Australian Broker Call

Credit Suisse rates ANN as Outperform (1) -

Credit Suisse notes the stock has underperformed the ASX 200 industrials by -5% since the first half results because of the weak global macro backdrop.

While cautious about the implications of a subdued economy, the broker has factored this into estimates and forecasts 13% growth in earnings per share in FY20, driven by lower raw material prices and cost reductions.

Outperform maintained. Target is raised to $28.60 from $27.50.

Target price is $28.60 Current Price is $27.74 Difference: $0.86
If ANN meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $27.56, suggesting downside of -0.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.4

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

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

The ACCC has conditionally authorised the merger with Automotive Holdings ((AHG)), to the extent AP Eagers disposes of existing new car dealerships in Newcastle and the Hunter Valley.

Morgan Stanley considers this a positive for both businesses, reaffirming the view that the merger did not raise competition concerns nationally. AP Eagers has an agreement to dispose of Kloster Motor Group, located in the Hunter Valley, for $54m.

Equal-weight rating retained. Target $7. Industry view: In-Line.

Target price is $7.00 Current Price is $10.48 Difference: minus $3.48 (current price is over target).
If APE meets the Morgan Stanley target it will return approximately minus 33% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.89, suggesting downside of -24.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Morgan Stanley rates BSL as Upgrade to Overweight from Equal-weight (1) -

Momentum in steel spreads is positive, with US price increases and declining raw material prices in east Asia. Morgan Stanley believes, with spreads moving in the right direction, investors can focus on the favourable fundamentals.

The broker believes FY20 forecasts are substantially de-risked and strong cash flow should eventuate. Rating is upgraded to Overweight from Equal-weight and the target raised to $14.50 from $12.00. Industry view: Cautious.

Target price is $14.50 Current Price is $13.04 Difference: $1.46
If BSL meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $13.64, suggesting upside of 4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Morgan Stanley rates ELO as Overweight (1) -

Morgan Stanley expects the company's FY19 revenue and earnings will be well received by the market. The company ended FY19 with 1341 customers, 310 or more net additions versus the prior year.

The company has pointed to traction being obtained in the lower-mid market and this is a key area of growth, the broker notes.

Overweight rating, In-Line industry view and $8.00 target.

Target price is $8.00 Current Price is $7.35 Difference: $0.65
If ELO meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Citi rates FMG as Neutral (3) -

Fortescue's share price sell-off yesterday could only be put down to sell-the-fact if Citi's assessment of the miner's June Q production report is anything to go by. Shipments were in line and costs lower than expected, with realised pricing up 50% on the same quarter last year on an improved grade mix.

Maiden FY20 guidance sees the broker raise its shipment and realised price expectations and thus earnings forecasts, with FY19 rising 13% and FY20 9%. Increased capex will nonetheless provide some offset. Neutral and $8.00 target retained.

Target price is $8.00 Current Price is $8.28 Difference: minus $0.28 (current price is over target).
If FMG meets the Citi target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.40, suggesting upside of 1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.0

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

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

Credit Suisse believes iron ore prices will peak in the current quarter and downgrades to Neutral from Outperform, despite finding the company difficult to fault.

That said, the broker finds little reason to sell the stock, particularly with a $0.22 dividend to come in August. However, it is likely the share price will come under pressure if iron ore prices ease.

The company reported a strong finish to FY19 with record June quarter production. Target is reduced to $8.00 from $8.20.

Target price is $8.00 Current Price is $8.28 Difference: minus $0.28 (current price is over target).
If FMG meets the Credit Suisse target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.40, suggesting upside of 1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.0

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

Macquarie rates FMG as Outperform (1) -

June quarter results beat Macquarie's expectations. Guidance for FY20 is also slightly better than expected. The broker believes the strong cash performance means the company is well-placed to deliver a positive surprise on dividends at the results on August 26.

The company has reiterated dividend payout-out guidance of 50-80% of FY19 earnings. Outperform maintained. Target is $11.

