Australian Broker Call

Citi rates A2M as Sell (5) -

After conducting a survey, Citi’s US retail team revealed consumers in China are more likely to buy domestic athletic brands (Li Ning and Anta) as compared to foreign athletic brands (Nike and Adidas).

This trend is consistent with what the broker is seeing in other consumer-related categories, including infant formula and vitamins. The Sell rating and $7.15 target for The a2 Milk Company is retained, given concerns this may be increasingly impacting demand.

Additionally, pricing may come under further pressure as resellers could start to discount as inventory moves closer to expiry, putting further pressure on reseller margins. Also, geopolitical tensions may ultimately restrict inventory flow.

Target price is $7.15 Current Price is $7.71 Difference: minus $0.56 (current price is over target).
If A2M meets the Citi target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.43, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: -0.2

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

UBS rates A2M as Buy (1) -

UBS pins its Buy rating on a meaningful recovery in indirect infant formula sales over the next two years, plus substantial gains in market share in China through the off-line roll-out and free trade zone expansion.

The broker acknowledges short-term earnings risks amid reduced visibility on daigou sales and the conflicting messages from peers in the March quarter. Target is steady at NZ$16.00.

Current Price is $7.71. Target price not assessed.

Current consensus price target is $8.43, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: -0.2

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

Ord Minnett rates ALG as Downgrade to Sell from Hold (5) -

Main Event is now reporting strong comparable numbers and Ord Minnett suspects its fears when the company announced a deal with RedBird Capital for a 51% stake in this business are likely materialising.

At the time of the deal, in the depths of the pandemic, the broker asserted, while this was positive for short-term cash flow, it could cap shareholder exposure to the upside in a potential recovery.

Despite valuing Main Event at $912m on a 100% basis, the broker estimates RedBird will be able to acquire its controlling stake for just $234m. Rating is downgraded to Sell from Hold and the target rises to $0.75 from $0.60.

Target price is $0.75 Current Price is $1.00 Difference: minus $0.25 (current price is over target).
If ALG meets the Ord Minnett target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Citi rates ALL as Buy (1) -

Citi notes that Aristocrat Leisure continued to perform very well, according to March surveys. Class III performance was considered solid across both outright and premium leased, while the company’s dominant Class II business has seen performance moderate.

Additionally, an increased level of penetration has not impacted the performance of Lightning Link or Dragon Link over the past 12 months, explains the analyst. New game performance also rebounded in March and Citi maintains its Buy rating with a target of $40.60.

Target price is $40.60 Current Price is $36.22 Difference: $4.38
If ALL meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $37.20, suggesting upside of 0.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Macquarie rates ALX as Neutral (3) -

Atlas Arteria reported its first-quarter traffic with APRR traffic better than expected while Greenway traffic was down -47% versus last year. Macquarie notes the underperformance at Greenway will not impact Atlas Arteria's cash flow.

Warnow was also down -18% versus last year driven by an extended lockdown and was well below the broker's expectation.

Macquarie expects France’s current lockdown to see a very weak April but the broker forecasts May and June should be better as the government reduces restrictions and traffic recovers. 

Neutral retained with a target price of $6.01.

Target price is $6.01 Current Price is $5.99 Difference: $0.02
If ALX meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $6.32, suggesting upside of 4.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Morgans rates ALX as Add (1) -

The March quarter performance for Atlas Arteria’s 31% stake in the APRR toll road network in France exceeded Morgans expectations by circa 10%. This toll road contributes around 84% of the broker’s overall equity valuation. 

The Dulles Greenway in the US, which contributes circa 10% of equity valuation was -12% below expectations, due to covid and heavy snowfall during the period.

The target price increases to $6.31 from $6.14, due largely to forecast changes and a spot FX rate update. The Add rating is maintained.

Target price is $6.31 Current Price is $5.99 Difference: $0.32
If ALX meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $6.32, suggesting upside of 4.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

UBS rates ALX as Neutral (3) -

While there continues to be a risk around traffic performance over the short term, UBS expects it will recover quickly once travel restrictions are lifted. This is ultimately a function of the roll-out of vaccines, which has been relatively slow in France.

The broker currently assumes traffic on APRR roads will be around -8% below the 2019 level for 2021 and flat by 2022.

The company has reported a weighted average toll revenue decrease for the quarter of -15% amid -20% declines in traffic across the portfolio compared with 2019. The Neutral rating is under review. Target is $5.75.

