Australian Broker Call

Citi rates ANZ as Neutral (3) -

Citi believes dividends from Australian banks could come under pressure, but the relative yield is still higher vs ex-US equities. As a result, the broker expects offshore investors to continue seeking these stocks as they look to diversify away from the US.

Factors expected to pressure dividends include tightening capital levels, with rising business credit also adding to capital intensity. Additionally, banks' payout ratios are already near the upper end of the guidance range, and the revenue outlook is weak due to net interest margin pressure.

Among the big four, the broker believes ANZ Bank's dividend is likely the most contentious, given it is not fully franked and requires DRP in action. The bank, along with National Australia Bank ((NAB)) has also reached the capital floor ahead of peers due to business mix.

Neutral. Target unchanged at $27.50.

Target price is $27.50 Current Price is $29.63 Difference: minus $2.13 (current price is over target).
If ANZ meets the Citi target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $27.25, suggesting downside of -8.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

Morgans rates ASX as Upgrade to Hold from Trim (3) -

ASX's Investor Day outcomes were broadly in line with Morgans' expectations. The broker cautions elevated depreciation and amortisation (D&A) will weigh on FY26 earnings.

FY26 total expense growth is guided at 8-11%, with operating expenses worsening by -4-7%, and D&A alone contributing around 4% to cost growth as technology projects go live, highlights the broker.

Capex remains elevated through FY27, notes Morgans, with guidance of -$170-180m in FY25/26 and -$160-180m in FY27, significantly above global peers.

The analyst notes the CHESS upgrade remains on track for a staged release beginning in 4Q26. Morgans raises its target price to $72 from $70 and upgrades to a Hold rating from Trim.

Target price is $72.00 Current Price is $72.46 Difference: minus $0.46 (current price is over target).
If ASX meets the Morgans target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $66.20, suggesting downside of -9.0% (ex-dividends)

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

Morgans rates AX1 as Downgrade to Hold from Buy (3) -

Accent Group delivered a softer-than-expected trading update, notes Morgans, with management citing ongoing weakness in the lifestyle footwear segment. A highly promotional environment also weighed on gross margins, notes the broker.

FY25 earnings (EBIT) guidance of $108-111m implies to the analysts flat year-on-year growth and came in around -18% below consensus expectations.

Like-for-like sales declined -1.0% for the first 23 weeks of 2H25, with performance deteriorating to -2.5% over the most recent 16 weeks, versus a positive 2.2% in the first seven weeks.

The broker lowers FY25 and FY26 EBIT forecasts by -16% and -15%, respectively, due to weaker sales, lower margins, and slightly higher operating costs.

Morgans expects sports-focused brands to outperform lifestyle banners, and sees long-term upside from newer concepts like Sports Direct and Nude Lucy.

The target price falls to $1.85 from $2.00. Rating downgraded to Hold from Accumulate.

Target price is $1.85 Current Price is $1.36 Difference: $0.49
If AX1 meets the Morgans target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $2.30, suggesting upside of 70.5% (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 CBA as Sell (5) -

Citi believes dividends from Australian banks could come under pressure, but the relative yield is still higher vs ex-US equities. As a result, the broker expects offshore investors to continue seeking these stocks as they look to diversify away from the US.

Factors expected to pressure dividends include tightening capital levels, with rising business credit also adding to capital intensity. Additionally, banks' payout ratios are already near the upper end of the guidance range, and the revenue outlook is weak due to net interest margin pressure.

The broker notes consensus is for dividend growth in CommBank over FY25-26 due to better organic capital generation vs peers. The bank also has the potential to push its payout ratio band above the 70-80% target range.

Sell. Target unchanged at $100.

Target price is $100.00 Current Price is $179.35 Difference: minus $79.35 (current price is over target).
If CBA meets the Citi target it will return approximately minus 44% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $109.25, suggesting downside of -39.1% (ex-dividends)

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

Ord Minnett rates CBA as Sell (5) -

Ord Minnett has analysed CommBank's recent share price rise that pushed its valuation over the $300bn mark, making it the most expensive bank in the world.

The broker notes index funds now own around 29% of the stock vs 18% in 2017, and retail investors own 47%, down from 51% in 2023.

