Australian Broker Call
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July 03, 2020
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1).
Last Updated: 05:00 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
BSL - | Bluescope Steel | Downgrade to Underweight from Equal-weight | Morgan Stanley |
HUB - | HUB24 | Downgrade to Neutral from Outperform | Credit Suisse |
NWL - | Netwealth Group | Downgrade to Underperform from Neutral | Credit Suisse |
TCL - | Transurban Group | Upgrade to Accumulate from Hold | Ord Minnett |
Overnight Price: $0.60
Macquarie rates AMI as Outperform (1) -
June quarter production numbers revealed strong gold output which translates directly to improved cash generation.
Maintaining higher levels of gold production is crucial, in Macquarie's view. Base metals improved as well.
Developments at Kairos and Peak North remain key prospects. Outperform rating and $0.70 target maintained.
Target price is $0.70 Current Price is $0.60 Difference: $0.1
If AMI meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 0.00 cents and EPS of 5.30 cents. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 0.00 cents and EPS of 9.60 cents. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
ANN ANSELL LIMITED
Commercial Services & Supplies
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Overnight Price: $37.48
UBS rates ANN as Neutral (3) -
UBS points out PMI data for the fourth quarter indicates manufacturing is recovering at a faster-than-expected pace.
In the US, in the month of June manufacturing recovered to a level not seen in over 12 months.
Europe, while also rebounding significantly, had a greater trough in April and has not yet attained pre-pandemic levels.
UBS believes this signals Ansell will likely experience growth in both of its divisions, given sustained demand for healthcare gloves as well.
Neutral rating retained. The target is increased to $36.75 from $35.00.
Target price is $36.75 Current Price is $37.48 Difference: minus $0.73 (current price is over target).
If ANN meets the UBS target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $32.55, suggesting downside of -13.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 74.46 cents and EPS of 174.24 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 175.8, implying annual growth of N/A. Current consensus DPS estimate is 77.0, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 21.5. |
Forecast for FY21:
UBS forecasts a full year FY21 dividend of 84.89 cents and EPS of 186.15 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 183.1, implying annual growth of 4.2%. Current consensus DPS estimate is 80.2, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 20.6. |
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
ASB AUSTAL LIMITED
Commercial Services & Supplies
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Overnight Price: $3.21
Citi rates ASB as Buy (1) -
Citi believes the market is under appreciating the company's ability to win new work with the US Navy.
The broker believes the pending additional EPF contract in the US is likely to shore up Austal's FY22-23 pipeline as the LCS program winds down.
Buy rating and $4.23 target maintained.
Target price is $4.23 Current Price is $3.21 Difference: $1.02
If ASB meets the Citi target it will return approximately 32% (excluding dividends, fees and charges).
Current consensus price target is $3.36, suggesting upside of 1.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 6.30 cents and EPS of 23.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 23.4, implying annual growth of 33.0%. Current consensus DPS estimate is 7.1, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 14.2. |
Forecast for FY21:
Citi forecasts a full year FY21 dividend of 6.80 cents and EPS of 22.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.2, implying annual growth of 3.4%. Current consensus DPS estimate is 8.1, implying a prospective dividend yield of 2.4%. Current consensus EPS estimate suggests the PER is 13.7. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
BKW BRICKWORKS LIMITED
Building Products & Services
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Overnight Price: $15.90
UBS rates BKW as Reinstate Coverage with Buy (1) -
UBS extends its building materials coverage and reinstates Brickworks with a Buy rating and $17.10 target.
The broker has a positive view on the company's leased and undeveloped land at the Oakdale Estate.
UBS suspects the market is overlooking the upside from developing this estate and the joint venture's track record with securing key tenants.
Moreover, e-commerce growth has put industrial property in high demand for warehousing and distribution centres.
Target price is $17.10 Current Price is $15.90 Difference: $1.2
If BKW meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $15.67, suggesting downside of -2.5% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 60.00 cents and EPS of 120.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 101.1, implying annual growth of -2.1%. Current consensus DPS estimate is 58.3, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 15.9. |
Forecast for FY21:
UBS forecasts a full year FY21 dividend of 63.00 cents and EPS of 48.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 52.9, implying annual growth of -47.7%. Current consensus DPS estimate is 59.3, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 30.4. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $11.44
Morgan Stanley rates BSL as Downgrade to Underweight from Equal-weight (5) -
BlueScope Steel is considered to be a high-quality business with a strong balance sheet and good cash generation. However, the broker suggests the company should follow an agile approach with challenging conditions in the US.