Target price is $5.75 Current Price is $5.99 Difference: minus $0.24 (current price is over target).
If ALX meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.32, suggesting upside of 4.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

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

Amcor's nine-month result is expected on May 5. 

Going by last year's nine-month numbers, Macquarie expects US$785m in net profit for the nine months, up 9%.

While the June quarter is Amcor's largest quarter in terms of contribution to the company's profit, this year Macquarie expects the contribution to be slightly lower due to higher raw material costs. 

Macquarie reduces its rating to Neutral from Outperform with the target dropping to $16.09 from $17.19.

Target price is $16.09 Current Price is $15.24 Difference: $0.85
If AMC meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $16.81, suggesting upside of 10.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Ord Minnett rates AMC as Buy (1) -

Amcor will report its March quarter results on May 5 and Ord Minnett expects constant currency growth in earnings per share of 8%. The broker lowers FY21 estimates modestly because of rising raw material costs but raises FY22 estimates as these are recovered.

The broker believes the company offers exposure to a highly defensive earnings stream and retains an Accumulate rating. Target is reduced to $16.75 from $17.00.

Target price is $16.75 Current Price is $15.24 Difference: $1.51
If AMC meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $16.81, suggesting upside of 10.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.6

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

Macquarie rates AZJ as Outperform (1) -

Aurizon Holdings' third-quarter volumes show NSW haulage volumes were impacted by NCIG ship loader and floods loader and were down -12.6% versus port at -7.7%.

At Central Queensland Conveyancing Centre, volumes fell less for Aurizon Holdings as compared to ports, which Macquarie attributes to growing BHP volumes and exposure to better performing mines.

The broker notes Aurizon's balance sheet gives the company capacity to pursue incremental opportunities. Coal is expected to rebound in the short-term, even though the long-term fundamentals are weak.

Outperform rating and $4.41 target maintained.

Target price is $4.41 Current Price is $3.87 Difference: $0.54
If AZJ meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $4.74, suggesting upside of 23.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Morgans rates AZJ as Add (1) -

A third quarter reduction in Coal division haulage volumes was principally driven by the -8% decline in market volumes in Qld, explains Morgans. This was estimated to be largely caused by a decline in volume through the Dalrymple Bay Coal Terminal (DBCT).

The broker points out the weakness in Qld volumes has implications for the company's Network below rail volumes. It's considered volumes across the network will fall below the FY21 regulatory forecast and result in Network under-recovering its revenue allowance.

The Add rating is unchanged and the target price is decreased to $4.40 from $4.56 though the analyst feels the shares look cheap compared to the estimated multiples for Dalrymple Bay Infrastructure ((DBI)).

Target price is $4.40 Current Price is $3.87 Difference: $0.53
If AZJ meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $4.74, suggesting upside of 23.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Citi rates BHP as Neutral (3) -

BHP Group reported March quarterly iron ore, petroleum and copper production largely in-line with Citi's estimates. The Coal division was considered a disappointment, with met coal and thermal volumes -11% and -18% shy of the broker's forecasts, due to weather. 

Management adjusted volume guidance to reflect a strong Escondida performance and the weather-impacted coal business. While iron ore and petroleum volume/cost guidance was unchanged, copper volume guidance was increased to 1,535-1660kt from 1,510-1,645kt.

Neutral rating and $46 target are retained.

Target price is $46.00 Current Price is $47.21 Difference: minus $1.21 (current price is over target).
If BHP meets the Citi target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $47.71, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

Credit Suisse rates BHP as Neutral (3) -

March quarter production generated some minor changes with an upgrade to copper and a downgrade to coal guidance. FY21 copper guidance has been raised to 1.54-1.66mt.

While metallurgical coal prices have been lagging, spot iron ore, copper, Brent oil and thermal coal are all ahead of Credit Suisse commodity price forecasts.

Apart from the laggard, metallurgical coal, the broker observes BHP Group is experiencing robust pricing across its range of commodities, supporting its capital return outlook.

Neutral rating with a target of $42.

Target price is $42.00 Current Price is $47.21 Difference: minus $5.21 (current price is over target).
If BHP meets the Credit Suisse target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $47.71, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

Macquarie rates BHP as Outperform (1) -

BHP Group’s third-quarter result was solid, observes Macquarie, with in-line iron-ore and petroleum volumes while coal volumes turned out weaker than forecast. The broker notes year to date, BHP has produced 211mt of iron ore which positions it well to achieve its guidance.

