Australian Broker Call

Ord Minnett rates AOF as Hold (3) -

Due to feedback from large unitholders in the Australian Unity Office Fund, potential refinements may be made to the merger proposal with the Australian Unity Diversified Property Fund. The general meeting will be adjourned.

According to Ord Minnett, the refined merger proposal will likely include an amendment to the merger ratio (less dilutive to net tangible assets) and potentially reduce gearing to the low 30%s. The broker's target price eases to $2.38 from $2.46. The Hold rating is maintained.

Target price is $2.38 Current Price is $2.31 Difference: $0.07
If AOF meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Ord Minnett rates ASX as Hold (3) -

While derivatives volumes on the ASX declined in November, cash market value traded and capital raisings experienced a material increase on the previous corresponding period, notes Ord Minnett. 

The broker lifts its target price to $82.50 from $79.00. The Hold rating is unchanged and Ord Minnett cautions its valuation may decline should interest rates eventually rise.

Target price is $82.50 Current Price is $90.52 Difference: minus $8.02 (current price is over target).
If ASX meets the Ord Minnett target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $78.34, suggesting downside of -11.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.3

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

Credit Suisse rates BAP as Outperform (1) -

Bapcor has announced the immediate retirement of its CEO and Managing Director given a deterioration in relationship with the company board. Credit Suisse notes three months notice had been provided in late November. 

While the broker notes this has caused significant disruption to the company, and has caused a -15% target price drop given share price impact, it expects the company can rebuild its valuation over the next 24 months. 

The Outperform rating is retained and the broker's target price decreases to $7.90 from $9.20.

Target price is $9.20 Current Price is $6.41 Difference: $2.79
If BAP meets the Credit Suisse target it will return approximately 44% (excluding dividends, fees and charges).

Current consensus price target is $8.39, suggesting upside of 25.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Macquarie rates BLD as Outperform (1) -

Boral's sale of its US fly ash business for A$1bn is a positive development, Macquarie suggests, even though the broker valued the business at A$1.5bn, as it focuses the company on its domestic cement, aggregate and concrete market.

The broker continues to like the Boral thesis, given a strengthening infrastructure demand environment and signs of recovery in the multi-residential market, combined with the credible opportunity to improve profitability via the group’s Transformation Plan.

Outperform retained, target falls to $7.20 from $7.50.

Target price is $7.20 Current Price is $6.27 Difference: $0.93
If BLD meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $6.58, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.2

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

Morgan Stanley rates BLD as Underweight (5) -

The sale price of US$755m for Boral's Fly Ash segment is broadly in-line with Morgan Stanley's valuation though may be less than consensus estimates.

The broker expects the majority of proceeds will be returned to shareholders. The Underweight rating and $6.10 target price are retained. Industry view: In-Line.

Target price is $6.10 Current Price is $6.27 Difference: minus $0.17 (current price is over target).
If BLD meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.58, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.2

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

UBS rates BLD as Neutral (3) -

After UBS allows for Boral's sale of the Fly Ash segment for US$755m, earnings forecasts fall from FY23 though estimates don't incorporate a capital return over FY22 as yet. The method or timing of any capital return is still being weighed by management.

The analyst notes the benefit of end market demand improvements are being offset by increased costs particularly around freight and labour. An improvement in commercial/apartment activity is considered the key catalyst going forward.

The target price falls to $6.10 from $6.45 and the Neutral rating is unchanged.

Target price is $6.10 Current Price is $6.27 Difference: minus $0.17 (current price is over target).
If BLD meets the UBS target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.58, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.2

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

UBS rates BPT as Initiation of coverage with Buy (1) -

UBS initiates coverage on Beach Energy with a Buy rating and $1.60 target price. The analyst estimates the share price is trading on multiples below large-cap energy peers, despite offering the highest production growth over FY22-24, relative to those peers.

The broker credits this disparity in valuation to the unexpected Western Flank reserve downgrade in April of 2021.

The analyst likes the company's strongest exposure to rising domestic gas prices (among stocks under coverage) and estimates more than 65% of FY22 production is natural gas sold into the domestic gas market. 

Target price is $1.60 Current Price is $1.17 Difference: $0.43
If BPT meets the UBS target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $1.64, suggesting upside of 34.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Credit Suisse rates CSL as Neutral (3) -

CSL's appeal to overturn the June 2021 ban on Mexican nationals crossing the border to donate plasma for compensation has been dismissed. Credit Suisse notes pre-covid collections from along the border accounted for 10% of US plasma volume. 

