Australian Broker Call

Citi rates ALU as Neutral (3) -

Citi assesses the fourth quarter will be the trough and conditions should improve as the US and Europe open up. Still, the broker is cautious about the near-term outlook as new license sales represent around 40% of revenue.

The trading update has pointed to weaker-than-expected seat growth and subscription renewal rates.

While the recent lock-down in Beijing would have negatively affected license sales in China, Citi is more inclined to believe the US and Europe are the other key drivers of the downgrade to revenue guidance.

The broker retains a Neutral rating and reduces the target to $35.50 from $37.40.

Target price is $35.50 Current Price is $33.60 Difference: $1.9
If ALU meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.2

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

Morgan Stanley rates ALU as Overweight (1) -

Altium has indicated FY20 revenue will be less than consensus expectations (US$192m). Morgan Stanley predicts a fall of circa -13-20% led by volumes and price discounts. 

The broker notes new lock-down measures in Beijing and an increase in covid-19 cases in parts of the US will weigh down the company’s second-half.

In the long run, the broker is positive the company will benefit from positive structural trends and maintains its Overweight rating with a target price of $40. Industry view: Attractive.

Target price is $40.00 Current Price is $33.60 Difference: $6.4
If ALU meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.2

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

Ord Minnett rates ALU as Downgrade to Lighten from Hold (4) -

The company has downgraded again - Ord Minnett counts five times since December - citing weaker June sales and a potential softness in renewal activity.

This reinforces the view for the broker that Altium is primarily a licence-driven software company which benefits from strong margins in good times but lacks the visibility on revenue in hard times.

Given the headwinds, Ord Minnett downgrades to Lighten from Hold. Target is reduced to $29.50 from $31.70.

Target price is $29.50 Current Price is $33.60 Difference: minus $4.1 (current price is over target).
If ALU meets the Ord Minnett target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.2

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

UBS rates ALU as Neutral (3) -

The company has indicated revenue in FY20 will be slightly below consensus estimates because of the new lock-downs in China and an increase in coronavirus cases in parts of the US.

UBS is not surprised and believes the result is still likely to be solid. The company also reiterated the fact that a material amount of business occurs in the last two weeks of June.

Discounting and extended payment terms will end on 1st September 2020, with new pricing effective from 1st July 2020. UBS considers the risk/return metrics balanced and retains a Neutral rating and $37 target.

Target price is $37.00 Current Price is $33.60 Difference: $3.4
If ALU meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.2

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

UBS rates AMA as Buy (1) -

The company is finalising pricing with all insurers, which UBS expects will help the underlying margin recovery.

Management has also indicated that profitability and cash generation have been better than previously expected and repair volumes are likely to return to pre-pandemic levels from October.

UBS highlights the upside, should volumes and underlying margins improve.

While preferring a cleaner balance sheet, to enable acquisitions, the broker still finds the valuation appealing and retains a Buy rating. Target is raised to $0.80 from $0.75.

Target price is $0.80 Current Price is $0.64 Difference: $0.16
If AMA meets the UBS target it will return approximately 25% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Morgans rates ANZ as Add (1) -

Morgans does not believe, at this stage, the bad debt damage inflicted on the banks by the virus will be as bad as the GFC, largely due to the extent of monetary/fiscal support.

Among the Big Four, Westpac's bad debt provisions are greater than that of the GFC, hence that stock is most preferred by the broker, while Commonwealth Bank is the least preferred given less fear is priced in than the others.

The broker sees ANZ Bank as paying a final dividend in November. Yesterday the broker upgraded to Add. Today the target is lifted to $21 from $17.

Target price is $21.00 Current Price is $18.97 Difference: $2.03
If ANZ meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $21.16, suggesting upside of 12.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Citi rates ASB as Buy (1) -

Austal remains an integral part of the US Navy's industrial base, Citi assesses, given the US government's investment in its Marine Corps.

The broker considers the market under appreciates the company's ability to win new work with the US Navy, which is now enhanced by the expansion into steel shipbuilding.

The broker increases capital expenditure estimates for the Mobile investment that leaves net profit estimates unchanged.

Despite the investment the company will make at Mobile over the next two years, the broker believes the balance sheet still has the potential for acquisitions.

Buy rating maintained. Target rises to $4.23 from $4.05.

