Australian Broker Call

Credit Suisse rates A2M as Outperform (1) -

The company has maintained its guidance for FY21 and Credit Suisse notes assumptions underpinning this include a material recovery in the second half involving growth in the China label and improvement in daigou.

Credit Suisse re-bases FY21-23 revenue estimates to take a more conservative stance on the recovery in corporate daigou. Outperform rating and NZ$21.00 target maintained.

Current Price is $13.98. Target price not assessed.

Current consensus price target is $15.66, suggesting upside of 13.8% (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: 0.1

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

Macquarie rates A2M as Outperform (1) -

Guidance has been maintained for first half revenue of $725-775m and FY21 revenue of $1.8-1.9bn. A2 Milk remains committed to the daigou channel and has noted some early signs of improvement.

Still, this is the greatest area of uncertainty Macquarie suggests and the company has acknowledged there is a large increase in revenue required in the second half to fulfil expectations.

Macquarie maintains an Outperform rating, finding few catalysts at present. Target is $17.95.

Target price is $17.95 Current Price is $13.98 Difference: $3.97
If A2M meets the Macquarie target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $15.66, suggesting upside of 13.8% (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: 0.1

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

Morgans rates A2M as Add (1) -

Morgans is encouraged by commentary from The a2 Milk Co on initial signs of a recovery in corporate daigou demand and improving daigou channel inventory.

While guidance is maintained, it is highly qualified and second half FY21 growth expectations appear ambitious to the broker.

Given uncertainty over the extent of the second half FY21 recovery, Morgans lowers the FY21 profit (NPAT) forecast by -7.2%.

The analyst considers challenges transitory and the depressed share price as an attractive opportunity.

The Add rating is unchanged and the target price is decreased to $17.28 from $18.14.

Target price is $17.28 Current Price is $13.98 Difference: $3.3
If A2M meets the Morgans target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $15.66, suggesting upside of 13.8% (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: 0.1

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

Ord Minnett rates A2M as Lighten (4) -

At its AGM, a2 Milk reiterated its FY21 guidance for revenue growth and operating earnings margin while acknowledging the uncertain environment. The company understands it needs to significantly increase its second-half revenue.

Ord Minnett is not optimistic and does not think the company will meet its FY21 revenue guidance. Accordingly, the broker has reduced its earnings estimates and its target price to $13.20 from $14.20.

The Lighten rating remains unchanged.

Target price is $13.20 Current Price is $13.98 Difference: minus $0.78 (current price is over target).
If A2M meets the Ord Minnett target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $15.66, suggesting upside of 13.8% (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: 0.1

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

UBS rates A2M as Buy (1) -

a2 Milk has kept its guidance intact for revenue in the first-half to be $725-$77m along with revenue for the full year to be between $1.80-$1.90bn.

UBS believes risks are skewed to the downside, especially when looking at the uncertainty around the improvement in the daigou channel in the second half.

While the company's cross-border e-commerce (CBEC) market share remains near record levels, the broker believes there is limited demand shift from the daigou channels.

Buy rating and NZ$20.50 target retained.

Current Price is $13.98. Target price not assessed.

Current consensus price target is $15.66, suggesting upside of 13.8% (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: 0.1

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

UBS rates AGL as Neutral (3) -

AGL Energy has suspended its plans to build a 250MW gas-fired generator and a 500MW battery park in NSW following the NSW Government's plans to underwrite 12GW of new renewable capacity in NSW over the next 10 years.

AGL's projects, which were planned so as to have 1000MW of new firming capacity by April 2021 to ensure minimal market impact when Liddell power station retires in 2023, have been put on hold.

The company will seek clarity on the impact of the NSW energy plan on its business before it progresses with its NSW projects.

UBS's rating and target price are under review at Buy and $15.60.

Target price is $15.60 Current Price is $12.87 Difference: $2.73
If AGL meets the UBS target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $14.31, suggesting upside of 10.6% (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 ALG as Buy (1) -

Ardent Leisure's latest trading update suggests an improving medium-term outlook given its plans to resume the rollout of the Main Event and with the resumption of Dreamworld’s roller-coaster construction.