The 13 CSL collection centres on, or in close proximity to, the border, account for around 7% of the company's plasma donations, with an approximate 80% of those collections coming from Mexican nationals. 

The broker expects an appeal to be launched, but does not see strong likelihood of success. Credit Suisse expects collections to be down -7% on pre-covid levels in the first half, but up 4% in the second half given new centre openings.

The Neutral rating and target price of $315.00 are retained. 

Target price is $315.00 Current Price is $296.29 Difference: $18.71
If CSL meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $311.23, suggesting upside of 2.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

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

Morgan Stanley feels the tempo of recovery for plasma collection is at risk after CSL lost its court challenge against the US Centre for Border Protection.

Only 16 of the company's 304 collection centres are near the US/Mexican border, though they collect more than average, notes the broker. The Equal-weight rating and target price of $280.00 are retained. Industry view: In line.

Target price is $280.00 Current Price is $296.29 Difference: minus $16.29 (current price is over target).
If CSL 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 $311.23, suggesting upside of 2.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Ord Minnett rates CSL as Hold (3) -

Ord Minnett expects US immunoglobulin (Ig) volumes for CSL to begin to recover in coming months, given the improvement in collections since April.

Despite distributed volumes in August contracting by -9%, yearly data shows flat growth, which is consistent with the analyst's forecast. The broker retains a Hold rating and $285 target.

Target price is $285.00 Current Price is $296.29 Difference: minus $11.29 (current price is over target).
If CSL meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $311.23, suggesting upside of 2.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Macquarie rates CWN as Neutral (3) -

Macquarie has tweaked its forecasts ahead of Crown Resorts' investor day and site tour of Crown Sydney next week. No specific guidance is anticipated but the broker hopes to gain a better understanding of the opportunity, subject to the NSW casino inquiry.

There remain risks, the broker notes, given the Crown Melbourne RC findings, the high-end player review, and the fact the casino hasn't yet opened to gaming, and noting that both rival Star Entertainment ((SGR)) and Blackstone have already taken swings at Crown.

Neutral retained, target rises to $12.20 from $10.40.

.

Target price is $12.20 Current Price is $11.16 Difference: $1.04
If CWN meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $13.40, suggesting upside of 17.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Macquarie rates DXI as Neutral (3) -

Macquarie has "recommenced" coverage of Dexus Industria REIT, as it was formerly known as APN Industria REIT, noting the trust continues its mix-shift towards industrial assets.

The broker is attracted to the funds from operations growth profile, driven by the lease-up of Rhodes and the industrial development pipeline. In addition, net tangible asset value should rise.

The trade-off is Rhodes has limited the REIT's balance sheet capacity and hampered free cash flow. Neutral and $3.40 target.

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

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Morgans rates EBR as Speculative Buy (1) -

Morgans initiates coverage on EBR Systems Inc with a Speculative Buy rating and $1.84 target price. The company is addressing the Cardiac Resynchronisation Therapy (CRT) market in patients with moderate to severe heart failure, with a lead product named WISE.

The analyst believes WISE is a truly differentiated wireless cardiac pacing device. In an estimated addressable market of US$2.1bn, the broker notes no peer company has a leadless, endocardial solution for the left ventricle.

Morgans cautions an investment in EBR Systems is more appropriate for investors with a higher risk profile.

Target price is $1.84 Current Price is $0.99 Difference: $0.85
If EBR meets the Morgans target it will return approximately 86% (excluding dividends, fees and charges).

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates FCL as Outperform (1) -

US-based Guidewire is a key comparable, Macquarie notes, to Fineos Corp. Guidewire's quarterly earnings result showed support from cloud migrations, new deals and expansions, and cloud representing more than 90% of sales.

Comparing Fineos' enterprise value to sales multiple with that of Guidewire and another US rival, Duck Creek, finds Fineos is trading in line. The broker makes no changes to forecasts.

Outperform and $4.92 target retained.

Target price is $4.92 Current Price is $4.32 Difference: $0.6
If FCL meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $4.89, suggesting upside of 7.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.8

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

Macquarie rates LLC as Neutral (3) -

Macquarie attended a site tour of Lendlease' Melbourne Quarter office development. The broker's estimates show potential upside from development, while execution on the remainder of the pipeline offer significant upside risks.

However, the key downside risk remains successful and timely execution against management's targets, which it hopes to reach by FY25-FY26. No change to forecasts. Neutral and $11.88 target retained.