The broker highlights copper guidance has been increased on strong Escondida results, while coal guidance has been downgraded due to adverse weather conditions. Buoyant iron-ore prices are driving strong earnings upgrade momentum, adds Macquarie.

Outperform rating reiterated with a target of $57.

Target price is $57.00 Current Price is $47.21 Difference: $9.79
If BHP meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $47.71, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

Morgan Stanley rates BHP as Overweight (1) -

After third quarter production results, Morgan Stanley assesses project execution and operational performance are both going well. Quarterly iron ore and petroleum were in-line with the broker's expectations, copper was ahead and coal was lower.

Management expects iron ore production to be at the upper end of the guidance range and the copper production range has been increased to 1,535-1,660kt from 1,510-1,645kt. Price realisation for iron ore should be better on higher lump sales, notes the analyst.

Morgan Stanley highlights major growth projects, notably South Flank and Ruby, are all tracking in-line or better than planned. The Overweight rating is retained with a target price of $47.35. Industry view: Attractive.

Target price is $47.35 Current Price is $47.21 Difference: $0.14
If BHP meets the Morgan Stanley target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $47.71, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

Morgans rates BHP as Hold (3) -

According to Morgans, BHP Group posted a solid third quarter underlying operational performance across iron ore, copper, petroleum and nickel, while both metallurgical and thermal coal disappointed.

Management now expects the upper half of FY21 guidance for iron ore shipments. A strong performance from Olympic Dam and Antamina more than offset Escondida. Management noted covid-depressed volumes are likely to continue at Escondida. 

While maintaining a Hold rating the analyst lifts the target price to $43.60 from $42.20, reflecting guidance changes, upgraded iron ore/copper/thermal coal forecasts and lower met coal.

Target price is $43.60 Current Price is $47.21 Difference: minus $3.61 (current price is over target).
If BHP meets the Morgans target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $47.71, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

Ord Minnett rates BHP as Buy (1) -

March quarter production was broadly in line with expectations. Iron ore shipments were affected by adverse weather. Copper volumes were ahead of Ord Minnett's forecasts, albeit down -8% quarter on quarter as grades and throughput dropped at Escondida.

Coal guidance has been revised lower. The stock is trading at an attractive dividend yield and Ord Minnett remains positive about Chinese iron ore demand. Buy rating and $56 target retained.

Target price is $56.00 Current Price is $47.21 Difference: $8.79
If BHP meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $47.71, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

UBS rates BHP as Neutral (3) -

March quarter production was in line with UBS estimates and China's steel production remains key to the outlook.

The broker expects BHP Group will benefit from high iron ore prices in the near term, forecasting prices will fall to around US$100/t by the end of 2021 and US$75/t by the end of 2023 as Brazilian supply recovers and Chinese demand softens.

UBS expects cash returns to shareholders will be high at the FY21 results on August 17. Neutral rating and $42 target maintained.

Target price is $42.00 Current Price is $47.21 Difference: minus $5.21 (current price is over target).
If BHP meets the UBS target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $47.71, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

Citi rates BKL as Sell (5) -

After conducting a survey, Citi’s US retail team revealed consumers in China are more likely to buy domestic athletic brands (Li Ning and Anta) as compared to foreign athletic brands (Nike and Adidas).

This trend is consistent with what the broker is seeing in other consumer-related categories, including infant formula and vitamins. The Sell rating and $59.20 target for Blackmores is retained, given concerns this may be increasingly impacting demand.

In addition, the broker is concerned about the performance of the market in Australia. This comes at a time when competition is increasing and the company is reducing its investment in its salesforce.

Target price is $59.20 Current Price is $84.24 Difference: minus $25.04 (current price is over target).
If BKL meets the Citi target it will return approximately minus 30% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $73.95, suggesting downside of -8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.2

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

Citi rates BUB as Sell (5) -

After conducting a survey, Citi’s US retail team revealed consumers in China are more likely to buy domestic athletic brands (Li Ning and Anta) as compared to foreign athletic brands (Nike and Adidas).

This trend is consistent with what the broker is seeing in other consumer-related categories, including infant formula and vitamins. The Sell rating and $0.35 target for Bubs Australia is retained, given concerns this may be increasingly impacting demand.

