Australian Broker Call

Citi rates ABC as Sell (5) -

Citi analysts hosted an investor meeting with company management and sentiment was "upbeat", the analysts report. Activity in domestic construction markets is expected to remain "strong" for another 2-3 years.

Underpinning management's confidence is the prediction that increased infrastructure activity will offset slowing activity in housing construction. The company also remains alert for any further consolidation opportunities.

The underlying story remains a positive one, that much the analysts are willing to acknowledge. They also suggest all of the positives are already well accounted for in today's share price. Sell rating retained. Target unchanged at $5.20.

Target price is $5.20 Current Price is $6.25 Difference: minus $1.05 (current price is over target).
If ABC meets the Citi target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.03, suggesting downside of -3.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.2

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

Ord Minnett rates AGL as Accumulate (2) -

The company has confirmed an approach by Alinta Energy to purchase the Liddell power station in NSW. Ord Minnett believes it unlikely AGL will sell the asset as extending its usage would likely have a negative impact on wholesale prices and, therefore, the value of the remainder of the company's generation assets.

This would also support the growth of a competitor in electricity retailing, while the separation from adjacent Bayswater would be complicated. Accumulate rating and $24.50 target maintained.

Target price is $24.50 Current Price is $21.67 Difference: $2.83
If AGL meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $24.46, suggesting upside of 12.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

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

Morgan Stanley believes the outcome of the company's portfolio review of the "value" business, to be announced at or before its May 10 AGM, is likely to be a major catalyst to unlock value. AMP is in discussions with a number of interested parties.

Morgan Stanley has no knowledge of any potential transaction but believes the status quo is not tenable and suggests either a de-merger and IPO of the businesses, or the sale of the life and mature business with a separate listing of the NZ business.

Equal-weight and $5.75 target retained. Industry view: In line.

Target price is $5.75 Current Price is $4.89 Difference: $0.86
If AMP meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $5.62, suggesting upside of 14.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

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

Citi has upgraded to Buy from Neutral with a higher price target, $33 versus $32 prior, on the realisation the company's shale assets, which are up for divestment, might catch a higher price than previously thought.

On Citi's present calculations, based upon recent transactions inside the US shale industry, BHP's shale assets might attract US$14bn instead of US$10bn, while global upheaval due to rising risks from economic protectionism are believed to be overdone.

Target price is $33.00 Current Price is $28.71 Difference: $4.29
If BHP meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $32.80, suggesting upside of 14.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Ord Minnett rates BRG as Buy (1) -

The US trade representative has released a list of Chinese products it proposes to subject to an additional tariff. Ord Minnett considers this list a short-term positive for Breville. The list appears to focus on commercial and technology-based products and was compiled by selecting products from the ranked list with lowest consumer impact.

Ord Minnett suspects the potential for a number of Breville products to be subject to trade tariffs was one of the factors behind the recent sell-off. On the negative side, the list may not be definitive and could be expanded further should China take retaliatory steps. Buy rating and $15.60 target maintained.

Target price is $15.60 Current Price is $11.10 Difference: $4.5
If BRG meets the Ord Minnett target it will return approximately 41% (excluding dividends, fees and charges).

Current consensus price target is $13.56, suggesting upside of 22.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

Credit Suisse rates BTT as Neutral (3) -

Credit Suisse downgrades earnings estimates by -3% for FY18 and -4% for FY19-20. The downgrades are on lower assumptions for funds under management in both Australia and JO Hambro.

Neutral rating maintained. Target is reduced to $10.40 from $11.10.

Target price is $10.40 Current Price is $9.65 Difference: $0.75
If BTT meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $11.91, suggesting upside of 23.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

UBS rates CL1 as Neutral (3) -

UBS found the March quarter update solid. The company still has AMP accounts that are expected to migrate in the fourth quarter of FY18. Despite the AMP migration and intense competition UBS continues to expect the company to gain market share.

The broker forecasts market share to lift to around 45% from 25% over the next decade. Neutral maintained. Target is $2.85.

Target price is $2.85 Current Price is $2.25 Difference: $0.6
If CL1 meets the UBS target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $3.20, suggesting upside of 42.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.7

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

Credit Suisse rates HUB as Outperform (1) -

Credit Suisse lowers forecasts by -2% for FY18 and -4% for FY19 amid lower assumptions for funds under administration. This is based on weaker equity markets in the March quarter.

Outperform rating maintained and target is reduced to $12.80 from $13.00.

