Australian Broker Call

Macquarie rates ALL as Outperform (1) -

Macquarie tweaks sales forecasts, given weaker-than-expected market volumes. Earnings are expected to remain volatile, given the uncertainty of when casinos will re-open.

That said, the balance sheet provides scope for ongoing investment, which Macquarie assesses is a competitive advantage.

The broker retains an Outperform rating and $32 target. First half results will be reported on May 21 and the broker forecasts net profit of $422m, flat year-on-year.

Target price is $32.00 Current Price is $24.07 Difference: $7.93
If ALL meets the Macquarie target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $29.11, suggesting upside of 20.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Macquarie rates AMI as Outperform (1) -

The March quarter was challenging and production from Hera was below expectations because of lower grades. Macquarie expects an improvement in the fourth quarter as Peak normalises.

The weak result drives a -41% reduction in earnings per share for FY20 in what the broker describes as a "very sensitive" year. No changes are made for FY21. Outperform rating and $0.50 target retained.

Target price is $0.50 Current Price is $0.32 Difference: $0.18
If AMI meets the Macquarie target it will return approximately 56% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Ord Minnett rates AMI as Buy (1) -

Ord Minnett was underwhelmed by the March quarter results. However, looking through the explosion in costs, stemming from lower base metal price adjustments and weaker gold output, the broker expects a rebound in the June quarter

An improvement in production and grades at Peak is also anticipated. Buy rating maintained along with a $0.45 target.

Target price is $0.45 Current Price is $0.32 Difference: $0.13
If AMI meets the Ord Minnett target it will return approximately 41% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Morgan Stanley rates ANZ as Overweight (1) -

A step up in new lending is weighing on capital, Morgan Stanley observes. At the same time the outlook for loan losses and dividends is unclear.

The broker finds little comfort from credit quality at this point in the cycle. The deferral of the dividend is prudent, the broker suggests, given the disappointing capital outcome.

Overweight. Target is reduced to $17.10 from $17.60. Industry view is In-Line.

Target price is $17.10 Current Price is $16.15 Difference: $0.95
If ANZ meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $19.48, suggesting upside of 20.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

UBS rates ANZ as Buy (1) -

First half results were below expectations, largely because of the -$815m impairment of AmBank and PT Panin investments. ANZ's base case is for a -11% reduction in CET1 from RWA inflation over the next two years.

UBS assesses this places significant pressure on future capital ratios, suspecting the market may be less forgiving if CET1 ratios fall below the unquestionably strong levels the regulator requires.

Buy rating maintained. Target is reduced to $20 and $21.

Target price is $20.00 Current Price is $16.15 Difference: $3.85
If ANZ meets the UBS target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $19.48, suggesting upside of 20.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Citi rates APT as Neutral (3) -

Tencent Holdings has taken a 5% stake in Afterpay. Citi envisages potential for the partnership to accelerate development, particularly in the area of mobile payments and cross-border trade.

There is also the potential for Afterpay to enter the Chinese market. While a takeover cannot be ruled out in future, Citi points out a strategic partnership does not necessarily warrant an equity stake and there is a low probability of a takeover in the near term.

Neutral/High Risk. Target is $27.10.

Target price is $27.10 Current Price is $36.16 Difference: minus $9.06 (current price is over target).
If APT meets the Citi target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $27.04, suggesting downside of -25.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

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

Tencent has become a substantial investor in Afterpay, and this is expected to evolve into a business partnership.

Morgan Stanley assesses a strategic investor is likely to stabilise the share price, which has experienced increasing volatility because of market concerns about credit losses.

It could also help Afterpay diversify from its initial focus on fashion and beauty retailing.

Equal-weight. Target is $19.00. Industry view is In-Line.

Target price is $19.00 Current Price is $36.16 Difference: minus $17.16 (current price is over target).
If APT meets the Morgan Stanley target it will return approximately minus 47% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $27.04, suggesting downside of -25.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Credit Suisse rates AQG as Outperform (1) -

Credit Suisse assesses the company is on track for 2020 guidance. The recovery enhancement project is expected to provide benefits from mid year.