The US steel industry utilisation, functioning at around 55%, is under pressure while steel spreads have declined to their lowest levels since 2011. Even though North Star is expected to perform better than peers, the broker expects a negative impact on volume.
The broker has reduced FY20-21 earnings estimates for North Star along with lower earnings forecasted in Australian steel products. This implies lower operating income for FY20 and FY21.
Morgan Stanley reduces its rating to Underweight from Equal-weight with the target price reducing to $10 from $13.50. Industry view: Cautious.
Target price is $10.00 Current Price is $11.44 Difference: minus $1.44 (current price is over target).
If BSL meets the Morgan Stanley target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $12.37, suggesting upside of 11.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 14.00 cents and EPS of 60.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 60.9, implying annual growth of -67.9%. Current consensus DPS estimate is 11.2, implying a prospective dividend yield of 1.0%. Current consensus EPS estimate suggests the PER is 18.2. |
Forecast for FY21:
Morgan Stanley forecasts a full year FY21 dividend of 14.00 cents and EPS of 58.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 61.1, implying annual growth of 0.3%. Current consensus DPS estimate is 11.6, implying a prospective dividend yield of 1.0%. Current consensus EPS estimate suggests the PER is 18.1. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.36
Morgans rates COE as Add (1) -
The broker has reviewed the progress of Cooper Energy's Sole project with regard the APA Group ((APA)) operated Orbost gas plant. July will be a big month, the broker notes, as output will allow bridging agreements with customers to be reached.
This and other catalysts ensure an Add rating but the broker has conservatively scaled back its Sole production forecasts for FY21, leading to a target decrease to 53c from 56c.
Target price is $0.53 Current Price is $0.36 Difference: $0.17
If COE meets the Morgans target it will return approximately 47% (excluding dividends, fees and charges).
Current consensus price target is $0.53, suggesting upside of 47.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 0.00 cents and EPS of 0.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 0.4, 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 90.0. |
Forecast for FY21:
Morgans forecasts a full year FY21 dividend of 0.00 cents and EPS of 0.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 2.5, implying annual growth of 525.0%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 14.4. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.20
Morgans rates GNX as Add (1) -
Genex Power has announced the extension of a number of agreements to September 30 for its K2-H pumped hydro project. While the capital required for the project is increasing, Genex is in discussions with the government's Australian Renewable Energy Agency which the broker notes is keen to provide hand-outs.
There remain a few key issues to be resolved, hence while the broker sees significant upside potential there are also risks. Speculative Buy retained, target rises to 37c from 35c.
Target price is $0.37 Current Price is $0.20 Difference: $0.17
If GNX meets the Morgans target it will return approximately 85% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 0.00 cents and EPS of 0.10 cents. |
Forecast for FY21:
Morgans forecasts a full year FY21 dividend of 0.00 cents and EPS of 0.20 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
GXY GALAXY RESOURCES LIMITED
New Battery Elements
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Overnight Price: $0.82
Morgan Stanley rates GXY as Underweight (5) -
Second-quarter production and sales results proved in-line with Morgan Stanley’s expectations. Shipments were ahead of the broker's estimates, though Morgan Stanley did not note any revenue impact.
The broker expects near-term weakness in the lithium market and is also concerned about Galaxy Resources’ mine life at Mt Cattlin.
Morgan Stanley retains its Underweight rating with a target price of $0.70. Industry view: Attractive.
Target price is $0.70 Current Price is $0.82 Difference: minus $0.12 (current price is over target).
If GXY meets the Morgan Stanley target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $0.80, suggesting downside of -1.9% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 11.91 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -7.2, 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 FY21:
Morgan Stanley forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 10.42 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -5.9, 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. |
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
UBS rates GXY as Neutral (3) -
The company has indicated June quarter production was 31,000t with sales of 42,000t. Full details will be released on July 23.
UBS believes the main driver of the share price will be the level at which lithium inventory unwinds.
The broker maintains a Neutral rating and $1.09 target.
Target price is $1.09 Current Price is $0.82 Difference: $0.27
If GXY meets the UBS target it will return approximately 33% (excluding dividends, fees and charges).
Current consensus price target is $0.80, suggesting downside of -1.9% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 13.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -7.2, 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 FY21:
UBS forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 4.47 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -5.9, 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. |
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
Overnight Price: $3.04
Credit Suisse rates HMC as Outperform (1) -
Credit Suisse updates estimates to allow for the equity raising and related acquisitions.
