Australian Broker Call
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October 13, 2021
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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: 05:00 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.
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Today's Upgrades and Downgrades
| GUD - | G.U.D. Holdings | Upgrade to Buy from Hold | Ord Minnett |
| Z1P - | Zip Co | Downgrade to Neutral from Buy | Citi |
Overnight Price: $2.68
Macquarie rates AFG as Outperform (1) -
Australian Finance Group reported record lodgments in the September quarter, the mix shifting towards higher-margin products, Macquarie observes. The AFG home-loan product constituted 9% of lodgments - up 41% over the year.
The broker expects earnings growth will be supported by this activity and the underlying shift in product mix. Macquarie estimates the AFG White Label is about seven times more profitable than third-party products, AFG Securitisation proving the most profitable.
Outperform rating and $3.18 target maintained.
Target price is $3.18 Current Price is $2.68 Difference: $0.5
If AFG meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $3.39, suggesting upside of 26.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 14.20 cents and EPS of 19.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.5, implying annual growth of 12.4%. Current consensus DPS estimate is 15.2, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 12.5. |
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 13.40 cents and EPS of 18.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 23.5, implying annual growth of 9.3%. Current consensus DPS estimate is 16.6, implying a prospective dividend yield of 6.2%. Current consensus EPS estimate suggests the PER is 11.4. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
AZJ AURIZON HOLDINGS LIMITED
Transportation & Logistics
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Overnight Price: $3.90
Macquarie rates AZJ as Outperform (1) -
Aurizon Holdings has reiterated guidance for FY22 earnings (EBIT) of $1.42-50bn and sustained expenditure of $430-530m. At its AGM, the company flagged a strong performance at Goonyella, although exports from Abbott Point were negative.
Macquarie believes the stock is attractively priced despite the cloudy outlook for coal.
The main catalyst for any upside is the Chinese outlook on Australian coal, while the main risk, the broker asserts, is the OneRail acquisition and the need to diversify.
Outperform retained. Target is $4.27.
Target price is $4.27 Current Price is $3.90 Difference: $0.37
If AZJ meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $4.38, suggesting upside of 11.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 28.10 cents and EPS of 28.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.1, implying annual growth of -28.1%. Current consensus DPS estimate is 28.0, implying a prospective dividend yield of 7.1%. Current consensus EPS estimate suggests the PER is 14.0. |
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 29.50 cents and EPS of 29.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.3, implying annual growth of 4.3%. Current consensus DPS estimate is 29.0, implying a prospective dividend yield of 7.4%. Current consensus EPS estimate suggests the PER is 13.4. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
CGF CHALLENGER LIMITED
Wealth Management & Investments
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Overnight Price: $6.34
Macquarie rates CGF as Neutral (3) -
Earlier today, Challenger reported a normalisation of first-quarter sales in Japan although this was offset by significant increases in institutional flows. The company reaffirmed FY22 guidance for net profit of $430-480m.
The life book grew 3.4% in the quarter while total annuity sales were flat. Funds under management increased to $108.4bn in the first quarter.
In an initial response to today's market update, Macquarie reports it continues to embrace the long-term growth implied in the stock along with the capital benefits of the bank licence.
Neutral rating and $5.70 target reported.
Target price is $5.70 Current Price is $6.34 Difference: minus $0.64 (current price is over target).
If CGF 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 $6.01, suggesting downside of -5.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 21.50 cents and EPS of 41.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 39.3, implying annual growth of -55.4%. Current consensus DPS estimate is 22.1, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 16.1. |
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 24.50 cents and EPS of 46.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 42.9, implying annual growth of 9.2%. Current consensus DPS estimate is 24.3, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 14.7. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
GUD G.U.D. HOLDINGS LIMITED
Household & Personal Products
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Overnight Price: $10.55
Citi rates GUD as Buy (1) -
G.U.D. Holdings reports a largely positive first-quarter update but Citi leaves its earnings forecasts unchanged and retains its $12.30 target price and Buy rating.
In what's considered a positive for auto parts sales, Australian mobility trends are improving.
The analyst highlights price rises are planned in larger auto businesses in the 2H22 to counter supply chain headwinds. The significant discount to peer Bapcor ((BAP)) is still considered excessive.
