Australian Broker Call

Macquarie rates ALX as Neutral (3) -

Macquarie lowers its traffic forecast for the APRR toll road network in France based on the first two months of traffic for 2024 and management commentary regarding a flattish outlook for 2024.

The broker also highlights Atlas Arteria's dividend is not sustainable without winning the French constitutional challenge. As a result, Macquarie's dividend forecasts for 2025 and 2026 are now lower at 37.5cps and 39cps, respectively.

Management has noted the dividend payout will return to match cash flow in the 2025 dividend year.

The target falls to $5.39 from $5.44. Neutral.

Target price is $5.39 Current Price is $5.43 Difference: minus $0.04 (current price is over target).
If ALX meets the Macquarie target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.67, suggesting upside of 6.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

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

The Australian Energy Regulator has released its discussion paper following review of the South West Queensland Pipeline (SWQP), pertinent to APA Group as the SWQP accounts for 15% of company earnings.

A final decision from the regulator is expected in November, either for full regulation to be applied or for lighter regulation to be maintained. Morgan Stanley believes full regulation would drive lower financial returns for APA Group.

The Equal-weight rating and target price of $9.18 are retained. Industry view: Cautious.

Target price is $9.18 Current Price is $8.10 Difference: $1.08
If APA meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $8.71, suggesting upside of 8.4% (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

Shaw and Partners rates AZY as Buy (1) -

Antipa Minerals has released further results from its second phase drilling program at Minyari Dome, with results underpinning an extension of the mineralisation footprint by 100 metres.

Shaw and Partners points out drilling intersected narrow, high grade and near surface gold. A maiden resource estimate for the GEO-01 target is due mid-year, and the broker expects this will prove a valuable addition to the existing 1.5m ounce Minyari resource.

The broker extrapolates a 300,000 ounces resource could add three years of mine life.

The Buy rating and target price of 4 cents are retained.

Target price is $0.04 Current Price is $0.01 Difference: $0.026
If AZY meets the Shaw and Partners target it will return approximately 186% (excluding dividends, fees and charges).

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

Citi rates CAR as Neutral (3) -

In line with Citi's view there is limited upside risk (and downside risk) for CAR Group's Trader Interactive in the 2H, overseas peer RV Trader (owned by US-listed Thor Industries) has noted tough conditions in the RV industry.

Thor's recent result and outlook commentary suggests those tough conditions could make it difficult in terms of dealer acquisition for
RVTrader, explains the broker. Thor is the largest manufacturer of RVs in North America.

Citi's $34.70 target and Neutral rating for CAR Group are unchanged.

Target price is $34.70 Current Price is $36.30 Difference: minus $1.6 (current price is over target).
If CAR meets the Citi target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $34.02, suggesting downside of -4.3% (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

Macquarie rates CHC as Outperform (1) -

Macquarie notes a positive reporting season for the listed Property sector, resulting in FY25 EPS growth upgrades of 3 percentage points to 11% across the sector.

The broker remains Overweight in active exposures and quality growth (in preference to passive REITs) as earnings growth can help offset the impact if bond yields rise in the near-term.

Charter Hall is one of the broker's key picks. It's felt operational metrics are at, or approaching, cyclical lows.

The target rises to $15.54 from $12.90 and the Outperform rating is maintained.

Target price is $15.54 Current Price is $13.00 Difference: $2.54
If CHC meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $13.94, suggesting upside of 8.0% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates CTD as Neutral (3) -

Citi reduces its FY25/FY26 earnings forecast for Corporate Travel Management by around -2% as 1H results showed execution in the underlying business was below historical norms.

It appears to the broker the company has lost some market share in A&NZ, while peers are growing at faster rates and with a better mix in the US.

For the near-term, Citi prefers Buy-rated Flight Centre Travel in the space for its operating momentum. An improving macroeconomic outlook is also noted.

The target for Corporate Travel Management falls to $17.50 from $17.55. and the Neutral rating is maintained.

Target price is $17.50 Current Price is $17.09 Difference: $0.41
If CTD meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $18.91, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates DHG as Neutral (3) -

REA Group's 11% price increase is slightly ahead of Citi's expectation for 10%, and the analyst sees the addition of  a new tier -Premiere Lux- as positive for yield growth.

Premiere Lux is aimed at the luxury segment (no specific house price point) but is expected to be taken up by high value properties, explains the broker.

REA Group's price increase likely gives Domain potential to increase its price a bit higher than Citi's current forecast.

The broker has a Neutral rating and $3.85 target for Domain Holdings Australia.

Target price is $3.85 Current Price is $3.31 Difference: $0.54
If DHG meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $3.39, suggesting upside of 2.5% (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

Bell Potter rates DVP as Buy (1) -

Increased underground development and mining activity at Bellevue saw Develop Global deliver a beat to Bell Potter's forecast at the revenue line. The company reported revenue of $65.8m, representing 162% growth year-on-year.

Underlying earnings of $6.6m, however, were a miss on higher than anticipated share-based payments and overheads. 