Citi sees the stock as an attractive way to play the reopening trade given the pent-up demand and the fact the company does not face structural pressures compared to other small-cap leisure stocks. 

The broker expects headwinds to the theme park due to Sea World’s new ride opening in December 2020 and the uncertainty around the reopening of Queensland’s borders.

Buy/High Risk retained. Target rises to $1.03 from $0.69.

Target price is $1.03 Current Price is $0.81 Difference: $0.22
If ALG meets the Citi target it will return approximately 27% (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

Citi rates ALL as Buy (1) -

Citi notes Aristocrat Leisure delivered a highly-provisioned FY20 result, which implies a likely understatement of the earnings of the land-based business. Earnings are expected to normalise by FY22.

Going ahead, the broker thinks FY21 earnings growth will be underpinned by the monetisation of RAID (a collection role-playing game) and the US gaming operations recovery.

The broker has upgraded its net profit forecasts by 7% in FY21 and 10% in FY22. Digital revenues are expected to grow by 10%. Overall, the broker remains comfortable in the short-term given the company's strong balance sheet and the prospect of a vaccine in 2021.

Citi maintains its Buy rating with the target rising to $40.60 $34.60.

Target price is $40.60 Current Price is $34.59 Difference: $6.01
If ALL meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $36.42, suggesting upside of 5.3% (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

Credit Suisse rates ALL as Outperform (1) -

In the wake of the FY20 results Credit Suisse upgrades estimates for earnings per share in FY23 and beyond by 8%, gaining confidence in the revenue momentum in digital and gaming operations.

Increased investment and a deeper covid-19 earnings trough in Australia means the broker has downgraded estimates for FY21 and FY22.

North American gaming operations are 25% of revenue and the recovery should be solid, the broker adds. Outperform retained. Target rises to $37.60 from $30.00.

Target price is $37.60 Current Price is $34.59 Difference: $3.01
If ALL meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $36.42, suggesting upside of 5.3% (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 ALL as Neutral (3) -

Net profit of $477m in FY20 was down -47% but better than Macquarie expected. The broker anticipates net profit could still reach $1bn in FY22 amid ongoing market share gains, although there are higher costs to be considered.

There is also substantial liquidity for M&A or capital management. The broker considers the stock fair value and retains a Neutral rating, raising the target to $32.00 from $31.50.

Target price is $32.00 Current Price is $34.59 Difference: minus $2.59 (current price is over target).
If ALL meets the Macquarie target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $36.42, suggesting upside of 5.3% (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

Morgans rates ALL as Add (1) -

According to Morgans, the underlying business fundamentals are improving for Aristocrat Leisure, and the strong balance sheet provides optionality.

The broker describes the FY20 result as a solid set of numbers across the board, with the land-based division impacted significantly by covid-19.

Revenue for the digital division rose 32% as consumers shifted to online gaming. 

Management noted that 92% of North America casinos were open as of November 12. At the end of October, 75% of the company’s Class II and 90% of its Class III gaming operations were open. 

The Add rating is unchanged and the target is increased to $37.31 from $36.78.

Target price is $37.31 Current Price is $34.59 Difference: $2.72
If ALL meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $36.42, suggesting upside of 5.3% (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

Ord Minnett rates ALL as Accumulate (2) -

Aristocrat Leisure's FY20 net profit was $476.6m, down -46.7% versus FY19 and in line with Ord Minnett's forecast of $477.7m. A fully franked final dividend of 10c was declared, ahead of the broker's forecast.

Digital bookings were 1.2% ahead of the broker's estimates along with the higher than expected margins. Average bookings per daily average users were at US$0.59, up 43.9% versus last year. Furthermore, the performance of RAID (a leading collection role-playing game) was strong with higher than anticipated bookings.

Based on its capital position and positive outlook, Ord Minnett maintains its Accumulate recommendation with a $38.60 target price.

Target price is $38.60 Current Price is $34.59 Difference: $4.01
If ALL meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $36.42, suggesting upside of 5.3% (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

UBS rates ALL as Buy (1) -

Aristocrat Leisure's FY20 net profit of $477m was just above consensus forecasts. Free cash flow was flat while revenue fell marginally. 