Target price is $12.80 Current Price is $10.15 Difference: $2.65
If HUB meets the Credit Suisse target it will return approximately 26% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

Credit Suisse rates IFL as Outperform (1) -

Credit Suisse lowers estimates by -1% for FY18 and -5% for FY19-20 amid lower funds under management assumptions. Weak equity markets, particularly in Australian equities, have led to the downgrades.

Outperform rating maintained. Target is reduced to $12.00 from $12.30.

Target price is $12.00 Current Price is $10.01 Difference: $1.99
If IFL meets the Credit Suisse target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $12.10, suggesting upside of 20.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Macquarie rates ING as Outperform (1) -

Macquarie believes the voluntary administration of Red Lea Chickens, which has around 2-3% market share, is positive for sector dynamics as it is likely to tighten up supply.

This should create opportunities for Inghams to take share. If Red Lea's sales were distributed based on current market shares this would add 1% to Inghams' Australian sales.

Outperform rating and $4.00 target retained.

Target price is $4.00 Current Price is $3.50 Difference: $0.5
If ING meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $3.88, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

Morgans rates JHC as Hold (3) -

The company has acquired another NSW portfolio, for $39m net of $14.5m in RADs, increasing places by 8%. The acquisition will be funded through debt and cash reserves.

Management has guided to an FY19 operating earnings uplift of $3.5-4.0m. Morgans notes the company has a strategic shareholder on its register and does not rule out corporate activity. Hold rating maintained. Target rises to $1.96 from $1.93.

Target price is $1.96 Current Price is $2.00 Difference: minus $0.04 (current price is over target).
If JHC meets the Morgans target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.90, suggesting downside of -4.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.2

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

Morgans rates LOV as Hold (3) -

The company has issued a third quarter trading update as its CEO, Steve Doyle, has announced his resignation effective mid April. Founder and current MD, Shane Fallscheer, will step back into the role.

Morgans notes continued positive momentum, with sales in the year to date up 20.3%. The broker believes the company is one of the best placed retailers under coverage with material global potential. Hold rating maintained. Target rises to $8.12 from $8.08.

Target price is $8.12 Current Price is $9.40 Difference: minus $1.28 (current price is over target).
If LOV meets the Morgans target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in July.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Credit Suisse rates MFG as Outperform (1) -

Credit Suisse downgrades earnings estimates by -1% for FY18 and -2% for FY19, primarily on lower forecasts for funds under management. The downgrades are driven by lower-than-expected market movements in the March quarter.

Outperform rating maintained. Target is reduced to $28 from $29.

Target price is $28.00 Current Price is $23.10 Difference: $4.9
If MFG meets the Credit Suisse target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $28.90, suggesting upside of 25.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.7

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

Credit Suisse rates PPT as Neutral (3) -

Credit Suisse lowers earnings estimates by -2% for FY18 and -6% for FY19-20 because of lower assumptions for funds under management. Australian equity markets underperformed in the March quarter.

Perpetual is the most exposed asset manager to Australian equity markets and thus experienced the largest downgrades in the broker's coverage.

Neutral rating maintained. Target is reduced to $49 from $56.

Target price is $49.00 Current Price is $45.40 Difference: $3.6
If PPT meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $51.08, suggesting upside of 12.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.3

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

Macquarie rates PRU as Neutral (3) -

The company has declared commercial production at Sissingue, its second mine. The company expects to begin development at Yaoure later this year.

Macquarie believes this is an important step in pursuit of the company's aim to produce 500,000 ounces per annum across its three West African gold operations. A large part of the Yaoure capital cost is to be funded by cash flow from Edikan and Sissingue.

Neutral rating maintained. Target rises to $0.48 from $0.40.

Target price is $0.48 Current Price is $0.46 Difference: $0.02
If PRU meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $0.56, suggesting upside of 22.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.8

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

UBS rates PRU as Upgrade to Buy from Neutral (1) -

UBS believes the company may have turned the corner and upgrades to Buy from Neutral. Operating consistency is now being achieved at Edikan, Sissingue is being delivered on time and on budget and the outlook is de-risking.

As the company is offering growth through a third development at Yaoure UBS believes the market could eventually re-rate the stock and potentially capture a gold premium. Target is raised to $0.55 from $0.33.

Target price is $0.55 Current Price is $0.46 Difference: $0.09
If PRU meets the UBS target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $0.56, suggesting upside of 22.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.8

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

Credit Suisse rates PTM as Underperform (5) -

Credit Suisse downgrades estimates for earnings per share by -4% in FY18-20, primarily on lower assumptions for funds under management and lower expected net inflows in the second half of FY18.

