Australian Broker Call

Credit Suisse rates ACL as Neutral (3) -

Credit Suisse reviews the Australian pathology sector and cuts covid-19 PCR testing forecasts from January 2023, to reflect regulation requiring a more expensive GP referral for the test.

The broker expects covid PCR tests to fall from a peak of 60,000 a day to just 5,500, pending infection waves.

The broker estimates tests represent 2% of Australian Clinical Labs' income but will result in a rough halving of earnings (EBIT) margins.

EPS forecasts fall -25% in FY23 and -16% in FY24.

Neutral rating retained. Target price falls to $3.45 from $3.83.

Target price is $3.45 Current Price is $3.11 Difference: $0.34
If ACL meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges).

Market Sentiment: 0.0

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

UBS rates ALU as Neutral (3) -

In research released yesterday, UBS initiated coverage on printed circuit board design software provider Altium with a $37.70 target price.

The broker adopts a Neutral rating and feels management's FY26 revenue target is optimistic in assuming a return to pre-covid growth rates. It's felt recent price rises in the current macroeconomic backdrop may result in lower subscriptions.

Analysis of peers by UBS also suggests margins may contract in the early phase of Altium's SaaS transition.

The broker forecasts growth will slow to 17% compound annual growth rate (CAGR) over next five years from 25% pre-covid due to the above factors as well as a longer term risk in China from geopolitics.

Target price is $37.70 Current Price is $36.54 Difference: $1.16
If ALU meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $36.34, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.5

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

Macquarie rates ASB as Outperform (1) -

Austal has reduced earnings guidance to $58m from $100m as a result of an increased provision for its T-ATS contract. Macquarie notes the company raised a US$7m provision in FY22 related to T-ATS 11 and 12, later increased to US$11.6m.

The company has submitted Requests for Equitable Adjustment seeking recovery of provision costs, but while these remain outstanding the extent of the loss remains uncertain. Macquarie expects it is likely Requests are successful and the loss is reduced. 

The Outperform rating is retained and the target price decreases to $2.70 from $2.90.

Target price is $2.70 Current Price is $1.83 Difference: $0.87
If ASB meets the Macquarie target it will return approximately 48% (excluding dividends, fees and charges).

Current consensus price target is $2.93, suggesting upside of 64.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Macquarie rates BHP as Outperform (1) -

BHP Group is accelerating its Escondida Future Options Study, intending to provide an update in the next 12-18 months. As highlighted by Macquarie, the study feeds into BHP Group's ongoing reshaping of its portfolio towards future trends, with copper a strategic priority. 

Macquarie anticipates BHP Group will spend US$4.8bn over the remainder of the decade to sustain Escondida at 1.2m tonnes per annum for an additional 14 years. 

The Outperform rating is retained and the target price decreases to $49.64 from $50.00.

Target price is $49.64 Current Price is $49.14 Difference: $0.5
If BHP meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $43.83, suggesting downside of -10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.0

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

Ord Minnett rates BHP as Hold (3) -

As BHP Group shares are trading near record highs, Ord Minnett reduces its target price to $36 from $44 and awaits a positive material change in the macroeconomic outlook before upgrading from a Hold rating.

The broker has switched to whitelabeling research by Morningstar. The new target of $36 compares to the last target of $42 (by JP Morgan) in the FNArena database in mid-December last year.

Target price is $42.00 Current Price is $49.14 Difference: minus $7.14 (current price is over target).
If BHP meets the Ord Minnett target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $43.83, suggesting downside of -10.7% (ex-dividends)

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.0

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

UBS rates BXB as Buy (1) -

In an update released yesterday, UBS noted US whitewood pallet prices are down around -4% from August-October last year, potentially indicating demand for pallets was softening. It's felt (more costly) whitewood pallets are likely to be cut first in an economic downturn.

While such slippage in demand is a potential risk, it's not sufficient for the analyst to change a positive outlook for the stock, as some downside is already assumed in forecasts. 

The Buy rating and $14.50 target are unchanged.

Target price is $14.50 Current Price is $11.81 Difference: $2.69
If BXB meets the UBS target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $13.31, suggesting upside of 13.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.4

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

Morgan Stanley rates DTL as Overweight (1) -

Management at Data#3 has provided new 1H profit (PBT) guidance toward the top end of prior guidance for $21-$25m. Despite improving supply chains, improving business momentum has maintained the backlog level, notes the analyst.

