Australian Broker Call

Morgan Stanley rates ACX as Overweight (1) -

Morgan Stanley observes the stock has de-rated materially following the FY16 results. The broker reiterates the Overweight rating  and considers the stock is a buying opportunity.

Analysis signals that the growth profile the company is messaging in its outlook is consistent with expectations. In future Morgan Stanley does not expect the company to provide earnings guidance, having created confusion with its update at the FY16 results. Target of $10 retained.

Target price is $10.00 Current Price is $6.17 Difference: $3.835
If ACX meets the Morgan Stanley target it will return approximately 62% (excluding dividends, fees and charges).

Current consensus price target is $8.19, suggesting upside of 32.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Deutsche Bank rates ALL as Buy (1) -

Deutsche Bank expects underlying net profit of $435m for FY16. The broker expects North America, VGT, digital and Australia will all surprise on the upside.

Earnings forecasts are increased by 1-4%. A Buy rating is retained. Target rises to $17.80 from $16.85.

Target price is $17.80 Current Price is $15.30 Difference: $2.5
If ALL meets the Deutsche Bank target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $15.94, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY16:

Forecast for FY17:

Market Sentiment: 0.8

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

Deutsche Bank rates AQG as Buy (1) -

The company has a pre-feasibility and maiden reserve for its 50% owned Gediktepe. Project economics are impressive but Deutsche Bank recognises the fact the project is in a study phase and permits are still required.

Nevertheless it appears to be a viable project that would diversify the company's earnings profile. Buy rating retained. Target is raised to $4.70 from $3.90.

Target price is $4.70 Current Price is $3.46 Difference: $1.24
If AQG meets the Deutsche Bank target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $4.60, suggesting upside of 32.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY16:

Forecast for FY17:

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

Market Sentiment: 0.6

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

Macquarie rates AQG as Upgrade to Neutral from Underperform (3) -

The maiden reserve for the Gediktepe project in western Turkey, which is 50% owned by Alacer Gold, has been released along with the pre-feasibility.

The project de-risks long-term earnings but how it will be funded is the key question for Macquarie. The broker values Alacer's share at $226m.  Rating is upgraded to Neutral from Underperform. Target rises to $3.70 from $3.30.

Target price is $3.70 Current Price is $3.46 Difference: $0.24
If AQG meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $4.60, suggesting upside of 32.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY16:

Forecast for FY17:

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

Market Sentiment: 0.6

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

Credit Suisse rates AWC as Upgrade to Neutral from Underperform (3) -

With the share price correction and potential for upside surprise on the growth front in China Credit Suisse upgrades to Neutral from Underperform.

With reasonable valuation support the broker does not want to be short the sector and does not believe this is the time to be underweight on the miners.  $1.30 target retained.

Target price is $1.30 Current Price is $1.32 Difference: minus $0.02 (current price is over target).
If AWC meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.39, suggesting upside of 5.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY16:

Forecast for FY17:

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 FMG as Upgrade to Neutral from Underperform (3) -

Credit Suisse upgrades iron ore forecasts modestly and, in conjunction with the company's US$700m repayment of a portion of a term loan, revises FY17 EBITDA up 16%.

The broker expects cash flow will be strong enough to mean net debt falls to $3.6bn at the end of FY18. Rating is upgraded to Neutral from Underperform. Target is raised to $4.65 from $4.50.

Target price is $4.65 Current Price is $4.89 Difference: minus $0.235 (current price is over target).
If FMG meets the Credit Suisse target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.64, suggesting downside of -5.1% (ex-dividends)

The company's fiscal year ends in June.

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: 0.1

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

Credit Suisse rates ILU as Upgrade to Neutral from Underperform (3) -

With the share price correction and potential for upside surprise on the growth front in China Credit Suisse upgrades to Neutral from Underperform.

With reasonable valuation support the broker does not want to be short the sector and does not believe this is the time to be underweight on the miners. Target is reduced to $6.40 from $6.70.

Target price is $6.40 Current Price is $6.03 Difference: $0.375
If ILU meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $6.64, suggesting upside of 10.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY16:

Forecast for FY17:

Market Sentiment: 0.0

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

Deutsche Bank rates MPL as Hold (3) -

The company has announced it will spend $40m over three years to provide its Extras members with free annual dental check ups, with potentially more such announcements to follow.

Deutsche Bank expects this to have a 20 basis point impact on gross margins but has already allowed for it in forecasts.

While retaining forecasts, the broker observes there is no guidance on how much the efforts to repair the brand will ultimately cost and risks appear skewed to the downside.

Hold rating and $2.80 target retained.

