Australian Broker Call

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

Macquarie expects reduced demand over the medium term across all geographies. The company's largest exposure is outright sales which have traditionally accounted for more than 70% of revenue. However, buyers have constrained budgets at present.

The broker considers it fortunate Ainsworth Game is conservatively positioned financially. Estimates are materially reduced and the broker downgrades to Neutral from Outperform. Target is lowered to $0.50 from $0.80.

Target price is $0.50 Current Price is $0.45 Difference: $0.05
If AGI meets the Macquarie target it will return approximately 11% (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

UBS rates ALU as Downgrade to Neutral from Buy (3) -

The pandemic lockdowns are affecting the company to a greater extent than UBS previously expected for the North American and European business.

Small business customers are preserving cash and this is affecting sales conversions in the seasonally strongest months of May and June.

In response, the company has accelerated its online sales functionality and launch discounted pricing. The discounting is expected to be a driver of lower revenue over the short term.

UBS downgrades to Neutral from Buy and the target is reduced to $37.00 from $37.50.

Target price is $37.00 Current Price is $34.91 Difference: $2.09
If ALU meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

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: 0.5

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

Ord Minnett rates APE as Accumulate (2) -

Ord Minnett forecasts a recovery in cash flow for AP Eagers that should avert the need to raise capital.

The broker believes the business is ideally positioned to participate in industry consolidation and this will accelerate market leadership and widen the competitive gap between scale networks and smaller operators.

Still, Ord Minnett acknowledges forecasting earnings and cash flow in the short term is almost impossible, given the variables around government, landlord and original equipment manufacturer support. Accumulate maintained. Target is reduced to $8.00 from $10.50.

Target price is $8.00 Current Price is $5.00 Difference: $3
If APE meets the Ord Minnett target it will return approximately 60% (excluding dividends, fees and charges).

Current consensus price target is $8.54, suggesting upside of 70.8% (ex-dividends)

The company's fiscal year ends in December.

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

Credit Suisse rates AST as Neutral (3) -

Credit Suisse assesses the growth outlook is improving as FY20 earnings came in ahead of expectations.

The company's FY24 $1.5bn unregulated asset growth target is unchanged and Credit Suisse increases expected growth rates for FY20-24.

Neutral rating maintained. Target rises to $1.85 from $1.75.

Target price is $1.85 Current Price is $1.88 Difference: minus $0.03 (current price is over target).
If AST 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 $1.79, suggesting downside of -4.6% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.3

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

UBS rates AST as Downgrade to Neutral from Buy (3) -

Underlying net profit in FY20 beat UBS estimates. The broker estimates the current pandemic relief package reduces FY21 revenue by around -1.5%.

However, the bigger issue arises from the recent rule change proposed by the regulator to extend retailer payment terms to networks to six months, from 10 days.

This could strain FY21 working capital if applied in Victoria. With credit metrics under pressure until capital is raised, UBS downgrades to Neutral from Buy. Target is raised to $1.90 from $1.85.

Target price is $1.90 Current Price is $1.88 Difference: $0.02
If AST meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $1.79, suggesting downside of -4.6% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.3

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

Morgans rates ATL as Hold (3) -

Apollo Tourism & Leisure has made good progress, the broker suggests, in selling down its US units at discount prices in order to extinguish debt ahead of a key summer season that won't happen this year. Locally, domestic and trans-Tasman tourism and travel should provide a buffer against closed international borders.

Earnings nevertheless remain at risk, as does the balance sheet. The current price looks attractive, the broker admits, in what might prove a reasonable recovery phase, but Hold retained for now. Target rises to 34c from 17c.

Target price is $0.34 Current Price is $0.30 Difference: $0.04
If ATL meets the Morgans target it will return approximately 13% (excluding dividends, fees and charges).

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 BHP as Upgrade to Buy from Neutral (1) -

UBS observes the stock has declined -20% since February because of the pandemic and the breakdown of the OPEC negotiations which have affected oil prices.

Yet, UBS assesses the company is in a strong position and should be able to return surplus cash to shareholders at a time when other more traditional dividend-paying stocks cannot.

Rating is upgraded to Buy from Neutral and the target reduced to $38 from $39. Meanwhile, the easing of lockdown restrictions across Europe and the US is a positive and the broker flags the fact India opening up will mean coal imports resume.

