Australian Broker Call
October 03, 2017
Access Broker Call Report Archives here
COMPANIES DISCUSSED IN THIS ISSUE
Click on symbol for fast access.
The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)
Last Updated: 12:02 PM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
| A2M - | THE A2 MILK CO | Downgrade to Hold from Buy | Deutsche Bank |
| AJM - | ALTURA MINING | Downgrade to Underperform from Neutral | Macquarie |
| SM1 - | SYNLAIT MILK | Downgrade to Sell from Hold | Deutsche Bank |
Deutsche Bank rates A2M as Downgrade to Hold from Buy (3) -
Synlait Milk ((SM1)) has received CFDA registration for a2 Milk's infant formula and a strong move in the share price of both stocks has resulted in Deutsche Bank revising estimates.
A material near-term earnings upgrade is made on the back of stronger a2 Milk volumes. Nevertheless, the broker now finds value is harder to obtain and downgrades to Hold from Buy. Target is raised to NZ$7.00 from NZ$5.80.
Current Price is $6.17. Target price not assessed.
Current consensus price target is $6.00, suggesting downside of -0.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 0.00 cents and EPS of 21.56 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 19.2, implying annual growth of N/A. Current consensus DPS estimate is 2.7, implying a prospective dividend yield of 0.4%. Current consensus EPS estimate suggests the PER is 31.4. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 0.00 cents and EPS of 27.19 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.8, implying annual growth of 29.2%. Current consensus DPS estimate is 4.6, implying a prospective dividend yield of 0.8%. Current consensus EPS estimate suggests the PER is 24.3. |
This company reports in NZD. 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
Macquarie rates AJM as Downgrade to Underperform from Neutral (5) -
Macquarie updates its development scenario for the Pilgangoora project.
The company has secured sufficient debt to bring the project into production. Nevertheless, the increased level of debt increases the risk associated with ramp up in case of any delay in achieving specifications could create a funding gap.
The broker believes, while the company may need to extend current debt facilities by at least a year to cover cash shortages, the expansion potential offers upside. Rating is downgraded to Underperform from Neutral. Target rises to $0.20 from $0.16.
Target price is $0.20 Current Price is $0.27 Difference: minus $0.07 (current price is over target).
If AJM meets the Macquarie target it will return approximately minus 26% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 0.70 cents. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 0.00 cents and EPS of 0.00 cents. |
Market Sentiment: -1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates KAR as Outperform (1) -
FY17 result revealed a net loss of -$81.5m. Macquarie is disappointed with the delays to Echidna/Kangaroo but envisages positive developments over FY18 as the company commits to final specifications at Echidna.
FY18 should be an important year for the company in developing the flagship project and the broker considers the go-ahead for Echidna/Kangaroo, or a farming down of the asset, as a major catalyst on the upside.
Outperform retained. Target is reduced to $1.90 from $2.10.
Target price is $1.90 Current Price is $1.31 Difference: $0.59
If KAR meets the Macquarie target it will return approximately 45% (excluding dividends, fees and charges).
Current consensus price target is $1.91, suggesting upside of 44.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 7.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -7.0, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 7.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -7.8, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is N/A. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates ORG as Buy (1) -
The company will sell Lattice Energy to Beach Energy ((BPT)) for close to $1.6bn. Lattice consists of most of the company's oil & gas assets in the Cooper Basin, offshore Victoria, New Zealand and Western Australia.
The company retains its interest in the Iron Bark CSG and Beetaloo Basin, NT, as well as its 37.5% stake in APLNG. UBS observes this is the last material asset sale in order to repair the balance sheet after the company took on a considerable debt load to fund APLNG construction.
UBS believes the company's energy markets division is on track to generate $1.7-1.8bn in operating earnings in FY18. Buy and $8.50 target retained.