Target price is $2.80 Current Price is $2.53 Difference: $0.27
If MPL meets the Deutsche Bank target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $2.78, suggesting upside of 9.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.2

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

Citi rates MQG as Sell (5) -

Management has repeated its guidance of FY17 (end-March) earnings likely to be broadly in line with FY16. Citi analysts, sticking with their negative view (Sell), highlight Macquarie would have had to report a weak Q1 if not for the sale of equity in Macquarie Atlas Group ((MQA)).

Even so, guidance still implies a stronger 2H17 is needed to meet the full year guidance, say the analysts. Citi analysts continue to expect earnings to be down in 4 of 6 divisions in FY17. Sell rating retained.

Target price is $59.00 Current Price is $81.23 Difference: minus $22.23 (current price is over target).
If MQG meets the Citi target it will return approximately minus 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $75.95, suggesting downside of -6.5% (ex-dividends)

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Credit Suisse rates MQG as Outperform (1) -

The multi-year earnings upgrade cycle appears to Credit Suisse to be now mature but the stock offers reasonably attractive value and yield and modestly expanding returns on equity.

The broker envisages scope for residual positive earnings surprise, noting recent FY17 guidance implies a return to a more traditional seasonal skew in earnings.

Outperform and $85 target retained.

Target price is $85.00 Current Price is $81.23 Difference: $3.77
If MQG meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $75.95, suggesting downside of -6.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Deutsche Bank rates MQG as Buy (1) -

The update on the short term outlook provided few changes. FY17 net profit is still expected to be broadly in line with FY16.

While some in the market may have wanted an upgrade to FY17 guidance, Deutsche Bank remains comfortable with forecasts for 3% growth, given guidance has erred on the side of caution recently. Buy rating and $84.00 target retained.

Target price is $84.00 Current Price is $81.23 Difference: $2.77
If MQG meets the Deutsche Bank target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $75.95, suggesting downside of -6.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

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

Guidance for FY17 profit is for it to be broadly in line with FY16. Morgan Stanley suspects gains on sales and better conditions in equity and commodities markets have boosted first half profit.

The broker believes consensus upgrades are now required to support the share price. Equal-weight rating and In-Line sector view retained. Target is raised to $74.00 from $68.00.

Target price is $74.00 Current Price is $81.23 Difference: minus $7.23 (current price is over target).
If MQG meets the Morgan Stanley target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $75.95, suggesting downside of -6.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Citi rates NCM as Buy (1) -

Newcrest has managed to offload its 50% stake in the Hidden Valley gold mine in PNG to JV partner Harmony Gold for $1, taking a loss on the deal. Citi analysts welcome the decision as it improves the overall quality of the Newcrest asset portfolio.

$28 price target and Buy rating retained.

Target price is $28.00 Current Price is $21.64 Difference: $6.36
If NCM meets the Citi target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $19.62, suggesting downside of -9.4% (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

Credit Suisse rates NCM as Underperform (5) -

Newcrest has sold its 50% stake in Hidden Valley to JV partner Harmony. Credit Suisse observes, assuming South African regulatory approval this ends a painful association with the asset.

The company will take an implied $10m loss on the divestment. Credit Suisse retains an Underperform rating and $19.20 target.

Target price is $19.20 Current Price is $21.64 Difference: minus $2.44 (current price is over target).
If NCM meets the Credit Suisse target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $19.62, suggesting downside of -9.4% (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

Morgan Stanley rates NCM as Underweight (5) -

Newcrest has divested the Hidden Valley asset stake to partner Harmony. Morgan Stanley expects the impact on valuation to be minimal as Hidden Valley only contributed 2% to group valuation.

The broker retains an Underweight rating and $22 target. Industry view: In-Line.

Target price is $22.00 Current Price is $21.64 Difference: $0.36
If NCM meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $19.62, suggesting downside of -9.4% (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

Ord Minnett rates NCM as Lighten (4) -

Ord Minnett has updated its modeling and views on Newcrest Mining following the divestment of 50% interest in Hidden Valley to JV partner Harmony Gold. The analysts cannot get past the past that on their analysis, Newcrest shares remain too expensively priced.

Lighten rating retained. Price target drops to $19 from $22.50. As for the gold sector in general, the analysts see a possibility for further de-rating should gold price momentum not rebound in the
near term.

Target price is $19.00 Current Price is $21.64 Difference: minus $2.64 (current price is over target).
If NCM meets the Ord Minnett target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $19.62, suggesting downside of -9.4% (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

UBS rates NCM as Sell (5) -

The company has sold its 50% stake in Hidden Valley to JV partner Harmony. Newcrest will book a small loss on the sale of US$10m There is no change to the larger Wafi-Golpu project.

UBS considers the sale of the asset immaterial and not as a total surprise but believes it will free up management to focus on growth assets. FY17 guidance has been trimmed to 2.35-2.60m ozs.

UBS observes Newcrest is benefitting from its size and liquidity compared with peers, and investor willingness to pay for a higher earnings and cash flow outlook.