Target price is $38.00 Current Price is $30.65 Difference: $7.35
If BHP meets the UBS target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $36.81, suggesting upside of 20.1% (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: 0.9

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

Morgans rates BKW as Hold (3) -

April building product sales In Australia were largely unchanged from a year ago, the broker notes, but -30% lower in the US due to lockdowns. Brickworks continues to prepare for downturns in both markets. The outlook is uncertain, but the company's Industrial Property Trust joint venture with Goodman Group ((GMG)) should prove resilient, the broker suggests.

Hold retained, target falls to $13.56 from $14.98.

Target price is $13.56 Current Price is $12.91 Difference: $0.65
If BKW meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $14.34, suggesting upside of 11.1% (ex-dividends)

The company's fiscal year ends in July.

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

Morgans rates BPT as Add (1) -

Morgans notes Australian oil & gas stocks are pricing in a rapid V-shaped recovery in oil prices that is looking increasingly unlikely. Global supply may be curtailed (beyond OPEC+) but demand will remain weak for some time even as lockdowns are lifted. The broker does not see consumption reaching 2019 levels before 2022.

Add retained for Senex Energy. Target falls to $1.66 from $1.71.

Target price is $1.66 Current Price is $1.39 Difference: $0.27
If BPT meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $1.74, suggesting upside of 24.9% (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

UBS rates BRG as Buy (1) -

Breville Group is raising $104m in equity from an institutional placement and underwritten share purchase plan. This is expected to be used for working capital in order to sustain sales growth and support international expansion.

In addition, the company will refinance $373m of existing debt facilities. Revenue grew 32% over January-April, ahead of expectations.

The company has noted strength in the online channel and favourable customer purchasing trends, such as trading up. Buy rating and $20.55 target maintained.

Target price is $20.55 Current Price is $20.01 Difference: $0.54
If BRG meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $18.18, suggesting downside of -9.2% (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

Citi rates CBA as Buy (1) -

Commonwealth Bank of Australia’s cash earnings for the third quarter amounted to $1.3bn, circa -15% below Citi’s estimate for the second half. This was aggravated by -$1.5bn of covid-19 loan loss provision and a remediation top-up of -$135m.

Citi has reduced FY20 cash earnings forecast by circa -6% to reflect more covid-19 provisions and lower fee income, slightly offset by stronger net interest income.

Lower CET1 position due to higher bad debts is expected to depress second-half earnings, leading the broker to remove dividend forecast for the period. Citi has also reduced FY20 CET1 estimate to circa 11.1% from 11.7% showing stronger risk-weighted asset (RWA) growth in the third quarter and impact from high-quality liquid assets spreads.

Buy rating retained with target price at $68.75.

Target price is $68.75 Current Price is $58.90 Difference: $9.85
If CBA meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $61.45, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Credit Suisse rates CBA as Neutral (3) -

Credit Suisse's initial impressions of a hole in capital have been tempered, given the reversal of market volatility impacts into April.

The broker was surprised by the partial sale of Colonial First State but acknowledges this provides flexibility, which should mean the bank is above the unquestionably strong levels of 10.5% in CET1 ratios under most scenarios.

Neutral rating maintained. Target is $65.

Target price is $65.00 Current Price is $58.90 Difference: $6.1
If CBA meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $61.45, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Macquarie rates CBA as Underperform (5) -

Earnings trends were broadly consistent with Macquarie's expectations. The capital position has been supported by the announcement of the divestment of the stake in Colonial First State, expected to boost the CET1 ratio by 30-40 basis points.

Operating income in the third quarter was relatively flat compared to the first half quarterly average, the broker notes. Underperform rating and $57 target maintained.

Target price is $57.00 Current Price is $58.90 Difference: minus $1.9 (current price is over target).
If CBA meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $61.45, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Morgan Stanley rates CBA as Underweight (5) -

Morgan Stanley assesses the bank's pre-provision profit trends, credit risk, capital position and dividend prospects are not sufficiently differentiating the business from its peers.

Hence, the broker finds it difficult to justify current premium multiples. The broker forecasts a reduction in the final dividend of -40% to $1.40. Ongoing margin pressure, higher loan losses and rising capital intensity are all expected.

Underweight. Target is reduced to $56.00 from $57.50. Industry view: In-Line.

Target price is $56.00 Current Price is $58.90 Difference: minus $2.9 (current price is over target).
If CBA meets the Morgan Stanley target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $61.45, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Morgans rates CBA as Hold (3) -

The highlight of Commonwealth Bank's March quarter update, for the broker, was the $1.5bn virus provision to take the bank's total provision coverage to 140 basis points, the highest, along side Westpac ((WBC)), of the majors. The Big Two thus have relatively robust provisions, with the Other Two are at risk of needing to top up, the broker suggests. CBA also reported above-system growth in mortgages and deposits.

