Australian Broker Call

Bell Potter rates 5GG as Speculative Buy (1) -

Pentanet provided  a "flat" quarterly update, Bell Potter observes, as it focuses on increasing its capacity to service high-margin on-net subscribers. The company expects early upgrade sites for its 5G network will go live in FY24.

The third tower will come online for testing in the fourth quarter of FY23. The upgrade should expand coverage for on-net services by slightly under 1000 per tower and reduce capacity constraints on the existing fixed wireless network.

Speculative Buy retained. Target is reduced to $0.12 from $0.16.

Target price is $0.12 Current Price is $0.08 Difference: $0.038
If 5GG meets the Bell Potter target it will return approximately 46% (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

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

Ord Minnett downgrades Avita Medical to Hold from Accumulate, after the share price rose above the broker's trigger level. Target price is steady at $5.60.

The broker expects the company to be free cash flow positive by FY26.

Target price is $5.60 Current Price is $4.65 Difference: $0.95
If AVH meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $5.22, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Ord Minnett rates BRG as Buy (1) -

Breville Group has reiterated FY23 guidance, in line with market forecasts.

Ord Minnett expects the company to raise gross profit margins and cut manufacturing costs and freight charges.

The broker appreciates the company's long-term growth prospects, driven by its strategy of geographic expansion, and organic growth through higher market penetration.

Buy rating and $23.50 target price retained.

Target price is $23.50 Current Price is $20.85 Difference: $2.65
If BRG meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $23.44, suggesting upside of 13.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Shaw and Partners rates BRG as Buy (1) -

Breville Group has reiterated FY23 guidance at its 2023 Macquarie Conference presentation, which sits above Shaw and Partners' forecast.

Hence the broker upgrades its estimates and expects short covering (shorts are more than 7%) in response to the announcement could drive the price higher, particularly given Breville Group's premium to peers has been sharply discounted to the five-year average.

Shaw and Partners now expects strong gross margins to hold, reflecting the company's pricing power, and observes two of its global competitors also staged a beat and reiterated guidance in the past week.

Buy rating retained. Target price rises to $23.50 from $23.00.

Target price is $23.50 Current Price is $20.85 Difference: $2.65
If BRG meets the Shaw and Partners target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $23.44, suggesting upside of 13.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Ord Minnett rates COG as Buy (1) -

COG Financial Services's March-quarter trading update pleased Ord Minnett, the company recording strong asset finance transaction volumes and commissions, and the broker believes the company is on track to meet expectations.

Ord Minnett also observes a backlog of equipment orders and a positive outlook for agriculture, transport and infrastructure market. 

Buy rating and $1.90 target price retained. 

Target price is $1.90 Current Price is $1.42 Difference: $0.48
If COG meets the Ord Minnett target it will return approximately 34% (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

Citi rates CPU as Buy (1) -

Computershare’s lower FY24 margin income guidance is disappointing for Citi, if not completely surprising, although the impact of balances (as opposed to rates) is more than expected.

But with hedging plans more clearly detailed, in the broker's view its margin income estimate used in prior calculations still stands up as reasonable, if not a little conservative.

Computershare now has surplus capital in excess of US$2bn, with this potentially rising to US$3bn by the end of FY24. Citi continues to believe its preference would be to deploy this in acquisitions rather than return it to shareholders, though the latter remains an option.

Target falls to $25.90 from $27.30, Buy retained.

Target price is $25.90 Current Price is $21.45 Difference: $4.45
If CPU meets the Citi target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $25.56, suggesting upside of 16.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

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

Computershare has downgraded FY24 margin income guidance implying -8% downside to consensus earnings forecasts, advises Morgan Stanley (the broker was already sitting -8.5% below consensus on FY24 management EPS).

The broker says a good degree of this is already reflected in the share price, but expects the company's shares to take a tumble none-the-less.

Morgan Stanley points out that the balance sheet is solid, the company boasting US$2bn in acquisition potential and suspects this could trigger a strategic shift.

Equal-weight rating and $22.60 target price retained. Industry view: In-line.

Target price is $22.60 Current Price is $21.45 Difference: $1.15
If CPU meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $25.56, suggesting upside of 16.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Morgans rates CPU as Add (1) -

Due to lower bond yields, Computershare has downgraded FY24 margin guidance, which equates to an around -10% downgrade to FY24 EPS guidance, according to Morgans.

As a result, the broker lowers its target to $25.86 from $29.78 though retains its Add rating as the current share price is more than -10% below the new target.