The analyst points to a "vicious cycle" where investment fund buying is driving the price, forcing passive investors and industry funds to buy more to maintain their benchmarks, and active managers to increase exposure to cut underweight positions.

The broker notes there's no obvious catalyst to reverse this trend, but warns in the banking sector reversals can be rapid.

Sell. Target unchanged at $105.

Target price is $105.00 Current Price is $179.35 Difference: minus $74.35 (current price is over target).
If CBA meets the Ord Minnett target it will return approximately minus 41% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $109.25, suggesting downside of -39.1% (ex-dividends)

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

Macquarie rates CKF as Neutral (3) -

Ahead of Collins Foods' FY25 results on June 24, Macquarie made modest revisions to FY25 earnings on the assumption of zero earnings from Taco Bell following the announcement of its exit. 

The broker is slightly below consensus on KFC same-store sales growth, and is overall -1% below consensus on EPS.

The analyst lowered the underlying EBITA margin recovery profile in FY26-27 due to the impact of the minimum wage increase and the company's inability to offset cost headwinds amid subdued sales growth.

FY25 EPS forecast cut by -4% and FY26 by -18%.

Neutral. Target unchanged at $8.20 as earnings downgrades are offset by lower beta and capex.

Target price is $8.20 Current Price is $7.44 Difference: $0.76
If CKF meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $9.68, suggesting upside of 30.3% (ex-dividends)

The company's fiscal year ends in April.

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

UBS rates EVN as Downgrade to Sell from Neutral (5) -

UBS downgrades Evolution Mining to Sell from Neutral, with the target price lowered by -16% to $6.70.

The stock is up 81% year-to-date, with the market regarding Evolution as the "cleaner" large-cap ASX gold play with copper, the analyst highlights.

Post the reserve and resource statement, alongside increasing capex forecasts, UBS lowers EPS by -14% for FY25 and -15% for FY26.

With lower earnings expectations, the analyst can no longer support the stock's current valuation, hence the downgrade.

UBS forecasts the gold price to reach US$3,600/oz, and its long-term forecast of US$2,200/oz remains unchanged.

Target price is $6.70 Current Price is $9.20 Difference: minus $2.5 (current price is over target).
If EVN meets the UBS target it will return approximately minus 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.14, suggesting downside of -16.1% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.6

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

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

While Stockland ((SGR)) and Mirvac Group should benefit from lower interest rates as residential sales volumes improve, Morgan Stanley emphasises Stockland is in a better position to outperform.

The analyst proposes residential-related income for Stockland will be over 50% of earnings before interest and tax, with a heavy exposure to Macquarie Park 2, industrial, and data centres, which underwrites potential development upside.

Morgan Stanley argues the return on capital employed (ex-investments) is around 5pts higher than Mirvac's due to fee-generating residential/land-lease partnerships, while Mirvac's office developments are not as lucrative as before FY22.

Equal-weight retained. Target price lifts to $2.45 from $2.25. Industry view: In Line.

Target price is $2.45 Current Price is $2.37 Difference: $0.08
If MGR meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $2.35, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in June.

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

Macquarie rates MPL as Neutral (3) -

Macquarie details how the Federal Government is considering the enforcement of a 'payout ratio' to increase payments to hospitals from insurers.

The analyst notes that while the goal is admirable, the ability to "execute" is challenging and is likely to be more subtle and nuanced.

Macquarie expects more small initiatives which will impact FY26 results.

A Neutral rating with $4.25 target retained.

Target price is $4.25 Current Price is $4.90 Difference: minus $0.65 (current price is over target).
If MPL meets the Macquarie target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.67, suggesting downside of -4.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Ord Minnett rates MVF as Buy (1) -

Following a second embryo mix-up incident at Monash IVF and the subsequent resignation of its CEO, Ord Minnett highlights several risks to the company's outlook.

They include weaker new patient volumes, likely loss of medical staff, higher opex and increased regulation. As a result, the broker downgraded FY26-27 EPS by -13-14%.

Still, the analyst maintained the Buy rating as a 10x FY27 price-earnings multiple is regarded as an attractive entry point.

Target cut to $0.95 from $1.05.

Target price is $0.95 Current Price is $0.67 Difference: $0.285
If MVF meets the Ord Minnett target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $1.10, suggesting upside of 69.2% (ex-dividends)

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 NAB as Sell (5) -

Citi believes dividends from Australian banks could come under pressure, but the relative yield is still higher vs ex-US equities. As a result, the broker expects offshore investors to continue seeking these stocks as they look to diversify away from the US.

