Australian Broker Call

Ord Minnett rates ABB as Accumulate (2) -

Superloop has rejected a takeover bid made by Aussie Broadband, on the basis that the offer fundamentally undervalues the company. Ord Minnett calculates the offer as a 33.2% premium to Superloop's three month volume-weighted average price.

The broker sees execution risks in Superloop's growth strategy, including an increasing skew to an offshore support and call centre model, as well as a higher depreciation and amortisation profile compared to Aussie Broadband. 

The Accumulate rating is retained and the target price increases to $4.89 from $4.88.

Target price is $4.89 Current Price is $4.63 Difference: $0.26
If ABB meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Bell Potter rates AIS as Buy (1) -

Bell Potter highlights an improving 1H operational performance by Aeris Resources. Overall results were in line with the broker's forecasts.

While the 1H loss was -$18.7m, this compares with -$50m in the previous corresponding period. All profitability metrics are improving, note the analysts.

Operating cash flow (OCF) was effectively break-even given around -$30m of payments were made in the half to normalise working capital balances, explains Bell Potter.

The Buy rating and 23c target are unchanged.

Target price is $0.23 Current Price is $0.12 Difference: $0.11
If AIS meets the Bell Potter target it will return approximately 92% (excluding dividends, fees and charges).

Current consensus price target is $0.16, suggesting upside of 36.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

UBS rates APE as Neutral (3) -

Growth for new vehicle sales in February rebounded to 21% year-on-year, highlighting to UBS material supply disruptions in the previous corresponding period.

Eagers Automotive achieved 20% year-on-year growth, broadly in line with the industry. The broker notes supply from Toyota is the current key moving forward.

The $14.10 target and Neutral rating are unchanged.

Target price is $14.10 Current Price is $14.43 Difference: minus $0.33 (current price is over target).
If APE meets the UBS target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $15.09, suggesting upside of 5.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Ord Minnett rates ARB as Accumulate (2) -

New vehicle sales have further strengthened in February, with a 21% increase seeing the industry report another monthly sales record. This marks a tenth consecutive month of sales growth 

ARB Corp benefitted from strong new vehicle sales in its key segments, SUVs and light commercial vehicles, with sales of key vehicle makes and models up 27.4% in February.

With three of the four highest selling vehicles all target vehicles for ARB Corp accessories, Ord Minnett sees the result as supportive of a growing order book. 

The Accumulate rating and target price of $41.00 are retained.

Target price is $41.00 Current Price is $40.52 Difference: $0.48
If ARB meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $37.50, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

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

UBS rates ASG as Buy (1) -

Growth for new vehicle sales in February rebounded to 21% year-on-year, highlighting to UBS material supply disruptions in the previous corresponding period.

Eagers Automotive achieved 18% year-on-year growth and the broker notes a slow start for the OEM mix in January/February with deliveries down versus the run-rate in the 2H of FY23.

The $3.10 target and Buy rating are unchanged.

Target price is $3.10 Current Price is $2.35 Difference: $0.75
If ASG meets the UBS target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $3.12, suggesting upside of 32.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

UBS rates BAP as Neutral (3) -

Growth for new vehicle sales in February rebounded to 21% year-on-year, highlighting to UBS material supply disruptions in the previous corresponding period.

All categories looked strong for Bapcor's aftermarket services, notes the broker.

The $6.00 target and Neutral rating are unchanged.

Target price is $6.00 Current Price is $5.97 Difference: $0.03
If BAP meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $6.15, suggesting upside of 2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

UBS rates BHP as Neutral (3) -

UBS raises its 2025-27 copper price forecasts by 13%, 19% and 13%, respectively, on increasing conviction over a supply crunch ahead and a robust demand outlook.

The broker sees an opportunity to purchase Buy-rated copper shares under its research coverage, which includes Sandfire Resources, South32 and Evolution Mining.

UBS is Neutral-rated on BHP Group and Rio Tinto and prefers the latter for its prospective overall return.

The target for BHP Group rises to $45 from $44.

Target price is $45.00 Current Price is $44.63 Difference: $0.37
If BHP meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $45.73, suggesting upside of 2.9% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

This company reports in USD. 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

Macquarie rates CCP as Neutral (3) -

In a read-through for Credit Corp's US segment, Macquarie reviews 4Q results for debt collection companies Encore Capital Group and PRA Group.

Purchase volumes in the quarter for Encore and PRA increased by 23% and 22%, respectively, and the broker notes US pricing continued to trend in the right direction.

As a result of positive commentary by management of these two companies, and a valuation roll-forward, the analyst raises the target for Credit Corp to $18.32 from $16.89. The Neutral rating is maintained.

Target price is $18.32 Current Price is $18.95 Difference: minus $0.63 (current price is over target).
If CCP meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.24, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Shaw and Partners rates ELD as Buy (1) -

Shaw and Partners increases its FY24-26 EPS forecasts for Elders by 4.3%, 7.3% and 7.2%, respectively, to reflect the latest more positive ABARES forecasts and a strong rebound in livestock prices.

