50 target on Premier Investments.

Target price is $19.50 Current Price is $27.33 Difference: minus $7.83 (current price is over target).
If PMV meets the Ord Minnett target it will return approximately minus 29% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $26.12, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Ord Minnett rates PXA as Accumulate (2) -

Pexa shares have been volatile surrounding updates around the Smoove acquisition and currently screen for Ord Minnett as materially undervalued.

Yet Ord Minnett believes Pexa's entry into the UK will be more difficult than its adoption in Australia. Pexa is facing a "cold start" problem, struggling to get its network effects started.

Accumulate and $15.00 target retained.

Target price is $15.00 Current Price is $10.70 Difference: $4.3
If PXA meets the Ord Minnett target it will return approximately 40% (excluding dividends, fees and charges).

Current consensus price target is $14.26, suggesting upside of 31.5% (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

Ord Minnett rates SUL as Downgrade to Sell from Lighten (4) -

E-commerce platforms have been outperforming physical stores lately, Ord Minnett notes. Data shows online sales rose 10% in October, with overall sales only up 1%.

As this structural shift marches on, retailers with greater online exposure should take market share, Ord Minnett believes.

The broker downgrades Super Retail to Sell from Lighten. $10.50 target retained.

Target price is $10.50 Current Price is $15.46 Difference: minus $4.96 (current price is over target).
If SUL meets the Ord Minnett target it will return approximately minus 32% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.72, suggesting downside of -18.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Citi rates VCX as Neutral (3) -

Citi has reduced its FY25 and FY26 FFO and AFFO per share to take into account the development of Chatswood Chase as a result of reduced rental income during the development period and higher finance costs.

The broker notes other operational risks include exposure to the performance of its retailer tenants, which will ultimately influence rents and portfolio occupancy. Vicinity Centres is also exposed to changes in supply-demand dynamics within its properties’ catchment areas.

The Neutral rating and target price of $2.00 are retained.

Target price is $2.00 Current Price is $2.00 Difference: $0.005
If VCX meets the Citi target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $1.90, suggesting downside of -5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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