The broker anticipates a ramp up in earnings from Develop Global through to FY26, as the Woodlawn operations restart and revenue generation from the underground mining services business grows.

The Buy rating is retained and the target price decreases to $4.10 from $4.30.

Target price is $4.10 Current Price is $2.50 Difference: $1.6
If DVP meets the Bell Potter target it will return approximately 64% (excluding dividends, fees and charges).

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

Macquarie rates FCL as Outperform (1) -

After reviewing positive 2Q results for Fineos Corp's peer in the US, Guidewire, Macquarie retains its Outperform rating and $2.22 target for Fineos.

The broker notes Guidewire shares have rallied around 18% in the past three months, versus the flat performance by Fineos, yet Fineos trades at a circa -75% discount to Guidewire.

Target price is $2.22 Current Price is $1.73 Difference: $0.49
If FCL meets the Macquarie target it will return approximately 28% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.8

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

Citi rates FLT as Buy (1) -

For the near-term, Citi prefers Buy-rated Flight Centre Travel in the sector for its operating momentum, and based on the improving macroeconomic outlook. The $24.15 target is retained.

The broker reduces its FY25/FY26 earnings forecast for Corporate Travel Management by around -2% as 1H results showed execution in the underlying business was below historical norms.

It appears to the broker Corporate Travel Management has lost some market share in A&NZ, while peers are growing at faster rates and with a better mix in the US.

Target price is $24.15 Current Price is $21.59 Difference: $2.56
If FLT meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $24.51, suggesting upside of 13.6% (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

Macquarie rates GMG as Outperform (1) -

Macquarie notes a positive reporting season for the listed Property sector, resulting in FY25 EPS growth upgrades of 3 percentage points to 11% across the sector.

The broker remains Overweight in active exposures and quality growth (in preference to passive REITs) as earnings growth can help offset the impact if bond yields rise in the near-term.

Goodman Group is one of Macquarie's key picks due to both its quality and resilient double-digit earnings growth. The target is raised to $34.84 from $31.81 and the Outperform rating is maintained.

Target price is $34.84 Current Price is $30.79 Difference: $4.05
If GMG meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $29.62, suggesting downside of -1.8% (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

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

While GPT Group has underperformed its peers since the release of results in February, Morgan Stanley points out this is consistent with the stock typically lagging in the first half of the calendar year. The broker estimates the stock is trading at a -6% discount.

The broker points out GPT Group was the only REIT within the sector to cut its payout ratio in February, which may also have driven underperformance compared to peers.

Morgan Stanley sees office leasing capital as a drag on on free cash flow, but expects other office owners may also be impacted by this theme.

The Equal-weight rating is retained and the target price decreases to $4.50 from $4.60. Industry view: In-Line.

Target price is $4.50 Current Price is $4.46 Difference: $0.04
If GPT meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $4.91, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in December.

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

Ord Minnett rates PAC as Buy (1) -

In a modestly value-accretive move, according to Ord Minnett, Pacific Current Group has sold its 4% stake in GQG Partners ((GQG)) for $257m, having outlayed US$2.7m in 2016 for the holding.

The broker assumes the cash stays on the balance sheet and debt is repaid at July 25, though management has stated alternative uses are being reviewed for the funds, including special dividends, share buybacks and acquisitions.

The broker's underlying earnings (EBITDA) forecasts over the next three years for Pacific Current Group fall by -10%, -40% and -46%, respectively, as dividends from the investment accounted for around 40% of earnings forecasts.

As the stake was sold for more than Ord Minnett was expecting, the broker's target rises to $12.50 from $12. Buy.

Target price is $12.50 Current Price is $9.65 Difference: $2.85
If PAC meets the Ord Minnett target it will return approximately 30% (excluding dividends, fees and charges).

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

Citi rates PDN as Buy (1) -

The world's largest producer and seller of natural uranium, Kazatomprom releases financial results on March 15. Citi believes this announcement could be a catalyst for higher uranium prices upon a 2025 production downgrade and/or lower inventory levels.

The broker notes a lack of sulphuric acid availability and ramp-up challenges make achieving Kazatomprom's 2025 production target unlikely.

A likely beneficiary is Paladin Energy, according to the analysts, as its share price is highly correlated to the uranium price.

The Buy rating and $1.45 target are unchanged.

Target price is $1.45 Current Price is $1.25 Difference: $0.205
If PDN meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $1.51, suggesting upside of 22.0% (ex-dividends)

The company's fiscal year ends in June.

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: 1.0

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

Macquarie rates PFP as Outperform (1) -

While making no forecast changes for Propel Funeral Partners, Macquarie raises its valuation multiple, and the target rises to $6.38 from $6.06. The Outperform rating is unchanged.

The company's 2023 result indicated pricing growth is still strong, notes the analyst, and US volumes have almost normalised. Also, February Birth, Death and Marriage (BDM) data show NSW and VIC deaths returned to growth of 1.2% year-on-year.

Target price is $6.38 Current Price is $5.71 Difference: $0.67
If PFP meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $6.19, suggesting upside of 8.7% (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

Morgan Stanley rates PLS as Underweight (5) -

Recent offtake announcements from Pilbara Minerals go some way in addressing near-term concerns raised by Morgan Stanley, but the broker feels uncontracted tonnes remain an issue amid project ramp up.

