Australian Broker Call

Macquarie rates AFG as Outperform (1) -

Total lodgements in the March quarter were down -15.5% and the mix continues to shift to the more profitable AFG HL book, Macquarie notes. This is a higher margin product as the company captures a higher commission and, if funded by Australian Finance Group, also captures a funding spread.

The broker maintains an Outperform rating with a steady $1.43 target. Macquarie suggests a bottoming of mortgage activity and continued growth in the AFG HL mix would support earnings growth.

Target price is $1.43 Current Price is $1.19 Difference: $0.24
If AFG meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Macquarie rates AST as Neutral (3) -

Ahead of the FY19 result on May 13, Macquarie reviews the outlook. FY19 operating earnings (EBITDA) of $1.13bn are expected. Revenue growth appears to be under pressure for electricity distribution and CES businesses making it difficult for the company to outperform expectations.

Despite the tough regulatory environment, Macquarie still considers the outlook sound. However, the share price is capturing the value of lower bond yields already and a Neutral rating is maintained. Target is raised $1.77 from $1.72.

Target price is $1.77 Current Price is $1.76 Difference: $0.01
If AST meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $1.72, suggesting downside of -2.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Macquarie rates BHP as Outperform (1) -

Macquarie saw a "soft" March quarter trading update with several impacts making their presence felt on lower-than-expected production volumes. Cost guidance has crept up as well.

In addition, the possible restart of Vale’s Brucutu mine is likely to see the iron ore miners sell off, predict the analysts.

Target price is $41.00 Current Price is $38.29 Difference: $2.71
If BHP meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $37.29, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

Citi rates BKL as Sell (5) -

Citi analysts remain of the view Blackmores owns a strong consumer brand and long term thematics including increasing health consciousness and a growing Asian middle class should be supportive of the company's growth outlook.

But... shorter term too many questions remain about the company's marketing strategy and whatever it is doing in China. Post yet another disappointing market update, the analysts have further lowered forecasts, emphasising the shares are not cheap, despite the sizeable de-rating.

Target price declines by -8% to $82.50. Sell rating remains firmly in place.

Target price is $82.50 Current Price is $93.58 Difference: minus $11.08 (current price is over target).
If BKL meets the Citi target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $84.54, suggesting downside of -9.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Credit Suisse rates BKL as Neutral (3) -

Credit Suisse lowers estimates for earnings per share by around -15% for FY19 and FY20 because of softer Australasian sales and the inclusion of -$5m per annum of restructuring charges.

The broker also notes the new Chinese e-commerce law has taken a permanent toll on the daigou trade, with many traders leaving the industry.

The company has acknowledged it overstocked channels to China in the first half and has altered selling incentives to avoid this occurring again.

Credit Suisse maintains a Neutral rating and reduces the target to $85 from $100.

Target price is $85.00 Current Price is $93.58 Difference: minus $8.58 (current price is over target).
If BKL meets the Credit Suisse target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $84.54, suggesting downside of -9.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Macquarie rates BKL as Neutral (3) -

Macquarie was disappointed with the March quarter update as there was a sharp deceleration in demand. Sales and margins were weaker and volatility is expected to persist in the near term amid a transition in China's strategy.

The company has maintained guidance for modest FY19 revenue growth. The broker maintains a Neutral rating and reduces the target to $86 from $95.

Target price is $86.00 Current Price is $93.58 Difference: minus $7.58 (current price is over target).
If BKL meets the Macquarie target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $84.54, suggesting downside of -9.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Morgan Stanley rates BKL as Underweight (5) -

March quarter earnings fell -45%, Morgan Stanley observes. The broker suggests the company is going through a painful de-stocking, which is necessary to mitigate brand risk and protect long-term earnings.

There are significant changes ahead, amid regulation uncertainty and elevated inventory levels. The risks remain high, in the broker's view, and an Underweight rating is maintained. Target is $75. Industry view is: Cautious.

