Australian Broker Call

Ord Minnett rates AAD as Hold (3) -

The quarterly update signalled constant-centre Main Event sales declined -2.5% in the three months to March, although after a very weak January there was improvement moving into March, which pleased Ord Minnett.

The roll-out plans for new centres have been reduced in FY18 to focus on improving the existing business, which the broker believes is a sensible course as it reduces execution risk. Hold rating and $1.70 target retained.

Target price is $1.70 Current Price is $1.95 Difference: minus $0.245 (current price is over target).
If AAD meets the Ord Minnett target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.88, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

UBS rates BHP as Neutral (3) -

Elliott Advisors, which owns around 1.6% of shares,  or 4.1% of the plc line, has presented directors with a plan which they believe has the potential to lift and add value to the shares.

The company has responded saying it regularly reviews opportunities to add value and believes the costs and associated risks with the proposal significantly outweigh any benefits. Part of the plan was the unification of the dual listed structure  which the company says has no obvious discount relative to relevant mining and oil & gas peers.

UBS, while considering the proposal is innovative, notes management has made impressive progress with simplifying the group and embedding a disciplined capital allocation process.

Neutral and $28 target retained.

Target price is $28.00 Current Price is $25.41 Difference: $2.59
If BHP meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $27.87, suggesting upside of 9.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

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 CSL as Buy (1) -

Competitor Shire is suing CSL in an attempt to prevent CSL from launching HAEGARDA in the US, Citi analysts report. If successful, the move will have a major impact on the analysts' profit growth projections for the years ahead.

Prior to the news, Citi analysts had updated their projections for the years ahead, predominantly to incorporate positive expectations for HAEGARDA, aimed at Hereditary Angioedema (HAE) patients. CSL should generate CAGR EPS growth of 23% from FY16-FY19, on the analysts revised estimates.

The analysts anticipate CSL's robust growth pace will be underpinned by the Behring business plus "exceptional profits" following a successful launch of HAEGARDA in FY18. Citi's positive view on the latter had pushed revised forecasts some 10% above market consensus for FY18 and FY19.

Buy rating retained. Price target had risen to $148 (from $136.40) on positive implications from a successful HAEGARDA launch.

Target price is $148.00 Current Price is $128.47 Difference: $19.53
If CSL meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $131.58, suggesting upside of 3.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

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

Market Sentiment: 0.6

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

Citi rates HGG as Neutral (3) -

Citi analysts have now shifted their forecasts to US GAAP standard and into USD, while incorporating merger partner Janus. Resultant EPS estimate changes are: FY17: -1%; FY18: +13%; FY19: +15%.

The analysts observe the share price looks undervalued, with management confident cost synergies will be achieved. Citi also notes Janus INTECH outflows and the lack of near term inclusion in the S&P500 are negatives compared to when the deal was first announced.

Given many uncertainties, Citi has set new price target at $4, which is at a discount to its valuation of $4.15. Neutral rating retained.

Target price is $4.00 Current Price is $3.83 Difference: $0.17
If HGG meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.01, suggesting upside of 3.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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

Market Sentiment: 0.0

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

Ord Minnett rates IEL as Initiation of coverage with Hold (3) -

The company is a global provider of English language testing and an international student placement agent as well as an operator of English language schools.

Ord Minnett observes growth in outbound students from Asia and the Middle East has underpinned placement volumes, driving net profit growth of 26% per annum since 2013.

To take advantage of these drivers the company is investing in a digital platform that is capable of delivering more leads and higher conversion rates.

While this investment takes place,  the broker believes that valuation is full and initiates coverage with a Hold recommendation and target of $4.56.

Target price is $4.56 Current Price is $4.39 Difference: $0.17
If IEL meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.5

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

UBS rates IGO as Neutral (3) -

UBS cuts gold price forecasts by around -5% but, elsewhere, remains positive on copper and nickel.

The broker focuses on company-specific events as a driver of share prices. Weak sentiment towards nickel has been fed by supply problems from The Philippines and Indonesia. Despite these two factors, UBS focuses on the improving stainless steel demand that should support higher prices.

The production delay at Nova appears to have deterred investors but this is not compromising the asset position, the broker asserts. Neutral retained. Target is reduced to $3.81 from $4.17.

Target price is $3.81 Current Price is $3.57 Difference: $0.24
If IGO meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $4.11, suggesting upside of 12.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.2

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

Macquarie rates MTR as Outperform (1) -

Competitor Airbnb is targeting US$10bn in revenue by 2020. However, Macquarie's analysis finds that a much smaller subset of these listings are available and able to compete with hotels, and experience is winning over price.

The broker continues to believe the company is attractive at around a -30% discount to global hotel peers. Hitting FY17 earnings guidance would be a positive catalyst in the broker's opinion. Outperform and $4.02 target retained.

Target price is $4.02 Current Price is $2.92 Difference: $1.1
If MTR meets the Macquarie target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $3.43, suggesting upside of 18.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.4

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

Credit Suisse rates ORG as Outperform (1) -

With market dynamics playing into the company's hands and the APLNG operations strong, Credit Suisse believes market optimism on the stock is not without merit.

The value of the company's flexible generation portfolio is exposed as the electricity market evolves to higher peak prices and volatility. This suggests to the broker that there is upside available despite the oil price risks. Outperform rating and $7.00 target retained.