Target price is $11.00 Current Price is $8.28 Difference: $2.72
If FMG meets the Macquarie target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $8.40, suggesting upside of 1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.0

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

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

The June quarter was in line with expectations and strong prices helped generate more cash, Morgan Stanley observes. The broker expects a final dividend of $0.095.

Equal-weight maintained. Target is $7.95. Industry view is Attractive.

Target price is $7.95 Current Price is $8.28 Difference: minus $0.33 (current price is over target).
If FMG meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.40, suggesting upside of 1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.0

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

Ord Minnett rates FMG as Buy (1) -

June quarter production revealed average revenue was -8% below the benchmark iron ore price but above Ord Minnett's forecasts. Guidance for FY20, for production of 170-175mt with costs around US$13.50/t , is largely in line with forecasts.

Ord Minnett is positive on the stock and maintains a Buy rating. Target is reduced to $10.50 from $11.00. The broker believes a drop in the company's share price following the report relates to a change in sentiment regarding iron ore markets.

Target price is $10.50 Current Price is $8.28 Difference: $2.22
If FMG meets the Ord Minnett target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $8.40, suggesting upside of 1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.0

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

UBS rates FMG as Sell (5) -

June quarter shipments were in line with expectations. With product discounts averaging -8% in the quarter UBS did consider there was a chance pricing could be better. The broker has reduced FY20-21 earnings estimates by -2-5%.

Sell rating is maintained because of concerns over the iron ore price. Target is steady at $7.20.

Target price is $7.20 Current Price is $8.28 Difference: minus $1.08 (current price is over target).
If FMG meets the UBS target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.40, suggesting upside of 1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.0

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

UBS rates GNC as Buy (1) -

The Australian Competition and Consumer Commission has raised preliminary concerns about the divestment of the bulk liquids terminals. The regulator considers the acquisition will remove competition in NSW, Victoria and South Australia.

A final decision is scheduled for October 17. UBS assesses a risk that either the terminals remain in the new GrainCorp post de-merger or are divested to another party for a lower price than currently agreed with ANZ Terminals. Buy rating and $9.65 target.

Target price is $9.65 Current Price is $8.51 Difference: $1.14
If GNC meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $8.85, suggesting upside of 3.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Macquarie rates GOR as Downgrade to Neutral from Outperform (3) -

Macquarie downgrades to Neutral from Outperform as the target is now in line with the current share price. Target is $1.40.

Gruyere will continue to produce gold via the SAG mill and CIL circuits until the commissioning of the ball mill. Commissioning in a timely manner will influence 2019 production costs, the broker assesses, with further delays likely to push back nameplate production.

Target price is $1.40 Current Price is $1.38 Difference: $0.02
If GOR meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Credit Suisse rates HLS as Neutral (3) -

On a fundamental basis, Credit Suisse envisages significant earnings risk with headwinds from Medical Centre and labour costs. There is also execution risk regarding the company achieving its strategic initiatives.

However, in the short term, the share price is expected to be supported by prospects for M&A. Neutral maintained. Target is reduced to $3.05 from $3.10.

Target price is $3.05 Current Price is $2.87 Difference: $0.18
If HLS meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $3.19, suggesting upside of 11.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

UBS rates HVN as Neutral (3) -

UBS lifts forecasts by 2-5% to reflect the benefit from fiscal and monetary stimulus in Australia. However, the share price is up 43% in the year to date which is considered to represent fair value and a Neutral rating is maintained.

The broker believes Harvey Norman is a stronger, more agile business the market appreciates offshore and the backdrop for Australian retailers also less negative. Target is raised to $4.10 from $3.40.

Target price is $4.10 Current Price is $4.47 Difference: minus $0.37 (current price is over target).
If HVN meets the UBS target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.88, suggesting downside of -13.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.2

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

Ord Minnett rates IAG as Downgrade to Hold from Accumulate (3) -

The share price has been strong recently and Ord Minnett observes the valuation gap has opened up relative to peers. As a result, the broker downgrades to Hold from Accumulate.

The company is due to report its FY19 result on August 8 and Ord Minnett will look for information regarding whether the company will put a stop to market share losses and seek growth, particularly in commercial insurance. Target is raised to $8.20 from $8.00.