Target price is $75.00 Current Price is $93.58 Difference: minus $18.58 (current price is over target).
If BKL meets the Morgan Stanley target it will return approximately minus 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $84.54, suggesting downside of -9.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Morgans rates BKL as Hold (3) -

March quarter profit was the weakest since the first quarter of 2015. Revenue dropped -4.3% and operating earnings (EBITDA) declined -35.6%. Morgans suspects the company may be through the worst but management still needs to fix the business in several areas and this will take time.

FY19 guidance was reiterated but Morgans believes this is too vague. Blackmores continues to expect modest FY19 revenue growth and for second half net profit to be below the first half. Morgans maintains a Hold rating and reduces the target to $83.75 from $86.00.

Target price is $83.75 Current Price is $93.58 Difference: minus $9.83 (current price is over target).
If BKL meets the Morgans target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $84.54, suggesting downside of -9.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Ord Minnett rates BKL as Hold (3) -

March quarter net profit was down -43.3%. Ord Minnett does not believe the sales trajectory and margins are representative of a business with market-leading brands and demographic tailwinds.

As the approach to China is under review and a CEO is yet to be found, the broker finds it difficult to assess the near-term outlook with any conviction. Ord Minnett maintains a Hold rating and lowers the target to $95 from $100.

Target price is $95.00 Current Price is $93.58 Difference: $1.42
If BKL meets the Ord Minnett target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $84.54, suggesting downside of -9.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Citi rates CHC as Buy (1) -

Operational conditions remain favourable, point out analysts at Citi. Looking forward to the Q3 trading update, they suggest yet another upgrade to management's guidance might be forthcoming.

Buy rating retained, while the price target lifts to $11.10.

Target price is $11.10 Current Price is $9.77 Difference: $1.33
If CHC meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $10.31, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.6

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

Deutsche Bank rates CIM as Hold (3) -

Management has confirmed FY19 guidance for net profit of $790-840m. The company achieved 5% net profit growth in the first quarter, in line with the implied guidance range of 1-8%.

Management has noted construction and services are gaining momentum and the mining sector is strengthening.

Deutsche Bank maintains a Hold rating and $46.15 target.

Target price is $46.15 Current Price is $49.40 Difference: minus $3.25 (current price is over target).
If CIM meets the Deutsche Bank target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $48.52, suggesting downside of -1.8% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Macquarie rates CIM as Neutral (3) -

First quarter net profit was solid, in Macquarie's opinion. Margins are at relatively high levels, hence the broker notes profit growth is driven by revenue.

The company has reaffirmed net profit guidance of $790-840m. The broker notes the company is a beneficiary of Australia's infrastructure expenditure over the next decade.

The business offers 8% growth in earnings per share in FY19, which Macquarie considers is attractive in a broader challenged market. Neutral rating maintained, as the stock is trading relatively close to the target. Target is raised to $51.26 from $50.90.

Target price is $51.26 Current Price is $49.40 Difference: $1.86
If CIM meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $48.52, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Ord Minnett rates CIM as Accumulate (2) -

March quarter revenues grew 6% and net profit 5%. Management has reaffirmed 2019 net profit guidance of $790-840m.

Ord Minnett observes the company continues to make progress and has a strong position in attractive and buoyant markets. Accumulate rating and $49.18 target maintained.

Target price is $49.18 Current Price is $49.40 Difference: minus $0.22 (current price is over target).
If CIM meets the Ord Minnett target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $48.52, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

UBS rates CIM as Neutral (3) -

Cimic reported a quarterly profit 2% ahead of the broker, underpinned by domestic infrastructure construction and improving global contract mining volumes. The tender outlook continues to firm, and includes some $130bn of PPP opportunities.

Post restructure Cimic is leaner, more profitable and generates more consistent cash flows, the broker notes. Its dominant position in Oz construction sees it highly leveraged to the infrastructure pipeline. A Neutral rating reflects fair value. Target rises to $50.00 from $49.40.

Target price is $50.00 Current Price is $49.40 Difference: $0.6
If CIM meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $48.52, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Citi rates COH as Buy (1) -

Cochlear has quicker-than-expected announced the launch of its own cochlear implant that can be used for two types of MRI scans without the need to remove the internal magnet and Citi analysts state this has increased confidence in their forecasts for the company.