Also, covid-19 has delayed and increased uncertainty surrounding the pathway to breakeven and the broker requires evidence of a material and sustainable daigou turnaround to turn positive on the stock.

Target price is $0.35 Current Price is $0.47 Difference: minus $0.12 (current price is over target).
If BUB meets the Citi target it will return approximately minus 26% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -1.0

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

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

Challenger reported its strongest quarter of annuity book growth in the 10-year time series, comments Credit Suisse. This was supported by $1bn in low margin/discounted institutional term annuities without which there would have been no growth.

The benefit of a stronger book was overshadowed by an FY21 downgrade and guidance is now for the lower end of the $390-440m pre-tax profit range.

Credit Suisse downgrades to Neutral from Outperform, assessing the recovery story is delayed. Target is reduced to $6.05 from $6.65.

Target price is $6.05 Current Price is $5.25 Difference: $0.8
If CGF meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $6.17, suggesting upside of 20.3% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates CSL as Buy (1) -

In a review of the plasma collection outlook, Citi recalls the negative impact on collections during 2020 of US covid-19 infection rates, and resultant social distancing measures. It's considered restricted travel and government stimulus packages also weighed.

Now, with around 40% of the US population having received at least one vaccination, the broker expects collection volumes to be back at 2019 levels in 2H21. Buy rating and $310 target. The analyst looks for consensus earnings upgrades later in the year.

Target price is $310.00 Current Price is $267.95 Difference: $42.05
If CSL meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $297.11, suggesting upside of 9.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Morgan Stanley rates CTD as Overweight (1) -

Breakeven was achieved in the third quarter and management expects to be positive earnings (EBITDA) in Q4. This was driven by domestic travel (circa 60% of pre-covid revenues) and A&NZ, where bookings are now 85% of FY19, explains Morgan Stanley.

In addition, essential travel in the UK/EU continues to support profitability and there are positive signs of recovering activity in the US, which may be accelerated by vaccine rollouts, notes the broker. Target is $21.50. Overweight rating reiterated. Industry view is In-Line.

Target price is $21.50 Current Price is $19.70 Difference: $1.8
If CTD meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $21.30, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Morgans rates CTD as Add (1) -

The third quarter earnings (EBITDA) loss was -$4.9m. In an improving monthly trend, March was breakeven and management expects to be earnings positive in the fourth quarter, led by A&NZ and UK/Europe. The Add rating and target price of $21.75 are unchanged.

The company can be highly profitable on domestic travel alone and remains Morgans' preferred pick in the sector. Other positive attributes are considered a greater exposure to essential services customers, a large pipeline of new client wins and a low cost base.

The company highlighted its strong exposure to US and UK/EU (70% of FY19 earnings), where vaccination rates are most advanced.

Target price is $21.75 Current Price is $19.70 Difference: $2.05
If CTD meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $21.30, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

UBS rates CTD as Buy (1) -

Corporate Travel broke even at the EBITDA level in the March quarter and expects positive underlying operating earnings in the fourth quarter. The recovery in the US will be critical, UBS notes, as will a strong exit from the lockdowns by corporate UK.

International travel in the UK could potentially resume on May 17 with "green countries". A strong domestic recovery in Australasia is also a positive. Buy rating retained. Target rises to $22.00 from $21.10.

Target price is $22.00 Current Price is $19.70 Difference: $2.3
If CTD meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $21.30, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Credit Suisse rates DRR as Outperform (1) -

March quarter production was slightly ahead of expectations. The corporate focus is now on bolt-on royalty opportunities, Credit Suisse suggests, as South Flank is now 95% complete and on track for first production by mid-2021.

The broker notes the share price has declined -10% since listing while the iron ore price has rallied around 45%. The broker assesses the dislocation is a re-rating opportunity and retains an Outperform rating. Target is $4.80.

Target price is $4.80 Current Price is $4.18 Difference: $0.62
If DRR meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $4.81, suggesting upside of 10.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Macquarie rates DRR as Outperform (1) -

BHP Group ((BHP)) has confirmed the South Flank project is 95% complete and commissioning activities are expected to commence in the last quarter of FY21. Buoyant iron-ore prices have led the broker to expect higher earnings for FY22-23.

Production from Mining Area C was well above Macquarie's expectations and the development of the South Flank project also appears on track to achieve first production by the middle of this year. 

Outperform rating with the target rising to $4.90 from $4.80.