Morgan Stanley retains its belief in further positive earnings surprises and maintains an Overweight rating and $7.30 target. Industry view is In-Line.

Target price is $7.30 Current Price is $7.00 Difference: $0.3
If DTL meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $7.07, suggesting downside of -2.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Macquarie rates HAS as Outperform (1) -

The Northern Australia Infrastructure Facility (NAIF) has increased funding for Hastings Technology Metals' Yangibana Rare Earths
Project to $220m from a previous $140m.

With Hastings Technology Metals lifting pre-production capital costs for the project to $658m in February 2022, the loan accounts for more than 50% of total debt required.  

Macquarie expects Hastings Technology Metals will need to raise a further $100m in equity and $200m in debt to fund development. The broker considers increased funding from NAIF to be a key step for Hastings Technology Metals.

The Outperform rating and target price of $4.90 are retained.

Target price is $4.90 Current Price is $3.69 Difference: $1.21
If HAS meets the Macquarie target it will return approximately 33% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Credit Suisse rates HLS as Downgrade to Underperform from Neutral (5) -

Credit Suisse reviews the Australian pathology sector and cuts covid-19 PCR testing forecasts from January 2023, to reflect regulation requiring a more expensive GP referrals for the test.

The broker expects covid PCR tests to fall from a peak of 60,000 a day to just 5,500, pending infection waves.

The broker estimates tests represent 2% of Healius's income but will result in a rough halving of earnings (EBIT) margins and observes the company's "stretched" balance sheet.

EPS forecasts fall -16% in FY23 and -22% in FY24 (the broker advises it sits -22% below consensus). 

Rating downgraded to Underperform from Neutral.  Target price eases to $3.10 from $3.20.

Target price is $3.10 Current Price is $3.32 Difference: minus $0.22 (current price is over target).
If HLS 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 $3.55, suggesting upside of 10.1% (ex-dividends)

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Ord Minnett rates HLS as Upgrade to Hold from Lighten (3) -

Ord Minnett upgrades its rating for Healius to Hold from Lighten on valuation.

By FY27, the broker expects the earnings (EBIT) margin will expand to 13% from 8% prior to the pandemic and approves of the company strategy of selling medical centres and day hospitals to achieve a simpler structure.

The last target price entry in the FNArena database was $2.70 in mid-December last year which now increases to $3.55. Ord Minnett has switched to whitelabeling research by Morningstar (previously: JP Morgan).

Target price is $3.55 Current Price is $3.32 Difference: $0.23
If HLS meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.55, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Citi rates HUB as Neutral (3) -

Hub24's December-quarter trading update fell -2% shy of Citi's funds-under-administration estimates. The PARS and Class acquisitions also underperformed. Adviser numbers rose 9%.

Earnings (EBIT) forecasts fall -3% in FY23 and -4% in FY24, mainly reflecting Class's development costs, says the broker.

Neutral rating retained. Target price falls to $29 from $29.45.

Target price is $29.00 Current Price is $26.70 Difference: $2.3
If HUB meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $31.01, suggesting upside of 21.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Credit Suisse rates HUB as Outperform (1) -

Hub24's December-quarter net flows felly a touch shy of Credit Suisse's and consensus forecasts, and the broker lowers its flows forecasts by between -$0.35bn and -$0.5bn. Class forecasts are also revised down to reflect weaker trends.

Adviser numbers increased, as did the company's share of advisers. The company slightly revised capital expenditure forecasts upward.

EPS forecasts fall -6% in FY23; -3% in FY24; and -2% in FY25. 

Outperform rating is retained, the broker appreciating the company's forecast 30% EPS compound annual growth rate. Target price eases to $33 from $34.

Target price is $33.00 Current Price is $26.70 Difference: $6.3
If HUB meets the Credit Suisse target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $31.01, suggesting upside of 21.8% (ex-dividends)

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Macquarie rates HUB as Outperform (1) -

In an initial response post Hub24's market update, Macquarie reports net inflows for Q2 were decisively stronger than anticipated, lifting total platform funds under administration to $55.bn as at Dec 31.

The numbers compare with a market that only gained slightly over the quarter.

The broker points out the interim result will be impacted by a different accountancy treatment for software intangibles as well as a one-off pre-tax impairment charge of -$3.3m related to the investment in Diverger.

Outperform. Target $32.

Target price is $32.00 Current Price is $26.70 Difference: $5.3
If HUB meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $31.01, suggesting upside of 21.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

UBS rates HUB as Buy (1) -

Hub24's funds under adminstrationg outpaced UBS by 1% thanks largely to non-custodial, lower margin business.