The implant is available in Germany with Citi analysts now expecting approval for most key countries should be in the bag on time for FY20. No changes made. Buy. Target price $198.

Target price is $198.00 Current Price is $179.55 Difference: $18.45
If COH meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $168.30, suggesting downside of -6.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.5

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

Credit Suisse rates COH as Underperform (5) -

The company has launched its new 3.0 Tesla MRI implant which allows users to undergo these MRIs without surgery. Credit Suisse expects the company will receive limited benefit from the new product in the second half.

In the broker's view, until Cochlear receives regulatory approval and launches this new implant in key developed markets it will continue to experience market share losses. Underperform rating and $168 target maintained.

Target price is $168.00 Current Price is $179.55 Difference: minus $11.55 (current price is over target).
If COH meets the Credit Suisse target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $168.30, suggesting downside of -6.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.5

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

Deutsche Bank rates COH as Sell (5) -

The company has launched the Nucleus Profile Plus cochlear implant, designed to be compatible with routine 1.5 and 3.0 Tesla MRI scans without the need to remove the internal magnet.

Deutsche Bank considers this a positive development for the company as it has been losing market share to Advanced Bionics' recently launched product.

The broker increases cochlear implant revenue estimates from FY20 onwards to reflect the new product. A weak FY19 result is expected and the stock is rated Sell, considered expensive relative to its growth outlook. Target is $151.50.

Target price is $151.50 Current Price is $179.55 Difference: minus $28.05 (current price is over target).
If COH meets the Deutsche Bank target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $168.30, suggesting downside of -6.3% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.5

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

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

The company has launched its 3.0 Tesla MRI compatible implant which Morgan Stanley observes puts it on a level footing with peers and should stem recent losses of market share.

Some risks over the short term remain, until the full roll-out is achieved. FY19 net profit guidance of $265-275m is unchanged and the broker is now more confident in the FY20 outlook.

Morgan Stanley retains an Equal-weight rating and raises the target to $163 from $160. In-Line industry view.

Target price is $163.00 Current Price is $179.55 Difference: minus $16.55 (current price is over target).
If COH meets the Morgan Stanley target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $168.30, suggesting downside of -6.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.5

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

Ord Minnett rates COH as Lighten (4) -

The company has launched its new cochlear implant, designed to withstand two of the main frequencies of MRI scans. This addresses Ord Minnett's concern that Cochlear was at risk of ceding market share, as implant clinics increasingly alerted potential recipients to the importance of this functionality.

A contraction is still expected in unit sales in the June half, particular in the US, but growth should return by FY20, in the broker's view. Lighten rating maintained. Target is raised to $162 from $155.

Target price is $162.00 Current Price is $179.55 Difference: minus $17.55 (current price is over target).
If COH meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $168.30, suggesting downside of -6.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.5

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

UBS rates COH as Sell (5) -

Cochlear is launching a new implant which can allow for MRI scans without the internal battery having to be first removed. The product will first be made available in Germany, followed by other European countries, and then other regions pending approval (eg from the US FDA).

Where MRI scans are a key driver of choice in implants, this product closes the gap to competitor Advanced Bionics, the broker notes, which launched its own product last year. That said, the broker suggests the market continues to price in sustained double-digit unit sales and upgrades and this means a Sell rating and $158 target is retained.

Target price is $158.00 Current Price is $179.55 Difference: minus $21.55 (current price is over target).
If COH meets the UBS target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $168.30, suggesting downside of -6.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.5

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

Macquarie rates COL as Neutral (3) -

The company is due to provide a strategic update on June 18. Macquarie suggests there is a slight possibility there could be a revision of the dividend, given the growing capital expenditure and weak earnings trajectory.

Earnings estimates are reduced by -0.6-3.6% because of dilution from the sale of the pubs and higher cost of debt assumptions.

Although the discount to Woolworths ((WOW)) is starting to close it remains too wide, in the broker's view. Neutral maintained. Target is $12.19.

