Australian Broker Call
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January 10, 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: 04:09 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
| BTT - | BT INVEST MANAGEMENT | Downgrade to Hold from Add | Morgans |
| PPH - | PUSHPAY HOLDINGS | Upgrade to Buy from Hold | Ord Minnett |
| PTM - | PLATINUM | Upgrade to Equal-weight from Underweight | Morgan Stanley |
Overnight Price: $2.16
Morgans rates ADH as Add (1) -
The company provided a positive first half update and upgraded FY18 EBIT guidance to $40-44m. Morgans still believes earnings risk is to the upside.
The broker suggests the update highlights the cost leverage in the company's vertical model that comes when execution is on target.
Add maintained. Target is raised to $2.21 from $1.92.
Target price is $2.21 Current Price is $2.16 Difference: $0.05
If ADH meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 11.00 cents and EPS of 18.00 cents. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 12.00 cents and EPS of 19.00 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
BTT BT INVESTMENT MANAGEMENT LIMITED
Wealth Management & Investments
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Overnight Price: $11.24
Morgans rates BTT as Downgrade to Hold from Add (3) -
Morgans makes some minor changes to forecasts based on the first quarter fund performance, currency and fee expectations.
The broker believes, while the upcoming funds under management update should be solid, net flows and fees could underwhelm versus consensus expectations.
Rating is downgraded to Hold from Add based on a short-term view. Target is raised to $11.96 from $11.60.
Target price is $11.96 Current Price is $11.24 Difference: $0.72
If BTT meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $11.51, suggesting upside of 2.4% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 49.00 cents and EPS of 60.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 60.6, implying annual growth of 10.6%. Current consensus DPS estimate is 49.3, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 18.5. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 55.00 cents and EPS of 67.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 68.7, implying annual growth of 13.4%. Current consensus DPS estimate is 55.8, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 16.4. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
DHG DOMAIN HOLDINGS AUSTRALIA LIMITED
Real Estate
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Overnight Price: $3.29
Credit Suisse rates DHG as Initiation of coverage with Neutral (3) -
Credit Suisse initiates coverage with a Neutral rating and $3.55 target. The company operates in a high-growth market and is a strong number two player. The broker expects digital revenue to grow 21% in FY18.
The cost growth has been high and the broker expects operating earnings growth will start to improve as costs ease following a significant period of investment.
Target price is $3.55 Current Price is $3.29 Difference: $0.26
If DHG meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $3.46, suggesting upside of 5.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Current consensus EPS estimate is 8.0, 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 41.1. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 5.02 cents and EPS of 8.51 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 9.1, implying annual growth of 13.7%. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 36.2. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $7.50
Morgan Stanley rates LOV as Equal-weight (3) -
Morgan Stanley observes a strong Christmas trading period has provided a solid end to the first half. Trading is expected to normalise in the second half as comparables will be difficult.
The broker increases FY18 net profit estimates by 4.7%. Equal-weight rating and In-Line industry view maintained. Target is $5.05.
Target price is $5.05 Current Price is $7.50 Difference: minus $2.45 (current price is over target).
If LOV meets the Morgan Stanley target it will return approximately minus 33% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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:
Morgan Stanley forecasts a full year FY18 dividend of 20.30 cents and EPS of 32.00 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:
Morgan Stanley forecasts a full year FY19 dividend of 22.20 cents and EPS of 35.00 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
MFG MAGELLAN FINANCIAL GROUP LIMITED
Wealth Management & Investments
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Overnight Price: $27.37
Credit Suisse rates MFG as Outperform (1) -
First half funds under management were up 14.4%, driven by $3.5bn in net inflows and positive market movements. Credit Suisse upgrades estimates by 1%.
Outperform rating and $29 target maintained.
Target price is $29.00 Current Price is $27.37 Difference: $1.63
If MFG meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $28.81, suggesting upside of 5.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 105.00 cents and EPS of 143.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 121.2, implying annual growth of 3.7%. Current consensus DPS estimate is 101.4, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 22.6. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 124.00 cents and EPS of 168.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 149.7, implying annual growth of 23.5%. Current consensus DPS estimate is 116.3, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 18.3. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates MFG as Equal-weight (3) -
Morgan Stanley expects slower flows in the next 18 months as the institutional business is re-built.
The company has invested in the brand by sponsoring test cricket and, with this support, the broker expects monthly retail flows to recover to around $130m in the second half and $150m in FY19.
Equal-weight retained. Target is raised to $26.50 from $26.00. Industry view: In-Line.
Target price is $26.50 Current Price is $27.37 Difference: minus $0.87 (current price is over target).
If MFG meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $28.81, suggesting upside of 5.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 107.50 cents and EPS of 142.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 121.2, implying annual growth of 3.7%. Current consensus DPS estimate is 101.4, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 22.6. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 121.00 cents and EPS of 159.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 149.7, implying annual growth of 23.5%. Current consensus DPS estimate is 116.3, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 18.3. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $2.09
Morgans rates NBL as Add (1) -
The first half trading update has revealed a strong Christmas period and Morgans upgrades forecasts by 3.2% and 3.4% for FY18 and FY19 respectively.
