Australian Broker Call

Macquarie rates A11 as Outperform (1) -

Atlantic Lithium has secured a mining lease for its Ewoyaa lithium project from the Ghana government (the first ever granted), and Macquarie believes this has sharply derisked the company. 

The government's maiden lease comes with conditions, advises the broker, including parliamentary ratification and key permits, such as environmental approvals, and the company must start production before October 2025 and list on the Ghana Stock Exchange within five years of first production.

The lease is valid for 15 years and is renewable. Macquarie observes the company is also planning to evaluate feldspar production and downstream lithium conversion for the lease, not included in the broker's base case. The broker observes upside to the Resource base.

EPS forecasts fall -15% to -35% across FY24 to FY28 to reflect higher royalty rates and free-carry interest.

Outperform rating retained. Target price falls to 66c from 70c.

Target price is $0.66 Current Price is $0.46 Difference: $0.2
If A11 meets the Macquarie target it will return approximately 43% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Bell Potter rates A4N as Buy (1) -

Markets for Alpha HPA’s products have strengthened since the March 2020 HPA (ultra-high purity alumina) First Project definitive feasibility study. The DFS assumed a US$15-25/kg HPA equivalent basket price and according to Bell Potter, it now looks like prices above this range will be achievable.

Recent independent market studies completed in preparation of debt funding have provided support for prices in excess of US$30/kg longer term. Selling products across sapphire glass, LED, lithium ion battery and semiconductor segments also diversifies and de-risks product pricing compared with the DFS estimates, the broker notes.

Target rises to $1.54 from $1.53, Buy retained.

Target price is $1.54 Current Price is $0.68 Difference: $0.86
If A4N meets the Bell Potter target it will return approximately 126% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Bell Potter rates AIS as Buy (1) -

Aeris Resources has released its full quarterly report on copper-gold-zinc production. Overall, Bell Potter considers the numbers a beat on forecasts for the quarter and a strong start to FY24.

This is tempered by costs at Tritton, which were higher than both forecasts and guidance. The broker needs to see these costs reduce to lift free cash flows and strengthen the balance sheet. The Jaguar copper-zinc mine has also been placed into care & maintenance.

The near-term outlook remains highly leveraged to increasing copper grades at the Tritton copper mine, and while Bell Potter forecasts strengthening operational cash flows, capital constraints and debt service requirements look likely to limit growth opportunities in the near term.

Buy and 30c target retained.

Target price is $0.30 Current Price is $0.18 Difference: $0.12
If AIS meets the Bell Potter target it will return approximately 67% (excluding dividends, fees and charges).

Current consensus price target is $0.27, suggesting upside of 48.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Macquarie rates AIS as Outperform (1) -

Aeris Resources' largely pre-released September-quarter production figures suggests guidance is on track, says Macquarie, but all-in-sustaining costs ($136m) were 5% higher than the broker's forecast ($129.3m).

The company closed the quarter with net cash and receivables of $43.4m (a -10% miss) and guidance was retained.

Jaguar has now transitioned into care and maintenance, and the company started cost cutting and redundancies in the quarter to cut costs.

EPS forecasts fall -7% in FY24; and -1% to -4% across FY25 to FY28.

Outperform rating retained. Target falls to 28c from 30c.

Target price is $0.28 Current Price is $0.18 Difference: $0.1
If AIS meets the Macquarie target it will return approximately 56% (excluding dividends, fees and charges).

Current consensus price target is $0.27, suggesting upside of 48.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Ord Minnett rates AIS as Hold (3) -

Following in-line 1Q results, Ord Minnett believes Aeris Resources will meet the favourable ends of both FY24 production and cost guidance, and sees significant valuation appeal. 

While deliverability is fine, the broker highlights a "precarious balance sheet position" and will become more constructive (than a Hold rating) once borrowing is reduced.

The analysts forecast an additional $30m debt drawdown to fund working capital and growth commitments. The target is reduced to 22c from 24c.