Factors expected to pressure dividends include tightening capital levels, with rising business credit also adding to capital intensity. Additionally, banks' payout ratios are already near the upper end of the guidance range, and the revenue outlook is weak due to net interest margin pressure.

The broker notes market expectations are largely for flat dividends from National Australia Bank and Westpac ((WBC)) but this is still at the payout target range of 65-75%, leaving little room for earnings disappointment.

The bank has also reached the capital floor ahead of peers due to its business mix.

Sell. Target unchanged at $30.50.

Target price is $30.50 Current Price is $38.87 Difference: minus $8.37 (current price is over target).
If NAB meets the Citi target it will return approximately minus 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $33.17, suggesting downside of -14.8% (ex-dividends)

The company's fiscal year ends in September.

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

UBS rates NEM as Buy (1) -

UBS retains a Buy rating on Newmont Corp with a $105 target price.

The analyst views the miner as being in a more sound position, having integrated deals and resolved production issues. The March quarter came in better than expected, with 2025 production on track for 5.6moz.

Net debt sits below US$5bn, and management is expected to return excess sales proceeds and excess free cash flow. UBS notes -US$1.3bn in development capex is targeted to Cadia, Tanami, and Ahafo North.

The broker forecasts the gold price to reach US$3,600/oz, and its long-term forecast of US$2,200/oz remains unchanged.

Target price is $105.00 Current Price is $88.07 Difference: $16.93
If NEM meets the UBS target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $97.60, suggesting upside of 11.7% (ex-dividends)

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: 1.0

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

Macquarie rates NHF as Underperform (5) -

Macquarie details how the Federal Government is considering the enforcement of a 'payout ratio' to increase payments to hospitals from insurers.

The analyst notes that while the goal is admirable, the ability to "execute" is challenging and is likely to be more subtle and nuanced.

Macquarie expects more small initiatives which will impact FY26 results.

An Underperform rating and $5.55 target price is retained for nib Holdings.

Target price is $5.55 Current Price is $6.56 Difference: minus $1.01 (current price is over target).
If NHF meets the Macquarie target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.89, suggesting upside of 6.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

UBS rates NST as Downgrade to Neutral from Buy (3) -

UBS downgrades Northern Star Resources to Neutral from Buy, with a decline in the target price of -11% to $23 following disappointing March quarter results.

While Northern Star assigns Super Pit guidance at 2moz for FY26, consensus sits at 1.85moz and UBS at 1.81moz. The broker anticipates guidance to be revised at the KCGM trip in early August. Hemi is also expected to be delayed by 12 months.

The analyst lowers EPS estimates by -6% for FY26 and FY27 on expected lower production of -3%.

UBS forecasts the gold price to reach US$3,600/oz, and its long-term forecast of US$2,200/oz remains unchanged.

Target price is $23.00 Current Price is $22.53 Difference: $0.47
If NST meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $22.46, suggesting upside of 8.3% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.6

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

Bell Potter rates NUF as Buy (1) -

Commencement of a strategic review of Nufarm’s Seeds business could act as a significant value catalyst, suggests Bell Potter, particularly if it results in a full or partial divestment.

Excluding the omega-3 platform, the Seeds segment is expected to deliver over $75m in FY25 earnings, with recent industry transactions supporting potential valuation ranges for the segment of between $644-947m, notes the broker.

The analysts point out that applying peer trading multiples to the crop protection and remaining corporate functions suggests an asset value between $2.1-2.3bn.

The current share price implies to the broker either a zero valuation for Seeds or a substantial discount to global crop protection peers.

Bell Potter retains a Buy rating and a $3.45 target price.

Target price is $3.45 Current Price is $2.24 Difference: $1.21
If NUF meets the Bell Potter target it will return approximately 54% (excluding dividends, fees and charges).

Current consensus price target is $3.22, suggesting upside of 37.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

Ord Minnett rates REG as Buy (1) -

Ord Minnett expects the upcoming November 1 rollout of aged care funding reforms to materially boost medium-term earnings for Regis Healthcare, driven primarily by higher Refundable Accommodation Deposit (RAD) pricing.