Target price is $4.23 Current Price is $3.68 Difference: $0.55
If ASB meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $3.36, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Ord Minnett rates ASB as Lighten (4) -

The US government will invest US$50m in shipbuilding operations. While finding it difficult to argue this is anything but a positive for Austal, Ord Minnett points out the investment does not underwrite the current returns being generated on the mature shipbuilding program, and so there is a risk to the free cash flow profile over the medium term.

Furthermore, unlike its US competitors, Austal has limited experience in building steel-hulled vessels and has limited designs and intellectual property in steel versus its traditional aluminium and aluminium alloy. Lighten retained. Target rises to $2.75 from $2.50.

Target price is $2.75 Current Price is $3.68 Difference: minus $0.93 (current price is over target).
If ASB meets the Ord Minnett target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.36, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Citi rates CGF as Neutral (3) -

Following the $300m capital raising announcement, Citi reduces FY20 estimates by -2%, FY21 by -16% and FY22 by -17%.

With the company electing to retain a robust capital position at the top of its target range, even after deploying the $300m proceeds, Citi now forecasts a materially lower profit.

Credit defaults also remain a key risk if the economy worsens and domestic annuity sales are likely to remain subdued. The broker retains a Neutral rating and raises the target to $5.25 from $4.60.

Target price is $5.25 Current Price is $5.32 Difference: minus $0.07 (current price is over target).
If CGF meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.09, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Credit Suisse rates CGF as Neutral (3) -

Challenger has raised $300m. The company has emphasised that this is an opportunistic raising to enhance returns.

Credit Suisse estimates that, if the entire amount can be deployed at a return of 20%, it would add around 13% to FY21 net profit estimates.

However, the broker points out consensus expectations were too high and the update is likely to mean downgrades to forecasts to the tune of around -10%.

Neutral maintained. Target is reduced to $5.50 from $5.70.

Target price is $5.50 Current Price is $5.32 Difference: $0.18
If CGF meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $5.09, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

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

Challenger is raising up to $300m with plans to deploy excess capital into investment-grade credit to improve its investment yield. Morgan Stanley considers this to be positive for FY21 earnings but is not sure if this will improve return on equity and earnings due to the dilution.

Guidance for FY20 net profit before taxes remains towards the bottom half of $500-550m. There will be no FY20 distribution.

Morgan Stanley rates the stock as Equal-weight with the target price increased to $5.40 from $4.80. Industry view: In-line.

Target price is $5.40 Current Price is $5.32 Difference: $0.08
If CGF meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $5.09, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Morgans rates CGF as Hold (3) -

Challenger's $300m capital raising gives management flexibility to better balance growth and capital levels going forward, the broker suggests. Earnings forecasts fall -6% and -12% in FY20-21 on dilution but also on a softer expectation for life sales.

The stock is not expensive but the broker remains cautious given low bond yields and the potential for more market volatility. Hold retained. Target rises to $5.35 from $4.75 on a valuation roll-forward.

Target price is $5.35 Current Price is $5.32 Difference: $0.03
If CGF meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $5.09, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Ord Minnett rates CGF as Hold (3) -

Challenger has sought to raise $300m to bolster its capital position. Ord Minnett reduces FY21 forecast by -9%, anticipating pressure on returns on equity and higher dilution from hybrids.

The main positive in the update for the broker is the assumption there are no material downside risks to asset values and FY21 may be a floor for normalised earnings.

From FY22 Challenger should benefit from factors such as higher spreads on incremental fixed income investments as well as rising dividends. Hold maintained. Target rises to $4.40 from $4.00.

Target price is $4.40 Current Price is $5.32 Difference: minus $0.92 (current price is over target).
If CGF meets the Ord Minnett target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.09, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Ord Minnett rates HLO as Downgrade to Hold from Buy (3) -

Ord Minnett notes, following a market update in May, the share price has risen sharply. At the same time the market has focused on the opening up of the domestic travel market and what earnings could look like in a post-pandemic world.

While comfortable with the long-term investment view, Ord Minnett downgrades to Hold from Buy, based on the rise in the share price. Target is raised to $2.58 from $1.98.

Target price is $2.58 Current Price is $2.74 Difference: minus $0.16 (current price is over target).
If HLO meets the Ord Minnett target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Ord Minnett rates IPL as Buy (1) -

Ord Minnett has reviewed earnings forecasts and valuation. Although fertiliser pricing should remain flat, the broker considers upside is possible, in view of the US planting season and a better outlook for Australasia.