The target rises to $10 from $9 and the Buy rating is retained.

Target price is $10.00 Current Price is $9.38 Difference: $0.62
If ELD meets the Shaw and Partners target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $8.09, suggesting downside of -13.9% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

UBS rates EVN as Buy (1) -

UBS raises its 2025-27 copper price forecasts by 13%, 19% and 13%, respectively, on increasing conviction over a supply crunch ahead and a robust demand outlook.

The broker sees an opportunity to purchase Buy-rated copper shares under its research coverage, which includes Sandfire Resources, South32 and Evolution Mining.

UBS is Neutral-rated on BHP Group and Rio Tinto and prefers the latter for its prospective overall return.

The target for Evolution Mining rises to $3.65 from $3.50. 

Target price is $3.65 Current Price is $3.20 Difference: $0.45
If EVN meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $3.63, suggesting upside of 13.4% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Bell Potter rates GNC as Buy (1) -

Bell Potter notes the March ABARE crop report highlighted an uplift in the 2023-24 winter and summer crop forecast.

As the 2023-24 east coast winter crop forecast was raised to 23.2mt from 21.7mt, GrainCorp will now likely need to make additional crop protection contract (CPC) payments above the broker's original forecast.

Regarding the summer forecast, the 2024 sorghum crop has been raised to 2.0mt from 1.5mt and the contestable summer crop (sorghum and cottonseed) to 3.2mt from 2.5mt, highlight the analysts.

As GrainCorp has a higher share in the summer crop, Bell Potter explains this will provide a cushion to the additional (assumed) CPC payments.

The Buy rating and $9.30 target are unchanged.

Target price is $9.30 Current Price is $7.76 Difference: $1.54
If GNC meets the Bell Potter target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $8.66, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

UBS rates GUD as Buy (1) -

Growth for new vehicle sales in February rebounded to 21% year-on-year, highlighting to UBS material supply disruptions in the previous corresponding period.

All categerories were strong for G.U.D. Holdings in the Aftermarket and the APG business top-20 models rose by 18% year-on-year in February, notes the broker.

The $12.80 target and Buy rating are unchanged.

Target price is $12.80 Current Price is $11.19 Difference: $1.61
If GUD meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $12.84, suggesting upside of 14.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Citi rates HLS as Sell (5) -

Healius has announced the immediate resignation of CEO Maxine Jacquet. Jacquet, who has been in the role just one year, will be succeeded by Paul Anderson, who has been operating as the CFO since March 2023.

With Anderson set to undertake a strategic review of the company, Citi expects the most likely outcome is the sale of the Imaging division, and that a partial sale of the Pathology department may also eventuate.

While the sale would solve near-term gearing issues, Citi expects it would not be sufficient to solve the profitability and structural challenges facing the Pathology department.

The Sell rating and target price of $1.10 are retained.

Target price is $1.10 Current Price is $1.29 Difference: minus $0.19 (current price is over target).
If HLS meets the Citi target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.55, suggesting upside of 23.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Ord Minnett rates HLS as Buy (1) -

The announcement of the resignation of Healius' CEO Maxine Jaquet after a year in the role has not impacted on Ord Minnett's rating or target price for the company at this point. 

The broker points out the past year has been a challenging one, with higher-margin covid testing revenue declining while inflationary pressures mounted.

A new CEO comes with a strategic review to ensure the company's operations are structured efficiently. The Buy rating and target price of $3.00 are retained.

Target price is $3.00 Current Price is $1.29 Difference: $1.71
If HLS meets the Ord Minnett target it will return approximately 133% (excluding dividends, fees and charges).

Current consensus price target is $1.55, suggesting upside of 23.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Morgans rates LOV as Add (1) -

Consumer Discretionary stocks under coverage by Morgans have generally exceeded expectations in the results season, and the broker raises its FY24 EPS estimates by 2%.

The broker prefers high quality businesses with strong growth prospects. The analysts' key picks that meet these criteria are Lovisa Holdings, Beacon Lighting ((BLX)) and Universal Store ((UNI)).

The target for Lovisa Holdings rises to $35 from $30 because Morgans applies a higher peer company multiple. The Add rating is maintained.

Target price is $35.00 Current Price is $30.65 Difference: $4.35
If LOV meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $29.27, suggesting downside of -4.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

UBS rates MIN as Sell (5) -

First tonnes for Onslow Iron are expected this June and significant volume growth is in prospect, notes UBS. It's felt this will be a transformational period for Mineral Resources' iron ore and mining services businesses.

The broker also raises its lithium price forecasts as a rebalancing of industry supply and demand has occured and the risk/reward ratio has modestly improved.

Largely due to these higher lithium forecasts and the outlook for Onslow Iron, the analyst's target rises to $60 from $51. Sell.

