Australian Broker Call

Credit Suisse rates ABP as Neutral (3) -

For the third (material) time in three years investors in Abacus Property have to accept shorter-term earnings dilution in exchange for longer-term growth potential, notes Credit Suisse, commenting upon the latest equity raising.

The group announced a $200m capital raise from institutions to fund development and acquisitions, and a further $15m may be raised via a shareholder purchase plan. The broker maintains its Neutral rating and $3.51 target price.

Target price is $3.51 Current Price is $3.35 Difference: $0.16
If ABP meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $3.65, suggesting upside of 9.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Ord Minnett rates ABP as Lighten (4) -

Ord Minnett views Abacus Property's $200m institutional equity raise and $15m share purchase plan as funding previously announced acquisitions.

The broker estimates the raising is around -4.5% dilutive to funds from operations (FFO) and lowers its target price to $3.40 from $3.50. the Lighten rating is unchanged.

Target price is $3.40 Current Price is $3.35 Difference: $0.05
If ABP meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.65, suggesting upside of 9.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Citi rates ANZ as Neutral (3) -

Recent outperformance by Australian banks compared to global peers since the Uraine/Russia crisis began may be hard to sustain, according to Citi. The difficulty of finding growth in the domestic economy is considered a handbrake.

The broker feels the recent outperformance may be partly due to Australia’s commodities-dependent economy, strong capital adequacy and the potential uplift from rising interest rates.

ANZ Bank remains the third preference among the big four banks, with Westpac ((WBC)) the most preferred. The Neutral rating and $29.25 target are retained.

Target price is $29.25 Current Price is $27.58 Difference: $1.67
If ANZ meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $30.05, suggesting upside of 9.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Morgan Stanley rates BHP as No Rating (-1) -

Morgan Stanley revisits BHP Group's Climate Transition Action Plan which was approved by shareholders last November.

The analyst feels the company's ESG credentials will improve following various planned actions including the Petroleum demerger, the potential exit from Thermal Coal and the pending BHP Mitsui Coal (BMC) exit.

As a reminder, the group is looking to attain net zero emissions in its operations by 2050.

Morgan Stanley is unable to provide a rating or target price on BHP Group. Industry view: In-Line.

Current Price is $46.25. Target price not assessed.

Current consensus price target is $48.74, suggesting upside of 4.9% (ex-dividends)

The company's fiscal year ends in June.

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: 0.2

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

Ord Minnett rates BSL as Buy (1) -

Despite strong cost inflation arising from the Ukraine/Russia conflict, Ord Minnett points out spot spreads are still generating a strong 18% free cash flow yield for BlueScope Steel from FY23 onwards. In addition, spot earnings are still around the consensus estimate.

A strong demand environment, ongoing capital management and valuation support leads the broker to remain Buy-rated with an unchanged $25 target price.

Target price is $25.00 Current Price is $19.65 Difference: $5.35
If BSL meets the Ord Minnett target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $25.06, suggesting upside of 25.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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) -

Recent outperformance by Australian banks compared to global peers since the Uraine/Russia crisis began may be hard to sustain, according to Citi. The difficulty of finding growth in the domestic economy is considered a handbrake.

The broker feels the recent outperformance may be partly due to Australia’s commodities-dependent economy, strong capital adequacy and the potential uplift from rising interest rates.

CommBank remains the least preferred by Citi among the big four banks, with Westpac ((WBC)) the number one pick. The Sell rating and $90.75 target are retained.

Target price is $90.75 Current Price is $106.29 Difference: minus $15.54 (current price is over target).
If CBA meets the Citi target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $92.45, suggesting downside of -12.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.6

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

Citi rates CCX as Buy (1) -

A key takeaway for Citi from Torrid's (a key US competitor to City Chic Collective) 4Q results was management's expectation for sales momentum to improve and grow positively.

In addition, data suggest to the broker City Chic US and Avenue materially outperformed Torrid in February 2022. However, Torrid is upping its marketing spend, which is expected to increase competitive tension.

Citi retains its Neutral rating and $4 target price.

Target price is $4.00 Current Price is $3.39 Difference: $0.61
If CCX meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $5.18, suggesting upside of 52.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

UBS rates CCX as Buy (1) -

City Chic Collective's key US competitor Torrid released FY21 results slightly above consensus and raised prices to mitigate inflation, notes UBS.

The broker feels City Chic Collective is well placed to gain market share and has well diversified product sourcing. The latter is seen as relevant given Torrid's sales were impacted by supply chain and inventory issues. 

The Buy rating and $5 target price are maintained.

Target price is $5.00 Current Price is $3.39 Difference: $1.61
If CCX meets the UBS target it will return approximately 47% (excluding dividends, fees and charges).

Current consensus price target is $5.18, suggesting upside of 52.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Ord Minnett rates JBH as Buy (1) -

Despite reinstated price discounts by Vodafone brand TPG Telecom ((TPG)), Ord Minnett still believes subscriber growth will be driven by network quality and the 5G rollout.