The broker notes the first firm indication of the sulphide optimisation target. Outperform retained. Target is raised to $8.10 from $7.45.

Target price is $8.10 Current Price is $8.34 Difference: minus $0.24 (current price is over target).
If AQG meets the Credit Suisse target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.87, suggesting upside of 6.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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 AQG as Outperform (1) -

The first quarter production at Copler was solid, Macquarie observes, marginally ahead of estimates.

The broker notes the sulphide plant is going from strength to strength and the company now envisages an upgrade that could materially lift throughput.

Macquarie retains an Outperform rating and raises the target slightly to $9.00.

Target price is $9.00 Current Price is $8.34 Difference: $0.66
If AQG meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $8.87, suggesting upside of 6.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

UBS rates AQG as Buy (1) -

March quarter production and financial metrics were either ahead or in line with UBS forecasts.

The broker assesses the company's 10-year vision for production of 300-400,000 ounces per annum is not yet underscored by technical detail, and therefore not priced in.

The broker retains a Buy rating and raises the target to $9.50 from $9.00.

Target price is $9.50 Current Price is $8.34 Difference: $1.16
If AQG meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $8.87, suggesting upside of 6.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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 ASB as Hold (3) -

Austal has been awarded a contract to build six patrol boats for the Australian government, worth US$350m. The US Department of Defence has also brought forward the awarding of a frigate contract, to Marinette Marine rather than Austal.

The latter decision will have a far more material impact on the company's long-term economic value, Ord Minnett suggests, given the US is a driver of the earnings profile and the littoral combat ship program effectively winds down through FY23.

Ord Minnett suggests the share price was not accurately reflecting the risk that Austal would not be involved in that US frigate program.

While some future work in the US is likely, the broker estimates potential size of the combined programs would be around -70% smaller than the frigate program. Hold rating. Target is $4.10.

Target price is $4.10 Current Price is $2.81 Difference: $1.29
If ASB meets the Ord Minnett target it will return approximately 46% (excluding dividends, fees and charges).

Current consensus price target is $4.12, suggesting upside of 46.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.7

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

Citi rates BAP as Initiation of coverage with Buy (1) -

Citi has initiated coverage on Bapcor with a $6 price target and Buy recommendation. Among the stand-out conclusions drawn in the report, is the expansion into Thailand could end up being worth more than double the company's target.

Citi analysts see several drivers for positive margin expansion, while being attracted to Bapcor's defensive characteristics.

Target price is $6.00 Current Price is $4.68 Difference: $1.32
If BAP meets the Citi target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $5.81, suggesting upside of 24.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Ord Minnett rates CQE as Accumulate (2) -

Charter Hall Social Infrastructure has sold 26 smaller NZ childcare centres for NZ$36.9m. The sale price represents a 6.6% yield and -8.7% discount to book value.

Ord Minnett assesses this is a positive outcome, given assumptions that childcare asset values will fall by around -10-15% over the next 12-18 months. Accumulate rating and $2.80 target maintained.

Target price is $2.80 Current Price is $2.38 Difference: $0.42
If CQE meets the Ord Minnett target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Morgans rates HLO as Hold (3) -

Helloworld's revenues have understandably declined materially and the company has moved quickly to reduce its cost base. The company has at least twelve months of liquidity, the broker notes, and will not need to raise capital, but gearing metrics will rise significantly.

Given a greater exposure than peers to international travel, the broker does not expect Helloworld's earnings to recover back to FY19 levels before FY23. Target falls to $2.11 from $2.45. Hold retained, with investors needing to be patient, the broker suggests.

Target price is $2.11 Current Price is $1.59 Difference: $0.52
If HLO meets the Morgans target it will return approximately 33% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Ord Minnett rates HPI as Accumulate (2) -

The company has agreed with its largest tenant, Queensland Venue, to defer part of the rent for April-September 2020, as hospitality businesses remain closed because of lock-downs.

This is not expected to have a material impact on adjusted funds from operations between FY20 and FY22. Ord Minnett maintains an Accumulate rating and $2.70 target.