Target price is $0.22 Current Price is $0.18 Difference: $0.04
If AIS meets the Ord Minnett target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $0.27, suggesting upside of 48.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

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

BlueScope Steel's downgrade to December half earnings (EBIT) guidance did not surprise Citi given US HRC min-mill spreads have risen from recent lows; and the broker expects lower Asian HRCE prices will continue to dampen export earnings in the short term.

But Citi is confident that China will retreat from loss-making steel exports in coming months and spies resilience in the Australian domestic market.

Rating is upgraded to Buy from Neutral. Target price falls to $21.40 from $23.50.

Target price is $21.40 Current Price is $18.08 Difference: $3.32
If BSL meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $18.80, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

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

FY24 guidance was reaffirmed during the release of Centuria Industrial REIT's 1Q results. Management noted ongoing strength in industrial markets and confirmed the sale of two Victorian assets for $70m in line with June-2023 book value.

While retaining an Equal-weight rating, Morgan Stanley believes the REIT could be more resilient than peers, even as cap rates expand, due to the ongoing positive trends for industrial rents.

Target $3.30. Equal-weight. Industry view: In-Line. 

Target price is $3.30 Current Price is $2.93 Difference: $0.37
If CIP meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.38, suggesting upside of 15.6% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Bell Potter rates CSR as Hold (3) -

In Bell Potter's view, CSR’s first half result (Nov 2) represents an important juncture as investors balance the levels of remaining support from the housing backlog with expectations for first monetary loosening.

With prospects for any major housing affordability corrections looking unlikely in the immediate term, the broker estimates the window for a ‘soft landing’ of new building materials demand following conclusion of the backlog in FY25 is beginning to look pressured.

Target falls to $5.40 from $5.60, Hold retained.

Target price is $5.40 Current Price is $5.64 Difference: minus $0.24 (current price is over target).
If CSR meets the Bell Potter target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.59, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Morgans rates CWY as Hold (3) -

Following first-time FY24 earnings (EBIT) guidance of around $350m at Cleanaway Waste Management's AGM, Morgans lowers its FY24 earnings forecast to align.

Management lowered its FY24 D&A expense guidance by -$10m due to ongoing softening of volumes for landfill. The company also expects FY24 net finance costs will be 15% greater than the previous corresponding period, assuming no further interest rate rises.

The broker lowers its target to $2.40 from $2.59 partly due to the earnings adjustment and a higher assumed discount rate. Hold.

Target price is $2.40 Current Price is $2.35 Difference: $0.05
If CWY meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $2.64, suggesting upside of 12.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Bell Potter rates DRO as Buy (1) -

DroneShield has released a quarterly update which detailed both a record quarter and a record year to date. The company has reported revenues of approximately 2.5x the total 2022 result, Bell Potter notes.

Cash receipts for the quarter were also a record, driven by completion of multiple material orders announced earlier in the year and partial completion of the record $33m US government contract.

The outlook for the company remains positive, the broker suggests, with the ongoing conflict in Ukraine and now the Middle East driving increased demand for DroneShield's products and technology.

Buy and 45c target retained.

Target price is $0.45 Current Price is $0.28 Difference: $0.165
If DRO meets the Bell Potter target it will return approximately 58% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Ord Minnett rates GNE as Hold (3) -

Based on Q1 results, Ord Minnett expects Genesis Energy will meet FY24 guidance for earnings (EBITDA) of NZ$430m.

Despite higher retail electricity prices in the quarter, the analyst points out customer numbers increased by 2%, while sales rose by 4%.

The company's dividend yield appears attractive, yet the broker cautions over long-term earnings headwinds in the form of a depleting Kupe oil and gas field and the closure of coal and gas power stations.

The Hold rating and $2.40 target are retained.

Target price is $2.40 Current Price is $2.22 Difference: $0.18
If GNE meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Shaw and Partners rates HLO as Buy (1) -

Following a strong September quarter, Helloworld Travel has reaffirmed full year guidance. Total transaction value increased 120% on the previous comparable period, while total revenue lifted 67%. 