Target price is $12.19 Current Price is $12.38 Difference: minus $0.19 (current price is over target).
If COL meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.93, suggesting downside of -3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Macquarie rates DLX as No Rating (-1) -

DuluxGroup has received. and accepted, a takeover bid from Nippon Paint and Macquarie has now moved to No Rating.

Current Price is $9.76. Target price not assessed.

Current consensus price target is $6.95, suggesting downside of -28.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

UBS rates FNP as Buy (1) -

Recent industry feedback based on dairy and nutritionals provides support for the broker's positive investment thesis, and a site visit provided the broker with confidence in Freedom Foods' execution capabilities.

There is a risk of dairy conditions deteriorating further into FY21 but the broker is happy with its forecasts, which suggest compound annual earnings growth of 55% over FY19-22. Buy and $6.60 target retained.

Target price is $6.60 Current Price is $5.17 Difference: $1.43
If FNP meets the UBS target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $6.01, suggesting upside of 16.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Macquarie rates GWA as Neutral (3) -

GWA has completed the acquisition of Methven. This will be 5% accretive in FY20. The company's exposure to the renovations and repair segment in Australia will increase to 57% from 53% and its global exposure will be around 60%.

Macquarie believes the company is executing well and winning market share, although the macro outlook is tough. Neutral rating maintained. Target is $3.60.

Target price is $3.60 Current Price is $3.31 Difference: $0.29
If GWA meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.39, suggesting upside of 2.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Ord Minnett rates HSO as Hold (3) -

The company has updated FY19 guidance in relation to the proposed takeover by Brookfield Asset Management. Hospital operating earnings for FY19 are expected in the range of $362-376m, implying growth of 5-9%.

Ord Minnett was not surprised by the news and believes the implications for the business and share price should be minimal, given the takeover proposal appears almost certain to proceed. Hold rating and $2.34 target maintained.

Target price is $2.34 Current Price is $2.46 Difference: minus $0.12 (current price is over target).
If HSO meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.43, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

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

Morgan Stanley observes the company has over-delivered on cost synergies but this is now well understood by the market. Some revenue synergies are being delivered but the broker believes this remains a work in progress.

Further cost savings may be needed to protect earnings. Positive catalysts appear long dated and an Equal-weight rating is maintained. Target is $34. Industry view is In-Line.

Target price is $34.00 Current Price is $35.31 Difference: minus $1.31 (current price is over target).
If JHG meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $33.98, suggesting downside of -3.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.2

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

UBS rates LYC as No Rating (-1) -

Lynas' March quarter rare earth production fell short of expectation due to a slower than assumed ramp up back from the December shutdown. Rates were nevertheless improving by the end of the quarter, the broker notes. Management is confident of sustaining stronger rates.

Lynas is now able to separate its neodymium from its praseodymium, as you do, which better meets customer needs and opens new market segments, the broker suggests. No further word on Malaysian regulations or the Wesfarmers ((WES)) bid.

The broker is advising and is thus currently restricted from making a recommendation.

Current Price is $2.01. Target price not assessed.

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

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

Deutsche Bank downgrades to Hold from Buy, noting retail leasing conditions are forecast to get worse for landlords. In addition to slowing income growth, the broker believes balance sheets will come under pressure as cap rates are forecast to expand.

The broker assesses over $10m in shopping centre assets are currently available for sale in the market.

Current Price is $2.81. Target price not assessed.

Current consensus price target is $2.54, suggesting downside of -9.7% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Morgan Stanley rates NEA as Overweight (1) -

Morgan Stanley notes the market may have been sceptical of the initial US expansion but the company had success in the first half and has flagged re-investment of around $15m per annum into growth initiatives.

These include targeted vertical expansion in the US, Canadian expansion and more product and content. The broker believes investors expected a material step up in investment and actively support it, as the stock has rallied as these initiatives were announced.

Overweight. Industry view is In-Line. Price target is raised to $4.20 from $3.00.