Target price is $12.30 Current Price is $10.55 Difference: $1.75
If GUD meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $12.81, suggesting upside of 11.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Citi forecasts a full year FY22 dividend of 60.00 cents and EPS of 76.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 75.7, implying annual growth of 12.9%. Current consensus DPS estimate is 59.4, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 15.1. |
Forecast for FY23:
Citi forecasts a full year FY23 dividend of 65.00 cents and EPS of 83.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 83.1, implying annual growth of 9.8%. Current consensus DPS estimate is 61.1, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 13.8. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates GUD as Upgrade to Buy from Hold (1) -
G.U.D. Holdings' trading update reveals modest organic growth in the automotive business.
The Davey business was robust and export demand remains strong, management noting revenue and earnings were in line with expectations and confirming margins in the quarter were higher than the prior half.
Ord Minnett expects the company will face cost challenges for the next nine months but believes the business is well-placed to implement price increases and maintain margins.
The stock is now trading at a -30% discount to the S&P/ASX Small Industrials index and the broker believes the risk/reward is now more balanced.
Rating is upgraded to Buy from Hold and the target raised to $12.25 from $12.00.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $12.25 Current Price is $10.55 Difference: $1.7
If GUD meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $12.81, suggesting upside of 11.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Ord Minnett forecasts a full year FY22 dividend of 59.00 cents and EPS of 73.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 75.7, implying annual growth of 12.9%. Current consensus DPS estimate is 59.4, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 15.1. |
Forecast for FY23:
Ord Minnett forecasts a full year FY23 dividend of 62.00 cents and EPS of 78.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 83.1, implying annual growth of 9.8%. Current consensus DPS estimate is 61.1, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 13.8. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates GUD as Buy (1) -
G.U.D. Holdings has signaled modest organic growth in the first quarter for the existing automotive business.
UBS believes this reflects some recovery in mobility as well as market-share gains. Freight and supply costs appear consistent with the FY21 results.
A second round of price increases is planned and the broker expects the company can therefore offset cost inflation.
UBS finds the valuation undemanding and retains a Buy rating with further catalysts expected at the AGM update on October 29. Target rises to $12.00 from $11.50.
Target price is $12.00 Current Price is $10.55 Difference: $1.45
If GUD meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $12.81, suggesting upside of 11.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
UBS forecasts a full year FY22 dividend of 61.00 cents and EPS of 76.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 75.7, implying annual growth of 12.9%. Current consensus DPS estimate is 59.4, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 15.1. |
Forecast for FY23:
UBS forecasts a full year FY23 dividend of 64.00 cents and EPS of 80.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 83.1, implying annual growth of 9.8%. Current consensus DPS estimate is 61.1, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 13.8. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $5.27
Credit Suisse rates IAG as Outperform (1) -
Credit Suisse adjusts earnings forecasts for Insurance Australia Group to allow for investment markets.
Markets were broadly in line with assumptions in the September quarter. The broker increases FY22 cash net profit by 0.4%.
Outperform rating and $5.90 target maintained.
Target price is $5.90 Current Price is $5.27 Difference: $0.63
If IAG meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $5.54, suggesting upside of 5.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Credit Suisse forecasts a full year FY22 dividend of 21.00 cents and EPS of 29.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 27.5, implying annual growth of N/A. Current consensus DPS estimate is 21.2, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 19.1. |
Forecast for FY23:
Credit Suisse forecasts a full year FY23 dividend of 23.00 cents and EPS of 31.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.6, implying annual growth of 7.6%. Current consensus DPS estimate is 23.3, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 17.7. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $18.37
Citi rates LOV as Neutral (3) -
Prior to Lovisa Holdings' AGM tomorrow, Citi anticipates strong ongoing sales growth, with the potential for gradual post-integration Beeline performance improvement.
Also, it's thought better US apparel and accessories foot traffic might help overcome the cycling of stronger comparisons.
The company might also benefit from the re-opening of stores in NSW, Victoria and the ACT in October and November, notes the analyst. The broker retains a $19.30 target price and Neutral rating.
Target price is $19.30 Current Price is $18.37 Difference: $0.93
If LOV meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $19.89, suggesting upside of 4.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Citi forecasts a full year FY22 dividend of 38.00 cents and EPS of 56.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 44.5, implying annual growth of 92.6%. Current consensus DPS estimate is 33.6, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 42.7. |
Forecast for FY23:
Citi forecasts a full year FY23 dividend of 51.70 cents and EPS of 76.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 59.9, implying annual growth of 34.6%. Current consensus DPS estimate is 44.4, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 31.7. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates LOV as Overweight (1) -
While Morgan Stanley believes the resignation of Lovisa Holdings Managing Director and CEO Shane Fallscheer will likely trigger a negative market reaction, but suspects execution risk for the global expansion might be reduced in the longer term. The new CEO has a strong global retail background.