From Shaw and Partners' perspective, international and domestic travel has returned and travellers are booking more complex international travel, with longer lead times and higher average per person spend, suggesting improving confidence. 

The Buy rating and target price of $3.50 are retained.

Target price is $3.50 Current Price is $2.36 Difference: $1.14
If HLO meets the Shaw and Partners target it will return approximately 48% (excluding dividends, fees and charges).

Current consensus price target is $3.71, suggesting upside of 68.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Morgans rates JDO as Initiation of coverage with Add (1) -

Morgans initiates coverage on Judo Capital with an Add rating and $1.43 target. The bank is considered a high return/high risk investment given it is a rapidly growing bank challenging the majors in the SME market and does not currently pay a dividend.

The broker believes management can deliver a five year internal rate of return (IRR) of more than 20% per annum, should at-scale targets be met.

Strong earnings growth should occur over FY25-26, according to the analyst, as the net interest margin (NIM) improves and operating costs and loan impairment growth moderate.

Target price is $1.43 Current Price is $0.80 Difference: $0.63
If JDO meets the Morgans target it will return approximately 79% (excluding dividends, fees and charges).

Current consensus price target is $1.23, suggesting upside of 45.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Morgans rates LGI as Hold (3) -

The sale of Australian Carbon Credit Units (ACCUs) represented more than 40% of LGI’s FY22 revenue, explains Morgans, and last July’s Safeguard Mechanism amendments will ensure higher prices as emitters need to reduce or offset emissions.

The safeguard is a system for regulating Australia’s largest emitters. The system requires facilities to surrender ACCUs to offset emissions in excess of their annually imposed emissions ‘baseline’, notes the analyst.

Morgans increases its target to $1.99 from $1.91 to align with the government’s proposed ACCU price ceiling. Hold.

Target price is $1.99 Current Price is $2.12 Difference: minus $0.13 (current price is over target).
If LGI meets the Morgans target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Ord Minnett rates NGI as Buy (1) -

Ord Minnett assesses a decent 1Q for Navigator Global Investments with a steady performance across key divisions and the NGI Strategic Portfolio.

The broker sees a stronger and more diversified offering for NGI investors after the November completion of the balance of the Strategic Portfolio. A US$220m capital raising was instituted to fund the acquisition.

After incorporating this capital raise into forecasts, along with 100% of the Dyal portfolio, the broker's target slips to $1.90 from $1.95. Buy.

Target price is $1.90 Current Price is $1.30 Difference: $0.6
If NGI meets the Ord Minnett target it will return approximately 46% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 1.0

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

Shaw and Partners rates PEN as Buy (1) -

Peninsula Energy has established its Dagger uranium resource, providing further potential expansion opportunities at its Lance project. Shaw and Partners points out Dagger has an inferred resource of 6.9m pounds at 1,037 parts per million. 

The company intends on a drilling program in the coming calendar year, with the goal of upgrading the resource. On a revised processing plan, Peninsula Energy is targeting first production in December 2024, ramping up to a 1.8m pound steady state by 2029. 

The Buy rating and target price of 27 cents are retained.

Target price is $0.27 Current Price is $0.12 Difference: $0.15
If PEN meets the Shaw and Partners target it will return approximately 125% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Morgan Stanley rates PFP as Overweight (1) -

Morgan Stanley sees scope for a significant re-rating of Propel Funeral Partners shares, and downside protection due to the strategic value of the asset. The company has announced the receipt of inbound interest from multiple parties and has appointed defence advisers.

At the same time, management noted none of the interest to-date has been compelling.

The broker's Overweight rating and target price of $6.10 are retained. Industry view: In-Line.

Target price is $6.10 Current Price is $4.53 Difference: $1.57
If PFP meets the Morgan Stanley target it will return approximately 35% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Macquarie rates PLL as Outperform (1) -

Piedmont Lithium's joint venture partner at Ewoyaa Atlantic Lithium has secured the mining lease for its Ewoyaa lithium project from the Ghana government (the first ever granted), and Macquarie believes this has sharply derisked the project. 

