Australian Broker Call

Macquarie rates A11 as Outperform (1) -

Atlantic Lithium has revised its Ewoyaa flowsheet by increasing product streams from one to three, for higher output and improved recoveries. The revised plan now expects crushing and screening at the concentrator to produce three different products with three sizes.

Management reiterated that the definitive feasibility study remains on track for the June quarter. A DFS update and mining licence approval for the Ewoyaa project present key near-term catalysts for Atlantic, Macquarie notes.

Outperform and 80c target retained.

Target price is $0.80 Current Price is $0.47 Difference: $0.33
If A11 meets the Macquarie target it will return approximately 70% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Morgan Stanley rates ALL as Overweight (1) -

Morgan Stanley reports during an investor roundtable, Aristocrat Leisure has reiterated its guidance for FY23, albeit with a skew to H2.

Landbased machines continue to experience positive operating dynamics while the company continues to forge ahead with the launches of new digital games.

The company is executing on the buy-back.

The Overweight rating and $43 target are unchanged. Industry View: In-Line. No changes made to forecasts.

Target price is $43.00 Current Price is $36.20 Difference: $6.8
If ALL meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $41.49, suggesting upside of 13.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.9

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

Macquarie rates BKW as Neutral (3) -

Brickworks reported first half results above Macquarie's estimates, once again driven by property sales and revaluations. Dividends were in line with expectations.

Building Products was nevertheless weaker than expected, both in Australia and North America. Revenue growth was driven by price and not volume. Around 10% price increases in both markets were not sufficient to offset broad-based (and continuing) cost pressures.

Property continues to evolve and despite tougher conditions in this space, the development pipeline in the Trust remains "enviable", the broker suggests.

Neutral retained, target rises to $24.05 from $22.50.

Target price is $24.05 Current Price is $23.76 Difference: $0.29
If BKW meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $26.62, suggesting upside of 17.3% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Morgans rates BKW as Add (1) -

Excluding property sales, 1H underlying earnings (EBITDA) of $607m for Brickworks were a -7.7% miss versus Morgans expectation and down around -30% compared to the previous corresponding period.

The Property division contributed a large slice ($453m) of the $607m in earnings, of which $263m was from property sales.

The broker points out the Investments division is a key contributor to the underlying Brickworks share price, with the Washington H Soul Pattinson & Co ((SOL)) interest representing around $17 per Brickworks share (last share price $23.76).

The target rises to $26.25 from $24.50 with any negative earnings movements, offset by an improved valuation for Washington H Soul Pattinson & Co, along an ongoing increase in industrial market rents, explains the broker.

Target price is $26.25 Current Price is $23.76 Difference: $2.49
If BKW meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $26.62, suggesting upside of 17.3% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Ord Minnett rates BKW as Buy (1) -

Despite a somewhat disappointing performance from both the Australian and North American building products operations, Brickworks has managed to deliver a 26% earnings increase over the first half, with the result underpinned by strength in property and investments. 

Ord Minnett expects property earnings to continue to benefit given a pipeline of development opportunities, but sees the near-term outlook for building products as more challenging as housing activity slows in Australia. 

The Buy rating is retained and the target price decreases to $28.00 from $32.00.

Target price is $28.00 Current Price is $23.76 Difference: $4.24
If BKW meets the Ord Minnett target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $26.62, suggesting upside of 17.3% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

UBS rates BKW as Buy (1) -

First half earnings (EBIT) for Brickworks were broadly in line with the UBS forecast. Property earnings were stronger than anticipated due a $113m revaluation benefit.

While earnings for Building Products will face FY24 headwinds from input costs, the analyst suggests the Property division's earnings should fare better with strong rental earnings offsetting cap rate headwinds.

The broker lowers its FY24 forecast on higher interest costs, negative property revaluations and an extended property development
profit profile. The target falls to $26.80 from $27. Buy.

Target price is $26.80 Current Price is $23.76 Difference: $3.04
If BKW meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $26.62, suggesting upside of 17.3% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Macquarie rates CXO as Outperform (1) -

Core Lithium has reached an agreement with Sichuan Yahua to sell an addition 18.5kt of spodumene from early production at Finniss. Sichuan Yahua is one of the miner’s two key offtake customers and will purchase 300kt of spodumene over the first four years of production.