Target price is $2.70 Current Price is $2.45 Difference: $0.25
If HPI meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Macquarie rates JBH as Downgrade to Neutral from Outperform (3) -

Following the recent share price performance Macquarie downgrades to Neutral from Outperform. The stock is up 29% since March 23 and has now reached the broker's valuation.

Macquarie remains confident in the short-term outlook for revenue but is becoming more cautious about the medium-term outlook for discretionary expenditure as the economy slows. Target is reduced to $34.80 from $38.80.

Target price is $34.80 Current Price is $33.84 Difference: $0.96
If JBH meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $33.96, suggesting upside of 0.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Macquarie rates LLC as Neutral (3) -

Post the recent equity raising, Macquarie notes the balance sheet is stronger. However a reduction in the pay-out ratio is expected. A successful sale of engineering could result in a change of credit tolerance, the broker assesses.

Macquarie likes the development opportunities but does not believe these will unfold quickly. Outperform rating maintained. Target is raised to $14.92 from $13.46.

Target price is $14.92 Current Price is $11.67 Difference: $3.25
If LLC meets the Macquarie target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $15.89, suggesting upside of 36.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Macquarie rates MND as Neutral (3) -

Monadelphous has updated the market and highlighted supply-chain issues that are causing delays on current projects. New projects are also being deferred.

The company has experienced a material reduction in maintenance activity levels as non-essential work is reduced and discretionary maintenance expenditure curtailed.

Macquarie assesses the balance sheet is strong but prefers to retain a Neutral rating until there is greater clarity on the outlook. Target is reduced to $11.16 from $13.80.

Target price is $11.16 Current Price is $9.20 Difference: $1.96
If MND meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $14.48, suggesting upside of 57.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

UBS rates MND as Buy (1) -

Monadelphous has pointed out the restrictions relating to the pandemic are causing significant delays or deferrals in engineering and maintenance projects.

If there is no improvement in current trading, the company expects FY20 revenue to be similar to FY19.

UBS notes there is upside to forecasts if operations normalise ahead of the second quarter of FY21.

Buy rating maintained. Target is reduced to $13.35 from $14.07.

Target price is $13.35 Current Price is $9.20 Difference: $4.15
If MND meets the UBS target it will return approximately 45% (excluding dividends, fees and charges).

Current consensus price target is $14.48, suggesting upside of 57.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Morgan Stanley rates NXT as Overweight (1) -

Morgan Stanley updates forecasts on the back of 12MW in new contracts and more than $800m in new equity. The broker suggests the latter highlights the company's ability to attract and deploy capital in an environment buoyed by accelerated demand for the cloud.

The majority of the benefit from the new contracts is expected in FY22. Overweight maintained. In-Line industry view. Target is raised to $10.50 from $9.00.

Target price is $10.50 Current Price is $9.40 Difference: $1.1
If NXT meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $9.65, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Morgans rates NXT as Hold (3) -

Since opening in November 2017, NextDC's M2 (Melbourne) data centre had for two years only 2% of capacity fully contracted but last month that leapt to 33% courtesy of two major cloud contracts, suggesting to the broker NextDC is fast becoming the country's second "Cloud Availability Zone", and justifying the money spent both on M2 and on M3 investment decision acceleration.

If all options are taken up on M2 it would be 115% contracted, the broker notes, hence M3 is required. The broker had already anticipated further contract wins hence only minor changes to forecasts. Target rises to $8.80 from $8.56, Hold retained.

Target price is $8.80 Current Price is $9.40 Difference: minus $0.6 (current price is over target).
If NXT meets the Morgans target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.65, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Ord Minnett rates NXT as Hold (3) -

NextDC has contracted 6MW of additional commitments in Victoria with an option for 6MW more and the right of first refusal on another 19MW. As a result capital expenditure will be pulled forward at the M2 facility in the second half.

Ord Minnett is encouraged by the contract win, noting wholesale customers are finally making a move into the all-important Melbourne market, although the use of options on additional capacity means, currently, they are not 100% committed.