Underperform rating maintained and target is lowered to $5.50 from $6.40.

Target price is $5.50 Current Price is $5.76 Difference: minus $0.26 (current price is over target).
If PTM meets the Credit Suisse target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.31, suggesting upside of 9.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.8

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

Citi rates RMD as Downgrade to Neutral from Buy (3) -

The share price has performed well and on Citi's observation this has pushed valuation to a 30% premium versus the five years trading average. Too expensive conclude the analysts and they have pulled back their rating to Neutral from Buy.

In addition, Citi analysts seem a bit worried that new mask launches by competitors Philips Electronics and Fisher & Paykel Healthcare ((FPH)) will tighten competition in the high margin mask sector, which might weigh upon forward growth rates for ResMed. Target untouched at $13.60.

Adding to Citi's concern is the observation ResMed hasn't been able to grow Masks at double digit rates for more than two consecutive quarters since 2012.

Target price is $13.60 Current Price is $12.48 Difference: $1.12
If RMD meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $12.01, suggesting downside of -3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

This company reports in USD. 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

Credit Suisse rates RRL as Neutral (3) -

St Barbara ((SBM)) has acquired around 12% of Duketon Mining ((DKM)) through a placement. Duketon Mining controls the portion of the Duketon belt not controlled by Regis Resources. Credit Suisse observes the pair would need a material discovery to support infrastructure investment.

The broker notes, however, that Regis Resources has sunk around $300m into high-quality infrastructure which could accommodate discoveries on Duketon Mining ground.

Neutral rating and $3.85 target maintained.

Target price is $3.85 Current Price is $4.61 Difference: minus $0.76 (current price is over target).
If RRL meets the Credit Suisse target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.80, suggesting downside of -17.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.5

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

Citi rates S32 as Upgrade to Neutral from Sell (3) -

South32 has been upgraded to Neutral from Sell, with a reduced price target; $3.40 versus $3.50 prior. Previously, Citi analysts were worried about the direction of manganese prices, but they have now concluded risk is to the upside.

Also, the analysts note cash flow generation remains strong to fund opportunities and the early stage projects that S32 has invested in, keeping potential for ongoing returns to shareholders alive.

Estimates have been slightly reduced, DPS estimate remains on 9c for as far as the eye can see beyond the 14c penciled in for the present fiscal year,

Target price is $3.40 Current Price is $3.32 Difference: $0.08
If S32 meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.35, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

This company reports in USD. 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

Macquarie rates SGR as Outperform (1) -

In expanding its strategic partnership with Chow Tai Fook and Far East, Star Entertainment has also outlined new long-term growth opportunities including hotel and precinct developments.

Macquarie believes the long-term growth outlook has improved, given the potential for increased investment in non-gaming infrastructure from the JV partners. Outperform rating and $6.05 target maintained.

Target price is $6.05 Current Price is $5.20 Difference: $0.85
If SGR meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $6.18, suggesting upside of 18.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.9

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

Credit Suisse rates STO as Outperform (1) -

Further to the news that Harbour Energy has made an indicative bid for Santos, Credit Suisse raises the question regarding what share of the equity will ENN/Hony own, assuming they elect to take their 15% entitlement in the new unlisted entity.

In any calculation, the broker suspects it will be a large amount. Therefore, Credit Suisse anticipates that such large ownership from ENN/Hony could raise yet more questions for the FIRB.

The broker remains on the fence regarding whether the deal is in the best interests of shareholders. Outperform rating and $6.35 target maintained.

Target price is $6.35 Current Price is $5.84 Difference: $0.51
If STO meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $5.44, suggesting downside of -6.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.1

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

Citi rates TWE as Sell (5) -

The company has a stated desire to acquire more business in the US. Citi observes Diageo was a success and there are two logical targets: Altria's wine business or Jackson Family Wines. Both are premium portfolios.

Assuming a cost of $3-4bn this would imply the need for an equity raising. Given the share price and cost of debt Citi calculates there could be accretion of 3-4% but the return on invested capital, even after synergies, would be low at around 6%.

The broker expects potential acquisitions to be a focus for investors over the coming year. Sell rating and $13.30 target maintained.

Target price is $13.30 Current Price is $16.92 Difference: minus $3.62 (current price is over target).
If TWE meets the Citi target it will return approximately minus 21% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.51, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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