Another highlight was the sale of 55% of Colonial First State, which will further bolster an already reasonable capital position. The broker still expects the bank to defer its dividend in August, unless APRA sees sufficient reason by that time to ease its cautious stance. Hold retained on valuation. Target unchanged at $61.

Target price is $61.00 Current Price is $58.90 Difference: $2.1
If CBA meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $61.45, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Ord Minnett rates CBA as Hold (3) -

Ord Minnett observes cash net profit in the March quarter was below the run rate required to achieve its second half forecasts. However, setting aside a larger provision for the pandemic and remediation costs, revenue was better than the broker expected.

Ord Minnett considers the valuation stretched , as it fails to reflect the challenged top-line, given a heavy exposure to retail banking, while cost savings are already captured in forecasts. Hold rating retained. Target rises to $57.40 from $56.90.

Target price is $57.40 Current Price is $58.90 Difference: minus $1.5 (current price is over target).
If CBA 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 $61.45, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

UBS rates CBA as Neutral (3) -

UBS found the most disappointing element of the third quarter results was the CET1 ratio, which came in at 10.7% versus a forecast of 11.1%.

The broker is concerned about the extent to which the banks are now reliant on models to estimate credit provisioning and capital adequacy.

Meanwhile, CBA continues to simplify the business with the sale of 55% stake in Colonial First State.

UBS removes its buyback forecast from estimates to allow for funding of dividend payments. Neutral rating and $65 target maintained.

Target price is $65.00 Current Price is $58.90 Difference: $6.1
If CBA meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $61.45, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Morgans rates COE as Add (1) -

Morgans notes Australian oil & gas stocks are pricing in a rapid V-shaped recovery in oil prices that is looking increasingly unlikely. Global supply may be curtailed (beyond OPEC+) but demand will remain weak for some time even as lockdowns are lifted. The broker does not see consumption reaching 2019 levels before 2022.

Add and 56c target retained for Cooper Energy.

Target price is $0.56 Current Price is $0.36 Difference: $0.2
If COE meets the Morgans target it will return approximately 56% (excluding dividends, fees and charges).

Current consensus price target is $0.54, suggesting upside of 49.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Credit Suisse rates ECX as Outperform (1) -

First half results were ahead of Credit Suisse estimates. The broker was encouraged by the outcome, as liquidity appears manageable and there is further comfort around cash generation.

Novated lease performance in recent weeks is ahead of what the broker would have expected and used car prices are also holding up, albeit on reduced volumes.

Management remains confident that Right2Drive will be disposed of in the second half. Outperform rating maintained. Target rises to $1.25 from $1.10.

Target price is $1.25 Current Price is $0.76 Difference: $0.49
If ECX meets the Credit Suisse target it will return approximately 64% (excluding dividends, fees and charges).

Current consensus price target is $1.15, suggesting upside of 51.6% (ex-dividends)

The company's fiscal year ends in September.

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 ECX as Neutral (3) -

EclipX Group continues to deliver against its plan, Macquarie observes. The first half result beat expectations, driven by the performance in New Zealand, better end-of-lease income and lower costs.

Moreover, the company has taken steps to maintain liquidity and believes it is positioned to leverage core competencies and take advantage of opportunities.

The broker retains a Neutral rating and raises the target to $0.86 from $0.74.

Target price is $0.86 Current Price is $0.76 Difference: $0.1
If ECX meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $1.15, suggesting upside of 51.6% (ex-dividends)

The company's fiscal year ends in September.

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 ECX as Equal-weight (3) -

Morgan Stanley observes the steady performance of the core business and annuity earnings provided stability in the first half. There are also practically no capital requirements over the short term.

While the valuation remains attractive, the broker considers the downside risks remain high. Equal-weight rating. Industry view is In-Line. Target is reduced to $1.10 from $1.70.

Target price is $1.10 Current Price is $0.76 Difference: $0.34
If ECX meets the Morgan Stanley target it will return approximately 45% (excluding dividends, fees and charges).

Current consensus price target is $1.15, suggesting upside of 51.6% (ex-dividends)

The company's fiscal year ends in September.

