Australian Broker Call
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January 09, 2018
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)
Last Updated: 04:08 PM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
| QBE - | QBE INSURANCE | Downgrade to Neutral from Outperform | Macquarie |
DLX DULUX GROUP LIMITED
Building Products & Services
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Overnight Price: $7.39
Credit Suisse rates DLX as Neutral (3) -
The company's 51%-owned DGL Camel has an agreement to sell the loss-making China/HK coatings portfolio with further detail to be provided at the May results.
Credit Suisse slightly increases valuation but does not believe an estimated 5% growth in earnings is sufficient to take a more positive view.
Neutral maintained. Target is raised to $7.50 from $7.40.
Target price is $7.50 Current Price is $7.39 Difference: $0.11
If DLX meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $7.00, suggesting downside of -5.3% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 28.00 cents and EPS of 38.74 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 37.7, implying annual growth of 1.1%. Current consensus DPS estimate is 27.5, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 19.6. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 30.00 cents and EPS of 41.04 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 39.2, implying annual growth of 4.0%. Current consensus DPS estimate is 28.5, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 18.9. |
Market Sentiment: -0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $7.50
Macquarie rates LOV as Outperform (1) -
The company has announced a strong trading update and Macquarie observes the competitive positioning continues to strengthen as the network expands and the brand presence increases.
The broker incorporates a risk-adjusted US roll-out in valuation and believes the current valuation is justified, given the scope for further earnings upgrades and global expansion.
The broker retains an Outperform rating and lifts the target to $8.60 from $6.75.
Target price is $8.60 Current Price is $7.50 Difference: $1.1
If LOV meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $6.45, suggesting downside of -14.0% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 20.80 cents and EPS of 35.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 32.3, implying annual growth of 16.8%. Current consensus DPS estimate is 19.7, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 23.2. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 23.00 cents and EPS of 39.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 36.1, implying annual growth of 11.8%. Current consensus DPS estimate is 21.7, implying a prospective dividend yield of 2.9%. Current consensus EPS estimate suggests the PER is 20.8. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $6.65
Morgan Stanley rates MNF as Overweight (1) -
Morgan Stanley has greater conviction in the company's ability to sustain organic growth in the high teens in coming years.
The broker lifts FY18 expectations for profit but reduces operating earnings estimates to reflect investment in R&D.
Overweight rating. Target price is raised to $7.70 from $6.15. In-Line sector view.
Target price is $7.70 Current Price is $6.65 Difference: $1.05
If MNF meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 13.00 cents and EPS of 24.00 cents. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 EPS of 28.00 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $10.55
Macquarie rates QBE as Downgrade to Neutral from Outperform (3) -
Macquarie suspects new management may review long-term margin guidance, as the business has fallen short of its target in seven out of the last 10 halves.
The broker does not believe the global insurance cycle, or the outlook for US bond yields, is strong enough to overcome this risk.
Rating is downgraded to Neutral from Outperform. Target is reduced to $11.70 from $12.40.
Target price is $11.70 Current Price is $10.55 Difference: $1.15
If QBE meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $11.35, suggesting upside of 7.6% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 31.62 cents and EPS of 18.22 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.6, implying annual growth of N/A. Current consensus DPS estimate is 35.3, implying a prospective dividend yield of 3.3%. Current consensus EPS estimate suggests the PER is 36.9. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 55.82 cents and EPS of 87.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 85.0, implying annual growth of 197.2%. Current consensus DPS estimate is 66.1, implying a prospective dividend yield of 6.3%. Current consensus EPS estimate suggests the PER is 12.4. |
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
Overnight Price: $10.94
Macquarie rates RMD as Re-instate Coverage with Neutral (3) -
Macquarie re-instates coverage with a Neutral rating and $11.65 target. The broker's view balances the favourable market position and opportunities with the impact in the near term of the decline in average selling prices.
Target price is $11.65 Current Price is $10.94 Difference: $0.71
If RMD meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $10.78, suggesting downside of -1.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 18.61 cents and EPS of 39.43 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 38.6, implying annual growth of N/A. Current consensus DPS estimate is 18.5, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 28.3. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 20.17 cents and EPS of 43.72 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 43.7, implying annual growth of 13.2%. Current consensus DPS estimate is 20.1, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 25.0. |
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
Summaries
| DLX | DULUX GROUP | Neutral - Credit Suisse | Overnight Price $7.39 |
| LOV | LOVISA | Outperform - Macquarie | Overnight Price $7.50 |
| MNF | MNF GROUP | Overweight - Morgan Stanley | Overnight Price $6.65 |
| QBE | QBE INSURANCE | Downgrade to Neutral from Outperform - Macquarie | Overnight Price $10.55 |
| RMD | RESMED | Re-instate Coverage with Neutral - Macquarie | Overnight Price $10.94 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 2 |
| 3. Hold | 3 |
Monday 15 January 2018
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