This has introduced grocery-anchored neighbourhood centre assets into the portfolio.
Around 6% of the portfolio income after the transaction will be derived from Woolworths ((WOW)).
Subject to shareholder approval, the first aged care asset will also be introduced to the portfolio.
Credit Suisse raises the target to $3.22 from $3.18 and retains an Outperform rating.
Target price is $3.22 Current Price is $3.04 Difference: $0.18
If HMC meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 12.00 cents and EPS of 9.00 cents. |
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 14.00 cents and EPS of 15.00 cents. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
HUB HUB24 LIMITED
Wealth Management & Investments
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Overnight Price: $11.16
Credit Suisse rates HUB as Downgrade to Neutral from Outperform (3) -
HUB24 has outperformed the market by 15-20% over the last three months, Credit Suisse observes.
The benefits from the rebound in equity markets are expected to be diluted by the tiered pricing structure and the likely deployment of high investor cash balances.
The broker continues to expect significant inflow and market share gains but assesses the company still needs to reduce platform fees.
A greater proportion of earnings are leveraged to cash which Credit Suisse expects will be deployed in the next 12 months.
Rating is, therefore, downgraded to Neutral from Outperform and the target is raised to $12.00 from $10.20.
Target price is $12.00 Current Price is $11.16 Difference: $0.84
If HUB meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $11.39, suggesting upside of 5.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 8.00 cents and EPS of 19.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 20.8, implying annual growth of 80.2%. Current consensus DPS estimate is 7.9, implying a prospective dividend yield of 0.7%. Current consensus EPS estimate suggests the PER is 52.2. |
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 9.00 cents and EPS of 22.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 25.2, implying annual growth of 21.2%. Current consensus DPS estimate is 10.7, implying a prospective dividend yield of 1.0%. Current consensus EPS estimate suggests the PER is 43.1. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.59
Morgans rates KAR as Add (1) -
The broker notes Karoon Energy was just about to make a transformational acquisition before oil prices collapsed in March. The broker now sees the Bauna deal as unlikely to progress, with valuations and debt markets severely impacted.
However, Karoon is keeping its options open, and lower-for-longer oil prices mean it's a buyers market. Add and $1.13 target retained.
Target price is $1.13 Current Price is $0.59 Difference: $0.54
If KAR meets the Morgans target it will return approximately 92% (excluding dividends, fees and charges).
Current consensus price target is $0.94, suggesting upside of 59.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 22.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -9.9, 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 FY21:
Morgans forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 4.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 5.3, 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 11.1. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
KMD KATHMANDU HOLDINGS LIMITED
Sports & Recreation
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Overnight Price: $1.18
Credit Suisse rates KMD as Outperform (1) -
Credit Suisse found the trading update better than anticipated. FY20 operating earnings (EBITDA) are expected to exceed NZ$70m.
The balance sheet is also robust, providing comfort for the broker into FY21.
Credit Suisse upgrades estimates substantially, to reflect the better revenue outcome as well as operating leverage.
Outperform retained. Target is raised to NZ$1.55 from NZ$1.40.
Current Price is $1.18. Target price not assessed.
The company's fiscal year ends in July.
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 0.00 cents and EPS of 6.73 cents. |
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 0.00 cents and EPS of 7.02 cents. |
This company reports in NZD. 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
Overnight Price: $6.11
Citi rates LOV as Sell (5) -
The company's trading update signalled the expected slowdown in costume jewellery demand as consumers stopped going out.
Citi assesses the medium-term sales outlook remains under pressure.
The broker considers the stock is expensive, given growth prospects have been delayed.
First half like-for-like sales are expected to decline by around -14%. Sell maintained. Target is reduced to $5.75 from $5.85.
Target price is $5.75 Current Price is $6.11 Difference: minus $0.36 (current price is over target).
If LOV meets the Citi target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $6.64, suggesting upside of 7.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 15.00 cents and EPS of 18.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.7, implying annual growth of -35.3%. Current consensus DPS estimate is 11.9, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 27.2. |
Forecast for FY21:
Citi forecasts a full year FY21 dividend of 5.00 cents and EPS of 17.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.4, implying annual growth of 38.3%. Current consensus DPS estimate is 17.0, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 19.7. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates LOV as Equal-weight (3) -
Lovisa Holdings’ FY20 earnings are below Morgan Stanley’s expectations. However, the balance sheet looks well-positioned for an eventual recovery, comments the broker. The company has guided to FY20 sales of $237m, implying a -3% miss.