Target price is $4.20 Current Price is $3.43 Difference: $0.77
If NEA meets the Morgan Stanley target it will return approximately 22% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Deutsche Bank rates OSH as Buy (1) -

Deutsche Bank notes revenue in the March quarter was down -21% because of timing of shipments. The broker also notes PNG LNG continues to operate well above nameplate capacity.

The broker reminds investors that only 10% of LNG sales are subject to spot pricing, which has been particularly low in recent months. Buy rating and $9.20 target maintained.

Target price is $9.20 Current Price is $8.04 Difference: $1.16
If OSH meets the Deutsche Bank target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $8.63, suggesting upside of 7.4% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

Macquarie rates OSH as Outperform (1) -

First quarter production was softer than expected. Macquarie notes the focus remains on a path to growth, with PNG LNG expansion in hand and Papua LNG on track for 2024 production.

The broker notes Oil Search is the least exposed to the LNG spot market of stocks under coverage, which is anticipated to remain weak over the next two years as new supply enters the market from the US.

Target price is $9.50 Current Price is $8.04 Difference: $1.46
If OSH meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $8.63, suggesting upside of 7.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

Ord Minnett rates OSH as Hold (3) -

March quarter production was softer than Ord Minnett expected. Total production was at the bottom of the run rate required to meet full year guidance of 28-31.5 mmboe.

Issues regarding liquids output are expected to be resolved and higher production is likely in upcoming quarters. Major milestones were reached on the expansion project and the Papua gas agreement has been signed.

Ord Minnett maintains a Hold rating and reduces the target to $8.50 from $8.55.

Target price is $8.50 Current Price is $8.04 Difference: $0.46
If OSH meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $8.63, suggesting upside of 7.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

UBS rates OSH as Neutral (3) -

The bad news is Oil Search saw a weak start to 2019, the broker notes, with Q1 revenues down -21% on lower LNG prices and sales volumes. The good news is PNG LNG continues to perform strongly and growth projects are proceeding in PNG and Alaska.

While some of the volume miss is down to timing, a -30% lower Japanese LNG price cannot be ignored. But for Oil Search it's mostly about growth catalysts from here, and the broker believes those are fully priced in. Neutral and $8.00 target retained.

Target price is $8.00 Current Price is $8.04 Difference: minus $0.04 (current price is over target).
If OSH meets the UBS target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.63, suggesting upside of 7.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

Morgans rates OTW as Add (1) -

Morgans lowers organic growth forecasts slightly. The broker notes the company has a history of delivering around 20% organic growth and this remains likely for the medium term.

The main reason for lower near-term growth forecasts relates to supplier changes, which have slowed delivery times. This is expected to be resolved at the end of 2019. The broker maintains an Add rating and $5.77 target.

Target price is $5.77 Current Price is $4.85 Difference: $0.92
If OTW meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Citi rates PRU as Buy (1) -

Perseus Mining has, in the opinion of analysts at Citi, released a "solid" March quarter production report. Gold output was pretty stable, while costs (AISC) fell by no less than -19%. A financing agreement for the development of Yaoure further supports the analysts' growing optimism.

On the back of all these encouraging achievements, Citi maintains the Buy/High Risk rating, while lifting the price target to 60c from 55c. The analysts point out the gold miner is on track to meet FY19 guidance of 271-291koz at cost of US$925-1000/oz; this compares with Citi's forecasts of 279koz at US$943/oz.

Target price is $0.60 Current Price is $0.45 Difference: $0.15
If PRU meets the Citi target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $0.59, suggesting upside of 31.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Macquarie rates PRU as Outperform (1) -

March quarter production was strong and costs at Edikan were lower than expected. The approval of Yaoure is key to the outlook. Sissingue also continues to perform to plan with increased movements in the quarter.

Macquarie maintains an Outperform rating and raises the target to $0.60 from $0.55. FY19 estimates for earnings per share are lifted by 8%.

Target price is $0.60 Current Price is $0.45 Difference: $0.15
If PRU meets the Macquarie target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $0.59, suggesting upside of 31.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Citi rates RIO as Buy (1) -

For Citi's early response to the March quarter production report, see yesterday's Australian Broker Call Report. The analysts saw a weak report, generally weaker-than-expected across the board. No changes made to $108 price target or Buy rating.