In a year where most of Aristocrat's land-based customers shut down due to the pandemic, UBS considers this result proof the company's digital strategy has been successful in diversifying the risk.

The company has guided to continued growth in both land-based and digital segments.

UBS now expects the net profit to rise to $1.127bn in FY22 with the US land based business making $1.146bn in FY22 versus $1.045bn in FY19.

UBS retains its Buy rating with the target rising to $38.80 from $34.25.

Target price is $38.80 Current Price is $34.59 Difference: $4.21
If ALL meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $36.42, suggesting upside of 5.3% (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

Credit Suisse rates ALQ as Outperform (1) -

First half results were weaker than Credit Suisse expected. The most robust segment was life sciences, with earnings only down -3%.

Management expects financing undertaken by junior miners will result in increased drilling and sample testing activity in the fourth quarter. Junior miners typically get involved with greenfield projects that tend to provide higher margins to ALS.

Credit Suisse retains an Outperform rating and lowers the target to $10.40 from $10.55.

Target price is $10.40 Current Price is $9.50 Difference: $0.9
If ALQ meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $10.02, suggesting downside of -2.2% (ex-dividends)

The company's fiscal year ends in March.

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

Macquarie rates ALQ as Outperform (1) -

First half net profit was in line with expectations. The highlight for Macquarie was the better-than-expected recovery in geochemical flows with September volumes up 10%. The uplift was driven by major miners.

The broker assesses the pace of the recovery in commodities and life sciences bodes well for the second half and beyond. Outperform retained. Target rises to $10.65 from $10.30.

Target price is $10.65 Current Price is $9.50 Difference: $1.15
If ALQ meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $10.02, suggesting downside of -2.2% (ex-dividends)

The company's fiscal year ends in March.

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

Morgan Stanley rates ALQ as Overweight (1) -

Als Ltd reported first half underlying earnings in-line with Morgan Stanley's expectations. 

The commodity segment looks encouraging to the broker and management seemed quite confident of further increases in testing volumes.

The analyst continues to believe that growth in the Life Sciences segment via acquisitions or organic growth offers the potential for a multiple re-rate over the medium term.

Overweight rating. Target is increased to $10.70 from $10. Industry view: In-line.

Target price is $10.70 Current Price is $9.50 Difference: $1.2
If ALQ meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $10.02, suggesting downside of -2.2% (ex-dividends)

The company's fiscal year ends in March.

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

Morgans rates ALQ as Add (1) -

ALS Ltd's first half FY21 underlying financials were in-line with market expectations, with the Life Sciences segment beating Morgans expectation.

All indications suggest to the broker the first quarter will mark the low-point in activity. Resilient margins and much stronger second quarter sample flows are likely to continue into the second half, believes the analyst.

Morgans forecast earnings to recover back to pre-covid levels during the first half of FY22. This is considered contingent upon avoiding further hard lock downs in key geographies.

The Add rating is unchanged and the target price is increased to $10.35 from $9.00.

Target price is $10.35 Current Price is $9.50 Difference: $0.85
If ALQ meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $10.02, suggesting downside of -2.2% (ex-dividends)

The company's fiscal year ends in March.

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

Ord Minnett rates ALQ as Lighten (4) -

ALS Ltd reported a first-half FY21 net profit of $80.6m, -3% below Ord Minnett’s $83.1m forecast. An interim dividend of 8.5c per share was declared.

The result was driven by a very soft first quarter on account of the pandemic followed by a visibly stronger second quarter. The company has guided towards a stronger second half led by improving geochemistry flows and with the possibility of M&A activity.

Despite the positives, Ord Minnett sees the risk of rising infections which could prolong the lockdowns and could see ALS’s trading profile back to the first quarter levels or potentially worse. 

The Lighten rating is maintained with a target price of $8.60.

Target price is $8.60 Current Price is $9.50 Difference: minus $0.9 (current price is over target).
If ALQ meets the Ord Minnett target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $10.02, suggesting downside of -2.2% (ex-dividends)

The company's fiscal year ends in March.