Australia and New Zealand have been the strongest markets but trading has been less as compared to other retailers. The company has decided to not re-open its stores in Spain.
Morgan Stanley expects the company to lag the rest of the retail sector and rates the stock as Equal-weight with a target price of $6.50. Industry view: In-line.
Target price is $6.50 Current Price is $6.11 Difference: $0.39
If LOV meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $6.64, suggesting upside of 7.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 0.00 cents and EPS of 22.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.7, implying annual growth of -35.3%. Current consensus DPS estimate is 11.9, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 27.2. |
Forecast for FY21:
Morgan Stanley forecasts a full year FY21 dividend of 0.00 cents and EPS of 28.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.4, implying annual growth of 38.3%. Current consensus DPS estimate is 17.0, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 19.7. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
NWL NETWEALTH GROUP LIMITED
Wealth Management & Investments
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Overnight Price: $9.48
Credit Suisse rates NWL as Downgrade to Underperform from Neutral (5) -
Credit Suisse observes Netwealth has outperformed the market by 15-20% over the last three months.
Looking into FY21 the broker envisages a flatter earnings profile and a declining revenue margin.
Consensus earnings estimates are assessed to be too high, with little valuation protection, and this increases the risk of disappointment.
Hence, the broker downgrades to Underperform from Neutral. Target is raised to $8.30 from $7.50.
Target price is $8.30 Current Price is $9.48 Difference: minus $1.18 (current price is over target).
If NWL meets the Credit Suisse target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $7.49, suggesting downside of -17.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 14.00 cents and EPS of 17.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.2, implying annual growth of 16.1%. Current consensus DPS estimate is 14.2, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 52.4. |
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 14.00 cents and EPS of 17.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 18.1, implying annual growth of 5.2%. Current consensus DPS estimate is 14.9, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 49.8. |
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $10.76
Credit Suisse rates NXT as Reinstate Coverage with Neutral (3) -
Credit Suisse reinstates coverage with a Neutral rating and $11.35 target.
The broker envisages NextDC will be a beneficiary of higher demand resulting from work-from-home arrangements.
Moreover, it is operating in an industry which is already exposed to structural growth.
The market is highly competitive but recent contract wins should underpin the near-term development pipeline.
Target price is $11.35 Current Price is $10.76 Difference: $0.59
If NXT meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $10.63, suggesting downside of -4.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 3.68 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -4.0, 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 FY21:
Credit Suisse forecasts a full year FY21 dividend of 0.00 cents and EPS of 1.65 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 0.2, 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 5560.0. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.54
Macquarie rates SO4 as Outperform (1) -
Salt Lake Potash will raise $15m via a convertible note to ensure Lake Way construction activities while project funding is finalised.
Macquarie expects development will accelerate in the second half of 2020 and the completion of project financing presents a key catalyst.
Outperform rating and $1 target maintained.
Target price is $1.00 Current Price is $0.54 Difference: $0.46
If SO4 meets the Macquarie target it will return approximately 85% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 8.60 cents. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 4.90 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $14.54
Ord Minnett rates TCL as Upgrade to Accumulate from Hold (2) -
Ord Minnett expects earnings should stabilise at around 20% ahead of pre-pandemic levels in FY23, and then grow at a relatively strong 7-9% per annum.
The broker incorporates new assumptions for the three airport-exposed assets, Citylink, Airport Link and Eastern Distributor.
Rating is upgraded to Accumulate from Hold and the target lifted to $16.00 from $15.25.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $16.00 Current Price is $14.54 Difference: $1.46
If TCL meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $13.80, suggesting downside of -5.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Ord Minnett forecasts a full year FY20 dividend of 47.00 cents and EPS of 1.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 10.9, implying annual growth of 65.2%. Current consensus DPS estimate is 46.0, implying a prospective dividend yield of 3.1%. Current consensus EPS estimate suggests the PER is 134.2. |
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 46.00 cents and EPS of 2.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 18.0, implying annual growth of 65.1%. Current consensus DPS estimate is 44.6, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 81.3. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $3.47
Credit Suisse rates WEB as Neutral (3) -
Webjet has issued EUR100m in convertible notes, primarily for M&A capacity because of attractive opportunities in the market.