The government's maiden lease comes with conditions, advises the broker, including parliamentary ratification and key permits, such as environmental approvals, and the company must start production before October 2025 and list on the Ghana Stock Exchange within five years of first production.

The lease is valid for 15 years and is renewable. Macquarie observes the company is also planning to evaluate feldspar production and downstream lithium conversion for the lease, not included in the broker's base case. The broker observes upside to the Resource base.

EPS forecasts fall -2% to -4% across 2023 to 2030.

Outperform rating and $1.60 target price retained.

Target price is $1.60 Current Price is $0.48 Difference: $1.125
If PLL meets the Macquarie target it will return approximately 237% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Ord Minnett rates PME as Sell (5) -

While Ord Minnett now concedes Pro Medicus is demonstrating smaller radiology groups are willing to pay a premium  for the company's technology, the Sell rating remains. It's felt wider uptake will be slow.

The broker advances this view following a contract win by Pro Medicus with South Shore Health in the US for $16m over eight years.

Ord Minnett's constant currency earnings forecasts are unchanged as such a contract win has already been anticipated, though the target rises by 3% to $34.50, largely due to a weaker Australian dollar.

Target price is $34.50 Current Price is $79.37 Difference: minus $44.87 (current price is over target).
If PME meets the Ord Minnett target it will return approximately minus 57% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $63.88, suggesting downside of -17.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

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

Ord Minnett rates QOR as Initiation of coverage with Buy (1) -

Ord Minnett initiates coverage on global digital safety and student wellbeing solutions company Qoria, formerly known as Family Zone Cyber Safety, with a Buy rating and sets a 32c target price.

The broker expects the company will approach breakeven in FY24, on an adjusted earnings (EBITDA) basis, and notes shares trade at a -16% discount to valuation relative to the peer group.

Qoria operates in large, state-funded and fragmented global markets with legislative tailwinds, points out Ord Minnett, and the company's product suite continues to take market share across all verticals and geographies.

Target price is $0.32 Current Price is $0.21 Difference: $0.11
If QOR meets the Ord Minnett target it will return approximately 52% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Citi rates RGN as Buy (1) -

Region Group's September-quarter operational update appears to have met Citi's forecasts, the broker observing the company enjoyed stable defensive sales growth from its supermarket-anchored retail portfolio. FY24 guidance was retained.

The broker expects inflation will fall to 3.5% in 2024 and 2% in 2025. Citi estimates this will cut Region Group's property expense growth rate, which rose 6% over the quarter, compared to a rise in property income of 4.2% in FY23, suggesting an improvement in income margins.

On the capital front, the company has identified 10 property worth $200m for sale at a cap rate of 5.25%, below the FY23 average of 5.85%, which will be used to reduce debt, then later acquisitions and capital management.

Buy rating and $2.60 target price retained.

Target price is $2.60 Current Price is $2.11 Difference: $0.49
If RGN meets the Citi target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $2.41, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

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

Following Region Group's 1Q operational update, Morgan Stanley's key takeaway is the potential divestment of ten small assets totaling  around $200m through FY24. Capital management initiatives, including a buyback, are being considered.

Management reaffirmed FY24 funds from operations (FFO) and adjusted funds from operations (AFFO) guidance of 15.6cps and 13.7cps, respectively.

Equal-weight and $2.25 target. Industry view: In-Line. 

Target price is $2.25 Current Price is $2.11 Difference: $0.14
If RGN meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $2.41, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Citi rates RMD as Buy (1) -

ResMed's competitior Philips has announce its move into markets outside of the US following the publication of its September-quarter results.

Management describes its return to the market as "encouraging", incurring no significant pricing differences.

Citi interprets this a a plus for ResMed, suggesting demand remains firm. 

While the broker considers concern over weight loss drugs such as Ozempic to be overdone, it expects ResMed's multiples are likely to remain pressured pending the SELECT and SURMOUNT-OSA trial data in November and mid-2024.

Buy rating and $39 target price retained heading into the company's September-quarter result.