Target price is $7.00 Current Price is $7.46 Difference: minus $0.46 (current price is over target).
If ORG meets the Credit Suisse target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.46, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

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 Accumulate (2) -

Ord Minnett believes the market may be overlooking the benefits that the trend in wholesale electricity prices will have on Origin Energy's business.

Generation volumes from the company's flexible assets have already increased materially and there will also be benefit from higher retail prices and reduced competition.

The broker reiterates an Accumulate rating and raises the target to $8.00 from $7.10.

Target price is $8.00 Current Price is $7.46 Difference: $0.54
If ORG meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $7.46, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.5

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

Morgans rates OZL as Upgrade to Hold from Reduce (3) -

The stock has corrected by around -16% from its recent high and now trades roughly in line with Morgans' revised valuation. Hence, the broker upgrades to Hold from Reduce.

Morgans believes the market is now valuing the company's inherent risks, particularly around the Carrapateena development, more appropriately.Target is raised to $8.30 from $8.20.

Target price is $8.30 Current Price is $8.20 Difference: $0.1
If OZL meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $8.81, suggesting upside of 6.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

UBS rates OZL as Buy (1) -

UBS cuts gold price forecast by around -5% and believes the sector is looking expensive. Elsewhere, the broker remains positive on copper and nickel.

The broker remains cautious on the direction of gold and focuses on company-specific events as a driver of share prices.

Gold represents around 20% of the company's revenues on the broker's numbers. Despite the short-term headwinds the stock remains the broker's pick in the copper space. Buy rating retained. Target is reduced to $10.50 from $11.00.

Target price is $10.50 Current Price is $8.20 Difference: $2.3
If OZL meets the UBS target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $8.81, suggesting upside of 6.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

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

UBS cuts gold price forecast by around -5% and believes the sector is looking expensive. Elsewhere, the broker remains positive on copper and nickel.

The broker remains cautious on the direction of gold and focuses on company-specific events as a driver of share prices.

The stock has performed strongly in 2017 and the broker believes there is  better risk/reward elsewhere. Rating downgraded to Sell from Neutral. Target is reduced to $3.13 from $3.36.

Target price is $3.13 Current Price is $3.52 Difference: minus $0.39 (current price is over target).
If RRL meets the UBS target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.14, suggesting downside of -12.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

Macquarie rates SAR as Neutral (3) -

The company has reported soft gold production in the March quarter as operations were adversely affected by rain. Cash and bullion declined in the quarter, in line with guidance. Exploration continues to provide encouraging drill results.

Delivery of a stronger quarter in June will be key to achieving the company's goal of 300,000 ounces per annum and this is factored into Macquarie's target price. Neutral and a $1.10 target are retained.

Target price is $1.10 Current Price is $1.03 Difference: $0.07
If SAR meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.5

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

Morgans rates SFR as Downgrade to Hold from Add (3) -

After the release of feasibility metrics for Monty that were slightly worse than Morgans expected, attention is now on the company's ability to add incremental mine life via exploration.

This is required  to justify the valuation/price upside, in the broker's opinion. Rating is downgraded to Hold from Add. Target is reduced to $7.02 from $7.10.

Target price is $7.02 Current Price is $6.49 Difference: $0.53
If SFR meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $6.84, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

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

UBS cuts gold price forecast by around -5% and believes the sector is looking expensive. Elsewhere, the broker remains positive on copper and nickel.

The broker remains cautious on the direction of gold and focuses on company-specific events as a driver of share prices.

UBS believes  the company is offering heightened risk/reward and subsequently downgrades to Neutral from Buy. Over the next 12 months the shorter mine life is likely to add pressure to find ways to extend mine life further, and this could prompt caution among investors, the broker believes.

Target is reduced to $6.81 from $7.43.

Target price is $6.81 Current Price is $6.49 Difference: $0.32
If SFR meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $6.84, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Citi rates SGR as Buy (1) -

Citi analysts remain of the view Star Entertainment shares are attractively valued at present level. This latest update sees earnings estimates being raised, further supporting their Buy rating.

The analysts see positive operational momentum providing catalysts in the short and medium term. Price target lifts to $6.75 from $6.

Target price is $6.75 Current Price is $5.52 Difference: $1.23
If SGR meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $6.11, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Macquarie rates STO as Outperform (1) -

The company has announced the early repayment of US$250m of its US$1.2bn 2019 facility and the extension of an undrawn US$810m bilateral bank loan. Macquarie believes the early partial repayment is delivering on the promise at the 2016 result to re-finance and term maturities.

The broker remains confident in the balance sheet following the capital raising and a strong quarter of sustained oil prices.

The broker believes the underperformance relative to peers in recent weeks highlights the risking of GLNG. Santos has the gas to meet exported volumes and the broker envisages little risk of reserve issues at Roma.

Outperform retained. Target is $4.70.

Target price is $4.70 Current Price is $3.87 Difference: $0.83
If STO meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $4.56, suggesting upside of 17.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

This company reports in USD. 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

Ord Minnett rates TLS as Upgrade to Buy from Hold (1) -

Recent share price weakness has elevated the stock to a Buy rating from Hold, Ord Minnett believes. Target is $5.35.

The stock is now suggesting a 6.8% dividend yield and offering significant value, in the broker's opinion, and the shares are trading at a level that implies a -20% reduction to the dividend.

Nevertheless, Ord Minnett expects the dividend to be sustained as the company goes about its strategic transformation.

Target price is $5.35 Current Price is $4.56 Difference: $0.79
If TLS meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $4.79, suggesting upside of 11.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.3

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