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

UBS rates ALQ as Neutral (3) -

ALS Ltd reported a first-half net profit of $81m, -18% below last year but mostly in line with UBS's estimate. The company declared an interim dividend of 8.5c, higher than UBS's expected 7.1c.

The company's organic revenues declined -9% but a better demand outlook has seen ALS invest in additional geochemistry laboratory capacity. 

UBS sees the stock price is adequately factoring in an improvement in both geochemistry testing and the normalisation of life sciences demand and retains its Neutral rating.

The target price rises to $9.90 from $9.50.

Target price is $9.90 Current Price is $9.50 Difference: $0.4
If ALQ meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $10.02, suggesting downside of -2.2% (ex-dividends)

The company's fiscal year ends in March.

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

Macquarie rates CHN as Outperform (1) -

The potential strike at Julimar has been extended by 800m following confirmation of mineralisation in Conductor X. Macquarie increases expected mine life by two years.

The higher-grade mineralised zones at depth could materially enhance the development scenario, the broker adds. Outperform retained. Target is lifted to $5.00 from $3.30.

Target price is $5.00 Current Price is $3.75 Difference: $1.25
If CHN meets the Macquarie target it will return approximately 33% (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

Morgans rates CIP as Hold (3) -

Centuria Industrial REIT has announced the acquisition of three cold storage facilities for $171.1m.

The acquisitions will be funded via an underwritten placement ($125m at $3.06) as well as debt.

Following the acquisitions, the portfolio will be valued at $2.3bn across 59 assets.

Morgans notes exposure to food distribution and cold store facilities is now 33%. 

The FY21 funds from operations (FFO) guidance was upgraded by management to be at least 17.5 cents and the DPS guidance is unchanged at 17 cents.

The Hold rating is unchanged and the price target is increased to $3.16 from $3.13

Target price is $3.16 Current Price is $3.06 Difference: $0.1
If CIP meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $3.31, suggesting upside of 7.0% (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 DXS as Neutral (3) -

Dexus Property Group has announced a conditional sale of its stake in Grosvenor Place to a co-owner in the asset. The proceeds of the deal will be $694m, a circa -5% discount to the asset's book value in June.

Citi observes the outlook for office demand and rents continues to deteriorate led by a significant increase in vacancy post-covid. This is visible in the sub-lease space in Sydney, a barometer of tenant demand, that is currently higher than it was during the GFC.

Despite the subdued rent environment, Citi notes the industry feedback and recent transactions by Dexus which implies a continued investment demand for office assets. 

The broker remains Neutral given the potential for office rent declining over the medium term and the limited buyback activity. Target rises to $9.73 from $9.11.

Target price is $9.73 Current Price is $9.85 Difference: minus $0.12 (current price is over target).
If DXS meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.65, suggesting downside of -1.4% (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

Macquarie rates DXS as Neutral (3) -

Dexus Property Group has sold an interest in Grosvenor Place at -5% below book value. Macquarie notes Dexus has now divested -$1.9bn worth of assets but the outlook for cash flow is still under pressure.

The shorter lease expiry and elevated vacancies at Grosvenor Place were cited as reasons for the divestment which, for the broker, highlight the difficult leasing environment ahead.

Macquarie remains cautious and retains a Neutral rating. Target is raised to $9.67 from $9.05, given more moderate asset value declines.

Target price is $9.67 Current Price is $9.85 Difference: minus $0.18 (current price is over target).
If DXS 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 $9.65, suggesting downside of -1.4% (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

UBS rates EML as Initiation of coverage with Buy (1) -

UBS initiates coverage on EML Payments with a Buy rating and a target price of $5.

EML Payments is a global fintech company providing end-to-end, full-service payments solutions, thus being well placed to benefit from the shift to a cashless society, a transition that has accelerated due to covid-19.

Post the Prepaid Financial Services (PFS) acquisition, the broker believes EML's opportunity pipeline has increased materially. Incentive and general purpose reloadable (GPR) remain the core drivers of organic growth, adds the broker. 