Hold rating maintained. Target rises to $9.15 from $9.00.

Target price is $9.15 Current Price is $9.40 Difference: minus $0.25 (current price is over target).
If NXT meets the Ord Minnett target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.65, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

UBS rates NXT as Buy (1) -

Industry feedback suggests to UBS further megawatts are being allocated. With 12MW recently gained in M2, the broker believes that further contract win in S2 would mean 65% of FY21-23 operating earnings growth is de-risked.

The broker highlights the premium the business deserves in a soft macro economic environment and retains a Buy rating. NextDC has announced contracted megawatts in M1/M2 have increased to over 27MW. Target is raised to $10.70 from $10.25.

Target price is $10.70 Current Price is $9.40 Difference: $1.3
If NXT meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $9.65, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Citi rates ORG as Buy (1) -

Origin Energy has acquired a 20% interest in UK retailer Octopus Energy with exclusive licensing rights in Australia for the Kraken IT platform.

The company takes the view that Kraken cannot be easily replicated by competitors and affords it an unassailable lead in Australia. Citi assesses this may be true in the short term, but not forever.

The broker suspects cost savings are offset by margin implications as other retailers improve capabilities over time. Buy retained. Target is raised to $6.42 from $5.95.

Target price is $6.42 Current Price is $5.23 Difference: $1.19
If ORG meets the Citi target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $6.55, suggesting upside of 25.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Macquarie rates ORG as Outperform (1) -

Origin Energy has announced the redevelopment of its customer interface platform and the acquisition of a 20% interest in Octopus Energy.

Macquarie assesses the acquisition is a long-dated structural change to the business. Expected cost savings of $100-150m will come with execution risk, as the Kraken platform requires the uptake of smart metres to unlock the full value add.

Target is raised to $7.71 from $7.26. Outperform maintained.

Target price is $7.71 Current Price is $5.23 Difference: $2.48
If ORG meets the Macquarie target it will return approximately 47% (excluding dividends, fees and charges).

Current consensus price target is $6.55, suggesting upside of 25.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

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

Origin Energy has negotiated a strategic partnership with Octopus Energy, a UK-based technology developer and energy retailer, to implement an overhaul of the Australian retail platform. Origin Energy will obtain a 20% shareholding in Octopus Energy.

Morgan Stanley considers the transaction metrics sound and the approach "innovative". Origin Energy will obtain a near-exclusive perpetual license for the Kraken technology in Australia that should become the core retail platform by FY24.

Cautious industry view. Equal-weight rating retained. Target is $6.33.

Target price is $6.33 Current Price is $5.23 Difference: $1.1
If ORG meets the Morgan Stanley target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $6.55, suggesting upside of 25.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Ord Minnett rates ORG as Accumulate (2) -

Origin Energy has taken a stake in Octopus Energy, a UK-based technology company. Origin Energy will have exclusive rights to the retailing platform known as Kraken, in Australia. This software is for the purpose of electricity retailing.

Ord Minnett assesses the timing of the deal is somewhat risky, given the likely headwinds from lower oil prices at APLNG and lower wholesale electricity in energy markets. Accumulate rating and $7.50 target maintained.

Target price is $7.50 Current Price is $5.23 Difference: $2.27
If ORG meets the Ord Minnett target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $6.55, suggesting upside of 25.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Credit Suisse rates QUB as Upgrade to Outperform from Underperform (1) -

Qube Holdings has announced a fully underwritten entitlement offer of $500m, reducing net debt. Following the pandemic Credit Suisse assesses attractive consolidation opportunities should emerge in the logistics sector.

The company has indicated bulk operations, 50% of revenue, are relatively unaffected by the pandemic. The partial sale process of Moorebank is proceeding, although it is likely to be slow, Credit Suisse observes.

The broker upgrades to Outperform from Underperform. Target of $2.80 retained.

Target price is $2.80 Current Price is $2.50 Difference: $0.3
If QUB meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $2.81, suggesting upside of 12.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Citi rates RMD as Neutral (3) -

March quarter results were better than Citi expected. However, the broker reiterates that short-term forecasts are difficult to make while the pandemic continues.