Adviser numbers also rose on the migratory trend to specialist wealth platforms.

FY23 EPS forecasts rise 3% and near-term flows forecasts are revised down to reflect lower flows per adviser in the December quarter.

Buy rating retained. Target price is steady at $31, which reflects the broker's estimate of 30% compound annual earnings growth over three years.

Target price is $31.00 Current Price is $26.70 Difference: $4.3
If HUB meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $31.01, suggesting upside of 21.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Macquarie rates HVN as Neutral (3) -

Following the release of strong first half preliminary results from JB Hi-Fi ((JBH)) Macquarie has upgraded its first half forecasts for Harvey Norman, anticipating the latter will benefit from similar tailwinds. 

Not only did Australian consumers prove resilient over the last year, the broker observes home furniture and consumer electronics spend improved into the end of 2022.

Despite the apparent positive end to the year, Macquarie remains cautious on the coming year as cost of living pressures increase.

The Neutral rating is retained and the target price increases to $4.40 from $4.30.

Target price is $4.40 Current Price is $4.38 Difference: $0.02
If HVN meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $4.44, suggesting downside of -1.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

UBS rates IEL as Buy (1) -

In a research update released yesterday, UBS noted an ongoing strong recovery in Australia for IDP Education, which should be further boosted by the China reopening.

While the analyst feels the recovery profile may be dampened by ongoing bottlenecks in Canada and year-on-year softness of Indian students into Canada, the positive long-term story remains intact.

The Buy rating is unchanged while the target slips to $34.85 from $35.25.

Target price is $34.85 Current Price is $30.10 Difference: $4.75
If IEL meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $33.22, suggesting upside of 11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Citi rates JBH as Buy (1) -

JB Hi-Fi's December-half trading update sharply outpaced Citi and consensus forecasts, the company posting strong sales and higher gross margins across all divisions.

The broker says strong Black Friday and holiday trading has positioned the company well heading into 2023 and, combined with Super Retail's ((SUL)) strong update yesterday, the result suggests the consumer may be in better shape than feared.

Earnings forecasts rise 15% in FY23 and 9% in FY24.

Buy rating retained. Target price rises to $55 from $50.

Target price is $55.00 Current Price is $46.51 Difference: $8.49
If JBH meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $46.03, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in June.

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

Credit Suisse rates JBH as Neutral (3) -

JB Hi-Fi's December-half trading update outpaced consensus and Credit Suisse's forecasts by 10%, thanks to strong Black Friday and holiday trading.

Gross margins also outpaced, save for in New Zealand, which still managed to post near record 17% sales growth on the June half.

Online sales also held up well, aiding earnings (eBIT) margin expansion, says the broker. FY23 EPS forecasts rise 10%, outer year forecasts are steady to reflect macro uncertainty.

Neutral rating retained. Target price rises to $48.58 from $45.73.

Target price is $48.58 Current Price is $46.51 Difference: $2.07
If JBH meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $46.03, suggesting downside of -4.1% (ex-dividends)

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

Macquarie rates JBH as Underperform (5) -

Preliminary first half results from JB Hi-Fi have beaten Macquarie's expectations on both the top and bottom lines. The retailer reported sales growth of 8.6% to $5.3bn and earnings growth of 14% to $479m as customers remain resilient to cost of living pressures. 

By brand, comparable sales growth in the second quarter was up 4.9% for JBH Australia, 9.8% for JBH New Zealand and 3.3% for The Good Guys.

While Macquarie feels the result proves JB Hi-Fi's ability to execute on its sales strategy, the broker remains cautious on the coming year as cost of living pressures increase.

The Underperform rating is retained and the target price increases to $42.10 from $41.30.

Target price is $42.10 Current Price is $46.51 Difference: minus $4.41 (current price is over target).
If JBH 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 $46.03, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in June.

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

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

Preliminary 1H earnings (EBIT) and profit for JB Hi-Fi exceeded consensus forecasts by 14.3% and 15.2%, respectively.

Morgan Stanley points out group earnings growth was skewed to JB Hi-Fi Australia (16.7%) and The Good Guys (9.8%), while JB Hi-Fi New Zealand experienced negative growth (-26.5% in local currency).

The Equal-weight rating and $42 target are unchanged. Industry view: In Line.

Target price is $42.00 Current Price is $46.51 Difference: minus $4.51 (current price is over target).
If JBH meets the Morgan Stanley target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $46.03, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in June.