Target price is $39.00 Current Price is $23.44 Difference: $15.56
If RMD meets the Citi target it will return approximately 66% (excluding dividends, fees and charges).

Current consensus price target is $36.89, suggesting upside of 61.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

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

ResMed is due to report much awaited 1Q results on October 27 (7.30 am AEDT) with one key focus, according to Morgan Stanley, being commentary surrounding the impact of weight loss drugs.

The market will also be awaiting evidence of gross margin recovery, suggest the analysts, and device growth in an environment free of supply pressures.

The broker is anticipating revenue growth of 20% for the 1Q  and muted margin improvement of 20bps to 56%. A margin of  57.4% is expected for FY25.

Separately, the broker reviewed competitor Philips' 3Q results and noted management commentary: "remediation of more than 99% of sleep therapy devices is completed while remediation of ventilators remains ongoing."

The Equal-Weight rating is retained with a target price of US$180.00. Industry view: In-Line. 

Current Price is $23.44. Target price not assessed.

Current consensus price target is $36.89, suggesting upside of 61.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Macquarie rates S32 as Neutral (3) -

South32's September-quarter results were mixed but net debt outpaced Macquarie's forecasts by a decent clip. Strong manganese production was offset by soft performances from nickel, zinc and met coal.

Management retained FY24 guidance.

The broker observes the Taylor feasibility study is nearing completion (due this quarter), and is a near-term catalyst for the company, and that feasibility studies at Hermosa and Sierra Gorda are on track.

Neutral rating and $3.40 target price retained. 

Target price is $3.40 Current Price is $3.27 Difference: $0.13
If S32 meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.09, suggesting upside of 26.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.7

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

Morgan Stanley rates S32 as Overweight (1) -

First quarter production for South32 was broadly in line with Morgan Stanley's forecast while sales were weaker across commodities, though Illawara thermal coal sales were a 45% beat due to an inventory drawdown.

Management left FY24 production guidance unchanged apart from a -5% reduction at Illawara driven by a long wall move and the impact of some (now resolved) industrial action.

The Overweight rating is maintained. Target is $4.15. Industry view: Attractive. 

Target price is $4.15 Current Price is $3.27 Difference: $0.88
If S32 meets the Morgan Stanley target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $4.09, suggesting upside of 26.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.7

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

UBS rates S32 as Buy (1) -

South32's September-quarter result appears to have met UBS forecasts but production was tracking in line with guidance.

The broker observes a rise in net debt due to an increase in aluminium inventories, which are expected to unwind within the next three to six months.

The company announced a group-wide cost review in the wake of lower commodity prices and is focusing on incremental capital expenditure and Cerro Matoso.

Studies at Sierra Gorda and Hermosa are due in the June half.

Buy rating and $4 target price retained.

Target price is $4.00 Current Price is $3.27 Difference: $0.73
If S32 meets the UBS target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $4.09, suggesting upside of 26.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.7

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

Macquarie - Cessation of coverage

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

Macquarie rates TWE as Outperform (1) -

Macquarie observes that China's is set to start reviewing tariffs on Australian wine - a process that should take about five months.

Assuming success, Macquarie estimates a 650,000 case increase in sales to China (on pre-covid volumes) should yield about $100m EBITS for Treasury Wine Estates.

The broker says that if the tariffs were dropped altogether, this could provide a chance for the company to take price across its Penfolds portfolio.

The company has previously forecast that in such as case, it will take the company three years to return to scale.

Outperform rating and $13.50 target price retained, the broker awaiting the outcome of the tariff review before incorporating forecasts.

Target price is $13.50 Current Price is $11.93 Difference: $1.57
If TWE meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $12.79, suggesting upside of 7.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Morgan Stanley rates TWE as Overweight (1) -

In a process expected to take five months, China will undertake an expedited review of tariffs imposed on Australian wine. Pending the review's outcome, China and Australia will suspend the dispute on wine at the World Trade Organisation.