In the medium term the risks are largely to the upside, while the outcome of 2021 competitive bidding remains the key downside risk.

Neutral retained. Target reduced to $27.00 from $27.50.

Target price is $27.00 Current Price is $24.61 Difference: $2.39
If RMD meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $23.95, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: -0.1

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

Credit Suisse rates RMD as Neutral (3) -

ResMed has reported a robust quarterly result, Credit Suisse observes, beating estimates by 25%. The results were driven by stronger ventilator sales and growth in re-supply of masks.

Still, the broker is cautious about the earnings outlook going into the fourth quarter. At the end of the third quarter, sleep diagnosis rates fell in double digits because of lock-downs and the closure of sleep laboratories.

The long-term strategy and growth potential remain intact and Credit Suisse retains a Neutral rating. Target rises to $26.00 from $25.50.

Target price is $26.00 Current Price is $24.61 Difference: $1.39
If RMD meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $23.95, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: -0.1

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

Macquarie rates RMD as Underperform (5) -

March quarter net profit was ahead of Macquarie's expectations, supported by increased ventilator demand. However, sleep apnoea diagnosis rates have declined by double digits because of the closure of sleep labs.

The broker assesses multiples remain elevated and an Underperform rating is retained. Target rises to $19.00 from $18.60.

Target price is $19.00 Current Price is $24.61 Difference: minus $5.61 (current price is over target).
If RMD meets the Macquarie target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $23.95, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: -0.1

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

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

Strong numbers were reported in the March quarter with ventilator sales, at least in part, cushioning the impact from lower growth in sleep apnoea diagnosis, Morgan Stanley notes.

The broker believes a premium valuation could remain as long as the market continues to believe the upside in pandemic-related ventilator sales will offset any erosion of the base sleep apnoea business.

Equal-weight. Target is reduced to $22 from $23. Industry view: In-Line.

Target price is $22.00 Current Price is $24.61 Difference: minus $2.61 (current price is over target).
If RMD meets the Morgan Stanley target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $23.95, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: -0.1

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

Ord Minnett rates RMD as Downgrade to Lighten from Hold (4) -

A strong lift in mask sales meant March quarter revenue was ahead of Ord Minnett's forecast. As expected, strong demand for ventilators in the midst of the pandemic provided a boost.

Beyond the current quarter, the broker expects much weaker economic conditions will weigh on a recovery in core sleep devices, especially in the US where individual health expenditure is more closely correlated to economic conditions.

Rating is downgraded to Lighten from Hold. The target is reduced to $21.90 from $22.60.

Target price is $21.90 Current Price is $24.61 Difference: minus $2.71 (current price is over target).
If RMD meets the Ord Minnett target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $23.95, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: -0.1

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

UBS rates RMD as Neutral (3) -

ResMed has flagged coronavirus-related sales of ventilator products contributed around US$35m in revenue in the March quarter.

Earnings were ahead of UBS estimates because of a higher gross margin, strong cost leverage and a lower effective tax rate.

On the sleep apnoea front diagnostic rates are likely to decline by double digits in some areas with restricted access to labs, the broker points out, and the relevant flow generators are likely to experience negative growth rates as a result.

Neutral rating maintained. Target is US$174.

Current Price is $24.61. Target price not assessed.

Current consensus price target is $23.95, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: -0.1

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

Credit Suisse rates RWC as Neutral (3) -

Credit Suisse assesses the company's update is, on the whole, a "good result". The broker suspects it underestimated a spike in DIY sales and omitted the boost from promotional activities.

The broker moderates its expectations of a decline in the fourth quarter but leaves FY20-21 estimates unchanged. Neutral rating and $2.70 target maintained.

Target price is $2.70 Current Price is $2.49 Difference: $0.21
If RWC meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.15, suggesting upside of 26.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Macquarie rates RWC as Outperform (1) -

Macquarie observes the North American business is resilient, so far. DIY is compensating for slower professional sales as access to worksites is limited. Activity in the UK and Europe continues to be subdued.