Target price is $60.00 Current Price is $64.00 Difference: minus $4 (current price is over target).
If MIN meets the UBS target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $68.79, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Morgans rates MPL as Hold (3) -

In a good outcome according to Morgans, Medibank Private will book a 3.31% annual price increase from April, which is above the 3.03% industry average announced for Australia's Health Insurance sector.

Separately, December APRA Private Health Insurance industry statistics showed Hospital Treatment (HT) benefits rose 8.8% on the previous corresponding period.

This increase is broadly in line with the recent trend of increasing HT benefit growth rates, explains the analyst.

Morgans raises its target for Medibank Private to $3.82 from $3.73 and maintains a Hold recommendation.

Target price is $3.82 Current Price is $3.75 Difference: $0.07
If MPL meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.81, suggesting upside of 0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Morgans rates NHF as Hold (3) -

In a good outcome according to Morgans, nib Holdings will book a 4.10% annual price increase from April, which is above the 3.03% industry average announced for Australia's Health Insurance sector.

Separately, December APRA Private Health Insurance industry statistics showed Hospital Treatment (HT) benefits rose 8.8% on the previous corresponding period.

This increase is broadly in line with the recent trend of increasing HT benefit growth rates, explains the analyst.

Morgans raises its target for nib Holdings to $8.16 from $8.00 and maintains a Hold recommendation.

Target price is $8.16 Current Price is $7.85 Difference: $0.31
If NHF meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $8.07, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Bell Potter rates PTM as Upgrade to Hold from Sell (3) -

Platinum Asset Management's 1H results on February 29 were a minor beat on Bell Potter's forecasts aided by slightly better revenue
and slightly lower costs. A  fully franked 6cps interim dividend was declared.

The broker was impressed by new CEO Jeff peter's first presentation of results, which included a two-point turnaround plan. It's noted the strategies will have a cost to implement, and there will be a lag between implementation and delivery.

Based on the results, the analysts increase earnings (EBITDA) forecasts by 7.1% for FY24, 14.7% for FY25 and 10.8% for FY26.

The target rises to $1.13 from 84c and the rating is upgraded to Hold from Sell.

Target price is $1.13 Current Price is $1.18 Difference: minus $0.05 (current price is over target).
If PTM meets the Bell Potter target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.21, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.4

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

UBS rates RIO as Neutral (3) -

UBS raises its 2025-27 copper price forecasts by 13%, 19% and 13%, respectively, on increasing conviction over a supply crunch ahead and a robust demand outlook.

The broker sees an opportunity to purchase Buy-rated copper shares under its research coverage, which includes Sandfire Resources, South32 and Evolution Mining.

UBS is Neutral-rated on BHP Group and Rio Tinto and prefers the latter for its prospective overall return.

The target for Rio Tinto rises to $127 from $125.

Target price is $127.00 Current Price is $124.77 Difference: $2.23
If RIO meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $129.00, suggesting upside of 4.0% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

This company reports in USD. 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 S32 as Buy (1) -

UBS raises its 2025-27 copper price forecasts by 13%, 19% and 13%, respectively, on increasing conviction over a supply crunch ahead and a robust demand outlook.

The broker sees an opportunity to purchase Buy-rated copper shares under its research coverage, which includes Sandfire Resources, South32 and Evolution Mining.

UBS is Neutral-rated on BHP Group and Rio Tinto and prefers the latter for its prospective overall return.

The target for South32 rises to $4 from $3.95.

Target price is $4.00 Current Price is $2.94 Difference: $1.06
If S32 meets the UBS target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $3.67, suggesting upside of 25.6% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.9

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

UBS rates SFR as Buy (1) -

UBS raises its 2025-27 copper price forecasts by 13%, 19% and 13%, respectively, on increasing conviction over a supply crunch ahead and a robust demand outlook.

The broker sees an opportunity to purchase Buy-rated copper shares under its research coverage, which includes Sandfire Resources, South32 and Evolution Mining.

UBS is Neutral-rated on BHP Group and Rio Tinto and prefers the latter for its prospective overall return.

The target for Sandfire Resources rises to $8.85 from $7.60. 

Target price is $8.85 Current Price is $7.91 Difference: $0.94
If SFR meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $7.44, suggesting downside of -5.6% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

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 XRO as Buy (1) -

Xero's inaugural investor day lacked quantitative detail, says Citi, but did provide an overview on key growth initiatives and company focus for the coming three years.

As part of this strategy, Xero intends to focus on its three largest market opportunities, Australia, the UK and the US. As per the broker, there remains work to be done in the US market in terms of product market fit. 

The broker expects this strategy can drive annual revenue per user and subscription growth. The Buy rating is retained and the target price increases to $159.00 from $129.40.

Target price is $159.00 Current Price is $134.52 Difference: $24.48
If XRO meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $126.48, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.5

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