Regis has increased its advertised RAD prices by 19% since December 2024 to an average of $638,000, well ahead of the broker’s estimates.

All else being equal, this could lift RAD funding by $500m to $2.2bn, increasing future RAD retention and Daily Accommodation Payment (DAP) pre-tax profit by around $10m each, forecasts the broker.

Although the new legislation has been delayed by four months, the analysts see ample headroom for further RAD pricing growth, with the cap expected to hit $800,000 by FY28.

Ord Minnett raises its target price to $8.25 from $7.40 and maintains a Buy rating.

Target price is $8.25 Current Price is $7.38 Difference: $0.87
If REG meets the Ord Minnett target it will return approximately 12% (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

Morgan Stanley rates SGP as Overweight (1) -

While Stockland and Mirvac Group ((MGR)) should benefit from lower interest rates as residential sales volumes improve, Morgan Stanley emphasises  Stockland is in a better position to outperform.

The analyst proposes residential-related income for Stockland will be over 50% of earnings before interest and tax, with a heavy exposure to Macquarie Park 2, industrial, and data centres, which underwrites potential development upside.

Morgan Stanley argues the return on capital employed (ex-investments) is around 5pts higher than Mirvac's due to fee-generating residential/land-lease partnerships, while Mirvac's office developments are not as lucrative as before FY22.

Overweight retained. Target price lifts to $6.75 from $6.50. Industry view: In Line.

Target price is $6.75 Current Price is $5.61 Difference: $1.14
If SGP meets the Morgan Stanley target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $5.69, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.4

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

Morgans rates VNT as Upgrade to Hold from Trim (3) -

Morgans upgrades Ventia Services to Hold from Trim.

The company has won $3.4bn of contracts since releasing financial results, meaning the 2024 record order book will continue to rise.

The analyst previously estimated around -$460m of defence contracts would be lost in June, but a seven-month extension has pushed out this loss to 2026.

It appears there has been little reputational damage to Ventia from the ACCC findings, the broker details, as contract wins continue.

By removing the valuation discount of -15% for reputational risk and making slight modifications to earnings estimates, the target price rises to $4.90 from $4.05.

Target price is $4.90 Current Price is $4.90 Difference: $0
If VNT meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $4.78, suggesting downside of -3.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Citi rates WBC as Sell (5) -

Citi believes dividends from Australian banks could come under pressure, but the relative yield is still higher vs ex-US equities. As a result, the broker expects offshore investors to continue seeking these stocks as they look to diversify away from the US.

Factors expected to pressure dividends include tightening capital levels, with rising business credit also adding to capital intensity. Additionally, banks' payout ratios are already near the upper end of the guidance range, and the revenue outlook is weak due to net interest margin pressure.

The broker notes market expectations are largely for flat dividends from Westpac and National Australia Bank ((NAB)) but this is above the payout target range of 65-75%, leaving little room for earnings disappointment.

Still, the broker expects the bank to push through 75% given the strong CET1 position in the short term and hopes for capital relief from overlay releases and IRRBB.

Sell. Target unchanged at $27.75.

Target price is $27.75 Current Price is $33.36 Difference: minus $5.61 (current price is over target).
If WBC meets the Citi target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.98, suggesting downside of -12.9% (ex-dividends)

The company's fiscal year ends in September.

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

Ord Minnett rates ZIP as Buy (1) -

In the second guidance upgrade in two months, highlights Ord Minnett, management at Zip Co has raised FY25 cash EBTDA guidance by around 5% to at least $160m.

The guidance raise follows strong trading momentum, particularly in the US where May total transaction value (TTV) growth exceeded 40% year-on-year, explains the broker.

Pleasingly, commentary suggests, this comes with no material deterioration in bad debts, which remain at around 1.6% of TTV.

Management also confirmed the business remains on track to meet its two-year targets and has repurchased 12.3m shares for $22.6m under its $50m buyback program.

Ord Minnett raises its cash EBTDA forecasts by 3-15% over the forecast period, supported by strong operational performance. The target price is increased to $3.40 from $3.00. Buy rating retained.

Target price is $3.40 Current Price is $2.67 Difference: $0.73
If ZIP meets the Ord Minnett target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $3.30, suggesting upside of 24.5% (ex-dividends)

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