Target price is $5.00 Current Price is $3.63 Difference: $1.37
If EML meets the UBS target it will return approximately 38% (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

Citi rates GUD as Buy (1) -

Responding to news reports suggesting GUD Holdings could be exploring M&A opportunities, Citi believes the company will acquire an automotive business since it has been a key focus area for the company in recent years.

An auto acquisition may help GUD Holdings regain some of its lost bargaining power with key customers, asserts Citi. The broker sees growth opportunities for the company in the auto category like brakes, engines parts etc where it has low-moderate market share.

Citi retains its Buy rating with a target price of $14.30.

Target price is $14.30 Current Price is $11.83 Difference: $2.47
If GUD meets the Citi target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $12.68, suggesting upside of 7.2% (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

Morgan Stanley rates IAG as Overweight (1) -

Insurers have lost the business interruption (BI) test case with all five judges finding that policyholders can claim on policies referring to the Quarantine Act 1908. Insurers can appeal.

Morgan Stanley believes share price reaction will depend on what estimates the group releases on BI claims cost. The stock is up greater than 20% since late September, when the broker thought too much was priced in for BI claims.

The analyst thinks the group has strong capital and has around $100m set aside for BI and other claims.

Overweight. Target is $6.50. Industry view: In-line.

Target price is $6.50 Current Price is $5.46 Difference: $1.04
If IAG meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $5.85, suggesting upside of 7.2% (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

Ord Minnett rates IAP as Hold (3) -

Investec Australia Property Fund unitholders have approved the internalisation of management and acquisition of the management rights of the TAP Fund for a combined -$40m.

Ord Minnett notes the transaction lowers the fund's operating costs and provides it with an avenue to grow earnings via managing third party capital.

Going ahead, the broker expects a structural shift towards working from home will put upward pressure on office incentives and vacancy which will weigh on asset values and net property income.

Ord Minnett moves to a Hold recommendation with a $1.30 target price.

Target price is $1.30 Current Price is $1.29 Difference: $0.01
If IAP meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

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

Morgan Stanley rates PGH as Initiation of coverage with Equal-weight (3) -

Morgan Stanley initiates coverage on Pact Group Holdings with an Equal-weight rating and a target price of $2.60.

In the broker's view, the investment debate is balanced between the lackluster past returns and the promise of a new strategy to lift returns.

Management has laid out a strategy to increase focus and improve performance. It remains early days and execution will be key, notes the analyst. There are considered upside risks from a better-than-anticipated outcome on the contract manufacturing sale. 

With a mixed track record, higher leverage, and a lower yield, the group is behind Amcor ((AMC)) and Orora ((ORA)) in Morgan Stanley's order of preference.

Target price is $2.60 Current Price is $2.64 Difference: minus $0.04 (current price is over target).
If PGH meets the Morgan Stanley target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.65, suggesting upside of 4.9% (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

Morgan Stanley rates PPT as Overweight (1) -

With the completion of the Barrow Hanley acquisition, Morgan Stanley believes Perpetual now has a US platform and ESG capabilities.

The group now has to turn around annualised outflows for Barrow Handley with more investment in distribution, notes the broker.

The analyst reduces underlying pro-forma EPS forecasts by circa -9%-11% for FY21 and FY22. This is a result of lower Barrow Hanley assets under management (AUM), and marking to market the rest of the Perpetual group.

Morgan Stanley retains its Overweight rating. The target price is decreased to $42.50 from $46.50. Industry view: In-line.

Target price is $42.50 Current Price is $30.18 Difference: $12.32
If PPT meets the Morgan Stanley target it will return approximately 41% (excluding dividends, fees and charges).

Current consensus price target is $33.33, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Ord Minnett rates PPT as Hold (3) -

Perpetual has completed the acquisition of a 75% interest in Barrow Hanley, a US-based equities and fixed income manager. Post a change of control, Perpetual managed to retain 87% of the funds under management (FUM), below its target of 92.5%.

Ord Minnett expects the acquisition to deliver 20% earnings accretion on an annualised basis, although cautions it is too early to assess the value accretion given the uncertainties on the FUM retention.

Awaiting signs of a turnaround in the flows outlook, Ord Minnett retains its Hold rating. Target is reduced to $31.50 from $32.50.