Target price is $8.50 Current Price is $7.40 Difference: $1.1
If ORG meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $7.85, suggesting upside of 6.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 0.00 cents and EPS of 40.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 48.2, implying annual growth of N/A. Current consensus DPS estimate is 4.4, implying a prospective dividend yield of 0.6%. Current consensus EPS estimate suggests the PER is 15.3. |
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 32.00 cents and EPS of 65.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 64.0, implying annual growth of 32.8%. Current consensus DPS estimate is 20.0, implying a prospective dividend yield of 2.7%. Current consensus EPS estimate suggests the PER is 11.5. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates PLS as Outperform (1) -
The company has secured an offtake agreement with Great Wall Motor Co for up to 150,000tpa of spodumene. The agreement should underpin the company's Pilgangoora expansion option, which is now factored into the base case.
Macquarie considers this agreement a clear demonstration that electric vehicle manufacturers are becoming increasingly concerned over securing raw materials. Outperform retained. Target rises to $0.75 from $0.50.
Target price is $0.75 Current Price is $0.66 Difference: $0.09
If PLS meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 2.70 cents. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 0.00 cents and EPS of 2.90 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates SGR as Buy (1) -
Ord Minnett observes the company is delivering on initiatives to improve its domestic business, reinvesting in the customer through product and loyalty programs.
The broker adjusts FY18 forecasts down for Star Sydney based on the soft start to the first half. Buy rating maintained. Target is reduced to $5.90 from $6.00.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $5.90 Current Price is $5.17 Difference: $0.73
If SGR meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $6.10, suggesting upside of 19.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 17.00 cents and EPS of 26.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.9, implying annual growth of -9.7%. Current consensus DPS estimate is 15.5, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 17.7. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 17.00 cents and EPS of 29.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.8, implying annual growth of 10.0%. Current consensus DPS estimate is 17.6, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 16.1. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates SKI as Add (1) -
In its Transgrid draft decision the Australian Energy Regulator has provided for significantly less capital expenditure than was proposed by the company, although suggests its final decision may be substantially different.
Morgans notes capital expenditure for contingent projects was not included and, if triggered, could enhance the regulated asset base and earnings growth.
While regulatory risks have increased, M&A activity highlights the upside potential, in the broker's opinion. Morgans retains an Add rating and lowers the target to $2.69 from $2.72.
Target price is $2.69 Current Price is $2.54 Difference: $0.15
If SKI meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $2.55, suggesting upside of 0.8% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 15.25 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 7.8, implying annual growth of 61.8%. Current consensus DPS estimate is 15.3, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 32.4. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 16.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.1, implying annual growth of 3.8%. Current consensus DPS estimate is 16.1, implying a prospective dividend yield of 6.4%. Current consensus EPS estimate suggests the PER is 31.2. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
SM1 SYNLAIT MILK LIMITED
Dairy
Overnight Price: $6.16
Deutsche Bank rates SM1 as Downgrade to Sell from Hold (5) -
Synlait has received CFDA registration for a2 Milk's ((A2M)) infant formula and a strong move in the share price of both stocks has resulted in Deutsche Bank revising estimates.
A material near-term earnings upgrade is made for Synlait on the back of stronger a2 Milk volumes. Nevertheless, the broker now finds value is harder to obtain and downgrades to Sell from Hold. Target is raised to NZ$6.00 from NZ$5.80.
Current Price is $6.16. Target price not assessed.
Current consensus price target is N/A
The company's fiscal year ends in July.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 0.00 cents and EPS of 32.82 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.8, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 19.8. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 0.00 cents and EPS of 41.25 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 36.0, implying annual growth of 16.9%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 16.9. |
This company reports in NZD. 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
Deutsche Bank rates TAH as Buy (1) -
The Supreme Court of Victoria has delayed the Tatts ((TTS)) shareholder vote on the proposed merger to November 30 and this will follow the company's AGM. The merger implementation date has been delayed to December 14.
The Australian Competition Tribunal will hear Tabcorp's application to authorise a proposed merger on October 24 and 25.