Target price is $11.88 Current Price is $10.34 Difference: $1.54
If LLC meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $12.69, suggesting upside of 18.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

UBS rates MFG as Sell (5) -

Magellan Financial Group reported 30 November funds under management (FUM) of $116.4bn as at 30 November. UBS estimates November net inflows of $280m, reversing the trend of net outflows in recent months. 

Institutional inflows of $780m were partly countered by a -$500m Retail outflow, and the flagship fund investment underperformance has persisted, points out the analyst. 

The broker continues to see downside risks to the revenue outlook (flows/fees) and retain its Sell rating and $29.50 target price.

Target price is $29.50 Current Price is $31.08 Difference: minus $1.58 (current price is over target).
If MFG meets the UBS target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $37.11, suggesting upside of 26.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Morgan Stanley rates MGR as Overweight (1) -

Morgan Stanley points out Mirvac Group is set to make greater than 1,000 apartment sales in the next 12 months. This is considered great timing, as its estimated Australia could have the lowest number of new apartment completions in a decade in FY23-25.

While apartment purchases have been less favoured over the last 12 months, the analyst expects tailwinds from the reopening of borders and the return of foreign buyers and students. Moreover, a rise in inner urban living and relative affordability are expected to assist.

Morgan Stanley's Overweight rating and $3.30 target price are maintained. Industry view: In-Line.

Target price is $3.30 Current Price is $2.92 Difference: $0.38
If MGR meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.12, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Morgans rates MME as Add (1) -

Morgans assesses a broadly positive trading update for the first two months of the 2Q22 for MoneyMe, which showed ongoing originations growth.

First half revenue guidance is for greater than $46m. The broker retains its Add rating and adjusts down its target price to $2.36 from $2.40.

Target price is $2.36 Current Price is $1.82 Difference: $0.54
If MME meets the Morgans target it will return approximately 30% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Citi rates MTS as Neutral (3) -

Following 1H results for Metcash, Citi assesses a step-change for earnings in Hardware. The broker upgrades FY22-24 earnings (EBIT) forecasts by 9%, 8% and 4%, respectively, and lifts its target price to $4.40 from $4.20.

Total Tools provided the largest boost within Hardware as sales productivity lifted, explains the analyst.

Management disclosed sales growth in the first five weeks of the 2H was 2.3% for Food, 20.1% in Hardware and 7.6% in Liquor. The analyst maintains a Neutral rating and expects an eventual normalisation of trading.
 

Target price is $4.40 Current Price is $4.24 Difference: $0.16
If MTS meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.57, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Credit Suisse rates MTS as Outperform (1) -

Metcash has exceeded expectations with first half results and carried momentum into the second half with the MTS Supermarket brand achieving 14.7% two-year cumulative growth in November, as noted by Credit Suisse.

Results from Metcash come despite evidence of growth deceleration in the independent supermarket retail segment. Coupled with further emerging growth in the Hardware segment, and a modest valuation, the broker notes Metcash is an increasingly attractive option. 

The Outperform rating is retained and the target price increases to $4.55 from $4.35.

Target price is $4.55 Current Price is $4.24 Difference: $0.31
If MTS meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $4.57, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Macquarie rates MTS as Upgrade to Outperform from Neutral (1) -

Metcash reported a solid first half result, Macquarie suggests, with hardware the standout performer driven by strength in Trade and the Total Tools acquisition. IGA posted sales growth well ahead of pre-pandemic levels.

Strong momentum has been sustained into the second half to date, despite state reopenings, with hardware up 20%. The company has accelerated its investment in online, the broker notes, but has also warned of supply disruptions and higher costs.

The broker upgrades to Outperform from Neutral. Target rises to $4.70 from $4.10.

Target price is $4.70 Current Price is $4.24 Difference: $0.46
If MTS meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $4.57, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Ord Minnett rates MTS as Accumulate (2) -

Metcash reported 1H earnings (EBIT) 4% above the forecast of Ord Minnett, with Hardware now a larger earnings contributor than Food and a key driver of growth, believes the analyst. The target price rises to $5 from $4.50 and the Accumulate rating is unchanged.

The Hardware growth is driven by the store rollout and retailer conversion strategy in Total Tools, explains the broker. Within Food, IGA retailers and Metcash have gained significant market share and are considered to have retained most.