Yet the broker notes that previous cycles where the stock was trading at around 2.0 times net present value were eventually proven to be optimistic. Sell rating and $12.31 target retained.

Target price is $12.31 Current Price is $21.64 Difference: minus $9.33 (current price is over target).
If NCM meets the UBS target it will return approximately minus 43% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $19.62, suggesting downside of -9.4% (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

Credit Suisse rates NUF as Neutral (3) -

Credit Suisse expects benign second half trading and considers the stock is trading at fair value, even after factoring in 50% earnings-per-share growth.

Earnings per share estimates are upgraded modestly on the back of expectations for the Brazilian business. Neutral rating retained. Target rises to $8.20 from $7.90.

Target price is $8.20 Current Price is $8.18 Difference: $0.025
If NUF meets the Credit Suisse target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $8.06, suggesting downside of -1.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY16:

Forecast for FY17:

Market Sentiment: 0.1

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

Deutsche Bank rates ORE as Buy (1) -

FY16 results reveal a net loss of US$22m, largely from the Borax Argentina business and corporate and finance costs.

Deutsche Bank notes Olaroz cash flow was weaker than expected, assumed to be because of a catch up on final payables from construction and commissioning.

The broker looks for the September quarter report for the next likely catalyst on cash flow. Buy rating retained. Target unchanged at $4.40.

Target price is $4.40 Current Price is $4.06 Difference: $0.345
If ORE meets the Deutsche Bank target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $4.32, suggesting upside of 6.5% (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

Citi rates PMV as Sell (5) -

On Thursday, Premier Investments will report like-for-like growth of 5.1% for FY16, predict analysts at Citi. They also forecast sales momentum has moderated in 2H16.

Gross margin is expected to be stable while sales growth for Smiggle should come in at 34% in 2H16 to $78m. Citi retains the Sell rating.

Target price is $13.80 Current Price is $16.28 Difference: minus $2.48 (current price is over target).
If PMV 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 $15.18, suggesting downside of -6.8% (ex-dividends)

Forecast for FY16:

Forecast for FY17:

Market Sentiment: -0.2

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

Morgan Stanley rates PRU as Upgrade to Overweight from Equal-weight (1) -

Morgan Stanley believes it is now time to focus on the events that will cause the stock to re-rate over the next 12 months including falling costs, project construction and a definitive feasibility study.

With operational issues now passing the broker considers it timely to upgrade to Overweight from Equal-weight. Target is raised to 80c from 70c. Industry view: In-Line.

Target price is $0.80 Current Price is $0.52 Difference: $0.283
If PRU meets the Morgan Stanley target it will return approximately 55% (excluding dividends, fees and charges).

Current consensus price target is $0.73, suggesting upside of 41.6% (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

Ord Minnett rates RMD as Downgrade to Hold from Accumulate (3) -

Ord Minnett’s analysis of the latest competitive bidding rates in the US market indicates cuts in FY17 will be greater than those implemented in FY14 and for ResMed this means a tough year lays ahead.

The stockbroker lowers its rating to Hold from Accumulate while reducing its price target to $8.65 from $9.40. The analysts do add current integration of health IT group Brightree provides a potential bright spot. Estimates have been lowered implying no growth is on the horizon.

Target price is $8.65 Current Price is $8.55 Difference: $0.105
If RMD meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $9.71, suggesting upside of 13.6% (ex-dividends)

The company's fiscal year ends in June.

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: 0.6

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

Credit Suisse rates S32 as Neutral (3) -

Credit Suisse revises up FY17 EBITDA estimates by 6%. Higher manganese and metallurgical coal estimates are offset by higher assumed Australian dollar and rand forecasts.

The broker expects, given the rate of cash build up, there is rising pressure to consider capital management. Excluding M&A the broker expects $1bn capital return is possible should commodity price forecasts hold up.

Neutral retained. Target is lifted to $2.10 from $2.00.

Target price is $2.10 Current Price is $2.31 Difference: minus $0.21 (current price is over target).
If S32 meets the Credit Suisse target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.08, suggesting downside of -10.1% (ex-dividends)

The company's fiscal year ends in June.

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: 0.1

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

Credit Suisse rates WHC as Neutral (3) -

Credit Suisse has revised up its coal price estimates. With fourth quarter price negotiations getting under way at least US$160/t appears likely for prime hard coking coal given reduced supply in China and from the US.

The broker raises 2017 estimates for thermal coal to US$60/t but still looks for prices to come under pressure in the medium term as the downtrend in imports for China and India renews.

The broker retains a Neutral rating. Target is lifted to $2.45 from $2.00.

Target price is $2.45 Current Price is $2.49 Difference: minus $0.04 (current price is over target).
If WHC meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.96, suggesting downside of -21.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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