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

Morgans rates JBH as Add (1) -

First half earnings (EBIT) for JB Hi-Fi  were a 12% beat compared to Morgans forecast, with like-for-like sales growth exceeding expectations for both JB Hi-Fi Australia and The Good Guys.

As a result of this performance and a brighter 2H outlook, the broker increases its earnings forecast for FY23 by 13%. The analyst had previously forecast a -25% drop in 2H profit, which has now improved to a -15% decline.

The Add rating is unchanged and the target rises to $53.00 from $50.00.

Target price is $53.00 Current Price is $46.51 Difference: $6.49
If JBH meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $46.03, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in June.

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 Lighten from Hold (4) -

Ord Minnett raises its FY23 EPS estimate for JB Hi-Fi by 10% (longer-term forecasts unchanged) following stronger-than-expected 1H earnings, supported by sales growth and increased operating margins.

Ord Minnett has switched to whitelabeling research by Morningstar. Due to recent share price strength (and a change of analyst) the broker's rating is downgraded to Lighten from Hold. During 2023 consumer spending is expected to progressively weaken.

At the end of October 2022, the last target in the FNArena database was $46 (set by JP Morgan), which has now fallen to $35.50.

Target price is $35.50 Current Price is $46.51 Difference: minus $11.01 (current price is over target).
If JBH meets the Ord Minnett target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $46.03, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates JBH as Neutral (3) -

JB Hi-Fi's trading update sharply outpaced UBS and consensus forecasts, the company posting strong sales across all its divisions and boosting market share.

Better stock availability, the turnaround at TGG, and a younger customer skew in Australia are just some of the contributors, says the broker.

EPS forecasts rise 14% in FY23 and 5% in FY24.

UBS says the question now is where does covid-inspired earnings (EBIT) expansion settle given a forecast economic slowdown? The broker observes the company is pinning its hopes on NZ.

Neutral rating retained. Target price rises to $46 from $44.

Target price is $46.00 Current Price is $46.51 Difference: minus $0.51 (current price is over target).
If JBH meets the UBS target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $46.03, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in June.

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

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

Morgan Stanley lowers its rating for Lovisa Holdings to Equal-weight from Overweight on concerns over slowing demand as reopening tailwinds ease and macroeconomic headwinds increase (particularly in Europe).

The broker also cites potential for a higher promotional spend in a downturn, along with a weaker Australian dollar, wage inflation and higher costs for roll-outs in new regions. It's also felt launches in new countries may miss forecasts.

The target falls to $25.00 from $27.25.

Target price is $25.00 Current Price is $25.82 Difference: minus $0.82 (current price is over target).
If LOV meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $26.14, suggesting upside of 1.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Ord Minnett rates PMV as Downgrade to Sell from Hold (5) -

Ord Minnett lowers its rating for Premier Investments to Sell from Hold on valuation.

The last target price entry in the FNArena database was $25.60 in early-December last year, which now falls to $19. Ord Minnett has switched to whitelabeling research by Morningstar (was JP Morgan previously).

Target price is $19.00 Current Price is $26.32 Difference: minus $7.32 (current price is over target).
If PMV meets the Ord Minnett target it will return approximately minus 28% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $24.79, suggesting downside of -7.2% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Citi rates RIO as Neutral (3) -

Rio Tinto's December-quarter production fell just shy of Citi's forecasts, taking 2022 production to the lower end of guidance.

Management has flagged that Pilbara iron ore costs will likely be higher than guidance, and copper cost forecasts were unchanged.

2023 production guidance is steady, the company forecasting flat production save for copper.

Citi cuts 2022 earnings forecasts -11% to reflect rising inflation and interest rates, which the broker says have raised closure liability and amortisation of discount. Currency assumptions have also been incorporated.

Neutral rating and $120 target price retained.

Target price is $120.00 Current Price is $120.67 Difference: minus $0.67 (current price is over target).
If RIO meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $115.29, suggesting downside of -5.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.0

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

Macquarie rates RIO as Neutral (3) -

Rio Tinto has retained full year guidance on the back of the release of its fourth quarter production results. The company reported a 2% beat to Macquarie's expected Pilbara iron ore production and a 6% beat to average realised iron ore prices.

The broker notes better than expected iron ore and copper volumes offset a weaker aluminium output, while higher iron ore realised pricing offered upside. At spot pricing, the broker highlights earnings could exceed its base case by 21% and 33% for 2023 and 2024 respectively.