Morgan Stanley suggests a re-entry into the Chinese market would be a key positive catalyst for shares of Treasury Wine Estates

While management has been successful at redistributing Penfolds to Asia ex-China, volumes remain depressed versus pre-tariff levels, explains the analyst.

The Overweight rating and $14.50 target are retained. Industry view: In-line.

Target price is $14.50 Current Price is $11.93 Difference: $2.57
If TWE meets the Morgan Stanley target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $12.79, suggesting upside of 7.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Macquarie rates VEA as Outperform (1) -

Macquarie observes Geelong's refining capacity has been restored and should be back to normalish this quarter, citing some extra operationgal expenditure but fully captured margins.

September-quarter Convenience and Mobility's fuels turnover surprised the broker to the downside, Macquarie sheeting the fall back to the dealer network.

But commercial fuel sales outpaced to the upside, as the company passed through oil-price and foreign-exchange volatility.

EPS forecasts fall -9% in 2023; and -3% in 2024 to reflect the miss.

Outperform rating retained, Macquarie spying "extraordinary value" in the company's shares at these levels ahead of the company's convenience retail transformation. Target price eases to $3.50 from $3.60.

Target price is $3.50 Current Price is $2.73 Difference: $0.77
If VEA meets the Macquarie target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $3.39, suggesting upside of 19.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

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

Viva Energy's 3Q sales were flat quarter-on-quarter and missed by -2% compared to forecasts by Morgan Stanley and consensus.

Despite recent negative revisions by consensus, the broker anticipates a modest negative market reaction to the update.

Equal-weight and $3.22 target retained. Industry view: Attractive.

Target price is $3.22 Current Price is $2.73 Difference: $0.49
If VEA meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $3.39, suggesting upside of 19.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Ord Minnett rates VEA as Accumulate (2) -

Ord Minnett assesses relatively strong 3Q fuel sales for Viva Energy, a good effort considering oil price strength and generally softer seasonal and economic conditions.

On the flipside, the broker notes crude oil intake fell by -40% due to extended maintenance at the Geelong refinery, resulting in an unaudited 3Q earnings (EBITDA) loss of -$20m for refining. More positively, processing has been progressively restored.

The broker highlights an attractive dividend yield and suggests shares are materially undervalued.

The Accumulate rating and $3.35 target are unchanged.

Target price is $3.35 Current Price is $2.73 Difference: $0.62
If VEA meets the Ord Minnett target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $3.39, suggesting upside of 19.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

UBS rates VEA as Buy (1) -

Viva Energy's September-quarter update outpaced UBS's forecasts thanks to strong refining margins at Geelong and Commercial and Industrial also proved a beat, thanks to strong fuel volumes and the company successful efforts to pass through price volatility.

UBS expects continued strength in the December quarter, underpinned by marine and jet fuel.

The broker considers the OTR acquisition will be a key catalyst as the company transforms its retail offering.

UBS forecasts a 16% compound annual growth rate for Viva Energy over 2023 to 2027 - excluding a contribution from OTR pending a decision from the competition watchdog.

EPS forecasts rise 14% for 2023; and are shaved (almost steady) over 2024 and 2025.

Buy rating retained. Target price rises to $3.50 from $3.40.

Target price is $3.50 Current Price is $2.73 Difference: $0.77
If VEA meets the UBS target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $3.39, suggesting upside of 19.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Ord Minnett rates XRO as Lighten (4) -

Prior to 1H results for Xero on November 9, Ord Minnett stays with its Lighten rating. While there was 3% growth in new businesses for the company in FY23, it's felt this disguises the impact of business failures on the company.

The analyst believes Xero has been spending an increasingly large share of the A&NZ sales and marketing budget on replenishing churned customers. This leaves less budget to allocate for subscriber and revenue growth, cautions Ord Minnett.

This churning probably involves business failures, suggests the broker, due to the high switching costs involved.

The $75 target is unchanged.

Target price is $75.00 Current Price is $107.90 Difference: minus $32.9 (current price is over target).
If XRO meets the Ord Minnett target it will return approximately minus 30% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $117.57, suggesting upside of 8.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. 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