The broker believes a focus on long-term offtakes would be a better strategy for Pilbara Minerals than its current aim to enter conversion via a joint venture partnership in pursuit of a downstream strategy.

Despite its asset quality, Morgan Stanley considers the stock overvalued.

The Underweight rating is retained and the target price increases to $3.30 from $2.95. Industry view: Attractive.

Target price is $3.30 Current Price is $4.02 Difference: minus $0.72 (current price is over target).
If PLS meets the Morgan Stanley target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.64, suggesting downside of -9.0% (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

Citi rates REA as Neutral (3) -

REA Group's 11% price increase is slightly ahead of Citi's expectation for 10%, and the analyst sees the addition of  a new tier -Premiere Lux- as positive for yield growth.

Premiere Lux is aimed at the luxury segment (no specific house price point) but is expected to be taken up by high value properties, explains the broker.

Citi has a Neutral rating and $187 target for REA Group. 

Target price is $187.00 Current Price is $187.62 Difference: minus $0.62 (current price is over target).
If REA meets the Citi target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $172.91, suggesting downside of -5.1% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Ord Minnett rates RPL as Initiation of coverage with Buy (1) -

Ord Minnett initiates research coverage on a diversified, alternative asset manager Regal Partners with a Buy rating and $3.60 target price.

The broker highlights the alternative assets space is the fastest growing sector of the global asset management industry. As Regal Partners integrates acquisitions and expands its footprint, earnings and funds under management (FUM) are expected to grow significantly.

The company has recently made significant acquisitions including a 50% stake in private credit manager Taurus and global long/short equity fund manager PM Capital, explain the analysts.

After allowing for a 5% fully franked dividend, Ord Minnett forecasts a 31% EPS compound annual growth rate over the next three years.

Target price is $3.60 Current Price is $2.77 Difference: $0.83
If RPL meets the Ord Minnett target it will return approximately 30% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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

Shaw and Partners rates SRG as Buy (1) -

SRG Global has secured a $35m multi-year marine maintenance contract with BlueScope Steel ((BSL)) for upgrades at the Port Kembla wharf, expected to complete in 2026.

Shaw and Partners points out this brings financial year-to-date contract wins to $500m, following on from $1.2bn in contract wins in FY23, and brings the tenders and pipeline total to $6.5bn. 

The broker anticipates earnings growth of 23% from SRG Global in the current financial year, a significant premium to comparable companies which it expects will deliver growth around 14%.

The Buy rating and target price of $1.20 are retained.

Target price is $1.20 Current Price is $0.77 Difference: $0.43
If SRG meets the Shaw and Partners target it will return approximately 56% (excluding dividends, fees and charges).

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

Bell Potter rates TLX as Buy (1) -

Telix Pharmaceuticals has entered into an agreement for the purchase of ARTMS, a company specialising in the "physics, chemistry and materials science of cyclotron produced radionuclides" according to Bell Potter.

The acquisition comes at a total consideration of $125.9m, comprising an $88.3m upfront payment and $37.6m in deferred payments subject to performance milestones.

ARTMS, says Bell Potter, will prove crucial to Telix Pharmaceuticals' zircon supply and the rollout Zircaiz for renal cancer imaging. 

The Buy rating is retained and the target price increases to $14.50 from $14.00.

Target price is $14.50 Current Price is $11.70 Difference: $2.8
If TLX meets the Bell Potter target it will return approximately 24% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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

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

Nationwide Building Society plans to takeover Virgin Money UK via a GBP2.9m bid. Nationwide has until April 4 to either announce a firm offer or withdraw its intentions.

Macquarie places a high probability on deal completion and feels there is only a small chance of an improved offer though does list other potentially interested parties including Natwest, Santander UK and HSBC.

The broker's rating is downgraded to Neutral from Outperform and the target raised to $4.25 (based on the offer price) from $3.70.

Target price is $4.25 Current Price is $4.08 Difference: $0.17
If VUK meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.25, suggesting upside of 3.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

This company reports in GBP. 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 VUK as Hold (3) -

Ord Minnett raises its target for Virgin Money UK to $4.25 to correspond with the bid by Nationwide Building Society, which is pitched at a 5% premium to the broker's stand-alone fair value estimate. The bid is also 38% above the share price prior to the announcement.

The board of Virgin Money recommends shareholders accept if a firm offer is made. Nationwide has until April 4 to either announce a firm offer or withdraw its intentions.

The broker doesn't anticipate a higher competing bid and suggests investors contemplate downside risk should the acquisition not proceed.

One alternative for investors, highlights the analyst, is to sell shares of Virgin Money UK on market and investing in another UK bank (with some currently trading at discounts to the broker's fair value) to maintain exposure to the sector.

The Hold rating is unchanged.

Target price is $4.25 Current Price is $4.08 Difference: $0.17
If VUK meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.25, suggesting upside of 3.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

This company reports in GBP. 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