Buy rating retained. Target is $5.20.
Target price is $5.20 Current Price is $4.29 Difference: $0.91
If TAH meets the Deutsche Bank target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $4.51, suggesting upside of 6.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 26.00 cents and EPS of 22.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.2, implying annual growth of N/A. Current consensus DPS estimate is 25.4, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 19.1. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 30.00 cents and EPS of 26.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.1, implying annual growth of 8.6%. Current consensus DPS estimate is 26.9, implying a prospective dividend yield of 6.4%. Current consensus EPS estimate suggests the PER is 17.6. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates TWE as Neutral (3) -
Credit Suisse observes the company is executing on a tactic to re-ignite growth in the supermarket channel via intense promotional activity. While still too early to draw any conclusions, the broker notes monthly volume growth has accelerated to 9%.
Despite capital being returned, the broker remains of the view that the company will seek acquisitions. FY18 forecasts for earnings per share are lifted because of the speed at which the company has repurchased shares under its $300m buy-back.
Neutral retained. Target is $14.15.
Target price is $14.15 Current Price is $13.89 Difference: $0.26
If TWE meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $13.00, suggesting downside of -5.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 30.00 cents and EPS of 45.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 45.6, implying annual growth of 24.9%. Current consensus DPS estimate is 30.2, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 30.0. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 36.00 cents and EPS of 54.97 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 57.2, implying annual growth of 25.4%. Current consensus DPS estimate is 38.1, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 24.0. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| A2M - | THE A2 MILK CO | Downgrade to Hold from Buy - Deutsche Bank | Overnight Price $6.17 |
| AJM - | ALTURA MINING | Downgrade to Underperform from Neutral - Macquarie | Overnight Price $0.27 |
| KAR - | KAROON GAS | Outperform - Macquarie | Overnight Price $1.31 |
| ORG - | ORIGIN ENERGY | Buy - UBS | Overnight Price $7.40 |
| PLS - | PILBARA MINERALS | Outperform - Macquarie | Overnight Price $0.66 |
| SGR - | STAR ENTERTAINMENT | Buy - Ord Minnett | Overnight Price $5.17 |
| SKI - | SPARK INFRASTRUCTURE | Add - Morgans | Overnight Price $2.54 |
| SM1 - | SYNLAIT MILK | Downgrade to Sell from Hold - Deutsche Bank | Overnight Price $6.16 |
| TAH - | TABCORP HOLDINGS | Buy - Deutsche Bank | Overnight Price $4.29 |
| TWE - | TREASURY WINE ESTATES | Neutral - Credit Suisse | Overnight Price $13.89 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 6 |
| 3. Hold | 2 |
| 5. Sell | 2 |
Tuesday 03 October 2017
Access Broker Call Report Archives here
Disclaimer:
The content of this information does in no way reflect the opinions of
FNArena, or of its journalists. In fact we don't have any opinion about
the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe
and comment on. By doing so we believe we provide intelligent investors
with a valuable tool that helps them in making up their own minds, reading
market trends and getting a feel for what is happening beneath the surface.
This document is provided for informational purposes only. It does not
constitute an offer to sell or a solicitation to buy any security or other
financial instrument. FNArena employs very experienced journalists who
base their work on information believed to be reliable and accurate, though
no guarantee is given that the daily report is accurate or complete. Investors
should contact their personal adviser before making any investment decision.
Latest News
| 1 |
The Market In Numbers – 23 Nov 20249:09 AM - Australia |
| 2 |
ASX Winners And Losers Of Today – 22-11-24Nov 22 2024 - Daily Market Reports |
| 3 |
FNArena Corporate Results Monitor – 22-11-2024Nov 22 2024 - Australia |
| 4 |
Next Week At A Glance – 25-29 Nov 2024Nov 22 2024 - Weekly Reports |
| 5 |
Weekly Top Ten News Stories – 22 November 2024Nov 22 2024 - Weekly Reports |