Moreover, the process appears well planned and Brett Blundy (chairman and major shareholder) will provide continuity. The broker retains a $21 price target and Overweight rating. Industry view: In-line.
Target price is $21.00 Current Price is $18.37 Difference: $2.63
If LOV meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $19.89, suggesting upside of 4.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Morgan Stanley forecasts a full year FY22 dividend of 26.30 cents and EPS of 43.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 44.5, implying annual growth of 92.6%. Current consensus DPS estimate is 33.6, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 42.7. |
Forecast for FY23:
Morgan Stanley forecasts a full year FY23 dividend of 35.40 cents and EPS of 59.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 59.9, implying annual growth of 34.6%. Current consensus DPS estimate is 44.4, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 31.7. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $23.92
Morgan Stanley rates NCM as Overweight (1) -
After Newcrest Mining announced spending initiatitives and future plans, Morgan Stanley feels the company is progressing organic opportunities and there's potential for value addition.
The analyst likes the expected fall in all-in-sustaining costs (AISC) to less than US$500. There's also considered upside potential at Red Chris with throughput of 13.5mtpa-15mtpa or even higher.
Overweight rating and $30 price target are retained. Industry view: In-Line.
Target price is $30.00 Current Price is $23.92 Difference: $6.08
If NCM meets the Morgan Stanley target it will return approximately 25% (excluding dividends, fees and charges).
Current consensus price target is $29.80, suggesting upside of 23.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Morgan Stanley forecasts a full year FY22 dividend of 19.93 cents and EPS of 98.34 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 139.4, implying annual growth of N/A. Current consensus DPS estimate is 37.5, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 17.3. |
Forecast for FY23:
Morgan Stanley forecasts a full year FY23 dividend of 61.13 cents and EPS of 90.37 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 139.7, implying annual growth of 0.2%. Current consensus DPS estimate is 41.7, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 17.3. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
QAN QANTAS AIRWAYS LIMITED
Transportation & Logistics
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Overnight Price: $5.47
Citi rates QAN as Buy (1) -
After Qantas Airways' recent announcement about fleet renewals and media speculation of a capital raise, Citi examines potential capital expenditure, including Project Sunrise, in more detail.
The broker concludes enough capex for fleet renewal and Project Sunrise has been factored-in.
Buy rating and $5.93 target price are unchanged.
Target price is $5.93 Current Price is $5.47 Difference: $0.46
If QAN meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $5.98, suggesting upside of 7.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Citi forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 33.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -35.9, implying annual growth of N/A. Current consensus DPS estimate is 3.5, implying a prospective dividend yield of 0.6%. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY23:
Citi forecasts a full year FY23 dividend of 8.50 cents and EPS of 55.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 51.6, implying annual growth of N/A. Current consensus DPS estimate is 10.5, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 10.8. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $12.72
Credit Suisse rates SUN as Outperform (1) -
Credit Suisse adjusts earnings forecasts for Suncorp Group to allow for investment market movements. Overall, small positive movements from credit spreads were offset by slight decreases in investment markets.
The broker retains an Outperform rating with a $13.91 target.
Target price is $13.91 Current Price is $12.72 Difference: $1.19
If SUN meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $13.40, suggesting upside of 4.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Credit Suisse forecasts a full year FY22 dividend of 73.00 cents and EPS of 85.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 74.6, implying annual growth of -7.7%. Current consensus DPS estimate is 59.6, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 17.1. |
Forecast for FY23:
Credit Suisse forecasts a full year FY23 dividend of 74.00 cents and EPS of 91.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 83.3, implying annual growth of 11.7%. Current consensus DPS estimate is 67.2, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 15.3. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $1.68
Macquarie rates VCX as Neutral (3) -
Vicinity Centres will acquire a 50% interest in Harbour Town Premium Outlets for $358m. This is a hybrid asset, with an outlet centre, convenience retail and cinema.
Macquarie believes there are strategic advantages in continuing to consolidate this sub-sector, the company now owning eight assets for a total value of $2.1bn.
Still, the broker is surprised the acquisition was deemed a better use of capital compared to a buyback, given the stock is trading at a -21% discount to net tangible assets.
Neutral rating and $1.66 target retained.
Target price is $1.66 Current Price is $1.68 Difference: minus $0.02 (current price is over target).