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 FLT as Resume Coverage with Neutral (3) -

Macquarie believes a $700m capital raising provides the company with the ability to deal with the travel restrictions. While total transaction value in April was down -95%, an improvement is expected as travel restrictions gradually ease.

The broker remains cautious nevertheless, given the potential for a second wave of the virus and the brand damage & cash flow impact from the modified refund policy, resuming coverage with a Neutral rating and $11.25 target.

Target price is $11.25 Current Price is $10.04 Difference: $1.21
If FLT meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $13.13, suggesting upside of 30.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Ord Minnett rates IDX as Upgrade to Buy from Accumulate (1) -

Integral Diagnostics has experienced a material decline in volumes in April which are only just beginning to recover, given Australasian success in controlling the pandemic outbreak.

In the event the restrictions continue to be unwound, Ord Minnett expects volumes will recover incrementally.

Meanwhile the fundamental drivers of industry growth remain intact and the broker upgrades to a Buy rating from Accumulate. Target is reduced to $4.07 from $4.58.

Target price is $4.07 Current Price is $3.31 Difference: $0.76
If IDX meets the Ord Minnett target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $3.93, suggesting upside of 18.9% (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

Credit Suisse rates JHX as Upgrade to Outperform from Neutral (1) -

US reports signal to Credit Suisse there was a -20% US market decline in April yet the outlook is improving. The broker observes James Hardie has re-established market share gains, validating the success of its commercial strategy.

The broker also notes the downside scenario is diminishing as end markets stabilise. Rating is upgraded to Outperform from Neutral and the target raised to $26.90 from $21.50.

Target price is $26.90 Current Price is $21.28 Difference: $5.62
If JHX meets the Credit Suisse target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $30.28, suggesting upside of 42.3% (ex-dividends)

The company's fiscal year ends in March.

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

Morgans rates KAR as Add (1) -

Morgans notes Australian oil & gas stocks are pricing in a rapid V-shaped recovery in oil prices that is looking increasingly unlikely. Global supply may be curtailed (beyond OPEC+) but demand will remain weak for some time even as lockdowns are lifted. The broker does not see consumption reaching 2019 levels before 2022.

Add retained for Karoon Gas. Target falls to $1.13 from $1.57.

Target price is $1.13 Current Price is $0.54 Difference: $0.59
If KAR meets the Morgans target it will return approximately 109% (excluding dividends, fees and charges).

Current consensus price target is $0.96, suggesting upside of 77.2% (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

Credit Suisse rates KGN as Downgrade to Neutral from Outperform (3) -

Sales growth accelerated in April and, while marketing expenses remain high, profit was likely supported by Marketplace sales and reduced price competition, Credit Suisse notes.

The broker is comfortable holding the stock for now following a period of strong share price performance and downgrades to Neutral from Outperform. Target is raised to $8.36 from $6.64.

Target price is $8.36 Current Price is $8.53 Difference: minus $0.17 (current price is over target).
If KGN meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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

Macquarie rates MYX as Neutral (3) -

Macquarie observes weaker volume trends have emerged for some products while competitor launches have affected several key generics. This highlights the competitive nature of the latter.

The broker lowers short-term revenue growth assumptions, partially offset by reduced operating expenditure growth an updated FX assumptions. Neutral maintained. Target is raised to $0.42 from $0.41.

Target price is $0.42 Current Price is $0.43 Difference: minus $0.01 (current price is over target).
If MYX meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.42, suggesting downside of -2.9% (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

Macquarie rates NCM as Resume coverage with a Neutral rating (3) -

Newcrest Mining has completed its equity placement and will use the funds to purchase financing facilities for the Fruta del Norte mine.

Macquarie considers the deal accretive and a welcome boost to earnings as the grade at Cadia declines.

The broker resumes coverage with a Neutral rating (upgraded from Underperform) and $28 target.

Target price is $28.00 Current Price is $29.02 Difference: minus $1.02 (current price is over target).
If NCM meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.57, suggesting downside of -1.5% (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

Morgans rates ORG as Add (1) -

The broker has lowered its long term oil price forecast by -11% to US$62/bbl, warning of further uncertainty in the near term dependent on how long the virus impact lasts. At US$30/bbl (Brent), the current price is just above APLNG's breakeven. Lower LNG demand is putting FY21 earnings at risk but the broker is not factoring that in at this stage.

However headwinds in the electricity market will become more severe in FY21, although the broker believes the market has already priced this in. The broker has removed a gearing discount on APLNG valuation, lifting its target for Origin Energy to $6.28 from $5.50, Add retained.