Growth in electronic detonator systems should also remain strong, although the broker is concerned about the second half as industrial production levels are likely to be below the previous year.

Earnings (EBIT) estimates are reduced by -20% for FY20 and -21.1% for FY21. Buy rating maintained. Target is reduced to $2.60 from $2.95.

Target price is $2.60 Current Price is $1.97 Difference: $0.63
If IPL meets the Ord Minnett target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $2.48, suggesting upside of 25.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Citi rates JHX as Buy (1) -

James Hardie expects US fibre cement EBIT margins to be in the range of 27-29% in the first quarter, ahead of the guidance range issued in May.

Citi observes there is scope for further improvement should volume growth in the US be sustained.

The company is experiencing a broad-based improvement in the US, largely because of new construction. Citi retains a Buy rating and target of $27.50.

Target price is $27.50 Current Price is $28.64 Difference: minus $1.14 (current price is over target).
If JHX 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 $31.42, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Credit Suisse rates JHX as Outperform (1) -

Volumes and margins have improved since the fourth quarter results in May and James Hardie has guided to North American exterior volumes up 0-2%, with Australia flat and Europe down -11-4%.

North American earnings (EBIT) margin guidance has been increased to 27-29%, while primary demand growth is assessed to be well in excess of 7%.

Credit Suisse revises up forecasts for North American margins.

The broker believes the strong performance justifies an Outperform rating and anticipates further upgrades to consensus estimates. Target is raised to $30.90 from $27.00.

Target price is $30.90 Current Price is $28.64 Difference: $2.26
If JHX meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $31.42, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Morgan Stanley rates JHX as Overweight (1) -

Updated guidance by James Hardie Industries for FY21’s first-quarter points towards a margin of 27-29%. Company management also notes a steadily improving housing market in North America.

This shows resilience, comments Morgan Stanley, and points towards an outstanding result in the current quarter, although the quarter ending September is expected to see a higher volume impact.

Morgan Stanley considers the company to be reasonably valued along with having growth opportunities.

The broker reiterates its Overweight rating with a target price of $32. Industry view: Cautious.

Target price is $32.00 Current Price is $28.64 Difference: $3.36
If JHX meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $31.42, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Ord Minnett rates JHX as Buy (1) -

James Hardie has updated guidance for the first quarter. Primary demand growth in the US is tracking ahead of expectations.

Ord Minnett believes the company has competently managed the disruptions to demand. Market share gains have also accelerated in North America.

Ord Minnett retains a Buy rating and raises the target to $30.00 from $28.20.

Target price is $30.00 Current Price is $28.64 Difference: $1.36
If JHX meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $31.42, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

UBS rates JHX as Buy (1) -

UBS believes the company's performance through the depths of the pandemic supports the outlook for better long-term volumes and margins.

Primary demand growth should be supported by homeowners doing exterior remodelling work once restrictions ease, amid a return to strong housing activity on the back of low interest rates.

The broker believes the stock still offers value, despite the recent rally and earnings upgrades. Buy rating maintained. Target is raised to $34 from $31.

Target price is $34.00 Current Price is $28.64 Difference: $5.36
If JHX meets the UBS target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $31.42, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Morgans rates LAU as Hold (3) -

Despite a positive update at the end of March, Lindsay Australia has seen a significant reduction in freight demand in May and particularly June, with the greatest impact being in Victoria.

The company has lowered FY20 earnings growth guidance to 5% from a prior 10% and the broker has cut forecasts by -15% and -13% in FY20-21.

Challenges will persist into FY21, but these should be more than offset by organic growth and internal initiatives, the broker suggests. Hold retained, target falls to 38c from 40c.

Target price is $0.38 Current Price is $0.35 Difference: $0.03
If LAU meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Citi rates MTS as Neutral (3) -

Metcash has delivered strong sales but also experienced elevated operating costs, Citi observes. The broker estimates sales growth of 25% in April before moderating to 17% over the past seven weeks.

Citi remains constructive on the stock as underlying growth is solid and a rebound in free cash flow will provide the opportunity for further acquisitions.

The broker retains a Neutral rating and raises the target to $3.10 from $2.95.