The company has emphasised this was not necessary from a liquidity perspective.
Acquisition opportunities that interest Credit Suisse centre on technology or ancillary products, to leverage the global footprint.
The broker is more cautious about consumer-facing opportunities. Neutral rating retained. Target is reduced to $3.80 from $4.50.
Target price is $3.80 Current Price is $3.47 Difference: $0.33
If WEB meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $4.07, suggesting upside of 21.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 9.00 cents and EPS of 11.56 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -6.0, implying annual growth of N/A. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 9.43 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -12.8, 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: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates WEB as Underweight (5) -
Webjet successfully completed a $163m convertible note issue with the proceeds to be used for strengthening the balance sheet and looking for potential M&A opportunities, but Morgan Stanley suspects its mostly about the balance sheet.
Morgan Stanley notes the high rate of cash burn plus the fact the share price has declined by more than -80% from all-time highs will make it difficult to find a meaningful M&A opportunity.
The broker expects leisure to lead the recovery rather than corporate. This implies the company’s biggest earnings contributor – B2B – will be a late-cycle story.
Morgan Stanley rates the stock as Underweight with a target price of $3.30. Industry view: In-line.
Target price is $3.30 Current Price is $3.47 Difference: minus $0.17 (current price is over target).
If WEB meets the Morgan Stanley target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $4.07, suggesting upside of 21.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 EPS of 3.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -6.0, implying annual growth of N/A. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY21:
Morgan Stanley forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 9.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -12.8, 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: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates WEB as Hold (3) -
Webjet has strengthened its balance sheet with a EUR100m convertible note offering which will allow for further acquisitions. Bookings are now improving as interstate borders reopen, the broker notes, but a greater leverage to international travel leads the broker to forecast an earnings loss in FY21.
An assumed recovery is now pushed out to FY23. The broker sees valuation as fair at this point, although investors will need to be patient. Hold retained, target rises to $3.39 from $3.20.
Target price is $3.39 Current Price is $3.47 Difference: minus $0.08 (current price is over target).
If WEB 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 $4.07, suggesting upside of 21.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 0.00 cents and EPS of 6.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -6.0, implying annual growth of N/A. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY21:
Morgans forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 15.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -12.8, 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: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates WEB as Buy (1) -
While at first blush the decision to raise $160m via a convertible note suggests financial stress, Ord Minnett notes the transaction is more likely a reflection of the company being cautious.
Webjet is seen as well-positioned for the inevitable recovery in the business-to-business segment post the pandemic.
The broker now assumes a full return to international travel does not begin until the second half of 2022.
Buy rating retained. Target is reduced to $4.51 from $4.86.
Target price is $4.51 Current Price is $3.47 Difference: $1.04
If WEB meets the Ord Minnett target it will return approximately 30% (excluding dividends, fees and charges).
Current consensus price target is $4.07, suggesting upside of 21.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Ord Minnett forecasts a full year FY20 dividend of 6.50 cents and EPS of minus 67.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -6.0, implying annual growth of N/A. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 29.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -12.8, 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: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates WEB as Buy (1) -
The company has raised EUR100m in convertible notes to obtain flexibility for acquisitions and ongoing capital management.
UBS believes the share price will remain volatile in the short term as a high degree of uncertainty surrounds the travel market.
Still, the broker acknowledges the outlook has improved materially since April and allows for a faster recovery in leisure travel and additional market share gains in its estimates.
Buy rating retained. Target is raised to $5.35 from $3.75.
Target price is $5.35 Current Price is $3.47 Difference: $1.88
If WEB meets the UBS target it will return approximately 54% (excluding dividends, fees and charges).
Current consensus price target is $4.07, suggesting upside of 21.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 0.00 cents and EPS of 16.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -6.0, implying annual growth of N/A. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY21:
UBS forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 1.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -12.8, 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: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $2.22
Macquarie rates WGX as Outperform (1) -
Westgold Resources sold around 65,000 ounces of gold in the June quarter, in line with Macquarie's estimates.
Big Bell is gaining traction, exiting FY20 at a 0.5mtpa run rate.
The better cash position lifts Macquarie's valuation and the target is raised to $3.00 from $2.90. Outperform.