Target price is $6.28 Current Price is $5.23 Difference: $1.05
If ORG meets the Morgans target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $6.78, suggesting upside of 29.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Morgans rates OSH as Downgrade to Hold from Add (3) -

Morgans notes Australian oil & gas stocks are pricing in a rapid V-shaped recovery in oil prices that is looking increasingly unlikely. Global supply may be curtailed (beyond OPEC+) but demand will remain weak for some time even as lockdowns are lifted. The broker does not see consumption reaching 2019 levels before 2022.

Oil Search downgraded to Hold from Add. Target falls to $2.82 from $3.55.

Target price is $2.82 Current Price is $2.74 Difference: $0.08
If OSH meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $2.95, suggesting upside of 7.5% (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: 0.3

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

Credit Suisse rates QUB as Outperform (1) -

Reports that the Chinese government is seeking to imposed tariffs on Australian beef, barley and other exports signals to Credit Suisse there may be a hit to container volumes.

The broker estimates around 20% of export container volumes handled by Qube Holdings are destined for China.

Still, the broker makes no changes to estimates, suspecting the trade tensions will be temporary. Instead, the main risks to the Outperform rating stem from a deep recession and weak take-up at Moorebank. Target is $2.80.

Target price is $2.80 Current Price is $2.48 Difference: $0.32
If QUB meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $2.63, suggesting upside of 6.1% (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 SGP as Sell (5) -

Stockland Corporation’s two major segments- residential and retail – are currently facing headwinds due to covid-19 led disruptions.

The residential segment saw net deposits in April sharply down driven by higher cancellations and lesser enquiries. The broker expects the enquiries to rebound but fears conversion levels could be muted.

March quarter for the retail portfolio saw specialty sales declining less than peers and the broker expects an L-shaped recovery.

Sell rating maintained with target price at $4.09.

Target price is $4.09 Current Price is $2.73 Difference: $1.36
If SGP meets the Citi target it will return approximately 50% (excluding dividends, fees and charges).

Current consensus price target is $3.33, suggesting upside of 22.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Credit Suisse rates SGP as Upgrade to Outperform from Neutral (1) -

The company has provided no certainty over the quantum of deferrals or abatements within the commercial tenant portfolio. Hence, earnings uncertainty continues, although Credit Suisse suggests this applies to most A-REITs.

The broker lowers rental income estimates and also believes it may be a stretch to hit the company's original FY20 target of over 5200 residential settlement lots.

FY20-22 estimates are downgraded and the target is reduced to $3.56 from $4.97.

Still, the land bank and relatively strong balance sheet mean Stockland is well-positioned and considered an undervalued asset play, and the rating is upgraded to Outperform from Neutral.

Target price is $3.56 Current Price is $2.73 Difference: $0.83
If SGP meets the Credit Suisse target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $3.33, suggesting upside of 22.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Macquarie rates SGP as Neutral (3) -

March quarter residential sales were in line with Macquarie's expectations and April is expected to be the low for the market.

The outlook is positive over the medium term but delays in residential sales along with defaults and the weak outlook for retail are expected to weigh in the short term.

Neutral rating maintained. Target is $3.09.

Target price is $3.09 Current Price is $2.73 Difference: $0.36
If SGP meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.33, suggesting upside of 22.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

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

Residential momentum was better than Morgan Stanley expected in the March quarter, with weekly inquiry levels back to pre-pandemic levels.

Net deposits fell in April because of increased cancellations or the closure of sales offices, which are now reopening. Retail specialty sales growth was down -18% in March but the broker observes this was more resilient than peers.

Equal-weight rating, In-Line industry view and $3.10 target maintained.

Target price is $3.10 Current Price is $2.73 Difference: $0.37
If SGP meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $3.33, suggesting upside of 22.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Ord Minnett rates SGP as Accumulate (2) -

Retail sales growth was ahead of peers in the March quarter, Ord Minnett observes. The portfolio benefited from the higher supermarket exposure and lower specialty weighting.

The broker also notes the residential division was strong and enquiries have picked up markedly in the past few weeks.

Ord Minnett considers Stockland oversold and maintains an Accumulate rating with a $3.10 target.

Target price is $3.10 Current Price is $2.73 Difference: $0.37
If SGP meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $3.33, suggesting upside of 22.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

UBS rates SGP as Neutral (3) -

UBS notes April was the weakest month for net deposits on record. The broker expects the focus will turn to FY21 and the likelihood that housing starts fall below 100,000 in coming quarters.