If VCX meets the Macquarie target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $1.66, suggesting downside of -4.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 7.50 cents and EPS of 9.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 10.0, implying annual growth of N/A. Current consensus DPS estimate is 8.1, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 17.4. |
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 10.40 cents and EPS of 12.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 12.0, implying annual growth of 20.0%. Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 14.5. |
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates VCX as Hold (3) -
Vicinity Centres has acquired a 50% stake in Harbour Town Outlet on the Gold Coast for $358m. Ord Minnett finds the retail acquisition "refreshing", noting the company has a strong track record in operating outlets and can extract more value via tenant re-mix and leasing.
A range of capital initiatives remains on the cards, the broker adds, and a buyback is still an alternative. Hold retained. Target is raised to $1.80 from $1.70.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $1.80 Current Price is $1.68 Difference: $0.12
If VCX meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $1.66, suggesting downside of -4.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Ord Minnett forecasts a full year FY22 dividend of 7.00 cents and EPS of 7.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 10.0, implying annual growth of N/A. Current consensus DPS estimate is 8.1, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 17.4. |
Forecast for FY23:
Ord Minnett forecasts a full year FY23 dividend of 10.00 cents and EPS of 11.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 12.0, implying annual growth of 20.0%. Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 14.5. |
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $25.63
Citi rates WBC as Buy (1) -
While Westpac Banking Corporation's write-downs largely reflect a catch-up by accounting valuations, Citi believes it is a setback for management. It's thought they had been looking to build credibility over an ambitious cost-out strategy.
Westpac will incur -$1.3bn (post tax) in notable items at the FY21 results, largely due to -$965m in asset write-downs in Westpac Institutional Bank (WIB).
The broker downgrades FY21 cash earnings by about -20%, having taken previously announced separation costs below the line.
Buy rating and $30 target price are unchanged.
Target price is $30.00 Current Price is $25.63 Difference: $4.37
If WBC meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $28.37, suggesting upside of 12.0% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY21:
Citi forecasts a full year FY21 dividend of 116.00 cents and EPS of 184.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 157.6, implying annual growth of 147.3%. Current consensus DPS estimate is 112.3, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 16.1. |
Forecast for FY22:
Citi forecasts a full year FY22 dividend of 130.00 cents and EPS of 194.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 183.0, implying annual growth of 16.1%. Current consensus DPS estimate is 127.2, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 13.8. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates WBC as Outperform (1) -
Westpac Banking Corporation has indicated second-half cash earnings will be affected by notable items worth $1.3bn. The items relate to a write-down of assets, additional provisions for refunds and separation costs associated with the sale of the life business.
Credit Suisse assesses the announcement is an acknowledgement of structurally-lower earnings going forward.
Outperform retained. Target is $28.
Target price is $28.00 Current Price is $25.63 Difference: $2.37
If WBC meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $28.37, suggesting upside of 12.0% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 92.00 cents and EPS of 149.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 157.6, implying annual growth of 147.3%. Current consensus DPS estimate is 112.3, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 16.1. |
Forecast for FY22:
Credit Suisse forecasts a full year FY22 dividend of 127.00 cents and EPS of 195.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 183.0, implying annual growth of 16.1%. Current consensus DPS estimate is 127.2, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 13.8. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates WBC as Neutral (3) -
Westpac Bank has announced -$1.3bn in large items will impact the second half. The CET1 position will decline by -15 basis points and as a result Macquarie lowers its expected buyback to $4.0bn from $4.5bn.
Macquarie considers the fundamental valuation is not demanding at current levels, although believes the latest impairments/write-downs are a reminder that the downgrade cycle is not over.
Neutral rating and target price of $26.50 are retained.
Target price is $26.50 Current Price is $25.63 Difference: $0.87
If WBC meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $28.37, suggesting upside of 12.0% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 120.00 cents and EPS of 131.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 157.6, implying annual growth of 147.3%. Current consensus DPS estimate is 112.3, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 16.1. |
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 125.00 cents and EPS of 163.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 183.0, implying annual growth of 16.1%. Current consensus DPS estimate is 127.2, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 13.8. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates WBC as Overweight (1) -
As the impact on capital is modest, Morgan Stanley retains its investment thesis on Westpac Bank after the announcement that cash earnings will be reduced by around -$1.3bn post tax, due to notable items.
Moreover, given the bank's "Fix" agenda in 2021, the analyst is not surprised by the provisions and the write-downs of goodwill and capitalised software. The broker retains a $29.20 target price and Overweight rating. Industry view: In-line.