The analyst expects the market will appreciate management's decison to simplifying the business into three core operations: Issuer Services, Corporate Trust and Employee Share Plans.

Target price is $25.86 Current Price is $21.45 Difference: $4.41
If CPU meets the Morgans target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $25.56, suggesting upside of 16.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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 CPU as Buy (1) -

In Computershare's trading update FY23 growth in earnings per share of over 90% was reaffirmed while FY24 margin income guidance was reduced. UBS observes the margin income decline is entirely attributable to a sharp fall in client balances.

While client activity levels are subdued, the broker believes the mix of businesses provides natural hedges and will offer a cyclical recovery in time. UBS also lauded the "exemplary dividend history".

While the company has left open the prospect of a buyback, the broker suspects an acquisition is more likely in the near term. Buy rating maintained. Target edges down to $28 from $29.

Target price is $28.00 Current Price is $21.45 Difference: $6.55
If CPU meets the UBS target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $25.56, suggesting upside of 16.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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 CWY as Outperform (1) -

Macquarie retains its $3.05 target and Outperform rating after Cleanaway Waste Management reiterated guidance for FY23  EBITDA of around $670m and EBIT of circa $300m.

Management noted the pressure on labour markets has eased and productivity improvements are planned. The company sees meaningful margin recovery potential, aided by non-recurrence of various operational disruptions and the unwinding of excess costs.

The broker maintains its Outperform rating and $3.05 target.

Target price is $3.05 Current Price is $2.56 Difference: $0.49
If CWY meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $2.80, suggesting upside of 10.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Citi rates DHG as Buy (1) -

Today's trading update from Domain Holdings Australia including margin guidance has disappointed, unveiling weaker-than-expected listings and negative geographical mix, report analysts at Citi in an initial response.

The analysts suspect consensus forecast for FY23 EBITDA will reset by some -6% lower. It's not all bad news as there has been a price increase as well, and this suggests FY24 net profit might receive a boost by some 7%, on the analysts' quick calculation.

Part of the assessment includes a broad calculation that Q4 might be performing better, meaning any downward adjustment to forecasts might remain limited.

Buy rating and $4 target price.

Target price is $4.00 Current Price is $3.33 Difference: $0.67
If DHG meets the Citi target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $3.40, suggesting upside of 6.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Citi rates DXS as Neutral (3) -

Dexus released a March quarter update highlighting stability in distribution of 51cps to 51.5cps for FY23.

The office portfolio remains stable as a flight to quality continued with well-located higher quality buildings attracting stronger demand, Citi notes.

Rent collections remain high at 99.3% together with high occupancies of 95.4% and 97.8% for the office and industrial portfolios respectively.

Dexus is currently trading at a -34% discount to Citi's net tangible asset valuation which the broker believes is caused predominantly due to negative global investor sentiment surrounding office fundamentals.

Neutral and $8.00 target retained.

Target price is $8.00 Current Price is $7.66 Difference: $0.34
If DXS meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $9.11, suggesting upside of 22.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

UBS rates DXS as Neutral (3) -

UBS notes office occupancy in the March quarter was stable and for Dexus at 95.4% well ahead of the market at 88%. This, the broker argues, reflects the quality skew in the company's business but is also a risk as challenging leasing conditions persist.

Momentum on developments could imply more external capital is required, from asset sales and third-party partners, to fund the $17.4bn pipeline. UBS estimates soft FFO growth of 1.6%. The broker retains a Neutral rating and $8.69 target.

Target price is $8.69 Current Price is $7.66 Difference: $1.03
If DXS meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $9.11, suggesting upside of 22.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Macquarie rates EDV as Outperform (1) -

In a 3Q trading update, Endeavour Group raised capex guidance to -$470-520m from -$300-460m, due to an increased number of hotel acquisitions over the period.

The analyst expects margins will return to pre-covid levels after noting the mix is normalising, with more food and beverages and
less gaming. It's noted promotional activity remains elevated due to higher competition and a more price conscious consumer.

The broker points out the alcohol industry has proven resilient over the years, regardless of the underlying economic situation, and retains its Outperform rating. The target falls by -4% to $7.10.

Target price is $7.10 Current Price is $6.53 Difference: $0.57
If EDV meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $6.75, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Morgan Stanley rates EDV as Underweight (5) -

Endeavour Group's March-quarter Retail sales rose 12%, representing a sharp upgrade on the February trading update, advises Morgan Stanley after a management call.