Target price is $3.10 Current Price is $2.86 Difference: $0.24
If MTS meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.12, suggesting upside of 8.5% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Credit Suisse rates MTS as Neutral (3) -

While the FY20 result may have missed stronger expectations, Credit Suisse believes the sales results support a solid outlook for FY21.

The broker assesses some permanence may have crept into local shopping, although does not discount the structural headwinds confronting IGA retailers.

The hardware business is showing some resilience to slower demand from trade in the early part of FY21, although the broker eases back the net impact on forecasts as housing stimulus is expected to be supportive.

Neutral maintained. Target rises to $3.07 from $2.89.

Target price is $3.07 Current Price is $2.86 Difference: $0.21
If MTS meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.12, suggesting upside of 8.5% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Morgan Stanley rates MTS as Overweight (1) -

Metcash's FY20 net profit of $210m was in-line with Morgan Stanley’s expectations although operating income was -2% lower than expected. Supermarket sales grew by about 10% in the second half, while liquor and food fell by -3% and -2%.

The company saw strong growth in supermarkets, liquor and hardware during the first seven weeks of FY21. Earnings forecast lifted by the broker for FY21 on account of a stronger than anticipated start to FY21.

Morgan Stanley notes the company is diversified with an improved balance sheet and retains its Overweight rating with target price increased to $3.50 from $3.30. Industry view: Cautious.

Target price is $3.50 Current Price is $2.86 Difference: $0.64
If MTS meets the Morgan Stanley target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $3.12, suggesting upside of 8.5% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Ord Minnett rates MTS as Accumulate (2) -

FY20 net profit of $209.7m was below Ord Minnett's forecasts. Cash conversion was weak because of the pandemic and a continuation of the first-half working capital build.

The potential acquisition of Total Tools was announced and is in its final stages. The broker believes Metcash has benefited from the pandemic, with wholesale sales excluding tobacco continuing strongly into June as consumers stay local.

More broadly the business is benefiting from a rational food retail industry. Ord Minnett envisages valuation support on a discounted cash flow basis and retains an Accumulate rating. Target is $3.15.

Target price is $3.15 Current Price is $2.86 Difference: $0.29
If MTS meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $3.12, suggesting upside of 8.5% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

UBS rates MTS as Buy (1) -

FY20 EBIT was below UBS estimates and cash flow appeared weak, as a lack of operating leverage drove the miss to estimates. However the first half trading update is strong.

Given the improving earnings backdrop, despite disappointing cash flow, UBS retains a Buy rating. Target is raised to $3.05 from $2.85.

The broker continues to believe Metcash is facing a structural loss of share in the medium to longer term. In the near term earnings risk remains low.

Target price is $3.05 Current Price is $2.86 Difference: $0.19
If MTS meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.12, suggesting upside of 8.5% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Citi rates OZL as Buy (1) -

OZ Minerals will acquire Cassini Resources ((CZI)). Subject to approvals, this will provide the company with the remaining 30% stake in West Musgrave. The consideration is $68m.

Citi observes the company's incentive is to gain full control of West Musgrave. The broker considers the project ambitious, amid modest greater limited options to push throughput higher.

Buy rating and $11.40 target maintained.

Target price is $11.40 Current Price is $10.42 Difference: $0.98
If OZL meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $10.71, suggesting downside of -0.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Morgan Stanley rates OZL as Overweight (1) -

OZ Minerals has offered to acquire Cassini resources ((CZI)) for about $70m. Cassini Resources owns 30% of the West Musgrave joint venture with OZ Minerals. The deal is subject to Cassini shareholder approval.

Morgan Stanley considers this acquisition and the consequent full ownership of the project will ease the company’s path to development. 

The broker rates the stock as Overweight with a target price of $12.60. Industry view: In-line.

Target price is $12.60 Current Price is $10.42 Difference: $2.18
If OZL meets the Morgan Stanley target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $10.71, suggesting downside of -0.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Credit Suisse rates SEK as Outperform (1) -

Seek has guided to FY20 being slightly ahead of Credit Suisse's estimates, expecting operating earnings (EBITDA) of $410m.

Zhaopin, Australasia and Seek Asia have continued to recover while the Latin American operations have been significantly impacted by the pandemic.

An increase in covenant limits provides headroom, the broker adds. Outperform maintained. Target rises to $24.00 from $23.50.