Target price is $31.50 Current Price is $30.18 Difference: $1.32
If PPT meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $33.33, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Ord Minnett rates RWC as Hold (3) -

Reliance Worldwide Corporation provided a positive update, showing the strong September-quarter sales trends had continued into October. 

Ord Minnett has revised its Reliance Americas sales forecasts accordingly and has also refined its margin forecasts to capture the operating leverage.

The broker sees potential upside to FY21 consensus on margins. FY21 earnings forecasts have been lifted by 3.6% but reduced by -5.7% for FY22. 

Hold recommendation is retained with a $4.20 target price.

Target price is $4.20 Current Price is $4.46 Difference: minus $0.26 (current price is over target).
If RWC meets the Ord Minnett target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.36, suggesting upside of 1.8% (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 SGM as Downgrade to Neutral from Buy (3) -

Citi highlights the share price of Sims is up 30% in 3 months led by higher aluminium and scrap steel (Turkey) prices. The Turkey scrap steel price is expected to average around US$308/t in FY21. 

The broker notes Sims margins appear to be thin, meaning there’s plenty of earnings leverage to both the upside and downside. Believing most of the share price upside has been captured, Citi moves to a Neutral rating from Buy.

The target price rises to $11 from $9.50.

Target price is $11.00 Current Price is $10.76 Difference: $0.24
If SGM meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $10.54, suggesting downside of -1.4% (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

Credit Suisse rates SKO as Outperform (1) -

First half operating revenue declined -66% and the company made a loss of -NZ$6.7m. Group bookings were down -77%. This was broadly in line with Credit Suisse estimates.

Australasian travel volumes have continued to recover with October running at 35% of the prior corresponding period. The company expects bookings to return to 40-70% of pre-pandemic levels by March 2021.

The long-term opportunity remains compelling, in the broker's view, yet the current market valuation is considered fair and a Neutral rating is maintained. Target rises to NZ$5.44 from NZ$4.40.

Current Price is $5.11. Target price not assessed.

Current consensus price target is $6.42, suggesting upside of 28.4% (ex-dividends)

The company's fiscal year ends in March.

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: 1.0

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

Morgans rates SLC as Add (1) -

FY21 earnings (EBITDA) guidance by Superloop was in-line with Morgans expectations, when “new investment for growth” is excluded.

The company explained it is investing an additional -$3m during FY21 in “new enterprise teams and scaling residential NBN”. 

Core earnings are expected by the broker to nearly double in FY21.

Acquiring more customers can potentially create significant value, assesses the analyst, who warns the company has “impressive” networks that are around 80% empty.

The Add rating is unchanged and the target decreased to $1.27 from $1.30.

Target price is $1.27 Current Price is $1.00 Difference: $0.27
If SLC meets the Morgans target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $1.26, suggesting upside of 27.6% (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

Ord Minnett rates SLC as Accumulate (2) -

Superloop's trading update highlights another solid quarter of new fibre connectivity sales. The company also provided a broadly in line FY21 guidance with Ord Minnett’s forecasts.

The broker notes the company has undergone a period of strategic reset and cost control and expects the next few years to be driven by higher utilisation and monetisation of its fibre assets.

Superloop’s investments across the enterprise and residential broadband segment are likely to be the catalysts for top-line growth, suggests the broker.

Accumulate rating and $1.42 target retained.

Target price is $1.42 Current Price is $1.00 Difference: $0.42
If SLC meets the Ord Minnett target it will return approximately 42% (excluding dividends, fees and charges).

Current consensus price target is $1.26, suggesting upside of 27.6% (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 SVW as Outperform (1) -

Credit Suisse found something for everyone in the latest trading update from Seven Group. While upgrade risk prevails, on existing numbers the broker believes the stock is too cheap.

Moreover, value creation through M&A signals a holding company discount is not justified. Year-to-date revenue for WesTrac is up 11% and Coates down -7%. Credit Suisse retains an Outperform rating and raises the target to $24.00 from $21.90.