March-quarter Hotels sale rose 18.5%, representing a sharp slowing since the February update.

Management guided to higher FY23 costs of -$240m to -$260m, compared with consensus estimates of -$230m, observes the broker and Hotels capital expenditure outpaced prior guidance at -$470m to $520m (-$320m to -$460m previously).

Underweight rating and $6.20 target price retained. Industry view: In-line.

Target price is $6.20 Current Price is $6.53 Difference: minus $0.33 (current price is over target).
If EDV 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 $6.75, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Morgans rates EDV as Add (1) -

Endeavour Group's Q3 sales growth was a slight beat versus Morgans forecast, but was offset by higher FY23 capex and net interest expense guidance.

Management noted trading conditions so far in Q4 are consistent with Q3.

The broker observes a lower contribution from gaming (higher margin) in the sales mix and lowers its Hotels margin assumptions accordingly. The target falls to $7.30 from $7.80. Add.

Target price is $7.30 Current Price is $6.53 Difference: $0.77
If EDV meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $6.75, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

UBS rates EDV as Neutral (3) -

Endeavour Group posted March quarter sales of $2.83bn, in line with UBS expectations. Hotel sales were up 18.5% yet below UBS estimates with five hotel acquisitions being completed during the quarter.

Store sales were up 2.8% while online sales were down as the broker observes consumers chased value in-store and were less inclined to pay for convenience in liquor. The broker reduces the target to $6.75 from $7.15 and retains a Neutral rating.

Target price is $6.75 Current Price is $6.53 Difference: $0.22
If EDV meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $6.75, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Citi rates FLT as Neutral (3) -

Today's trading update has seen Flight Centre Travel narrow its guidance down to $270-290m in FY23 EBITDA and Citi analysts, upon first response, believe the midpoint of that range is more or less in line with market consensus sitting at $282m.

Equally important, the analysts point out updated guidance is inclusive of the acquired Scott Dunn ($9m) which was not the case in the prior guidance for $250-280m.

Neutral. Target $19.55.

Target price is $19.55 Current Price is $20.35 Difference: minus $0.8 (current price is over target).
If FLT 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 $19.00, suggesting downside of -8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Macquarie rates HLS as Outperform (1) -

Macquarie lowers its FY23 EPS forecast for Healius to more align with the consensus forecast after updating estimates to reflect management expectations for FY23 earnings.

The broker slightly lowers its revenue estimates for both pathology and imaging and raises cost assumptions due to timing differences.

The Outperform rating is unchanged with Medicare data indicating positive trends for both base pathology and imaging, and the target slips to $4.05 from $4.10.

Target price is $4.05 Current Price is $3.07 Difference: $0.98
If HLS meets the Macquarie target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $3.22, suggesting upside of 6.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Morgans rates LVH as Add (1) -

In the wake of 3Q results for LiveHire, Morgans lowers its FY23-25 revenue estimates by around -10-20% on more conservative assumptions around direct sourcing (DS) technology clients in North America.

A slower client ramp-up than management expected has resulted in delayed revenues in the DS business, explains the analyst.

As part of a recently completed strategic review, LiveHire has engaged a US-based firm to “find potential strategic investors, merger partners, and/or acquirers”. The analyst highlights the company is focused upon cash preservation and attaining cash flow breakeven.

The target falls to 22c from 28c. Add.

Target price is $0.22 Current Price is $0.09 Difference: $0.135
If LVH meets the Morgans target it will return approximately 159% (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

Ord Minnett rates MIN as Lighten (4) -

Ord Minnett cuts FY23 and FY24 EPS forecasts for Mineral Resources by -65 and -23% after the company was forced to delay expansion plans at several mines, including Mt Marion.

But the broker remains upbeat, pointing out mining services production volumes are expected to double within two to three years and Mt Marion remains on budget, while Wodgina is on schedule to meet FY23 production guidance.

Given the company's strong share price retreat, the broker now believes the company is approaching fair value.

Despite the cuts, Ord Minnett says its EPS forecasts are above consensus, the broker expecting a sharp rally in lithium prices.

Hold rating and $75 target price retained. 

Target price is $75.00 Current Price is $72.97 Difference: $2.03
If MIN meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $92.86, suggesting upside of 29.8% (ex-dividends)

The company's fiscal year ends in June.

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 MMS as Overweight (1) -

McMillan Shakespeare provided no trading update at its investor day but Morgan Stanley said a positive surprise was management's isolation of the EV opportunity.