The company has not experienced significant demand deterioration in Asia-Pacific but manufacturing is being scaled back to four days a week starting from May 11.

Macquarie believes management is taking the appropriate actions on cost and the balance sheet remains robust.

Outperform rating. Target is reduced to $3.75 from $4.05.

Target price is $3.75 Current Price is $2.49 Difference: $1.26
If RWC meets the Macquarie target it will return approximately 51% (excluding dividends, fees and charges).

Current consensus price target is $3.15, suggesting upside of 26.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

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

Demand for the company's products has varied across regions, with the UK and Europe the most affected by the pandemic. The US is tracking "broadly in line with expectations".

There has been no significant deterioration in Australia to date but management expects new housing construction, around 50% of demand, will decline over the next year.

Manufacturing in Australia will be scaled down to four days a week from five, beginning May 11. Around 40% of the UK workforce remains furloughed.

There were no real surprises in the update and Morgan Stanley maintains an Equal-weight rating. Target is $3.20. Industry view is Cautious.

Target price is $3.20 Current Price is $2.49 Difference: $0.71
If RWC meets the Morgan Stanley target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $3.15, suggesting upside of 26.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Morgans rates RWC as Hold (3) -

An update from Reliance Worldwide revealed Australia and the US have performed reasonably well to date. Virus impact has left Europe subdued, the UK particularly weak on distribution restrictions and Canada also limited.

The broker has cut FY20 forecast earnings by -14%. Target falls to $2.60 from $3.50, Hold retained on uncertainty.

Target price is $2.60 Current Price is $2.49 Difference: $0.11
If RWC meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $3.15, suggesting upside of 26.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Ord Minnett rates RWC as Accumulate (2) -

Ord Minnett was pleased that demand in North America was ahead of expectations in the March quarter and held up in April. However, there is an expectation that demand is more likely to deteriorate than improve from now on.

The performance in Europe was weak, as expected. The balance sheet remains strong and there is significant headroom for debt.

The company will reduce employee shifts across the Australian network to manage inventory levels more closely. Accumulate maintained. Target is $3.20.

Target price is $3.20 Current Price is $2.49 Difference: $0.71
If RWC meets the Ord Minnett target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $3.15, suggesting upside of 26.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

UBS rates RWC as Buy (1) -

Reliance Worldwide is on track for a revenue growth target of 7-9%, UBS assesses. US sales in the March quarter were ahead of expectations and April also appears strong.

Unlike the UK, US plumbing is considered an essential service and channel partners have not been restricted.

While UBS assesses the repair market is growing at a natural 3% per annum, no growth is expected in the first half of FY21. Buy rating maintained. Target is reduced to $3.44 from $3.50.

Target price is $3.44 Current Price is $2.49 Difference: $0.95
If RWC meets the UBS target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $3.15, suggesting upside of 26.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Macquarie rates TYR as Initiation of coverage with Underperform (5) -

Macquarie initiates coverage with an Underperform rating and $2.50 target. The broker assesses system growth is being derived from less advantageous channels for Tyro Payments.

The recently-launched e-commerce offering, card-not-present, is yet to gain meaningful traction compared with other offerings.

While in the shorter term the share price may be supported by announcements relating to the easing of social restrictions, fundamentals are unlikely to recover until the end of the year at the earliest, in the broker's view.

The mix shift pressures on net transaction margins are also likely to partially offset transaction value growth.

Target price is $2.50 Current Price is $2.77 Difference: minus $0.27 (current price is over target).
If TYR meets the Macquarie target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.93, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

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

While Worley may be better placed than in previous downturns, Morgan Stanley assesses this would depend on the extent and severity of the recession and this is difficult to forecast at present.

Although the share price has declined by nearly -40%, there remains significant uncertainty, and while trading conditions will remain sound over the next few months, the broker suspects activity will soften towards the end of 2020.

Equal-weight rating maintained. Target is lowered to $8.40 from $15.00. Industry view is In-Line.

Target price is $8.40 Current Price is $7.89 Difference: $0.51
If WOR meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $11.64, suggesting upside of 47.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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