The broker likes the cash generation and attractive dividend yield. Further acquisitions could also add meaningful increments, given the track record of turning around underperforming business.
Target rises to $2.45 from $2.40, Add retained.
Target price is $2.45 Current Price is $2.09 Difference: $0.36
If NBL meets the Morgans target it will return approximately 17% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 12.00 cents and EPS of 20.00 cents. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 13.00 cents and EPS of 22.00 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $3.68
Ord Minnett rates PPH as Upgrade to Buy from Hold (1) -
Ord Minnett is now confident the move to higher value customers is occurring. Management appears to be successfully demonstrating it can scale a fast-growing software business.
The broker forecasts gross profit can grow by over 70% in FY19 and by 50% in FY20. Rating is upgraded to Buy from Hold. Target is raised to $4.46 from $2.86.
Target price is $4.46 Current Price is $3.68 Difference: $0.78
If PPH meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).
The company's fiscal year ends in March.
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 9.44 cents. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 0.39 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
PTM PLATINUM ASSET MANAGEMENT LIMITED
Wealth Management & Investments
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Overnight Price: $8.16
Credit Suisse rates PTM as Neutral (3) -
First half funds under management were up 19% and better than Credit Suisse expected. The broker upgrades estimates by 2% for FY18.
Neutral rating and $7.10 target maintained.
Target price is $7.10 Current Price is $8.16 Difference: minus $1.06 (current price is over target).
If PTM meets the Credit Suisse target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $5.92, suggesting downside of -27.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 33.00 cents and EPS of 34.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 32.5, implying annual growth of 2.4%. Current consensus DPS estimate is 30.9, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 25.1. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 36.00 cents and EPS of 37.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 32.7, implying annual growth of 0.6%. Current consensus DPS estimate is 31.3, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 25.0. |
Market Sentiment: -0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates PTM as Upgrade to Equal-weight from Underweight (3) -
The business has demonstrated consistent flows in the first half and this is well ahead of Morgan Stanley's prior expectations. The broker considers the inflows sustainable.
FY18 estimates for earnings per share are raised 26% on marking to market the strong investment returns to December 2017.
Rating is upgraded to Equal-weight from Underweight. Target is raised to $7.50 from $4.40. Industry view In-Line.
Target price is $7.50 Current Price is $8.16 Difference: minus $0.66 (current price is over target).
If PTM meets the Morgan Stanley target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $5.92, suggesting downside of -27.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 32.00 cents and EPS of 36.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 32.5, implying annual growth of 2.4%. Current consensus DPS estimate is 30.9, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 25.1. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 34.00 cents and EPS of 37.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 32.7, implying annual growth of 0.6%. Current consensus DPS estimate is 31.3, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 25.0. |
Market Sentiment: -0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $3.89
Credit Suisse rates SBM as Outperform (1) -
The company has upgraded FY18 production guidance to 365-385,000 ozs and has committed to providing corresponding cost guidance at the full December quarter disclosure.
Credit Suisse is pleased with the performance at both Gwalia and Simberi which has driven the upgrade.
Outperform. Target is $2.95.
Target price is $2.95 Current Price is $3.89 Difference: minus $0.94 (current price is over target).
If SBM meets the Credit Suisse target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $3.37, suggesting downside of -13.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 10.55 cents and EPS of 35.51 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 34.3, implying annual growth of 8.2%. Current consensus DPS estimate is 8.5, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 11.3. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 11.91 cents and EPS of 39.71 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 99.0, implying annual growth of 188.6%. Current consensus DPS estimate is 8.0, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 3.9. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| ADH | ADAIRS | Add - Morgans | Overnight Price $2.16 |
| BTT | BT INVEST MANAGEMENT | Downgrade to Hold from Add - Morgans | Overnight Price $11.24 |
| DHG | DOMAIN HOLDINGS | Initiation of coverage with Neutral - Credit Suisse | Overnight Price $3.29 |
| LOV | LOVISA | Equal-weight - Morgan Stanley | Overnight Price $7.50 |
| MFG | MAGELLAN FINANCIAL GROUP | Outperform - Credit Suisse | Overnight Price $27.37 |
| Equal-weight - Morgan Stanley | Overnight Price $27.37 | ||
| NBL | NONI B | Add - Morgans | Overnight Price $2.09 |
| PPH | PUSHPAY HOLDINGS | Upgrade to Buy from Hold - Ord Minnett | Overnight Price $3.68 |
| PTM | PLATINUM | Neutral - Credit Suisse | Overnight Price $8.16 |
| Upgrade to Equal-weight from Underweight - Morgan Stanley | Overnight Price $8.16 | ||
| SBM | ST BARBARA | Outperform - Credit Suisse | Overnight Price $3.89 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 5 |
| 3. Hold | 6 |
Monday 15 January 2018
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