Target price is $4.90 Current Price is $4.18 Difference: $0.72
If DRR meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $4.81, suggesting upside of 10.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Ord Minnett rates LRK as Buy (1) -

Margins performed strongly in the March quarter while revenue growth of 175% impressed Ord Minnett.

The broker considers the company was highly effective in its strategy during the period with the improved margin largely attributable to sales of limited release product and a strong performance online.

Ord Minnett retains a Buy rating and raises the target to $3.39 from $3.18.

Target price is $3.39 Current Price is $2.40 Difference: $0.99
If LRK meets the Ord Minnett target it will return approximately 41% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates MIN as Outperform (1) -

Mineral Resources has significantly improved its performance at Mt Marion over the past two years, highlights Macquarie, with spodumene production expected to be 450-475kt in FY21.

The broker expects project operating income to rise to $160-170m in FY22-23 from $31m in FY20. Further, spot iron-ore prices continue to drive strong earnings upgrade momentum with the broker expecting higher earnings than its base case forecasts for FY21-22.

Outperform maintained. Target is $61.

Target price is $61.00 Current Price is $44.35 Difference: $16.65
If MIN meets the Macquarie target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $45.32, suggesting upside of 0.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Citi rates NST as Buy (1) -

After a softer March quarter across the board, Citi believes the June quarter will show if consistent performance can be delivered. The broker keeps a Buy rating heading into the July Strategy Day and trims the target price to $13.40 from $13.50.

The first quarter since the merger delivered 366koz of gold at an all-in-sustaining cost (AISC) of $1598/oz, worse than Citi's expectations by -7% and 12%, respectively.

The analyst's numbers were impacted by lower grades at Pogo, which is continuing to operate under virus restrictions, and lower volume from Kalgoorlie.

Target price is $13.40 Current Price is $10.95 Difference: $2.45
If NST meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $12.83, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in June.

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

Credit Suisse rates NST as Outperform (1) -

Gold production was down -9% in the March quarter and missed Credit Suisse estimates. Issues during the quarter included a 14-day mill shutdown and unplanned downtime at Thunderbox along with persistent disruptions from the pandemic to mining rates at Pogo.

FY21 guidance is unchanged and the broker anticipates the company's track record will mean a strong end to the year. Outperform rating and $13 target maintained.

Target price is $13.00 Current Price is $10.95 Difference: $2.05
If NST meets the Credit Suisse target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $12.83, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in June.

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

Morgan Stanley rates NST as Underweight (5) -

In the first partial quarter after the recent merger, production was -12% below Morgan Stanley's estimates, with all-in-sustaining-costs (AISC) 13% higher. It was considered a broad-based miss across sites.

Production and AISC remains noticeably worse than guidance at Kalgoorlie and the biggest cost miss was at Pogo, notes the broker. Overall, management has maintained FY21 guidance. The Underweight rating and $10.65 target are unchanged. Industry view: Attractive.

Target price is $10.65 Current Price is $10.95 Difference: minus $0.3 (current price is over target).
If NST 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 $12.83, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in June.

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

Morgan Stanley rates NXL as Overweight (1) -

Morgan Stanley is disappointed after management lowered guidance and notes the company will not meet prospectus forecasts for two of the most critical metrics which drive intrinsic value.

FY21 revenue guidance was downgraded by -4% to -7%, and annualised contract value (ACV) by -11% to -16%. This was driven by a faster than expected customer shift to consumption/SaaS and compounded by a slower recovery in the operating environment.

The Overweight rating and $10.75 target are retained. Industry view is Attractive.

Target price is $10.75 Current Price is $4.29 Difference: $6.46
If NXL meets the Morgan Stanley target it will return approximately 151% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Ord Minnett rates OZL as Lighten (4) -

As it turned out, today's market update has revealed a weaker-than-expected quarterly performance by OZ Minerals and Ord Minnett, in a quick response, thinks the Aussie dollar and gold price are to blame.

But that's certainly not the full story as production of copper missed forecasts too due to lower than expected grades. The broker believes the rather precarious covid situation in Brazil puts operations at risk of hitting production targets over the coming quarters.

The Lighten rating and target price of $14.50 are now both under review, as per standard practice at Ord Minnett.