Target price is $24.00 Current Price is $21.81 Difference: $2.19
If SEK meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $20.47, suggesting downside of -4.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Ord Minnett rates SEK as Accumulate (2) -

Revenue guidance has been lowered, largely because of lower off-line revenue growth at Zhaopin, while Latin America remains weak.

Ord Minnett expects a -35% decline in listing volumes in the second half across Australasia and Asia and the trading update has confirmed expectations.

The broker maintains an Accumulate rating and raises the target to $24 from $22.

Target price is $24.00 Current Price is $21.81 Difference: $2.19
If SEK meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $20.47, suggesting downside of -4.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Citi rates SGP as Sell (5) -

Stockland has indicated CEO Mark Steinert will retire and has commenced a process to find his successor. The company also announced a second half dividend of 10.6c, around -25% below the original guidance.

Meanwhile, commercial property valuations have indicated declines of around -6% overall. Citi envisages risk of further downside and values the retail portfolio at around -34% below December 2019 levels.

While the revaluations of commercial property are substantial they appear to be consistent with peers, the broker points out. Sell rating and $3.21 target maintained.

Target price is $3.21 Current Price is $3.52 Difference: minus $0.31 (current price is over target).
If SGP meets the Citi target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.54, suggesting downside of -2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Morgan Stanley rates SGP as Overweight (1) -

Stockland has announced a second-half distribution of $0.106, below Morgan Stanley’s estimated $0.127. This brings the total distribution for FY20 to $0.241.

CEO Mark Steinert announced his retirement although the date has not been confirmed yet. The broker notes devaluation since December 2019 along with a decline in retail will likely increase gearing levels above the company’s target range but well below its covenant level (50%).

Morgan Stanley rates the stock as Overweight with a target price of $4.30. Industry view: In-line.

Target price is $4.30 Current Price is $3.52 Difference: $0.78
If SGP meets the Morgan Stanley target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $3.54, suggesting downside of -2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

UBS rates SGP as Neutral (3) -

CEO Mark Steinert will retire and a flexible transition period has been agreed in order to smooth the handover in the context of the recovery from the pandemic.

Separately, the company has also indicated it will pay a second half distribution of 10.6c, which is ahead of UBS estimates but lower than the guidance that was previously withdrawn.

Stockland also announced draft valuations for the commercial property portfolio, with retail assets expected to be down -10% the overall portfolio down -6%. Gearing will remain in the target range of 20-30%.

UBS expects the market-leading residential development business will remain core under an incoming CEO.

Neutral rating maintained but under review. Target is $3.55.

Target price is $3.55 Current Price is $3.52 Difference: $0.03
If SGP meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.54, suggesting downside of -2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

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

Morgan Stanley considers the ongoing diversion from public transport temporary and expects a rise in usage in 2021. Headwinds for Transurban Group in FY21 stem from economic weakness and working from home, comments the broker.

Toll road traffic is expected to reach 2019 levels by the end of 2021 while the group has announced it will raise tolls from July. 

Morgan Stanley estimates the company’s FY21 distributions to be $0.49 and is comfortable with the company's fundamentals.

The broker retains its Equal-weight rating with the target price increased to $15.07 from $14.85. Industry view: Cautious.

Target price is $15.07 Current Price is $14.54 Difference: $0.53
If TCL meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $13.55, suggesting downside of -8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Morgans rates TCL as Hold (3) -

Transurban's traffic numbers have experienced a recovery from the April lows as restrictions ease but as to how long it will take to return to normal, if ever, remains unclear.

Guidance for a second half dividend of 16c is above the broker's and consensus forecasts, but the broker believes FY21 dividend consensus is too high.

While no assets are facing debt default, the broker suggests a capital raising is not yet out of the question. Target rises to $13.67 from $13.52, Hold retained.

Target price is $13.67 Current Price is $14.54 Difference: minus $0.87 (current price is over target).
If TCL meets the Morgans target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.55, suggesting downside of -8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Ord Minnett rates TCL as Hold (3) -

Transurban has guided to $0.16 in free cash flow in the second half which will be paid out as a distribution. This is ahead of Ord Minnett's estimates and is underpinned by the recovery in traffic, which is ahead of previous assumptions.

Sydney is leading the way and has benefited from the performance of the high freight route assets, M7 and M5. Hold rating maintained. Target is raised to $15.25 from $13.50.

Target price is $15.25 Current Price is $14.54 Difference: $0.71
If TCL meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $13.55, suggesting downside of -8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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