Target price is $5.00 Current Price is $4.24 Difference: $0.76
If MTS meets the Ord Minnett target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $4.57, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

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

UBS reinstates coverage of Northern Star Resources with a new analyst and a Buy rating, up from Neutral. The broker sees management's forecast 25% production growth as conservative and sees more potential at the Super Pit.

The analyst feels the mid-2022 expansion study release will be a key catalyst though cautions the company is more exposed to the tight
WA labour market than peers. UBS sets a $11.20 target price down from $14.40 prior to the hiatus in coverage.

Target price is $11.20 Current Price is $9.09 Difference: $2.11
If NST meets the UBS target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $11.75, suggesting upside of 29.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Morgan Stanley rates PGH as Underweight (5) -

According to Morgan Stanley, Pact Group is managing cost pressures well in the core Packaging/Materials Handling segments though the Contract Manufacturing segment (CMS) remains troubled. Margins in CMS are expected to remain pressured throughout FY22.

As a result, the broker lowers its earnings forecast for FY22 and reduces its target price to $2.70 from $3.30. The company is Morgan Stanley's least preferred in the sector. The Underweight rating is retained. Industry view: In-Line.

Target price is $2.70 Current Price is $2.45 Difference: $0.25
If PGH meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $3.53, suggesting upside of 42.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Citi rates SIG as Neutral (3) -

Following a trading update by Sigma Healthcare, Citi reduces FY22-24 earnings forecasts by -24%, -15% and -2%, respectively and lowers its target price to $0.50 from $0.60. The Neutral rating is unchanged.

Ongoing issues with an enterprise resource planning system, resulting in a significant loss of market share, and covid-related issues were primarily responsible for the earnings downgrades, explains the analyst.

Management downgraded underlying earnings (EBITDA) guidance for FY22 by circa -15%, and now expect a -10% decline over FY21.

Target price is $0.50 Current Price is $0.49 Difference: $0.01
If SIG meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $0.56, suggesting upside of 21.7% (ex-dividends)

The company's fiscal year ends in January.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Credit Suisse rates SIG as Downgrade to Neutral from Outperform (3) -

Impacts of the ERP system rollout have driven Sigma Healthcare to issue a downgrade to full-year profit, now guiding to a -10% year-on-year underlying earnings decline. Credit Suisse highlights implementing rollout during covid restrictions impacted customer experience.

The broker notes updated guidance implies a -27% year-on-year underlying earnings decline in the second half, and has accordingly updated its underling earnings forecast -15% in FY22 to $74.2m, or a -10.8% year-on-year decline, and earnings per share -29%.

The rating is downgraded to Neutral from Outperform and the target price decreases to $0.53 from $0.70. 

Target price is $0.53 Current Price is $0.49 Difference: $0.04
If SIG meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $0.56, suggesting upside of 21.7% (ex-dividends)

The company's fiscal year ends in January.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Ord Minnett rates TYR as Buy (1) -

Ord Minnett see sustained growth in to the 2H after a trading update by Tyro Payments showed November transaction value of $3.1bn, up 41% on the same period last year.

The broker notes its proxy for merchant acquisition, daily app downloads, has recovered well since the end of September. The Buy rating and $4.30 target price are retained.

Target price is $4.30 Current Price is $2.68 Difference: $1.62
If TYR meets the Ord Minnett target it will return approximately 60% (excluding dividends, fees and charges).

Current consensus price target is $4.19, suggesting upside of 48.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Credit Suisse rates VSL as Outperform (1) -

Vulcan Steel has issued a guidance upgrade and is now guiding to profit after tax of NZ$93-100m for FY22, which Credit Suisse notes is a 26-35% increase on prospectus guidance.

Group revenue is up 35% year-to-date, and while volume is also up 11% year-to-date, caution from the company would suggest upgrades are price and margin led. Profit after tax forecasts increase 24% and 7% for FY22 and FY23, group volume declines -2% for FY22.

The Outperform rating is retained and the target price increases to $9.60 from $8.90.

Target price is $9.60 Current Price is $8.50 Difference: $1.1
If VSL meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

UBS rates VSL as Buy (1) -

UBS believes the risk reward ratio is favourable for Vulcan Steel. This comes as management upgraded FY22 profit guidance by 31%. The analyst attributes this to stronger Australian volumes post lockdown and to market stock-outs across some steel products in New Zealand.

The broker lifts its target price to $9.50 from $9.00, after raising FY22 and FY24 profit estimates by 24% and 14% ron higher revenue growth. The Buy rating is unchanged.

Target price is $9.50 Current Price is $8.50 Difference: $1
If VSL meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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