The Neutral rating and target price of $115.00 are retained.

Target price is $115.00 Current Price is $120.67 Difference: minus $5.67 (current price is over target).
If RIO meets the Macquarie target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $115.29, suggesting downside of -5.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.0

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

Morgan Stanley rates RIO as Overweight (1) -

As 4Q iron ore production exceeded the expectations of Morgan Stanley and consensus by 7%, the broker feels 2023 is set for improved performance compared to prior years when meeting guidance was a struggle.

Realised prices of US$94/t  for the 2H were 10% above the broker's forecast due to significantly better low grade iron ore price realisation, though management flagged costs would be sightly higher than the top end of guidance for 2022.

Aluminium production was in line with the consensus forecast, while alumina, copper and bauxite production delivered misses of -3%, -4% and -5%, respectively, versus the broker's forecasts.

The Overweight rating is maintained, with the broker preferring Rio over BHP Group ((BHP)). The $123 target is maintained. Industry View: Attractive.

Target price is $123.00 Current Price is $120.67 Difference: $2.33
If RIO meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $115.29, suggesting downside of -5.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.0

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

Morgans rates RIO as Hold (3) -

Following 4Q results that contained few surprises, Morgans notes most Rio Tinto segments performed in line with guidance except for alumina, which fell short.

The price target rises to $110 from $107 largely as a result of the broker raising its long-term iron ore price forecast to US$72/t from $US65/t.

As the potential from a China reopening is considered largely already incorporated into the current share price, the analyst maintains a Hold rating.

Target price is $110.00 Current Price is $120.67 Difference: minus $10.67 (current price is over target).
If RIO meets the Morgans target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $115.29, suggesting downside of -5.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.0

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

Ord Minnett rates RIO as Lighten (4) -

Fourth quarter production for Rio Tinto was mildly stronger than Ord Minnett had forecast. 

While Pilbara iron ore shipments (the key earnings driver) were also just ahead of the broker's forecast, the broker feels a 35% rise in the Rio share price since November is due to investor hopes around the China reopening. A Lighten rating is maintained.

Ord Minnett has switched to whitelabeling research by Morningstar. The target rises to $99, which compares to the last target of $93 in the FNArena database set back in mid-December last year (by JP Morgan).

Target price is $99.00 Current Price is $120.67 Difference: minus $21.67 (current price is over target).
If RIO meets the Ord Minnett target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $115.29, suggesting downside of -5.5% (ex-dividends)

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.0

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

UBS rates RIO as Sell (5) -

UBS analysts are observing more evidence in Rio Tinto's Q4 update that operationally things seem to be improving, albeit with the added notion there has to date been no change to the company's guidance for 2023.

The broker does cut its own projections on the back of higher provision costs, as well as higher costs for the aluminium business. Both negatives are only partially compensated for through higher price realisation for iron ore.

UBS is not convinced this year's China recovery will take a V-shape, instead argiung it will very much look like an L-shaped recovery instead. Rio Tinto is expected to pay out a lower dividend; US$2.04 (final for 2022) instead of the previously predicted US$2.42.

The dividend forecast for 2023 has been noticeably reduced to US$4.50. UBS is happy to stick with a Sell rating. Price target is $95 (unchanged).

Target price is $95.00 Current Price is $120.67 Difference: minus $25.67 (current price is over target).
If RIO meets the UBS target it will return approximately minus 21% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $115.29, suggesting downside of -5.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.0

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

Credit Suisse rates SHL as Outperform (1) -

Credit Suisse reviews the Australian pathology sector and cuts covid-19 PCR testing forecasts from January 2023, to reflect regulation requiring a more expensive GP referral for the test.

The broker expects covid PCR tests to fall from a peak of 60,000 a day to just 5,500, pending infection waves and retur the sector to a new normal.

The broker estimates tests represent 3.5% of Sonic Healthcare's income (compared with 2% for Healius ((HLS)) and Australian Clinical Labs ((SCL)) ).

While the broker expects Sonic will outperform these peers given its geographical diversity, (covid remains higher per capita in Germany), the company is not immune and Credit Suisse cuts EPS forecasts -9% across FY23 to FY25.

Sonic remains the broker's sector pick, Credit Suisse admiring its strong balance sheet.

Outperform rating retained. Target price eases to $37.50 from $38.50.

