Australian Broker Call

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

Ord Minnett upgrades its rating for Atlas Arteria to Hold from Lighten on valuation after a recent share price fall.

No changes are made to forecasts and the $6 target is unchanged.

Target price is $6.00 Current Price is $6.30 Difference: minus $0.3 (current price is over target).
If ALX meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.48, suggesting upside of 3.0% (ex-dividends)

The company's fiscal year ends in December.

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

UBS rates ANZ as Buy (1) -

Recent events in the US and Europe in UBS' view have lowered the confidence threshold of investors for banks in their portfolios and Australia is no different. The broker now expects funding costs to move higher, fiercer deposit competition, bad debts higher than expected, and tightening bank regulation.

UBS updates earnings forecasts to reflect some of these dynamics in estimates.

ANZ Bank target falls to $25 from $30. Buy retained.

Target price is $25.00 Current Price is $22.64 Difference: $2.36
If ANZ meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $27.23, suggesting upside of 20.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

UBS rates ASX as Neutral (3) -

In the fallout from the pause in the CHESS replacement project last November, regulators have now acted to address ASX's clearing & settlements monopoly position, UBS notes.

Proposed changes to legislation include empowering ASIC and RBA to intervene, paving the way for competition to emerge and implementing interoperability between clearing counterparties.

The broker believes ASX C&S consensus revenue expectations are likely to be too optimistic in the mid-long term. Even in the unlikely event no new competition emerges, it is likely that C&S pricing is revised downwards. Neutral and $70 target retained.

Target price is $70.00 Current Price is $64.61 Difference: $5.39
If ASX meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $70.63, suggesting upside of 8.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

UBS rates BEN as Downgrade to Sell from Neutral (5) -

Recent events in the US and Europe in UBS' view have lowered the confidence threshold of investors for banks in their portfolios and Australia is no different. The broker now expects funding costs to move higher, fiercer deposit competition, bad debts higher than expected, and tightening bank regulation.

UBS updates earnings forecasts to reflect some of these dynamics in estimates.

Bendigo & Adelaide Bank target falls to $8 from $10. Downgrade to Sell from Neutral.

Target price is $8.00 Current Price is $8.77 Difference: minus $0.77 (current price is over target).
If BEN meets the UBS target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.82, suggesting upside of 15.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

UBS rates BOQ as Downgrade to Sell from Neutral (5) -

Recent events in the US and Europe in UBS' view have lowered the confidence threshold of investors for banks in their portfolios and Australia is no different. The broker now expects funding costs to move higher, fiercer deposit competition, bad debts higher than expected, and tightening bank regulation.

UBS updates earnings forecasts to reflect some of these dynamics in estimates.

Bank of Queensland target falls to $6 from $8. Downgrade to Sell from Neutral.

Target price is $6.00 Current Price is $6.48 Difference: minus $0.48 (current price is over target).
If BOQ meets the UBS target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.17, suggesting upside of 12.4% (ex-dividends)

The company's fiscal year ends in August.

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

UBS rates CBA as Neutral (3) -

Recent events in the US and Europe in UBS' view have lowered the confidence threshold of investors for banks in their portfolios and Australia is no different. The broker now expects funding costs to move higher, fiercer deposit competition, bad debts higher than expected, and tightening bank regulation.

UBS updates earnings forecasts to reflect some of these dynamics in estimates.

CommBank target falls to $100 from $101. Neutral retained.

Target price is $100.00 Current Price is $96.06 Difference: $3.94
If CBA meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $91.27, suggesting downside of -5.1% (ex-dividends)

The company's fiscal year ends in June.

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

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

Ord Minnett upgrades its rating for Credit Corp to Buy from Accumulate on valuation after a recent share price fall.

No changes are made to forecasts and the $28 target is unchanged.

Target price is $28.00 Current Price is $15.85 Difference: $12.15
If CCP meets the Ord Minnett target it will return approximately 77% (excluding dividends, fees and charges).

