Australian Broker Call

Ord Minnett rates ANN as Accumulate (2) -

In paying -US$640m for Kimberly Clark's Personal Protective Equipment (KCPPE) business, Ansell is getting the business for less than what Ord Minnett believes it is worth.

The target price rises to $32 from $30 (despite a dilutive equity raise) as the broker assumes stronger returns on new capital that Ansell invests in the future. KCPPE earns higher margins and is less capital intensive, explains the analyst.

Ansell is raising US$263m from an underwritten share placement and will raise up to US$65m via a share purchase plan. The balance for the KCPPE business will come from US$377m of new committed debt and US$24m from existing cash.

The Accumulate rating is maintained.

Target price is $32.00 Current Price is $25.43 Difference: $6.57
If ANN meets the Ord Minnett target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $27.18, suggesting upside of 3.0% (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: 0.3

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

Citi rates ARB as Buy (1) -

Citi believes ARB Corp's newer way of partnering with OEMs is helpful for growing the company's brand in the US which should then have a positive impact on ARB's aftermarket sales.

The new factory fitted strategy means ARB does not rely on individual car dealers to sell its products. This is a positive, according to the broker, as car dealers typically lack knowledge or adequate incentives to sell ARB’s products at the point of sale.

Toyota has launched a Trailhunter trim for its new next-gen 4Runner in the US and the analysts assume ARB will have several of its
branded accessories factory fitted, which could result in 7% upside to Citi's FY25 gross profit forecast.

The Buy rating and $44.90 target are maintained.

Target price is $44.90 Current Price is $39.99 Difference: $4.91
If ARB meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $37.50, suggesting downside of -5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

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

Ord Minnett rates BPT as Accumulate (2) -

Ord Minnett finds it hard to believe another cost blowout and schedule delay has occurred at Beach Energy's Waitsia Stage 2 gas project.

The company's share of capex increases by around one third to -$600-$650m from -$450-500m and first gas has been delayed by around six months to early-2025 due to construction quality issues, explains the analyst.

Thankfully, Brent crude has risen by around 10% in the past month, thereby halving the broker's negative valuation adjustment for Beach Energy. The target falls to $2.40 from $2.50 and the Accumulate rating is maintained.

Ord Minnett believes Beach's balance sheet can cover the cost blowout at Waitsia.

Target price is $2.40 Current Price is $1.62 Difference: $0.785
If BPT meets the Ord Minnett target it will return approximately 49% (excluding dividends, fees and charges).

Current consensus price target is $1.95, suggesting upside of 22.6% (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

Bell Potter rates DVP as Buy (1) -

Develop Global's Woodlawn operation is expected to recommence production in the 1H of 2025. Bell Potter suggests the final investment decision (FID) and announcement of a financing package are important upcoming catalysts.

Financing options include a minority interest sell-down of the Woodlawn project and traditional project financing, explains the broker.

Separately, management is guiding to FY25 Mining Services revenue of circa $175m, compared to the $186m forecast by the analysts.

The broker's Buy rating is maintained and the target falls to $3.30 from $4.10 to reflect lower Mining Services business revenue, reduced Woodlawn production in FY25, and delayed production from the Pioneer Dome project near Kalgoorlie.

Target price is $3.30 Current Price is $2.18 Difference: $1.12
If DVP meets the Bell Potter target it will return approximately 51% (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

UBS rates ELD as Neutral (3) -

It appears to UBS the majority of Elders' earnings weakness, as indicating by a trading update, is linked to the December quarter and within the Livestock Agency business. Management noted 1H earnings were significantly below expectations.

The broker highlights livestock auction values have since recovered, with the March quarter up by 11% on the previous corresponding period. This recovery, alongside a solid 2024 winter crop outlook, provides some optimism to the analyst around the second half.

However, UBS cautions a lack of detail released by management around the 1H result makes any assessment difficult.

The broker's Neutral rating is retained and the target price falls to $9.00 from $9.70 on EPS downgrades over FY25 and FY26.

Target price is $9.00 Current Price is $8.00 Difference: $1
If ELD meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $8.88, suggesting upside of 9.4% (ex-dividends)

The company's fiscal year ends in September.

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

Citi rates GMG as Buy (1) -

Despite Goodman Group's more than 25% share price rally so far this year, Citi anticipates further good news in a quarterly update on May 8. The broker also sees increased potential for an upgrade to earnings guidance prior to the June reporting season.

The analysts note ongoing advancement for Goodman’s data centre pipeline and further progress on execution of the development work in progress.

The broker also notes potential realised earnings from the internalisation of Goodman’s management company in New Zealand.

The conversion of Goodman’s assets from traditional warehouses into Data Centres presents a robust growth opportunity, suggests Citi.

The Buy rating and $32.50 target are maintained. 

Target price is $32.50 Current Price is $31.81 Difference: $0.69
If GMG meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $30.06, suggesting downside of -7.1% (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

Bell Potter rates RRL as Buy (1) -

Input cost inflation and scope changes for the McPhillamys Gold project have resulted in material capital and operating cost increases, compared to Bell Potter's prior estimates.

The definitive feasibility study (DFS) on the project is due around the end FY24, and management at Regis Resources continues to await final Commonwealth approvals.

Given the recent highs for the gold price and the broker's long-term price forecast of around $3,200oz (in Australian dollars), McPhillamys remains an attractive project.

The Buy rating and $2.60 target are unchanged.

Target price is $2.60 Current Price is $2.09 Difference: $0.51
If RRL meets the Bell Potter target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $2.14, suggesting upside of 1.2% (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

UBS rates SUN as Buy (1) -

UBS has restructured its financial model and sum-of-parts valuation for Suncorp Group to reflect the likely sales of the bank and the NZ Life business during FY25. Insurance forecasts are also refreshed.

The analysts notes selling the bank and NZ Life is timely for the remaining general insurance division, where margins are rising towards the top end of the group's mid-term target range.

The broker's Buy rating is maintained and the target increased to $18.20 from $16.80 as EPS forecasts for FY24 and FY25 are increased by 2% and 6%, respectively.

Target price is $18.20 Current Price is $16.42 Difference: $1.78
If SUN meets the UBS target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $16.61, suggesting upside of 2.4% (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

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

After a period of research restriction, UBS upgrades its rating for Whitehaven Coal to Buy from Neutral and raises the target to $8.70 from $6.30 (the last price in the FNArena database). The company now derives around 70% of revenues from met coal.

The broker's forecasts now include the completion of the Blackwater and Daunia acquisition, and incorporates rises for the broker's 2025 and long-term met coal price forecasts of 11% and 13%, respectively. The 2024 forecast is trimmed by -8%.

As Indian demand accelerates over the medium-to-long-term, UBS believes the met coal market will remain in structural deficit.

Target price is $8.70 Current Price is $7.36 Difference: $1.34
If WHC meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $8.35, suggesting upside of 10.2% (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