Target price is $3.00 Current Price is $2.22 Difference: $0.78
If WGX meets the Macquarie target it will return approximately 35% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 0.00 cents and EPS of 7.50 cents. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 0.00 cents and EPS of 37.80 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Today's Price Target Changes
Company | Last Price | Broker | New Target | Prev Target | Change | |
AMP | AMP Ltd | $1.82 | Ord Minnett | 1.98 | 1.59 | 24.53% |
ANN | Ansell | $37.72 | UBS | 36.75 | 35.00 | 5.00% |
BKW | Brickworks | $16.07 | UBS | 17.10 | 14.50 | 17.93% |
BSL | Bluescope Steel | $11.06 | Morgan Stanley | 10.00 | 13.50 | -25.93% |
COE | Cooper Energy | $0.36 | Morgans | 0.53 | 0.56 | -5.36% |
GNX | Genex Power | $0.22 | Morgans | 0.37 | 0.35 | 5.71% |
GXY | Galaxy Resources | $0.81 | Morgan Stanley | 0.70 | 0.80 | -12.50% |
HMC | Home Consortium Ltd | $3.02 | Credit Suisse | 3.22 | 3.18 | 1.26% |
HUB | HUB24 | $10.85 | Credit Suisse | 12.00 | 10.20 | 17.65% |
LOV | Lovisa | $6.18 | Citi | 5.75 | 5.85 | -1.71% |
NWL | Netwealth Group | $9.02 | Credit Suisse | 8.30 | 7.50 | 10.67% |
NXT | Nextdc | $11.12 | Credit Suisse | 11.35 | 8.00 | 41.87% |
TCL | Transurban Group | $14.63 | Ord Minnett | 16.00 | 15.25 | 4.92% |
WEB | Webjet | $3.34 | Credit Suisse | 3.80 | 4.50 | -15.56% |
Morgans | 3.39 | 3.20 | 5.94% | |||
Ord Minnett | 4.51 | 4.86 | -7.20% | |||
UBS | 5.35 | 3.75 | 42.67% | |||
WGX | Westgold Resources | $2.25 | Macquarie | 3.00 | 2.90 | 3.45% |
Summaries
AMI | Aurelia Metals | Outperform - Macquarie | Overnight Price $0.60 |
ANN | Ansell | Neutral - UBS | Overnight Price $37.48 |
ASB | Austal | Buy - Citi | Overnight Price $3.21 |
BKW | Brickworks | Reinstate Coverage with Buy - UBS | Overnight Price $15.90 |
BSL | Bluescope Steel | Downgrade to Underweight from Equal-weight - Morgan Stanley | Overnight Price $11.44 |
COE | Cooper Energy | Add - Morgans | Overnight Price $0.36 |
GNX | Genex Power | Add - Morgans | Overnight Price $0.20 |
GXY | Galaxy Resources | Underweight - Morgan Stanley | Overnight Price $0.82 |
Neutral - UBS | Overnight Price $0.82 | ||
HMC | Home Consortium Ltd | Outperform - Credit Suisse | Overnight Price $3.04 |
HUB | HUB24 | Downgrade to Neutral from Outperform - Credit Suisse | Overnight Price $11.16 |
KAR | Karoon Energy | Add - Morgans | Overnight Price $0.59 |
KMD | Kathmandu | Outperform - Credit Suisse | Overnight Price $1.18 |
LOV | Lovisa | Sell - Citi | Overnight Price $6.11 |
Equal-weight - Morgan Stanley | Overnight Price $6.11 | ||
NWL | Netwealth Group | Downgrade to Underperform from Neutral - Credit Suisse | Overnight Price $9.48 |
NXT | Nextdc | Reinstate Coverage with Neutral - Credit Suisse | Overnight Price $10.76 |
SO4 | SALT LAKE POTASH | Outperform - Macquarie | Overnight Price $0.54 |
TCL | Transurban Group | Upgrade to Accumulate from Hold - Ord Minnett | Overnight Price $14.54 |
WEB | Webjet | Neutral - Credit Suisse | Overnight Price $3.47 |
Underweight - Morgan Stanley | Overnight Price $3.47 | ||
Hold - Morgans | Overnight Price $3.47 | ||
Buy - Ord Minnett | Overnight Price $3.47 | ||
Buy - UBS | Overnight Price $3.47 | ||
WGX | Westgold Resources | Outperform - Macquarie | Overnight Price $2.22 |
RATING SUMMARY
Rating | No. Of Recommendations |
1. Buy | 12 |
2. Accumulate | 1 |
3. Hold | 7 |
5. Sell | 5 |
Friday 03 July 2020
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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.
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