The broker points out that EVs carry higher prices than traditional vehicles, providing accretive unit economics - higher net asset values financed and novated yield accretion.

Morgan Stanley adds regulatory changes have helped lower EV ownership costs through the novated channel and that this continue in the years to come (see novated yield accretion above).

While the cost of selling EVs is higher than for internal combustion vehicles, the broker believes most of the rise in unit economics will bolster margins.

In terms of business as usual, June-half backlogs have grown at the same pace as the December half, and the broker says this points to demand resilience. 

Overweight rating and $17.50 target price retained. Industry view: In-line.

Target price is $17.50 Current Price is $15.51 Difference: $1.99
If MMS meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $15.72, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Morgans rates MP1 as Add (1) -

Morgans has reviewed last week's Q3 results for Megaport, which as expected were weak. However, management's guidance for FY23 and FY24 was ahead of consensus forecasts by 45% and 89%, respectively, largely due to a resetting of the cost base.

Achievement of guidance should be within management’s control, explains the analyst, as it’s primarily based on lower operating costs. It's thought the business will become free cash flow positive in FY24.

As the bulk of the broker's valuation is derived from forecasts in outer years, the valuation doesn't move as much as earnings. The target rises to $9.00 from $8.25. Buy.

Target price is $9.00 Current Price is $5.54 Difference: $3.46
If MP1 meets the Morgans target it will return approximately 62% (excluding dividends, fees and charges).

Current consensus price target is $9.16, suggesting upside of 70.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

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

Medibank Private's outlook update appears to have met if not outpaced Morgan Stanley's forecasts, the company posting strong growth in non-resident business, and the short-stay surgery model starting to yield results.

About 4% of the company's procedures are now trafficked through the model, up from 2.2% in FY21, yielding implied saving of -$3,000 to -$9,000 per procedure, advises the broker.

Meanwhile, resident cash claims have been sharply below forecasts and the broker believes stability in this sector, combined with the short-stay developments, points to structurally lower claims expense. 

Morgan Stanley adds the company is leading the push to create sustainable systems. FY23 and FY24 EPS forecasts move upwards.

Equal-Weight rating and $3.43 target price retained.

Target price is $3.43 Current Price is $3.49 Difference: minus $0.06 (current price is over target).
If MPL meets the Morgan Stanley target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.46, suggesting downside of -1.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Morgans rates MPL as Hold (3) -

A market update by Medibank Private held few surprises for Morgans, with management broadly re-affirming key FY23 guidance metrics.

The target rises to $3.50 from $3.32 due to an 1-3% EPS upgrade for all forecast years, and the broker maintains its Hold rating on valuation, despite the current favourable operating environment.

Target price is $3.50 Current Price is $3.49 Difference: $0.01
If MPL meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $3.46, suggesting downside of -1.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Ord Minnett rates MPL as Hold (3) -

Medibank Private's March-quarter trading update met Ord Minnett's forecasts, which believes the worst is behind the company.

Management reiterated FY23 guidance.

While the broker expects Medibank will return more claim savings to clients, it points out that lower claims are a positive, allowing lower premium increases and an opportunity to attract more members.

Meanwhile, international students and overseas worker members posted strong growth. Over the medium term, the broker expects average claims per policyholder to nose out premium growth, given the ageing population, eroding margins, but that return on equity should remain attractive at more than 25%.

Hold rating and $3.30 target price retained.

Target price is $3.30 Current Price is $3.49 Difference: minus $0.19 (current price is over target).
If MPL 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 $3.46, suggesting downside of -1.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

UBS rates MPL as Buy (1) -

Medibank Private has refreshed FY23 guidance with policyholder growth reaffirmed at 0.5-0.75%. Profitability continues to rebound post the pandemic. Yet UBS observes FY23 guidance relies on a strong finish in the fourth quarter as the third quarter numbers appear soft.

Cash claims paid have picked up modestly in the second half but remain lower than the company expected. UBS interprets this to mean FY23 resident claims inflation is tracking below guidance.

In the non-resident segment, the business is underweight but catching up quickly, the broker adds. Buy rating and $3.70 target maintained.

Target price is $3.70 Current Price is $3.49 Difference: $0.21
If MPL meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $3.46, suggesting downside of -1.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Macquarie rates PMT as Outperform (1) -

Early results from Patriot Battery Metals' winter drilling program have confirmed the CV5 spodumene pegmatite at Corvette (in the James Bay Region of Quebec) is now extended by 550m to 3.7km.