The broker notes the discounts in the secondary sales channel for JB Hi-Fi are lower than for the majority of the previous 12 months. The Buty rating and $57 target are retained.

Target price is $57.00 Current Price is $48.93 Difference: $8.07
If JBH meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $56.68, suggesting upside of 13.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Morgans rates MYD as Downgrade to Hold from Add (3) -

Following a review of  late February's 1H results for MyDeal.com.au, Morgans increases its earnings (EBITDA) loss forecasts. As a result the target price falls to $0.60 from $0.90 and the rating is lowered to Hold from Add.

The broker feels there may be a lack of catalysts from future sales updates, given management has set a gross sales target of $500m by FY25. This is the same year management expects earnings profitability, a year later than the analyst had predicted.

Target price is $0.60 Current Price is $0.63 Difference: minus $0.03 (current price is over target).
If MYD meets the Morgans target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Citi rates NAB as Neutral (3) -

Recent outperformance by Australian banks compared to global peers since the Uraine/Russia crisis began may be hard to sustain, according to Citi. The difficulty of finding growth in the domestic economy is considered a handbrake.

The broker feels the recent outperformance may be partly due to Australia’s commodities-dependent economy, strong capital adequacy and the potential uplift from rising interest rates.

National Australia Bank remains the second most preferred by Citi among the big four banks, with Westpac ((WBC)) the number one pick. The Neutral rating and $30.50 target are retained.

Target price is $30.50 Current Price is $31.21 Difference: minus $0.71 (current price is over target).
If NAB meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $31.91, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

UBS rates QUB as Neutral (3) -

Qube Holdings has now specified its $400m capital management program will be executed in the form of an off-market buyback. UBS, in an initial response, reminds investors it had previously suggested an off-market buyback seemed like the most obvious choice.

Previously management at Qube wasn't certain about the utilisation of franking credits, but UBS now points out today's announcement implies Qube will be able to use its balance of franking credits as a partial source of funding.

On UBS's calculations, eligible super funds could realise a 6% premium to the market price. In addition, this initiative does not mean Qube is now ex-growth, points out the broker.

The Neutral rating and $3.30 target are unchanged.

Target price is $3.30 Current Price is $3.01 Difference: $0.29
If QUB meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $3.32, suggesting upside of 8.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Morgans rates RED as Upgrade to Add from Hold (1) -

Morgans believes the pathway to gold production in the next quarter at Red 5's King of the Hills project has been derisked and raises its rating to Add from Hold. The target also rises to $0.48 from $0.34.

Energisation and commissioning of the SAG mill remains the final major activity to be completed, explains the analyst. It's felt the share  price will continue to re-rate in coming months as investors also adjust their risk discounts.

Target price is $0.48 Current Price is $0.37 Difference: $0.11
If RED meets the Morgans target it will return approximately 30% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates S32 as Outperform (1) -

South32 is trading on free cash flow yields of 47% and 36% for FY23 and FY24, and Macquarie believes this metric is a good proxy for future total shareholder returns.

After incorporating a free cash flow payout ratio of 90%, the total shareholder return could be around $800m, or 45% higher than the broker is currently estimating.

Macquarie maintains its Outperform rating and $7 target price.

Target price is $7.00 Current Price is $4.82 Difference: $2.18
If S32 meets the Macquarie target it will return approximately 45% (excluding dividends, fees and charges).

Current consensus price target is $5.38, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in June.

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: 1.0

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

Ord Minnett rates TLS as Buy (1) -

Despite reinstated price discounts by Vodafone brand TPG Telecom ((TPG)), Ord Minnett still believes subscriber growth will be driven by network quality and the 5G rollout.

The broker feels Telstra is best positioned for near-term gains in post-paid market share. The Buy rating and $4.50 target are retained.

Target price is $4.50 Current Price is $3.95 Difference: $0.55
If TLS meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $4.43, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Ord Minnett rates TPG as Buy (1) -

Despite reinstated price discounts by Vodafone brand TPG Telecom, Ord Minnett still believes subscriber growth will be driven by network quality and the 5G rollout.

The broker retains its Buy rating and $7.25 target price.

Target price is $7.25 Current Price is $5.75 Difference: $1.5
If TPG meets the Ord Minnett target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $7.31, suggesting upside of 29.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Citi rates WBC as Buy (1) -

Recent outperformance by Australian banks compared to global peers since the Uraine/Russia crisis began may be hard to sustain, according to Citi. The difficulty of finding growth in the domestic economy is considered a handbrake.

The broker feels the recent outperformance may be partly due to Australia’s commodities-dependent economy, strong capital adequacy and  the potential uplift from rising interest rates.

Westpac remains the the most preferred among the big four banks. The Buy rating and $27 target are retained.

Target price is $27.00 Current Price is $23.66 Difference: $3.34
If WBC meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $25.16, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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