Target price is $8.20 Current Price is $8.61 Difference: minus $0.41 (current price is over target).
If IAG meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.89, suggesting downside of -8.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Citi rates IFL as Sell (5) -

IOOF's June Q funds under management fell short of the broker's expectation but underlying composition was a little better than expected, suggesting the business is not yet broken. However the broker believes there are still significant challenges ahead.

These include material additional advice remediation charges and a need to completely restructure the advice business, which will require significant investment. Citi would not be surprised to see the new CEO rebase expectations at the upcoming result release.

Sell and $4.80 target retained.

Target price is $4.80 Current Price is $5.87 Difference: minus $1.07 (current price is over target).
If IFL meets the Citi target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.38, suggesting downside of -8.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

Credit Suisse rates IFL as Neutral (3) -

Positive market movements supported an increase in funds under management and administration of 3.4% in the June quarter.

Credit Suisse assesses the company is facing uncertainty regarding the potential impact of remediation costs, industry pressures and completing the acquisition of the ANZ P&I.

The broker maintains a Neutral rating and $5.90 target.

Target price is $5.90 Current Price is $5.87 Difference: $0.03
If IFL meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $5.38, suggesting downside of -8.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

Macquarie rates IFL as Neutral (3) -

June quarter flows improved, Macquarie observes, most notably in platforms. While recognising the momentum was encouraging, ongoing uncertainty around the ANZ transaction and risks regarding potential remediation charges make the broker cautious.

Neutral rating maintained. Target is raised to $6.10 from $5.85. FY20 estimates for earnings per share are raised by 4.6%

Target price is $6.10 Current Price is $5.87 Difference: $0.23
If IFL meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $5.38, suggesting downside of -8.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

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

Funds under management beat Morgan Stanley's estimates in the June quarter, with benefits from positive markets. Adjusted for pension payments, both platform and advice flows were ahead of expectations.

Equal-weight rating maintained. Target is $4.95. Industry view: In Line.

Target price is $4.95 Current Price is $5.87 Difference: minus $0.92 (current price is over target).
If IFL meets the Morgan Stanley target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.38, suggesting downside of -8.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

UBS rates IFL as Sell (5) -

There were positive net flows of $381m in the June quarter, which suggests to UBS there was little brand damage from the December run-in with the regulator. Nevertheless, revenue pressure may intensify if the company looks to address its pricing to sustain flows.

There is also heightened risk heading into the FY19 result regarding the potential remediation provisions for advice. Sell rating maintained. Target is raised to $5.15 from $5.05.

Target price is $5.15 Current Price is $5.87 Difference: minus $0.72 (current price is over target).
If IFL meets the UBS target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.38, suggesting downside of -8.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

UBS rates JBH as Downgrade to Sell from Neutral (5) -

UBS lifts estimates for FY19-21 by 1-10% to reflect the benefit of fiscal and monetary stimulus. The broker believes the company is executing well but rising costs, increased competitive intensity and the need to invest will mean the multiple de-rates.

JB Hi-Fi has the lowest degree of operating leverage among discretionary retailers under coverage and margin headwinds are not factored in, UBS assesses. Rating is downgraded to Sell from Neutral and the target is raised to $26.85 from $23.50.

Target price is $26.85 Current Price is $30.40 Difference: minus $3.55 (current price is over target).
If JBH meets the UBS target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $27.33, suggesting downside of -10.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

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

The company has announced a US$665m acquisition in Brazil with a producing asset called Bauna. Morgan Stanley notes the price paid will be lower, as the effective date of acquisition is January 1 2019.

While the announcement appears positive, the broker requires further information, including medium-term production profiles and the abandonment timeline, to do further analysis.

The company will undertake an equity raising but fund the transaction with existing cash and up to US$250m in debt.

Equal-weight retained. Target is $0.94. Industry view is In-Line.