The analyst suggests drilling results at CV5 and CV13 present key near-term catalysts ahead of the maiden resource release in the 2Q of 2023.

The Outperform rating and $2.00 target are unchanged.

Target price is $2.00 Current Price is $1.45 Difference: $0.555
If PMT meets the Macquarie target it will return approximately 38% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

This company reports in CAD. 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

Macquarie rates PNV as Outperform (1) -

In the wake of a 3Q sales update by PolyNovo, Macquarie sees ongoing sales strength, with entry into new geographies helping to
diversify the sales mix outside the US.

Sales of NovoSorb BTM grew by 23% year-on-year, but fell by -6.8% quarter-on-quarter.

The company shipped the new MTX product to the US in early April. The analyst expects this product will support sales over the medium-to-longer-term.

The broker's Outperform rating is unchanged and the target slips to $2.75 from $2.80.

Target price is $2.75 Current Price is $1.62 Difference: $1.135
If PNV meets the Macquarie target it will return approximately 70% (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

Macquarie rates PXA as Outperform (1) -

Following a volume update by Pexa Group for the PEXA Australia Exchange, Macquarie lowers its transfer volume forecasts in FY23 and FY24. It's felt transfer volumes have bottomed, and a return to mid-cycle levels in FY25 is forecast.

The impact of these changes on the analysts's valuation are offset by a FY24 price increase to 7.0% from 5.0%, as the March inflation print is expected to be passed through on 1 July.

The broker's forecast also allows for a delay of market share losses in Australia to the 1H of FY25 from the 1H of FY24.

The target rises to $17.50 from $17.00. Outperform.

Target price is $17.50 Current Price is $13.16 Difference: $4.34
If PXA meets the Macquarie target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $16.28, suggesting upside of 28.2% (ex-dividends)

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

Ord Minnett rates QAN as Hold (3) -

Ord Minnett says the succession to Qantas Airways CEO of Vanessa Hudson (former CFO) will not change much at Qantas, which like all airlines has a challenging business model, as pointed out on many occasions by Warren Buffet.

The broker expects pre-pandemic conditions to return and the company's struggles to continue, and adds the company faces a big capital expenditure bill (-$15bn) over the next five years, given its average fleet age, at 14 years, is higher than for competitors Virgin Australia and Air New Zealand.

The broker expects this will constrain shareholder returns, as will likely tougher competition as Virgin Australia prepares for a potential float, Regional Express Holdings ((Rex)) eyes more lucrative routes, and Bonza hits the tourism centres.

Hold rating and $5.90 target price retained.

Target price is $5.90 Current Price is $6.54 Difference: minus $0.64 (current price is over target).
If QAN meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.65, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates RHC as Neutral (3) -

Ramsay Health Care's trading update, released earlier today, seems to have unveiled a big "miss" of $235m in net profit for the first nine months against market consensus sitting around $413m for the full year, Citi analysts comment in an initial response.

The gap implies net profit of $178m for Q4 and the analysts think this is too much.

Ramsay Health Care continues to anticipate a gradual recovery and more normalised earnings in FY24, but there are also "risks" around the outlook for Elysium.

Citi sees potential for a valuation write-down, as explicitly flagged by Ramsay's statement today.

Neutral. Target $69.

Target price is $69.00 Current Price is $65.01 Difference: $3.99
If RHC meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $68.83, suggesting upside of 11.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

UBS rates SGM as Neutral (3) -

After some site tours, UBS assesses the Sims Resource Renewal demonstration plant has potential but requires meaningful offtake agreements. The long-term economics remain uncertain. The 60t/day plant would offset just $2.6m per annum of landfill cost.

Meanwhile, the company continues to progress with several key divestments and excess capital will be reinvested in growth. UBS upgrades estimates for the second half of FY23, given scrap price movements.

The risk still remains to the downside, the broker adds. Neutral maintained. Target is $16.30.

Target price is $16.30 Current Price is $15.11 Difference: $1.19
If SGM meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $14.90, suggesting upside of 0.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.5

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

Ord Minnett rates TCL as Lighten (4) -

Transurban Group has increased FY23 guidance by 2% to 58c thanks to rising tolls and traffic volumes on the one hand, and lower than expected interest expense and operating costs on the other.

Ord Minnett believes the near-term outlook to be positive given a rising population, strong employment, and the part cpi-linked tolls.

The broker projects a five-year compound annual distribution growth rate of 12% but considers the company to be overvalued.