Target price is $14.50 Current Price is $24.62 Difference: minus $10.12 (current price is over target).
If OZL meets the Ord Minnett target it will return approximately minus 41% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $19.76, suggesting downside of -18.7% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Citi rates PLS as Downgrade to Sell from Neutral (5) -

Citi lowers the rating to Sell from Neutral after the share price has rallied 25% since mid-February. The price is now calculated to be trading ahead of underlying valuation. The $1.10 target price is maintained.

March quarter lithium concentrate shipments missed expectations, due largely to a fire on an inbound cargo vessel at berth that pushed 11.5kt of shipment into April. Costs were also higher quarter-on-quarter, thanks to a stronger Australian dollar and higher freight charges.

Target price is $1.10 Current Price is $1.25 Difference: minus $0.15 (current price is over target).
If PLS meets the Citi target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.09, suggesting downside of -2.9% (ex-dividends)

The company's fiscal year ends in June.

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

Macquarie rates PLS as Outperform (1) -

Macquarie observes Pilbara Minerals' third quarter was mixed with higher production offset by lower shipments and higher cash costs. Spodumene production was 7% ahead of the broker's forecast while a delayed final shipment led to -9% lower than expected sales.

Macquarie expects higher volumes and prices in the June quarter. Noting Pilbara was able to operate at the targeted 330ktpa for February and March, the broker has lifted its forecast to 88kt from 82kt  to reflect the stronger guidance.

Outperform rating with a target of $1.50.

Target price is $1.50 Current Price is $1.25 Difference: $0.25
If PLS meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $1.09, suggesting downside of -2.9% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates PLS as Sell (5) -

Production in the March quarter was 17% ahead of Ord Minnett's forecasts as the Pilgangoora project ramped up. Sales were just 7% ahead of forecasts as a shipment was delayed.

Costs were higher and the broker lowers FY21 earnings estimates. Sell rating and $0.80 target retained.

Target price is $0.80 Current Price is $1.25 Difference: minus $0.45 (current price is over target).
If PLS meets the Ord Minnett target it will return approximately minus 36% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.09, suggesting downside of -2.9% (ex-dividends)

The company's fiscal year ends in June.

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

Morgan Stanley rates RRL as Overweight (1) -

Morgan Stanley believes the 11% increase in Reserves to 4.0moz, all from Duketon, gives around seven years of visibility and should help ease investor concerns around mine lives.

The broker sees ongoing brownfield and greenfield extension potential at Duketon, with further Resource conversion and life extensions likely. The Overweight rating and $4.19 target are maintained. Industry view: Attractive.

Target price is $4.19 Current Price is $2.74 Difference: $1.45
If RRL meets the Morgan Stanley target it will return approximately 53% (excluding dividends, fees and charges).

Current consensus price target is $3.84, suggesting upside of 34.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Ord Minnett rates SXY as Buy (1) -

March quarter production was broadly in line with Ord Minnett's estimates. The broker found nothing surprising in the result but it did underscore a positive view on Senex Energy.

Management confirmed the business is now net cash, which will support its growth objectives. As the stock offers good value and strong growth with a solid balance sheet, Ord Minnett reiterates a Buy rating and a $3.90 target.

Target price is $3.90 Current Price is $3.15 Difference: $0.75
If SXY meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $3.77, suggesting upside of 22.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Macquarie rates TPW as Neutral (3) -

Temple & Webster Group has reset its medium-term operating income expectations as the group continues to pursue a high-growth strategy aimed at maximising the market share.

Macquarie notes recent feedback suggests the group's revenue performance is well ahead of smaller peers and raises the prospect of consolidation when covid spending tailwinds for the category normalise.

The broker continues to view Temple & Webster Group as the best-in-breed pureplay online retailer but also thinks the near-term valuation reflects much of this growth runway. 

Neutral rating maintained with a target of $10.90.

Target price is $10.90 Current Price is $9.75 Difference: $1.15
If TPW meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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

Ord Minnett rates WSA as Buy (1) -

March quarter shipments were below forecasts but Ord Minnett assumes this can be made up from stockpiles in the final quarter of FY21.

Costs at Forrestania were higher after poor ground conditions were experienced in early FY21 but conditions are expected to improve. Odysseus development remains on schedule. Buy rating and $3.20 target retained.

Target price is $3.20 Current Price is $2.25 Difference: $0.95
If WSA meets the Ord Minnett target it will return approximately 42% (excluding dividends, fees and charges).

Current consensus price target is $2.58, suggesting upside of 16.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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