Target price is $0.94 Current Price is $1.59 Difference: minus $0.65 (current price is over target).
If KAR meets the Morgan Stanley target it will return approximately minus 41% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Citi rates MQG as Neutral (3) -

The main take-out from any Macquarie AGM is guidance, and here management stuck to FY20 "slightly down" on FY19. The main reason is a bumper FY19 in oil market trading given geopolitical influences, and in forex given central bank easing speculation, which will be hard to top.

However, Citi sees FY20 earnings risk skewed to the upside despite the lofty benchmark provided by FY19. Neutral and $123.50 target retained.

Target price is $123.50 Current Price is $129.07 Difference: minus $5.57 (current price is over target).
If MQG meets the Citi target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $131.28, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Morgan Stanley rates MQG as Overweight (1) -

At its AGM Macquarie Group has reaffirmed guidance for FY20 to be slightly lower than FY19, as expected.

Morgan Stanley suspects downside risk is reduced and is confident the business can grow earnings by 9% in the first half because the second quarter of FY19 was weaker than the first.

Having said that, the broker believes the company needs to deliver a strong first half as the second half will be cycling a much tough comparable.

The broker maintains an Overweight rating and $136 target. In-Line industry view maintained.

Target price is $136.00 Current Price is $129.07 Difference: $6.93
If MQG meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $131.28, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Ord Minnett rates MQG as Hold (3) -

Ord Minnett notes stronger-than-expected commodity conditions have helped the company make a solid start to the year, with first quarter net profit broadly in line with a year ago.

While acknowledging falling bond yields and strong equity markets as positive influences, the broker does not believe the risk/reward is sufficiently attractive to become more constructive on the stock.

Hold rating maintained. Target rises to $134 from $130.

Target price is $134.00 Current Price is $129.07 Difference: $4.93
If MQG meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $131.28, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

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

UBS raises estimates for earnings per share by 9-12% and upgrades to Buy from Neutral. The broker estimates, at the current share price, the market is factoring in an $11m uplift in earnings (EBIT) from the new turnaround strategy.

UBS believes this is too low, given Myer is most leveraged to tax reductions and there is scope to reduce space over the next 3-4 years. Target is raised to $0.64 from $0.59.

Target price is $0.64 Current Price is $0.53 Difference: $0.11
If MYR meets the UBS target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $0.50, suggesting downside of -6.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

Citi rates NCM as Neutral (3) -

Newcrest's FY19 production was "outstanding", the broker suggests, bouncing back from the operational issues of FY17-18. The broker awaits FY20 guidance at the upcoming result release.

Meanwhile, the miner's share price was up 68% in FY19 with the gold price up 16%. Neutral and $33.25 target retained.

Target price is $33.25 Current Price is $33.66 Difference: minus $0.41 (current price is over target).
If NCM meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $25.29, suggesting downside of -24.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

This company reports in USD. 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

Credit Suisse rates NCM as Underperform (5) -

Credit Suisse considers the June quarter satisfactory, as the company delivered on FY19 reduction guidance. Cadia and Lihir meet targets while Telfer and Gosowong were weaker than expected.

Credit Suisse maintains an Underperform rating and $20.30 target.

Target price is $20.30 Current Price is $33.66 Difference: minus $13.36 (current price is over target).
If NCM meets the Credit Suisse target it will return approximately minus 40% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $25.29, suggesting downside of -24.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

This company reports in USD. 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 NCM as Underperform (5) -

The mines performed well in the June quarter, with Macquarie noting a strong result on costs. Grades at Cadia were firm and well above expectations.

Macquarie is not surprised by the delay at Wafi Golpu, although it does highlight some of the uncertainties in the company's project pipeline. Underperform rating and $24 target maintained.

Macquarie anticipates FY20 will be the start of the decline in the production outlook for Newcrest.

Target price is $24.00 Current Price is $33.66 Difference: minus $9.66 (current price is over target).
If NCM meets the Macquarie target it will return approximately minus 29% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $25.29, suggesting downside of -24.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

This company reports in USD. 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

UBS rates NCM as Sell (5) -

June quarter production was slightly below UBS estimates. Some concerns have been put to rest regarding the impact of the NSW drought on Cadia (unlikely to affect FY20 production) and the sustainability of 15mtpa at Lihir, which was maintained.

