Australian Broker Call

Macquarie rates AMC as Outperform (1) -

Macquarie assesses currency changes for Amcor and highlights with around 50% of earnings generated in America, the stronger US dollar negatively impacts the company's US earnings on translation but is positive when converted back to Australian dollars.

All else being equal, a stronger USD lowers reported net debt.

The broker notes Amcor is due to report 2Q25 earnings in early February, forecast to be similar to 1Q25 at an EPS of US16.2c per share.

Healthcare is expected to improve in 2H25, and management has retained EPS guidance of US72c-US76c for FY25, representing growth of 3-8%.

Target price slips to $18 from $18.04. Outperform rating retained.

Target price is $18.00 Current Price is $15.41 Difference: $2.59
If AMC meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $16.40, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

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

Bell Potter rates BDM as Buy (1) -

Burgundy Diamond Mines reported interim December quarter results of US$93m over 1.02mct at an average price of US$91/ct, Bell Potter observes.

The company has generated relatively consistent proceeds over 2024 despite weakness in the rough diamond market.

Proceeds from the update result in lower-than-expected indicative 2024 revenue of US$434m compared to Bell Potter's estimate of US$456m and sales of 4.8mct.

Management indicated revenue may not be recognised in 4Q2024, leading the analyst to lower earnings forecasts by -57% for 2024 and -30% for 2025.

Target price falls to 18c from 22c. Buy rating remains.

Target price is $0.18 Current Price is $0.08 Difference: $0.102
If BDM meets the Bell Potter target it will return approximately 131% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 1.0

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

Bell Potter rates CVL as Initiation of coverage with Buy (1) -

Bell Potter initiates coverage of Civmec with a Buy rating and a $1.75 target price.

Civmec provides heavy engineering and construction services to the energy, resources, infrastructure, marine, and defense sectors. An estimated 60% of FY24 revenue was generated from iron ore businesses.

Historically, the company has achieved through-the-cycle growth of 11% p.a. over a 10-year period, driven by dominant customers BHP Group ((BHP)), Rio Tinto ((RIO)), and Fortescue ((FMG)).

Bell Potter believes Civmec will continue to benefit from government spending of $15bn on Royal Australian Navy shipbuilding in WA.

On Bell Potter's assessment, the stock is trading at a discount to peers of approximately -15%. Buy rated with a $1.75 target price.

Target price is $1.75 Current Price is $1.32 Difference: $0.43
If CVL meets the Bell Potter target it will return approximately 33% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Citi rates DXS as Neutral (3) -

Dexus's updated portfolio valuations show a decline in office of -3.2% and a rise in industrial of 1.4%, resulting in an overall fall of -2.1% in valuation, in line with Citi's expectations.

The REIT trades at a discount to NTA of approximately -20% amidst poor sentiment, particularly for office space, the broker comments.

Countering this, the broker notes the relative quality of the Dexus portfolio and Australia's low vacancy rate compared to overseas.

Citi anticipates continued demand for quality industrial and logistics space over the next few years.

Neutral rating retained. Target $7.30.

Target price is $7.30 Current Price is $6.71 Difference: $0.59
If DXS meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $7.84, suggesting upside of 17.5% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.2

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

Bell Potter rates JHX as Initiation of coverage with Buy (1) -

Bell Potter initiates coverage of James Hardie Industries with a Buy rating and a $64 target price.

The broker highlights the company's quality as the world's largest producer of fibre cement board, with 65% exposure to the US repair and remodeling market, which is typically less cyclical than new housing construction.

Management recently outlined its aim to triple North American earnings to US$3.4bn by FY35, supported by double-digit top-line growth on a compound basis and margin expansion of 350-550bps. The analyst estimates this equates to $87 per share in today's value.

Buy rated. Target price $64.

Target price is $64.00 Current Price is $53.82 Difference: $10.18
If JHX meets the Bell Potter target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $59.84, suggesting upside of 17.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

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

Market Sentiment: 0.8

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

UBS rates NAB as Sell (5) -

National Australia Bank reinforced the stability of its management team and ongoing focus on succession planning at the AGM. UBS highlights the ongoing emphasis on customer service and increased investment in digital, data, and analytics, including AI.

Interest rates are expected to be cut in 1H 2025, with the bank noting that every decline of -25bps in the cash rate negatively impacts the net interest margin by -1bps.

The CET1 ratio remains robust, the broker comments, with approximately $600m remaining of the $3bn buyback.

The Sell rating and $37.50 target price remain unchanged.

Target price is $37.50 Current Price is $37.99 Difference: minus $0.49 (current price is over target).
If NAB 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 $32.87, suggesting downside of -11.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.7

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

Bell Potter rates PER as Downgrade to Speculative Hold from Buy (3) -

Bell Potter downgrades Percheron Therapeutics to Speculative Hold from Buy. Target price falls to 1c from 14c.