Target price is $108.00 Current Price is $96.40 Difference: $11.6
If RIO meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $96.49, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

Credit Suisse rates RIO as Neutral (3) -

Rio Tinto has downgraded iron ore shipment guidance to 333-343mt, and a recovery in the second quarter remains subject to weather conditions. Credit Suisse believes the lower end of the range is a stretch, requiring around 88mt per quarter, despite only shipping at, or above, this rate twice in history.

However, Credit Suisse suspects less tonnage into already tight market may ultimately mean prices offset more than the loss of volumes. March quarter numbers were soft but the broker notes it is not unusual for this to occur, given the season. A Neutral rating and $84 target are maintained.

Target price is $84.00 Current Price is $96.40 Difference: minus $12.4 (current price is over target).
If RIO meets the Credit Suisse target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $96.49, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

Deutsche Bank rates RIO as Hold (3) -

Rio Tinto has lowered iron ore guidance. Shipments from the Pilbara in the March quarter were the lowest since the first quarter of 2015, at 69mt.

Deutsche Bank calculates annualised shipments run at a rate of 276mt which compares to a whole-of-system capacity of 360mt.

The broker maintains a Hold rating and $89.80 target.

Target price is $89.80 Current Price is $96.40 Difference: minus $6.6 (current price is over target).
If RIO meets the Deutsche Bank target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $96.49, suggesting upside of 0.1% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

Macquarie rates RIO as Outperform (1) -

The company has cut 2019 iron ore shipment guidance to 333-343mt after a weak first quarter outcome. Macquarie believes the lower guidance is a stretched target and cuts its forecasts to 330mt.

Meanwhile, buoyant iron ore prices continue to drive earnings momentum and supply issues are supporting higher prices. The broker maintains an Outperform rating and raises the target to $107 from $106.

Target price is $107.00 Current Price is $96.40 Difference: $10.6
If RIO meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $96.49, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

Ord Minnett rates RIO as Hold (3) -

March quarter production numbers revealed weak iron ore shipments because of the impact from fire and the cyclones. Aluminium was mixed, with strong bauxite volumes and relatively soft aluminium output. Copper was in line with Ord Minnett's estimates.

The broker observes Rio Tinto is set for another extraordinary year of cash flow because of the iron ore market disruption. As the stock is trading near valuation a Hold rating is maintained. Target is raised to $103 from $99.

Target price is $103.00 Current Price is $96.40 Difference: $6.6
If RIO meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $96.49, suggesting upside of 0.1% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

UBS rates RIO as Neutral (3) -

Cyclone Veronica and the fire at Cape Lambert led to a predictable -14% drop in Rio's March quarter production, leading to a reduction in FY production guidance. The flipside, the broker notes, is a stronger iron ore price supported by the dam failure in Brazil and Veronica's temporary closure of Port Hedland.

Were the broker to input the current iron ore spot price, earnings forecasts would rise 19%. The broker lifts its target to $98.00 from $97.50 but retains Neutral on recent share price strength.

Target price is $98.00 Current Price is $96.40 Difference: $1.6
If RIO meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $96.49, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.3

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

Deutsche Bank rates SCG as Downgrade to Sell from Hold (5) -

Deutsche Bank downgrades to Sell from Hold, noting retail leasing conditions are forecast to get worse for landlords. In addition to slowing income growth, the broker believes balance sheets will come under pressure as cap rates are forecast to expand.

The broker assesses over $10m in shopping centre assets are currently available for sale in the market.

Current Price is $3.90. Target price not assessed.

Current consensus price target is $3.95, suggesting upside of 1.2% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

UBS rates SGP as Sell (5) -

Reports suggest both Stockland and Aveo Group ((AOG)) are progressing transactions in the retirement living sector. An independent assessment ranks Aveo ahead of Stockland on catchment quality and overlap, the broker notes. Stockland is looking to sell part of its retirement living business but has so far failed.

With residential conditions continuing to deteriorate the broker sees little chance of a sale, and downside risk to earnings. Sell and $3.60 target retained.