UBS maintains a Sell rating, and remains concerned that production and earnings will peak in FY20. Target is $25.

Target price is $25.00 Current Price is $33.66 Difference: minus $8.66 (current price is over target).
If NCM meets the UBS target it will return approximately minus 26% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $25.29, suggesting downside of -24.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

This company reports in USD. 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

Ord Minnett rates ORI as Lighten (4) -

Ord Minnett believes a significant threat is looming for Orica. China's policy to replace electric detonators with a safer electronic delay alternative by 2022 provides a catalyst for commercial innovation and lower production costs.

This is likely to disrupt the global shock tube market for existing manufacturers. Ord Minnett estimates the impact on the company's pre-tax profit could reach $51m per annum, as a result of competition from China.

Earnings forecasts are reduced by -1-5% from FY22. The broker maintains a Lighten rating and reduces the target to $16.20 from $16.50.

Target price is $16.20 Current Price is $20.45 Difference: minus $4.25 (current price is over target).
If ORI meets the Ord Minnett target it will return approximately minus 21% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $19.08, suggesting downside of -6.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Credit Suisse rates PLS as Outperform (1) -

June quarter production was solid but sales were soft, Credit Suisse observes. September quarter production plans have been moderated to accommodate soft demand from key customers.

Hence, the broker suspects the outlook could get worse before it gets better. Nevertheless, other issues appear transient and Credit Suisse is of the view that the high-quality Pilgangoora mine will in time become a leading global supplier.

Outperform rating maintained. Target is reduced to $0.90 from $1.00.

Target price is $0.90 Current Price is $0.48 Difference: $0.42
If PLS meets the Credit Suisse target it will return approximately 88% (excluding dividends, fees and charges).

Current consensus price target is $0.80, suggesting upside of 66.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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

Macquarie rates PLS as No Rating (-1) -

June quarter production met Macquarie's expectations. Modifying cost expectations in line with the company's commentary means FY20 estimates for earnings per share drop by -31%.

The company will reduce production in the first quarter of FY20 to allow customers to ramp up conversion capacity. Modifications will also be undertaken on the plant to further optimise the process.

The broker is advising hence is currently restricted from making a recommendation.

Current Price is $0.48. Target price not assessed.

Current consensus price target is $0.80, suggesting upside of 66.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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

Ord Minnett rates QBE as Accumulate (2) -

Ord Minnett believes the stock is exposed to the hardening in the commercial insurance cycle and has suffered earlier than peers in running out to reserves. QBE Insurance is due to release its first half result on August 15.

Interest rates are a headwind, although the stock is more leveraged to the large swings that occur on the underwriting side, which Ord Minnett assesses, on balance, should be supportive.

Accumulate maintained. Target is raised to $14.00 from $13.30.

Target price is $14.00 Current Price is $12.30 Difference: $1.7
If QBE meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $12.93, suggesting upside of 5.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Credit Suisse rates SHL as Downgrade to Underperform from Neutral (5) -

Despite some stabilisation and improvement offshore, Credit Suisse is cautious about conditions for the company in Australia.

On the back of weaker-than-expected industry data, estimates are reduced by -1% and the target is lowered to $24.20 from $24.70.

The broker is not able to justify the current valuation and downgrades to Underperform from Neutral.

Target price is $24.20 Current Price is $27.40 Difference: minus $3.2 (current price is over target).
If SHL 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 $27.24, suggesting downside of -0.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

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

UBS reviews volume trends for the Australian IVF market and the implications. Data is positive for Virtus Health and the broker updates growth assumptions. Earnings estimates are upgraded by 1-11% across FY19-21.

Target lifts to $5.40 from $4.40 and the rating is upgraded to Buy from Neutral. The domestic outlook is the key driver for the business, while organic earnings growth is likely to remain challenging in the international division, in the broker's view.

Target price is $5.40 Current Price is $4.96 Difference: $0.44
If VRT meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $5.20, suggesting upside of 4.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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