UBS assesses considerable uncertainty in relation to asset values, the outcome of rental negotiations and residential sales. Investors are expected to take comfort in Stockland's substantial liquidity position.

The broker raises the target to $3.05 from $3.00. Neutral rating is under review.

Target price is $3.05 Current Price is $2.73 Difference: $0.32
If SGP meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $3.33, suggesting upside of 22.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

UBS rates SHV as Buy (1) -

A record Californian almond crop has been predicted, UBS notes. The broker suspects this will dampen short-term pricing even further in the soft environment.

At the April update Select Harvests indicated 70% of its crop was committed at sale prices between $8-8.50/kg. Therefore, the exposure to the current pricing environment is minimal, assuming all existing contracts are honoured.

UBS retains a positive outlook, Buy rating and $9 target.

Target price is $9.00 Current Price is $7.64 Difference: $1.36
If SHV meets the UBS 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: 1.0

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

UBS rates SIG as Sell (5) -

The AGM update has indicated sales volumes were up 70% on average in March, because of the dynamics surrounding the pandemic. The transactions regarding a sale and lease back of distribution centres are progressing.

No formal guidance was provided for FY21 but both retail and hospital pharmacy are expected to "remain above market growth". UBS retains a Sell rating and $0.53 target.

Target price is $0.53 Current Price is $0.59 Difference: minus $0.06 (current price is over target).
If SIG meets the UBS target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.59, suggesting upside of 0.0% (ex-dividends)

The company's fiscal year ends in January.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.5

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

Macquarie rates SPK as Neutral (3) -

Spark NZ has received a short-term allocation of 5G spectrum, providing initial spectrum through to October 31, 2022. Macquarie observes this is a stop-gap measure to initiate 5G services before a long-term auction and allocation occur.

The broker notes the company has withstood the pandemic isolation period relatively well and has reiterated guidance. Neutral maintained. Target is NZ$4.80.

Current Price is $4.24. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.0

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

Morgans rates STO as Downgrade to Hold from Add (3) -

Morgans notes Australian oil & gas stocks are pricing in a rapid V-shaped recovery in oil prices that is looking increasingly unlikely. Global supply may be curtailed (beyond OPEC+) but demand will remain weak for some time even as lockdowns are lifted. The broker does not see consumption reaching 2019 levels before 2022.

Santos downgraded to Hold from Add. Target falls to $4.29 from $4.72.

Target price is $4.29 Current Price is $4.55 Difference: minus $0.26 (current price is over target).
If STO 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 $5.38, suggesting upside of 18.2% (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: 0.6

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

Morgans rates SXY as Add (1) -

Morgans notes Australian oil & gas stocks are pricing in a rapid V-shaped recovery in oil prices that is looking increasingly unlikely. Global supply may be curtailed (beyond OPEC+) but demand will remain weak for some time even as lockdowns are lifted. The broker does not see consumption reaching 2019 levels before 2022.

Add retained for Senex Energy. Target falls to 41c from 49c.

Target price is $0.41 Current Price is $0.20 Difference: $0.21
If SXY meets the Morgans target it will return approximately 105% (excluding dividends, fees and charges).

Current consensus price target is $0.35, suggesting upside of 75.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.9

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

Citi rates VUK as Buy (1) -

Following a detailed analysis, Citi analysts have concluded that, yes, impairments are forthcoming, but they should be manageable and investors can trust book value.

With this analysis in the background, Citi analysts found the released interim report "reassuring". They agree with management at the bank the book is "conservative".

On Citi's calculations, the shares are trading at a significant discount to peers in the UK. The analysts suggest the market is overly pessimistic and reiterate their Buy rating. Price target GBP1.20, down from GBP1.30.

Current Price is $1.32. Target price not assessed.

Current consensus price target is $1.80, suggesting upside of 36.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.7

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

Morgans rates WPL as Downgrade to Hold from Add (3) -

Morgans notes Australian oil & gas stocks are pricing in a rapid V-shaped recovery in oil prices that is looking increasingly unlikely. Global supply may be curtailed (beyond OPEC+) but demand will remain weak for some time even as lockdowns are lifted. The broker does not see consumption reaching 2019 levels before 2022.

Woodside Petroleum downgraded to Hold from Add. Target falls to $22.56 from $26.23.

Target price is $22.26 Current Price is $21.14 Difference: $1.12
If WPL meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $23.79, suggesting upside of 12.5% (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: 0.6

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