Target price is $37.50 Current Price is $31.37 Difference: $6.13
If SHL meets the Credit Suisse target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $34.44, suggesting upside of 9.6% (ex-dividends)

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Macquarie rates SRL as Neutral (3) -

Having reported on its second quarter, Macquarie finds Sunrise Energy Metals development ready. The company closed out the quarter with $20.6m cash on hand, leaving it well placed to advance its titular project towards production. 

Despite this, the broker highlights securing a strategic funding and offtake partner remains the key catalyst for the company in the coming year. It estimates the Sunrise project capital cost at US$2.4bn, with the project forecast to produce 21,300 tonnes of nickel and 4,300 tonnes of cobalt per annum in its first ten years. 

The Neutral rating and target price of $2.10 are retained.

Target price is $2.10 Current Price is $2.08 Difference: $0.02
If SRL meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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

Macquarie rates SUL as Neutral (3) -

Despite impacts of inflation, Super Retail managed to grow earnings ahead of Macquarie's expectations in the first half. The company reported sales growth of 13.0% to $1.96bn over the half, underpinned by strong trading in key retail periods. 

Inventory has increased in the half, and has returned to pre-covid levels relative to sales. Despite the positive update, Macquarie remains somewhat cautious given Super Retail is facing tough comparables over the remainder of the fiscal year.

The Neutral rating is retained and the target price increases to $12.08 from $10.91.

Target price is $12.08 Current Price is $12.25 Difference: minus $0.17 (current price is over target).
If SUL meets the Macquarie target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.70, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

UBS rates SUL as Buy (1) -

Super Retail's December-half trading update sharply outpaced UBS and consensus forecasts, thanks to strong holiday and Black Friday trading across all brands and solid cost and inventory management.

The broker speculates that capital management initiatives may be in the wings as the company unwinds its covid inventory. EPS forecasts rise 7% in FY23 and 6% in FY24.

Rating downgraded to Neutral from Buy to reflect growing macro headwinds. Target price rises to $13.25 from $12.

Target price is $13.25 Current Price is $12.25 Difference: $1
If SUL meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $12.70, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Ord Minnett rates TCL as Downgrade to Lighten from Buy (4) -

Ord Minnett downgrades its rating for Transurban Group to Lighten from Buy on valuation.

While there has been a strong recovery in traffic volumes post covid-19 lockdowns, distributions fell -20% in FY20 and are unlikely to fully recovery until this financial year, suggests the analyst.

Ord Minnett has switched to whitelabeling research by Morningstar. The target falls to $12.00 from the last entry of $15.00 (by JP Morgan) in the FNArena database in mid-October last year.

Target price is $12.00 Current Price is $13.61 Difference: minus $1.61 (current price is over target).
If TCL meets the Ord Minnett target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.89, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

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

A first half trading update by Tyro Payments impressed Morgan Stanley, along with a 25% increase in FY23 earnings (EBITDA) guidance. New customers, revenue growth and gross profit exceeded the broker's expectations.

Morgan Stanley raises its target to $1.60 from $1.40 and believes the trading multiples (which exceed most global peers) are justified, based on recent takeover bids. Equal-weight. Industry view: Attractive.

Target price is $1.60 Current Price is $1.48 Difference: $0.12
If TYR meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $1.89, suggesting upside of 23.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

UBS rates TYR as Buy (1) -

Yesterday, UBS upgraded its FY23 and FY24 earnings (EBITDA) forecasts for Tyro Payments by 24% and 10%, respectively, following management's 25% upgrade to FY23 earnings guidance.

Management also released preliminary 1H results with metrics for transaction value, normalised gross profit and earnings all comfortably ahead of the broker's forecasts.

The analyst's forecasts are set slightly below management guidance due to the company's exposure to discretionary spending and the current macroeconomic backdrop.

The target rises to $1.95 from $1.85. Buy.

Target price is $1.95 Current Price is $1.48 Difference: $0.47
If TYR meets the UBS target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $1.89, suggesting upside of 23.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

UBS rates UMG as Buy (1) -

UBS downgrades United Malt to Neutral from Buy to reflect recent strength in the company's share price. The broker observes supply challenges have eased but so has demand.

Looking forward, the broker says several events carry both risk and opportunity: the new CEO's deleveraging through a capital raising; the company's transformation program; the implementation of pass-through mechanisms; and the averaging of the demand equation as interest in higher end craft beer meets weaker consumer sentiment.

Neutral rating retained. Target price steady at $3.70.

Target price is $3.70 Current Price is $3.66 Difference: $0.04
If UMG meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.83, suggesting upside of 3.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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