Following the latest trial data in Duchenne Muscular Dystrophy, management has decided to terminate the trial as soon as possible and practicable.

The broker believes the move is sensible as there is "no hint" the drug had any patient benefits and highlights the risks for investors in "small, single-arm clinical trials."

Bell Potter notes the board will conduct a strategic review of the pipeline in the new year for Avicursen.

Target price is $0.01 Current Price is $0.01 Difference: $0.003
If PER meets the Bell Potter target it will return approximately 43% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.5

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

Citi rates PMT as Buy (1) -

In a strategic deal, Patriot Battery Metals announced the placement of 9.9% of shares at a 35% premium to the 90-day volume-weighted average price in exchange for approximately 12.5% of spodumene concentrate tonnes at full production or 100ktpa with VW.

Citi notes the agreement has left the "door open" for further collaboration and represents VW's first direct investment in a mining company. The broker views the investment as validation of the project's quality.

The analyst believes there is no other "greenfields hard rock discovery like Shaakichiuwaanaan" in the current cycle.

Citi increases net profit forecasts by 39% for 2025 and 40% for 2026.

Buy rating retained, high risk noted, and target lowered to 50c from 75c.

Target price is $0.50 Current Price is $0.32 Difference: $0.185
If PMT meets the Citi target it will return approximately 59% (excluding dividends, fees and charges).

Current consensus price target is $0.81, suggesting upside of 118.9% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

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

Market Sentiment: 1.0

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

UBS rates QBE as Buy (1) -

UBS believes there are upside risks to 2024 earnings from lower CATs and more robust 2H 2024 income for QBE Insurance.

The analyst notes a "benign" CAT period for November/December so far, with a more seasonally busy period in the Australian home market approaching.

Management is likely to initiate an annual buyback of US$300m, UBS states, pointing to additional upside risks to 2025 consensus earnings.

Target price remains at $21.50. Buy rating maintained, with the report highlighting a compelling valuation on an 11.1x price-to-earnings multiple.

Target price is $21.50 Current Price is $18.92 Difference: $2.58
If QBE meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $20.70, suggesting upside of 7.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.7

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

Ord Minnett rates QUB as Accumulate (2) -

Management at Qube Holdings confirmed "modest" earnings growth for FY25, with a very robust comparison period for Patrick Stevedoring in the previous year.

Higher crop yields in NSW have boosted the company's grain trading and logistics infrastructure, Ord Minnett notes. Container volumes have grown, while automotive import volumes have declined.

In 2025, the analyst expects higher land-side logistics charges will support margins and offset cost pressures.

Ord Minnett maintains an Accumulate rating. Target rises to $4.09 from $4.01.

Target price is $4.09 Current Price is $3.96 Difference: $0.13
If QUB meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $4.23, suggesting upside of 9.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.8

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

Ord Minnett rates SRG as Downgrade to Accumulate from Buy (2) -

Ord Minnett downgrades SRG Global to Accumulate from Buy due to valuation.

The analyst highlights ongoing growth in work-in-hand for the company, up 10% since August, representing approximately $925m in contract wins across a broad range of sectors. Work-in-hand stands at $3.3bn at the end of 1H25.

Ord Minnett raises earnings forecasts by an average of 17% for FY25-FY27, with the target price increasing to $1.32 from $1.13.

Due to the strong share price performance, the stock is now rated Accumulate.

Target price is $1.32 Current Price is $1.27 Difference: $0.05
If SRG meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $1.42, suggesting upside of 13.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.8

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

Citi rates XRO as Buy (1) -

Citi estimates the new remuneration package for Xero's CEO will increase opex growth by approximately 2% in FY26, including the "top-up options."

The increase may pressure consensus opex forecasts for FY26. The analyst notes Xero's adherence to achieving the Rule of 40 suggests management's confidence in top-line growth, with much of the increase already flagged in the rise in spend per employee.

Citi maintains a Buy rating with a $198 target price.

Target price is $198.00 Current Price is $170.63 Difference: $27.37
If XRO meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $196.15, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

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

Market Sentiment: 0.7

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

Ord Minnett rates XRO as Hold (3) -

To align with other US-based CEO packages, Xero announced an increase in CEO Cassidy's remuneration, with a slight cut to the base salary but a sizeable rise in both short- and long-term incentives.

Ord Minnett makes no changes to earnings forecasts.

The target price of $180 and Hold rating are retained.

Target price is $180.00 Current Price is $170.63 Difference: $9.37
If XRO meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $196.15, suggesting upside of 17.5% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

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

Market Sentiment: 0.7

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