Australian Broker Call

Credit Suisse rates CAJ as Upgrade to Outperform from Neutral (1) -

The company has proposed a $40m equity raising, effectively removing gearing concerns. Credit Suisse observes, under a new team, cost savings and radiologist re-engagement seem to be the priority and the valuation is undemanding.

Against a backdrop of improving market dynamics, the broker suspects an equity re-rating is garnering momentum. Credit Suisse upgrades to Outperform from Neutral. Target is raised to $0.21 from $0.15.

Target price is $0.21 Current Price is $0.15 Difference: $0.06
If CAJ meets the Credit Suisse target it will return approximately 40% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Macquarie rates CLQ as Initiation of coverage with Outperform (1) -

The company offers a unique exposure to cobalt, say the analysts, with the Syerston project targeting first production in 2020. Macquarie initiates coverage with a Outperform rating and $1.50 target.

The project also contains an area of highly concentrated skandium, for which the main use is an aluminium alloy, making it important in the aerospace industry.

Target price is $1.50 Current Price is $1.07 Difference: $0.435
If CLQ meets the Macquarie target it will return approximately 41% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Morgan Stanley rates DMP as Overweight (1) -

Morgan Stanley believes concerns regarding with franchisees are largely overdone and continues to believe this stock is an attractive growth story.

Management has provided more transparency at its investor briefing  and outlined capital investment initiatives, which are viewed positively by franchisees and are envisaged driving an increase in store sales.

Price target is $80. Overweight. Sector view is In-Line.

Target price is $80.00 Current Price is $55.68 Difference: $24.32
If DMP meets the Morgan Stanley target it will return approximately 44% (excluding dividends, fees and charges).

Current consensus price target is $70.40, suggesting upside of 26.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.7

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

UBS rates DMP as Buy (1) -

Feedback from the company's  investor briefing suggests to UBS that the system is healthy in Australasia and finding the right sites, not franchisee demand, is the main impediment to meeting long-term store target.

The broker continues to believe the market is materially undervaluing the long-term opportunity available to the business by the transfer of its Australian model to Europe.

Buy rating and $77 target retained.

Target price is $77.00 Current Price is $55.68 Difference: $21.32
If DMP meets the UBS target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $70.40, suggesting upside of 26.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.7

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

Morgans rates IPD as Add (1) -

The company has announced its next generation device, SOZO, which measures, monitors and manages fluid status, has completed safety and performance testing.

Morgans believes the main risk to its target is a delay in recruiting the heart failure trial. The broker is frustrated by a rising short position in the stock and can only speculate what is driving this. One view suggested relates to the slow revenue growth in the lymphoedema part of the business.

The broker retains an Add rating and $2.04 target.

Target price is $2.04 Current Price is $0.70 Difference: $1.34
If IPD meets the Morgans target it will return approximately 191% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Macquarie rates MFG as Outperform (1) -

Funds under management in February were up 2.4%, with around $126m in net inflows in the month. Net funds flow failed to beat Macquarie's target of being up over 5% of opening funds under management.

Outperform rating retained. Target rises to $25.99 from $25.58.

Target price is $25.99 Current Price is $23.40 Difference: $2.59
If MFG meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $26.51, suggesting upside of 13.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.8

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

Macquarie rates PTM as Neutral (3) -

Funds under management were down -0.2% in February, with around -$250m in net outflows. Macquarie observes performance and outflows remain a drag on funds under management.

Neutral maintained. Target falls to $4.90 from $4.94.

Target price is $4.90 Current Price is $5.17 Difference: minus $0.27 (current price is over target).
If PTM meets the Macquarie target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.81, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.5

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

Morgan Stanley rates PTM as Underweight (5) -

Morgan Stanley estimates net outflows of around -$500m in February.The company has suggested that outflows are starting to normalise, but the broker suspects a risk these continue for longer and there is downside emerging to forecasts.

The buy-back of up to 10% of issued capital is expected to support the share price. Underweight. Target is $4.30. Industry view: In-Line.

Target price is $4.30 Current Price is $5.17 Difference: minus $0.87 (current price is over target).
If PTM meets the Morgan Stanley target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.81, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.5

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

Ord Minnett rates QUB as Buy (1) -

Ord Minnett continues to believe Moorebank will be the long-term driver of earnings and valuation. In recent months, the broker observes concerns around the performance of the Patrick division has weighed on the share price.

Competitor DP World has made an announcement which could help allay concerns, Ord Minnett suspects, signalling a renewed focus on its bottom line and increasing port infrastructure charges at its Melbourne and Sydney operations.

The broker suggests this may be a tentative step towards a more rational Australian stevedoring industry. Buy rating and $2.80 target retained.

Target price is $2.80 Current Price is $2.29 Difference: $0.51
If QUB meets the Ord Minnett target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $2.60, suggesting upside of 13.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.6

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

Deutsche Bank rates RIO as Buy (1) -

The company's 2016 annual report reveals Pilbara reserves have increased by 2%, even after accounting for production depletion.

The Jadar lithium resource in Serbia has increased by 16%. Although not in its base case valuation, Deutsche Bank believes construction of an underground panel and stoping mine might begin sometime in 2020, with first production possible in 2022.

Buy rating retained. Target rises to $72 from $70.

Target price is $72.00 Current Price is $61.61 Difference: $10.39
If RIO meets the Deutsche Bank target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $72.04, suggesting upside of 16.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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

UBS rates SYD as Neutral (3) -

Based on the ACCC airport monitoring report, UBS calculates the implied return on the company's aeronautical asset base.  Kingsford Smith Airport generated a 10.6% EBITA return in FY16, its lowest in four years.

The year-on-year impact was largely because of the Qantas domestic T3 transaction in August 2015,  which increased depreciation. UBS forecasts an aeronautical return over the next two financial years of 11.4% and 12.3% respectively, but concedes this could change with higher capital expenditure.

The improvement in returns is being driven by a normalisation in depreciation and continued curtailment of operating costs. Returns should also benefit, in the broker's view, from front-ended inflation in international aeronautical charges and the continued improvement in traffic mixed towards international.

A Neutral rating is retained. Target is $6.60.

Target price is $6.60 Current Price is $5.98 Difference: $0.62
If SYD meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $6.65, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.4

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

Credit Suisse rates TGR as Outperform (1) -

Credit Suisse acknowledges its initial reaction to the equity raising was negative, as both the expected capital expenditure and growth outlook were similar to what was already assumed.

Subsequently, overlaying a stronger balance sheet and plausible reasons for accelerated certain initiatives the broker is more comfortable.

Credit Suisse expect strong FY18 growth and does not consider the valuation expensive at this stage. Outperform retained. Target is reduced to $4.85 from $5.20.

Target price is $4.85 Current Price is $4.53 Difference: $0.32
If TGR meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $5.11, suggesting upside of 12.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.8

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