Current consensus price target is $24.40, suggesting upside of 53.5% (ex-dividends)

The company's fiscal year ends in June.

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

Morgans rates IPD as Speculative Buy (1) -

Most large private insurance companies use the Category 2A recommendation from the National Comprehensive Cancer Network (NCCN) Guidelines as the basis for coverage policy determinations.

In a very positive milestone for ImpediMed, according to the broker, the NCCN has recommended biompedance spectroscopy (BIS) be used as an objective management tool to identify early signs of lymphoedema.

ImpediMed has the only FDA-cleared BIS technology (SOZO) for assessment of lymphoedema.

The Speculative Buy rating and 18c target are unchanged.

Target price is $0.18 Current Price is $0.13 Difference: $0.055
If IPD meets the Morgans target it will return approximately 44% (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

Macquarie rates LLL as Outperform (1) -

While FY22 reported earnings for Leo Lithium were in line with Macquarie's forecast, a -$10.5m earnings (EBITDA) loss was -30% wider than anticipated due to higher-than-expected corporate overhead charges.

The broker highlights the Goulamina project is tracking to plan with first production due in late 2024, and direct shipping ore (DSO) will provide early cash flow in late 2023.

The Outperform rating and $1.50 target are unchanged.

Target price is $1.50 Current Price is $0.49 Difference: $1.015
If LLL meets the Macquarie target it will return approximately 209% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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

Bell Potter rates LTR as Buy (1) -

The board of Liontown Resources has knocked back a takeover offer from Albemarle, citing both value and opportunistic timing of the approch as reason. Albemarle had made a $5.5bn bid for the company, equating to $2.50 a share compared to its prior bids of $2.20 and $2.35 a share made in October and March respectively. 

Bell Potter finds the level on interest in Liontown Resources speaks to the quality of its Kathleen Valley asset, as well as the scarcity of growth opportunities in the sector. While the broker finds Albemarle's offer reasonable, it feels additional value could be argued. 

The Buy rating is retained and the target price increases to $3.35 from $2.81.

Target price is $3.35 Current Price is $2.57 Difference: $0.78
If LTR meets the Bell Potter target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting downside of -2.3% (ex-dividends)

The company's fiscal year ends in June.

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 LTR as Neutral (3) -

Following news of a rejected take-over approach by industry heavyweight Albemarle, Citi has lifted its price target for Liontown Resources to $2.80, representing a 30c premium to the cash offer as well as a -20c discount to the broker's unrisked Net Asset Value (NAV).

Without board approval, the broker doesn't think a bid for the company can be successful, referencing the long tail of retail investors who are currently on Liontown's register as shareholders.

Overall, the move is seen as a positive for the sector generally. Neutral rating retained. Prior target was $1.80.

Target price is $2.80 Current Price is $2.57 Difference: $0.23
If LTR meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting downside of -2.3% (ex-dividends)

The company's fiscal year ends in June.

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

Morgans rates LTR as Downgrade to Hold from Speculative Buy (3) -

On the basis of undervaluation, the board of Liontown Resources has rejected the $2.50/share takeover offer by Albemarle.

While Morgans feels it's possible Albemarle will lift its bid or a third party competes, it's hard to recommend investors increase their stakes given a markedly higher bid is unlikely.

The broker lowers its rating to Hold from Speculative Buy given the 67% rally in share price to $2.57 yesterday. The target is raised to $2.50 from $1.96.

Target price is $2.50 Current Price is $2.57 Difference: minus $0.07 (current price is over target).
If LTR meets the Morgans target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.50, suggesting downside of -2.3% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates LYC as Neutral (3) -

A site visit to Mt Weld provided a good opportunity to revisit Lynas Rare Earths' flagship asset ahead of its planned expansion due to start in the second half of next year, but UBS was hoping for more colour on Kalgoorlie.

There were no significant developments on this front other than Lynas reiterating feed start for the June quarter and that it remains focused on overturning the cracking & leaching covenant attached to its Malaysian license.

With little guidance on FY24 there remains a wide range of estimates for volume, the broker notes.