Target price is $24.00 Current Price is $21.98 Difference: $2.02
If SVW meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $22.13, suggesting downside of -0.9% (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 SVW as Buy (1) -

Seven Group Holdings' AGM showed Coates remains on track to deliver operating income growth in FY21 despite year to date sales down by -7%.

WesTrac is also expected to deliver growth in operating income in FY21 underpinned by sales growth and fleet deliveries with parts/service volumes still strong. 

UBS retains its positive view on Seven Group Holdings' main drivers which include Coates Hire and WesTrac. According to the broker, these two are leveraged to the investment themes of normalisation in Australian mine sustaining capex and growth in the east coast infrastructure investment. 

UBS maintains its Buy rating with the target price increased to $24 from $21.

Target price is $24.00 Current Price is $21.98 Difference: $2.02
If SVW meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $22.13, suggesting downside of -0.9% (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 UMG as Downgrade to Underperform from Neutral (5) -

The maiden FY20 result was ahead of relatively bearish expectations, Credit Suisse asserts. The broker downgrades FY21 estimates to allow for a partial reversion of the current sales trajectory during the northern hemisphere winter.

Temporary cost reductions and some government assistance also benefited the business during the year and these inputs may not continue in FY21.

Credit Suisse is watching closely for signs of a permanent contraction in craft brewing capacity but forecasts an earnings recovery in FY22 on the basis of a craft market recovery.

A rapid increase in the share price following the results has meant the broker downgrades to Underperform from Neutral. Target is raised to $4.23 from $4.02.

Target price is $4.23 Current Price is $4.74 Difference: minus $0.51 (current price is over target).
If UMG 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 $4.81, suggesting upside of 5.0% (ex-dividends)

The company's fiscal year ends in September.

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 UMG as Outperform (1) -

FY20 maiden net profit beat expectations significantly. The final dividend of 3.9c was also a surprise for Macquarie.

Volumes over the past 12 months are at 90% of pre-pandemic levels and while the outbreak still presents some uncertainty for volumes, the company points out pricing is holding up.

Macquarie expects FY21 volumes to be up 7-8%. The risk centres on the northern hemisphere, depending on how well brewer pubs maintain outdoor capacity during the cold weather. Outperform retained. Target rises to $5.09 from $5.05.

Target price is $5.09 Current Price is $4.74 Difference: $0.35
If UMG meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $4.81, suggesting upside of 5.0% (ex-dividends)

The company's fiscal year ends in September.

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 UMG as Hold (3) -

The FY20 result for United Malt Group was in-line with Morgans forecast, after adjusting for a restatement of the previous corresponding period.

Underlying earnings (EBITDA) fell -18% given lockdown restrictions impacted the company’s traditional growth market (the craft beer industry), in particular.

Current volumes are at around 90% of pre covid-19 levels. Off-premise demand remains strong, however, it continues to be more than offset by weakness in on-premise consumption, explains the broker.

The analyst notes outlook comments were somewhat cautious given rising covid-19 cases in the northern hemisphere. Social restrictions are also providing some uncertainty on the extent of the recovery.

Morgans doesn’t expect earnings to recover back to FY19 levels (plus the addition of expanded capacity) until FY22.

The Hold rating is unchanged and the target is increased to $4.82 from $4.13, partly due to an appreciation in peer multiples.

Target price is $4.82 Current Price is $4.74 Difference: $0.08
If UMG meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $4.81, suggesting upside of 5.0% (ex-dividends)

The company's fiscal year ends in September.

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 UMG as Buy (1) -

United Malt delivered an FY20 operating income that was 20% ahead of UBS's forecast led by lower levels of operating deleverage and cost-out. Overall, the broker views the group as a recovery trade with recent news on the vaccine a key positive for consumption recovery.

While the broker remains positive on United Malt due to its strong market position and hard to replicate assets, UBS expects headwinds worth circa -$26m in FY21 driven mostly by the unwinding of government wage support and increased corporate costs.

UBS retains its Buy rating with the target rising to $5.10 from $4.65.

Target price is $5.10 Current Price is $4.74 Difference: $0.36
If UMG meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $4.81, suggesting upside of 5.0% (ex-dividends)

The company's fiscal year ends in September.

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