Target price is $29.20 Current Price is $25.63 Difference: $3.57
If WBC meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $28.37, suggesting upside of 12.0% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY21:
Morgan Stanley forecasts a full year FY21 dividend of 118.00 cents and EPS of 164.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 157.6, implying annual growth of 147.3%. Current consensus DPS estimate is 112.3, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 16.1. |
Forecast for FY22:
Morgan Stanley forecasts a full year FY22 dividend of 125.00 cents and EPS of 174.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 183.0, implying annual growth of 16.1%. Current consensus DPS estimate is 127.2, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 13.8. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates WBC as Hold (3) -
Westpac Banking Corporation has announced large items that will detract from earnings in the second half of FY21, totalling -$1.3bn. Most of this relates to impairment charges on the Westpac Institutional Bank because of a prolonged low interest-rate environment and weak financial-markets income.
There is likely to be some impact on capital management, Ord Minnett assesses, and forecasts a second-half CET1 ratio of 12.4% and an off-market buyback of $5bn. Hold rating and $27 target maintained.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $27.00 Current Price is $25.63 Difference: $1.37
If WBC meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $28.37, suggesting upside of 12.0% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 116.00 cents and EPS of 136.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 157.6, implying annual growth of 147.3%. Current consensus DPS estimate is 112.3, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 16.1. |
Forecast for FY22:
Ord Minnett forecasts a full year FY22 dividend of 120.00 cents and EPS of 163.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 183.0, implying annual growth of 16.1%. Current consensus DPS estimate is 127.2, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 13.8. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $6.65
Citi rates Z1P as Downgrade to Neutral from Buy (3) -
Citi downgrades Zip Co to Neutral from Buy and lowers its target price to $7.40 from $7.95 to reflect lower customer growth forecasts and higher operating expenditure forecasts.
The latter reflects increasing promotional activity and global expansion, explains the analyst.
This comes as app downloads fell for the sixth consecutive month in September, notes the broker. Moreover, there's considered potential for an equity raise, should the International expansion strategy accelerate.
Target price is $7.40 Current Price is $6.65 Difference: $0.75
If Z1P meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $7.37, suggesting upside of 10.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Citi forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 37.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -15.1, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY23:
Citi forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 25.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -4.7, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is N/A. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Today's Price Target Changes
| Company | Last Price | Broker | New Target | Prev Target | Change | |
| GUD | G.U.D. Holdings | $11.46 | Ord Minnett | 12.25 | 12.00 | 2.08% |
| UBS | 12.00 | 11.50 | 4.35% | |||
| SUN | Suncorp Group | $12.78 | Credit Suisse | 13.91 | 14.00 | -0.64% |
| VCX | Vicinity Centres | $1.74 | Ord Minnett | 1.80 | 1.70 | 5.88% |
| Z1P | Zip Co | $6.65 | Citi | 7.40 | 8.90 | -16.85% |
Summaries
| AFG | Australian Finance Group | Outperform - Macquarie | Overnight Price $2.68 |
| AZJ | Aurizon Holdings | Outperform - Macquarie | Overnight Price $3.90 |
| CGF | Challenger | Neutral - Macquarie | Overnight Price $6.34 |
| GUD | G.U.D. Holdings | Buy - Citi | Overnight Price $10.55 |
| Upgrade to Buy from Hold - Ord Minnett | Overnight Price $10.55 | ||
| Buy - UBS | Overnight Price $10.55 | ||
| IAG | Insurance Australia | Outperform - Credit Suisse | Overnight Price $5.27 |
| LOV | Lovisa Holdings | Neutral - Citi | Overnight Price $18.37 |
| Overweight - Morgan Stanley | Overnight Price $18.37 | ||
| NCM | Newcrest Mining | Overweight - Morgan Stanley | Overnight Price $23.92 |
| QAN | Qantas Airways | Buy - Citi | Overnight Price $5.47 |
| SUN | Suncorp Group | Outperform - Credit Suisse | Overnight Price $12.72 |
| VCX | Vicinity Centres | Neutral - Macquarie | Overnight Price $1.68 |
| Hold - Ord Minnett | Overnight Price $1.68 | ||
| WBC | Westpac Banking | Buy - Citi | Overnight Price $25.63 |
| Outperform - Credit Suisse | Overnight Price $25.63 | ||
| Neutral - Macquarie | Overnight Price $25.63 | ||
| Overweight - Morgan Stanley | Overnight Price $25.63 | ||
| Hold - Ord Minnett | Overnight Price $25.63 | ||
| Z1P | Zip Co | Downgrade to Neutral from Buy - Citi | Overnight Price $6.65 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 13 |
| 3. Hold | 7 |
Wednesday 13 October 2021
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