Neutral and $9.00 target retained.

Target price is $9.00 Current Price is $6.54 Difference: $2.46
If LYC meets the UBS target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $7.77, suggesting upside of 20.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

Citi rates MMS as Buy (1) -

Two observations stand out from Citi's update on McMillan Shakespeare vis a vis the NDIS.

Firstly, the estimated number of participants that has likely joined the plan manager pool, assuming market share hasn't changed, is below Citi's forecasts.

Secondly, the current review into NDIS does pose potential risk.

Buy. Target $16.10.

Target price is $16.10 Current Price is $14.42 Difference: $1.68
If MMS meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $15.09, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates NAB as Downgrade to Sell from Neutral (5) -

Recent events in the US and Europe in UBS' view have lowered the confidence threshold of investors for banks in their portfolios and Australia is no different. The broker now expects funding costs to move higher, fiercer deposit competition, bad debts higher than expected, and tightening bank regulation.

UBS updates earnings forecasts to reflect some of these dynamics in estimates.

National Australia Bank target falls to $25 from $33. Downgrade to Sell from Neutral.

Target price is $25.00 Current Price is $27.66 Difference: minus $2.66 (current price is over target).
If NAB meets the UBS target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.90, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

Morgans rates ORG as Hold (3) -

After adjusting for a dividend prior to takeover completion, Morgans raises its target to $8.55 from $6.90, following the receipt by Origin Energy of a binding offer from EIG and Brookfield at $8.91/share.

While the payment will be made in Australian dollars, there is a US$2.19/share dividend component, meaning there is some potential upside for shareholders wishing to accept currency risk, explains the analyst.

The broker also points out for shareholders the 4.5cps/month ticking fee (to compensate for time lag) applies after November 30, which could also add to total compensation.

Morgans maintains its Hold rating due to limited share price upside after the recent rally in price.

Target price is $8.55 Current Price is $8.17 Difference: $0.38
If ORG meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $8.50, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates ORG as Hold (3) -

Ord Minnett feels the Brookfield consortium takeover offer is attractive, which the Origin Energy board will likely recommend.

After raising the likelihood of a successful bid to 75% from 50%, the broker's target price rises to $8.50 from $8.00.

Ord Minnett feels gaining ACCC approval will be the biggest hurdle to deal completion, as, typically, utilities are only allowed to own either generation or retail assets, or transmission and distribution networks.

In a separate exercise, the analyst raises its earnings forecasts after management provided additional detail on future LNG trading profits.

The Hold rating is unchanged.

Target price is $8.50 Current Price is $8.17 Difference: $0.33
If ORG meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $8.50, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in June.

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

Macquarie rates ORI as Neutral (3) -

The analyst at Macquarie reports in from the Orica-hosted investor tour of the Americas and highlights the Latin American division has the largest exposure to future facing commodities across the group. Of total revenue, 62% derives from copper and 21% from gold.

The broker expects the explosives market in the region will grow at a 3.9% compound annual growth rate (CAGR) measured in tonnes  over next five years, driven by production growth for gold, copper and iron ore, and related explosives use.

The Neutral and $16 target retained.

Target price is $16.00 Current Price is $15.08 Difference: $0.92
If ORI meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $16.43, suggesting upside of 8.9% (ex-dividends)

The company's fiscal year ends in September.

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

Bell Potter rates PXS as Buy (1) -

Data continues to be collected on Pharmaxis' PXS-5505 treatment, with Bell Potter suggesting headline data expected in mid 2023 are likely to provide a more comprehensive understanding of the efficacy and safety. 

Bell Potter highlights the drug targets disease modification in myelofibrosis, setting it apart from the three FDA approved drugs for the management of the disease.

The broker points out other pipeline drugs, namely PXS-4728 and PXS-6302, could provide upside to the current valuation. 

The broker is Buy rated with a target price of $0.10.

