Australian Broker Call

Citi rates ALL as Buy (1) -

Citi has analysed the bookings data to August and notes digital industry bookings have flattened over the last 12 months. Aristocrat Leisure's social casino portfolio is outgrowing the genre by 6%.

Although RAID was down -12% over the quarter it appears bookings over the last six months have flattened, while Merge Gardens is growing strongly.

While the stock may have outperformed recently Citi retains a Buy rating with a $42.80 target based on the consistency in its social casino portfolio and its market-leading land-based business.

Target price is $42.80 Current Price is $40.49 Difference: $2.31
If ALL meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $44.06, suggesting upside of 8.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.9

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

Citi rates BBN as Upgrade to Buy from Neutral (1) -

Citi upgrades to Buy from Neutral, assessing the -9% decline in the share price since the August results adequately reflects consumer uncertainty.

If the trading update at the AGM is ahead of expectations, the broker suspects it could be a catalyst to move the stock higher. Underpinning this is the expectation like-for-like sales will improve as comparables get easier to cycle.

With the new CEO commencing by the AGM, Citi anticipates a greater focus on supplier partnerships, cost optimisation and store refurbishment, which should be viewed positively, to the extent there is little pressure on the balance sheet. Target is $2.20.

Target price is $2.20 Current Price is $1.92 Difference: $0.28
If BBN meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $2.16, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Macquarie rates CIP as Outperform (1) -

Centuria Industrial REIT has divested two assets for $70m, in line with book value. Macquarie observes the divestments reduce gearing by -1.2 percentage points while having a limited impact on free cash flow.

The company's strategy continues to be around extracting value from assets to reinvest into higher yielding opportunities, which the broker believes may be a source of catalysts in the medium term.

Macquarie currently forecasts FY24 FFO of 17.2c per security, marginally above guidance. Outperform rating retained. Target edges up to $3.41 from $3.40.

Target price is $3.41 Current Price is $3.06 Difference: $0.35
If CIP meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $3.43, suggesting upside of 12.0% (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

Morgans rates CIP as Hold (3) -

Centuria Industrial REIT has confirmed the sale of two industrial assets for at total of $70m and proceeds will be used for paying down debt. Morgans had already assumed one of the sales in its forecasts and now includes the smaller asset as well.

The broker observes the industrial/logistics sector is resilient and there are strong leasing fundamentals. Hence the company's portfolio is well-placed with its focus on infill markets, although there is near-term uncertainty around interest rates and the impact on capitalisation rates. Hold rating and $3.36 target maintained.

Target price is $3.36 Current Price is $3.06 Difference: $0.3
If CIP meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $3.43, suggesting upside of 12.0% (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

Ord Minnett rates CSR as Hold (3) -

Ord Minnett observes Australian housing construction faces challenges amid higher interest rates and cost inflation that is weighing on activity. CSR shares are outperforming yet half of its building products revenue comes from the challenged detached housing sector.

The recent appreciation in the share price, in Ord Minnett's view, partially reflects the strength of the balance sheet while diversity outside detached dwellings is also supportive.

The company is also returning capital via buybacks which the broker calculates are broadly value-neutral at current prices.

FY24 EBIT of $252m is expected, down -24% on FY23 and underpinned by a -16% fall in building products earnings. Hold rating retained. Target is $5.50.

Target price is $5.50 Current Price is $5.82 Difference: minus $0.32 (current price is over target).
If CSR 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 $5.62, suggesting downside of -3.2% (ex-dividends)

The company's fiscal year ends in March.

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 IPL as Downgrade to Equal-weight from Overweight (3) -

Broadly consistent with expectations, Incitec Pivot revealed explosives are improving while fertiliser remains challenging. Morgan Stanley assesses persistent gas supply issues imply downside risk to FY24 estimates, also making a sale of the fertiliser business more difficult.

Distribution earnings are now expected to be at the lower end of the $40-60m guidance range for fertilisers. The company has also disclosed a -$13-50m negative impact to FY23 EBIT related to sulphuric acid supply.

Morgan Stanley believes the gas supply issues in the fertiliser business are key risk to earnings and downgrades to Equal-weight from Overweight. Target is lowered to $3.29 from $3.65. Industry view: In-Line.

Target price is $3.29 Current Price is $3.05 Difference: $0.24
If IPL meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.23, suggesting upside of 2.9% (ex-dividends)

The company's fiscal year ends in September.

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

Ord Minnett rates MGR as Accumulate (2) -

Ord Minnett reviews its forecasts for Mirvac Group, noting the shares screen substantially undervalued despite improving over the past year. The broker expects lower residential gross development margins of 19% in FY24, given cost pressures and longer construction times.

As less-equipped rivals exit, Ord Minnett assesses the company is one of the few large developers capable of the full range of design, construction and development, which would help it navigate the supply chain, government policy and market challenges.

Accumulate rating and $3.10 target maintained.

Target price is $3.10 Current Price is $2.29 Difference: $0.81
If MGR meets the Ord Minnett target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $2.67, suggesting upside of 16.2% (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

Macquarie rates RHC as Neutral (3) -

Macquarie flags press commentary regarding several parties progressing to the next round of bidding for Ramsay Sime Darby. Binding bids are due by October with commentary suggesting the transaction could be valued at US$1.5bn.

Assuming proceeds would be used to reduce debt, Macquarie calculates this would reduce concerns relating to the company's balance sheet.

Regardless, the near term outlook remains uncertain and Macquarie maintains a Neutral rating. Target is reduced to $52.50 from $53.35.

Target price is $52.50 Current Price is $50.62 Difference: $1.88
If RHC meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $57.40, suggesting upside of 11.4% (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

Bell Potter rates SHV as Buy (1) -

Select Harvests has reduced its FY23 estimate for almond prices to $6.30-6.50/kg from $7.45/kg. Most of the downward movement (60%) is linked to the market with the remainder driven by quality, Bell Potter observes.

FY23 orchard production is lifted to 19,500t following a greater recovery in the pollinator crop. The broker observes cost pressures have demonstrated signs of peaking and new management continues to accelerate initiatives within the business.

Californian acreage implies a slowing in global supply growth in the outer years which should lead to a firming almond price. Buy rating retained. Target is reduced to $5.30 from $5.50.

Target price is $5.30 Current Price is $4.36 Difference: $0.94
If SHV meets the Bell Potter target it will return approximately 22% (excluding dividends, fees and charges).

The company's fiscal year ends in September.

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 UNI as Buy (1) -

UBS takes a closer look at the youth consumer and sizes up the roll-out opportunity for Universal Store. This drives an upgrade of 25% and 32% to FY24 and FY25 EPS, respectively, led by both store and sales growth as well as gross margin expansion.

Cost of living pressures may be enduring, but UBS has data suggesting the situation is not getting worse for the company's 16-35 year-old cohort.

The roll-out opportunity remains significant across each of the three company banners and the broker retains a Buy rating. Target rises to $4.25 from $3.30.

Target price is $4.25 Current Price is $3.65 Difference: $0.6
If UNI meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $3.99, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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