Target price is $3.60 Current Price is $3.90 Difference: minus $0.3 (current price is over target).
If SGP meets the UBS target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.74, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.2

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

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

March quarter traffic was ahead of Credit Suisse estimates. The broker increases FY19 proportional earnings estimates by 1%, based on higher traffic growth assumptions.

The broker raises the target to $12.20 from $11.80 and downgrades to Underperform from Neutral on valuation grounds.

Credit Suisse expects management will provide updates on the delivery of WestConnex and debt raisings on Queensland roads at its investor briefing on April 29.

Target price is $12.20 Current Price is $13.13 Difference: minus $0.93 (current price is over target).
If TCL 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 $12.53, suggesting downside of -4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Deutsche Bank rates TCL as Buy (1) -

Traffic growth in the March quarter was slightly stronger than Deutsche Bank expected. The broker notes major toll road projects appear to be progressing to plan, with the WestGate tunnel legislation, including the Citylink funding, passed by the Victorian Parliament in March.

Deutsche Bank retains a Buy rating and $13.25 target.

Target price is $13.25 Current Price is $13.13 Difference: $0.12
If TCL meets the Deutsche Bank target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $12.53, suggesting downside of -4.6% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Macquarie rates TCL as Neutral (3) -

March quarter traffic was mixed, in Macquarie's view, with Brisbane disappointing and Citylink (Melbourne) better than expected. The variation on expectations was not enough to change the broker's outlook.

The strong share price performance reflects a record low bond yield and suggests the stock is fully priced. Neutral rating and $13.27 target maintained.

Target price is $13.27 Current Price is $13.13 Difference: $0.14
If TCL meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $12.53, suggesting downside of -4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Morgans rates TCL as Hold (3) -

March quarter traffic data were slightly softer than Morgans expected. Average daily traffic growth across the portfolio was up 2.3%. Earnings estimates are slightly reduced and the broker makes no change to forecast distributions.

While retaining a Hold rating, the broker believes it prudent investors consider trimming overweight positions, as previous experience has shown that the share price can come under pressure if bond yields rebound strongly from their lows. Target is reduced to $12.08 from $12.10.

Target price is $12.08 Current Price is $13.13 Difference: minus $1.05 (current price is over target).
If TCL meets the Morgans target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.53, suggesting downside of -4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

UBS rates TCL as Buy (1) -

Traffic growth of 2.3% in the March quarter was largely as expected but does help correct some of the worrying trends apparent in the prior quarter, the broker suggests.

Transurban has outperformed the market by some 20% over the past six months, which the broker puts down to yield attractiveness and bond prices fall. Despite the outperformance the broker retains Buy and a $13.75 target, suggesting the traffic turnaround should provide continued support.

Target price is $13.75 Current Price is $13.13 Difference: $0.62
If TCL meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $12.53, suggesting downside of -4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

UBS rates TLS as Upgrade to Buy from Neutral (1) -

UBS notes Telstra is a "divisive" stock, for which one should still be wary of internal risks while at the same time acknowledging external tailwinds are building, namely NBN/5G upside, a dissipating mobile threat from TPG Telecom ((TPM)) and a more rational Optus (in terms of price discounts) ahead of the 5G launch. The broker does not believe those tailwinds are currently priced in.

UBS has increased its earnings forecasts and its target to $3.60, and suggests the current dividend now looks sustainable and 5G offers upside. Rating upgraded to Buy.

Target price is $3.60 Current Price is $3.37 Difference: $0.23
If TLS meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.24, suggesting downside of -3.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Macquarie rates WAF as Outperform (1) -

The company has released a revised outlook for Sanbrado. The mine is now expected to produce 300,000 ounces in the first full year of production. Life-of-mine production estimates are broadly in line with Macquarie's forecasts.

Achieving first gold in the third quarter of 2020 is the main catalyst for the stock. Macquarie maintains an Outperform rating and $0.50 target.

Target price is $0.50 Current Price is $0.31 Difference: $0.19
If WAF meets the Macquarie target it will return approximately 61% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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