The pace of the ramp-up at Finniss now first spodumene has been produced presents a key near-term catalyst for Core Lithium, Macquarie suggests.

Outperform and $1.10 target retained.

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

Current consensus price target is $0.97, suggesting upside of 22.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Ord Minnett rates MYR as Upgrade to Hold from Lighten (3) -

While the Australian department store sector has long been in decline, and likely to continue on that trend according to Ord Minnett, the broker does consider Myer to offer the greatest leverage to the sector and points out the retailer is following clear strategy to address the challenges facing the wider sector. 

Ord Minnett expects the introduction of Amazon to the Australian market to prove disruptive to incumbent retailers, and this impact to emerge at the same time as decline in the sector's relevance to consumers who are shifting spending to entertainment, leisure and specialty stores. 

The rating is upgraded to Hold from Lighten and the target price of $0.75 is retained.

Target price is $0.75 Current Price is $0.89 Difference: minus $0.135 (current price is over target).
If MYR meets the Ord Minnett target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Macquarie rates NSR as Underperform (5) -

National Storage REIT has announced a $325m equity raise, with proceeds to be used to fund strategic growth initiatives and repay debt. The bookbuild price range represents a -4.0%-7.2% discount to last closing price and -1.2%-4.5% discount to net tangible assets per share as at December, Macquarie notes.

The transaction allows the REIT to re-stock the balance sheet with earnings impacts largely neutral in the long-term prior to deployment, which the broker views favourably.

But Macquarie continues to see downside risk to revenue per metre as the cycle slows, while interest costs are a material headwind in FY24.

Underperform and $2.23 target retained.

Target price is $2.23 Current Price is $2.44 Difference: minus $0.21 (current price is over target).
If NSR meets the Macquarie target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.24, suggesting downside of -9.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.8

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

Morgans rates PAN as Add (1) -

Following the release of an updated Savannah Nickel mine plan by Panoramic Resources, Morgans notes the steady ramping-up of operations. Design production levels are expected to achieve the company's target mine rate of 960ktpa in early FY24.

The target falls to 25c from 39c after the broker updates its forecasts for nickel, copper and cobalt, and adopts management's target for an operating mine life until the end of FY35.

The company is Morgans' preferred ASX nickel exposure with significant exploration potential at Savannah, Savannah North and regional targets. Add.

Target price is $0.25 Current Price is $0.16 Difference: $0.09
If PAN meets the Morgans target it will return approximately 56% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Ord Minnett rates PMV as Upgrade to Lighten from Sell (4) -

Ord Minnett has lifted its rating on Premier Investments, operator of retail brands including Just Jeans, Jay Jays, Portmans, Jacqui E, Dotti and Peter Alexander, as well as stationary brand Smiggle. 

The broker highlights Smiggle, which has limited competitors, a unique concept and an affordable price point, remains pivotal to growth plans. Having already achieved success with the brand in Australia, New Zealand and the UK, the company intends to pursue  expansion in Europe to drive long-term growth. 

The rating is upgraded to Lighten from Sell and the target price of $19.00 is retained.

Target price is $19.00 Current Price is $24.95 Difference: minus $5.95 (current price is over target).
If PMV meets the Ord Minnett target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $26.62, suggesting upside of 5.1% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Ord Minnett rates SOL as Hold (3) -

WH Soul Pattinson delivered an in-line first half result, according to Ord Minnett, and the company announced a 36 cent per share dividend which benefited from strong operating cash flows and higher dividends from New Hope Corp ((NHC)). 

With WH Soul Pattinson committing to a progressive dividend policy to deliver higher payments each year, Ord Minnett is anticipating the company pays out a 95 cent per share full year dividend. 

The Hold rating and target price of $26.90 are retained.

Target price is $26.90 Current Price is $28.91 Difference: minus $2.01 (current price is over target).
If SOL meets the Ord Minnett target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Citi rates SQ2 as Buy (1) -

Citi feels Block's response/refutation to an activist short-seller report lacks detail and will likely be insufficient to settle investors’ concerns.