Target price is $0.10 Current Price is $0.04 Difference: $0.056
If PXS meets the Bell Potter target it will return approximately 127% (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

Citi rates RWC as Sell (5) -

Citi analysts returned with more optimism from Reliance Worldwide's investor briefing, commenting they believe the new products announced should prove a positive, incrementally.

Given the staged introduction, however, the broker also foresees a more gradual positive impact, spread out over two years, if not longer.

Sell rating retained, alongside an unchanged price target of $3.

Target price is $3.00 Current Price is $3.53 Difference: minus $0.53 (current price is over target).
If RWC 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 $3.86, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in June.

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: 0.3

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

Macquarie rates RWC as Outperform (1) -

Following the launch of two new products for the Americas region, Macquarie lifts its target price for Reliance Worldwide to $4.40 from $4.20.

Management pointed to systemic benefits for the supply chain from the launches, as well as growth potential in the APAC region.

The broker considers the valuation for Reliance Worldwide remains attractive, especially considering near and long-term growth potential from increasing organic growth possibilities.

Target price is $4.40 Current Price is $3.53 Difference: $0.87
If RWC meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $3.86, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in June.

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: 0.3

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

Morgan Stanley rates RWC as Overweight (1) -

One takeaway for Morgan Stanley from an investor day held by Reliance Worldwide was the launch of the second generation of the flagship product SharkBite, named SharkBite Max, which will have a higher selling margin.

Another highlight was the company's entry into the previously unserved market in the US, called the PEX-a pipe and fittings market. The retail market will be the first point of entry, followed by wholesale at a later date.

The broker admires these two initiatives though sees no meaningful earnings impact until after FY24 and maintains its Overweight rating and $4.00 target. Industry View: In-Line.

Target price is $4.00 Current Price is $3.53 Difference: $0.47
If RWC meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.86, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in June.

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: 0.3

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 has announced the launch of SharkBite Max into the Americas region, which is intended to replace the existing
SharkBite product.

Management will also be entering the PEX-a market, which is the fastest-growing pipe and fittings system in both residential construction and remodel markets.

The analyst sees more upside from the PEX-a market announcement, as it offers new product development and the potential to win additional market share via existing partners.

General positivity from these announcements is countered by lower levels of construction activity and Ord Minnett retains its $3.40 target and Hold rating.

Target price is $3.40 Current Price is $3.53 Difference: minus $0.13 (current price is over target).
If RWC meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.86, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in June.

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: 0.3

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

UBS rates RWC as Buy (1) -

The key takeaways from the Reliance Worldwide's investor day, UBS suggests, were two new product suites introduced and new manufacturing lines in Alabama commissioned specifically for product assembly in the US, driving plant efficiency.

UBS found the New Product Development announcement positive, albeit one that is largely required to ensure above market growth is maintained. It builds on the company's cost-out plans and provides a backbone for continued recovery in group margin.

Buy and $4.60 target retained.

Target price is $4.60 Current Price is $3.53 Difference: $1.07
If RWC meets the UBS target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $3.86, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in June.

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: 0.3

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

Morgan Stanley rates SHL as Overweight (1) -

February Medicare data show covid testing benefits fell -59% from January with volumes falling by -63%. Due to this contraction, total pathology benefits fell by -14% on the previous corresponding period.

Excluding covid testing, Morgan Stanley calculates adjusted pathology benefits rose by 20% in February and by 5% on a 12-month rolling basis.

Diagnostic imaging benefits are running above pre-pandemic levels.

The broker prefers Sonic Healthcare in the sector and maintains its Overweight rating and $34.80 target.

Target price is $34.80 Current Price is $34.49 Difference: $0.31
If SHL meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $34.27, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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) -

Morgan Stanley suggests Cash App has a significant opportunity to become a sizeable institution, despite recent controversy and points made by short-seller Hindenburg, which are well understood by the market.

The broker sees Cash App as the best long-term value creator for Block due to its strategy of focusing on millenials and Gen Z with a view to becoming a key financial provider to these generations as they mature.

A survey conducted by the broker indicates these generations are highly amenable to using various banking services offered by Cash App.