Among other items, the report alleges improper compliance standards as it relates to Cash App account establishment and ongoing fraud monitoring, explains the analyst. Much of the report details nefarious misuse on the Cash App platform.

Unresolved issues, according to the analyst, include whether black-listed accounts should be permitted to re-enter the platform, and, whether “active users/accounts” metric disclosures are accurate.

The Buy rating and US$90 target are unchanged.

Current Price is $108.99. Target price not assessed.

Current consensus price target is $149.00, suggesting upside of 67.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

This company reports in USD. 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

Morgan Stanley rates SQ2 as Equal-weight (3) -

Following a report released by short-seller Hindenburg, Morgan Stanley comments a key concern/question for investors remains how widespread is the issue of fraudulent accounts on Block's Cash App platform.

The report claims fraudulent accounts, inflated user counts, and “predatory” fees, among other things.

The broker also ponders: what is its impact to revenue once these claims are resolved? 

The US$72 target and Equal-weight rating are unchanged. Industry View: Attractive.

Current Price is $108.99. Target price not assessed.

Current consensus price target is $149.00, suggesting upside of 67.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

This company reports in USD. 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

Ord Minnett rates SQ2 as Accumulate (2) -

Ord Minnett has reiterated a very high uncertainty rating on Block, following the release of a report by Hindenburg Research claiming Block's core Cash App business has been built through fraud and that the platform is being used to perpetrate criminal activity. 

The broker finds much of the evidence in the report anecdotal, attributing the uncertainty to the hard to predict long-term economics of the Cash App business. It does note claims raised by Hindenburg Research have potential to elicit regulatory response. 

The Accumulate rating and target price of $153.00 are retained.

Target price is $153.00 Current Price is $108.99 Difference: $44.01
If SQ2 meets the Ord Minnett target it will return approximately 40% (excluding dividends, fees and charges).

Current consensus price target is $149.00, suggesting upside of 67.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

This company reports in USD. 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

Morgan Stanley rates TUA as Overweight (1) -

First half earnings (EBITDA) for Tuas were a 10% beat versus Morgan Stanley's forecast. It's felt the company remains on-track for free cash flow break-even in FY24.

A key highlight for the analyst were plans to launch into broadband at the end of FY23, leveraging Singapore's NBN and existing infrastructure.The company is considered well positioned to replicate its mobile success in broadband.

The broker's target rises to $2.15 from $2.00 on higher forecasts for subscriptions, margins and the inclusion of broadband from FY24.

The Overweight rating is retained. Industry View: In-Line.

Target price is $2.15 Current Price is $1.36 Difference: $0.79
If TUA meets the Morgan Stanley target it will return approximately 58% (excluding dividends, fees and charges).

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Macquarie rates UMG as Outperform (1) -

United Malt's Scottish expansion is almost complete which increases the company’s capacity to serve the growing distilling market. United Malt is focussed on the higher growth single malt whiskey market.

Global giant Diageo forecasts a 6% compound annual growth in retail sales value between 2021-26 for scotch whiskey, Macquarie notes.

United Malt’s guidance reiteration at its February AGM was an important factor in helping to restore market confidence, the broker suggests.

Macquarie believes there is a credible path to an earnings recovery in FY23-24, and the stock is trading at a -16% discount to global brewers.

Outperform and $3.99 target retained.

Target price is $3.99 Current Price is $3.44 Difference: $0.55
If UMG meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $3.88, suggesting upside of 12.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Macquarie rates WES as Neutral (3) -

Wesfarmers has hosted a Wesfarmers Chemicals, Energy and Fertilisers investor briefing and site tour. The expansion opportunities in the business, particularly in the lithium project, provide upside risk to earnings, Macquarie suggests.

The cash generation of these assets at current prices continue to be the key focus, particularly if WesCEF is able to double capacity and bring forward its cash flows.

Shifting to the retail businesses, the broker's concerns over the outlook for discretionary consumer spending remain intact. Neutral and $56.70 target retained.

Target price is $56.70 Current Price is $49.60 Difference: $7.1
If WES meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $50.20, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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