The target falls to US$70 from US$72 and the Equal-weight rating is unchanged. Industry View: Attractive.

Current Price is $96.00. Target price not assessed.

Current consensus price target is $149.00, suggesting upside of 54.4% (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

Shaw and Partners rates SRG as Buy (1) -

SRG Global has signed a $55m infrastructure deal with Fortescue Metals Group ((FMG)), taking its year-to-date contract catch to $1.015bn, observes Shaw and Partners.

This compares with $628m for all of 2022, says the broker. 

Shaw and Partners appreciates the company's strong organic growth and recurring revenue and believes a recent run of acquisitions positions the company well to take advantage of strong industry fundamentals.

Buy rating and $1.10 target price retained.

Target price is $1.10 Current Price is $0.74 Difference: $0.36
If SRG meets the Shaw and Partners target it will return approximately 49% (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

Bell Potter rates UMG as Downgrade to Hold from Buy (3) -

United Malt has entered into a process and exclusivity deed with Malteries Soufflet SAS. The latter made a bid to acquire all ordinary shares on issue at $5.00 a share, in what Bell Potter feels is a "full" offer price and notes is a material premium to the previous closing price.

The broker points out Malteries Soufflet initially made a bid for United Malt in December, and has lifted its offer three times since. Given the persistence shown, Bell Potter expects there is a reasonable probability of this deal progressing. 

The rating is downgraded to Hold from Buy and the target price increases to $5.00 from $4.25.

Target price is $5.00 Current Price is $4.50 Difference: $0.5
If UMG meets the Bell Potter target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $4.51, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Morgans rates UMG as Hold (3) -

The world's second largest maltster, Malteries Soufflet, has made a conditional, non-binding and indicative proposal for 100% of United Malt at $5.00/share.

Morgans considers the offer is a good one, given inherent difficulties for management in executing its turnaround strategy in the next few years.

The broker thinks the chances of another offer are limited and the transaction will likely complete. United Malt has been shopped around for some time and it's thought the process and exclusivity deed with Malteries Soufflet may restrict interest from other parties.

The Hold rating is maintained.

Target price is $5.00 Current Price is $4.50 Difference: $0.5
If UMG meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $4.51, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Ord Minnett rates UMG as Downgrade to Hold from Accumulate (3) -

Following the $5.00/share non-binding indicative proposal from Malteries Soufflet for United Malt, Ord Minnett raises its target to $4.75 from $4.00. A 75% probability of deal completion is assigned.

The analyst doubts Malteries Soufflet will raise its bid and thinks the emergence of another bidder is unlikely given the strategic role United Malt serves to Malteries Soufflet.

The deal is not yet considered a fait accompli due to upcoming due diligence and regulatory hurdles.

The rating is downgraded to Hold from Accumulate.

Target price is $4.75 Current Price is $4.50 Difference: $0.25
If UMG meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $4.51, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

UBS rates UMG as Buy (1) -

UBS believes the third offer for United Malt Group from Malteries Soufflet looks attractive at a 45% premium to last close.

Malteries Souflett is registered in France and is the largest commercial maltster in Europe and second largest globally, with operations also in LatAm and Asia.

The takeover looks logical from a geographic expansion perspective, the broker suggests, given United Malt's leading position in North America.

Buy and $3.80 target retained.

Target price is $3.80 Current Price is $4.50 Difference: minus $0.7 (current price is over target).
If UMG meets the UBS target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.51, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

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

Recent events in the US and Europe in UBS' view have lowered the confidence threshold of investors for banks in their portfolios and Australia is no different. The broker now expects funding costs to move higher, fiercer deposit competition, bad debts higher than expected, and tightening bank regulation.

UBS updates earnings forecasts to reflect some of these dynamics in estimates.

Westpac target falls to $22.50 from $27.00. Downgrade to Neutral from Buy.

Target price is $22.50 Current Price is $21.53 Difference: $0.97
If WBC meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $25.75, suggesting upside of 20.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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