Lighten rating and $12.50 target price retained.

Target price is $12.50 Current Price is $14.64 Difference: minus $2.14 (current price is over target).
If TCL meets the Ord Minnett target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.65, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Citi rates VCX as Neutral (3) -

Vicinity Centres published a strong operational update highlighting that it now expects FY23 funds from operations to be around the top end of the guidance range, in line with Citi's estimates.

Portfolio retail sales remain strong, up 13% year on year for March Q, with premium centers recording an impressive 20.3% growth. Positive leasing spreads were recorded which is a positive surprise to the market, in the broker's view.

Management does expect sales growth to moderate into the June Q as the effects of higher cost of living start to moderate growth.

Neutral and $2.00 target retained.

Target price is $2.00 Current Price is $2.07 Difference: minus $0.07 (current price is over target).
If VCX 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 $2.05, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

Macquarie rates VCX as Neutral (3) -

As part of a 3Q operational update, Vicinity Centres upgraded guidance for both funds from operations (FFO) and adjusted FFO toward the upper end of prior ranges.

These changes bring guidance into line with Macquarie's existing forecasts. As a result the $2.03 target is unchanged.

The broker points out re-leasing spreads continue to improve though management noted the sales (and therefore leasing) environment could become more challenging.

The Neutral rating is unchanged.

Target price is $2.03 Current Price is $2.07 Difference: minus $0.04 (current price is over target).
If VCX meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.05, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

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

Vicinity Centres' March-quarter trading update apears to have met Morgan Stanley's expectations.

The company upgraded its FY23 guidance to the top end of its guidance range, at where both Morgan Stanley and consensus had already placed their estimates.

On the downside, management's FY24 outlook was cautious given rising household costs, which the company feared could flow through to weaker consumer sentiment.

FY23 and FY24 EPS forecasts rise. Equal-weight rating and $2.26 target price retained. Industry view: In-line.

Target price is $2.26 Current Price is $2.07 Difference: $0.19
If VCX meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.05, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

UBS rates VCX as Sell (5) -

UBS was surprised by the consumer resilience reflected in Vicinity Centres' March quarter update. UBS estimates March quarter leasing spreads of around 2%, underpinned by demand for premium space at Chadstone/outlets.

Attendance is now 88% of 2019 levels or 93% ex-CBDs. FY23 guidance for FFO has narrowed to the top of the range of 14-14.6c.

The broker envisages headwinds will accumulate in FY24 as the macro environment deteriorates and capital requirements increase. Moreover, the last of the easy pandemic comparisons have passed. Sell maintained. Target is $1.91.

Target price is $1.91 Current Price is $2.07 Difference: minus $0.16 (current price is over target).
If VCX 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 $2.05, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

Citi rates WOW as Buy (1) -

Woolworths reported Australian Food March Q sales growth of 6.6%, comfortably beating Citi's forecast. This was a strong result and in line with Coles Group's ((COL)) 6.5%. NZ Food and Big W were also ahead of expectations.

Looking ahead to FY24, Citi continues to believe there is upside to the current consensus sales growth forecast for Australian Food of 3.5%, with the broker positioned for 5%, given industry feedback suggesting inflation around mid-single digits and population growth of 2%.

Buy and $42.20 target retained.

Target price is $42.20 Current Price is $38.58 Difference: $3.62
If WOW meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $35.86, suggesting downside of -7.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

Morgan Stanley rates WOW as Underweight (5) -

Woolworths Group's March-quarter sales update outpaced consensus forecasts, thanks to strength in same-store sales.

Meanwhile, inflation eased to 5.8% from 7.7% due mainly to an easing in fresh prices (long-life products remain stickier but the company did witness a fall in supplier price requests in April).

Own-brand sales rose 9.1% in the quarter with more than 20% growth registered in pantry and chilled dairy as customers succumbed to growing household pressure. 

Big W growth eased, with apparel particularly feeling the pinch.

Underweight rating and $29.70 target rice retained.

Target price is $29.70 Current Price is $38.58 Difference: minus $8.88 (current price is over target).
If WOW meets the Morgan Stanley target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $35.86, suggesting downside of -7.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

Morgans rates WOW as Hold (3) -

Like-for-like sales growth for both Australian Food and NZ Food was higher than Morgans forecast in the 3Q, while BIG W disappointed. Overall, the trading update was slightly better than expected.

Management stated 4Q sales trends were in line with the 3Q, and noted signs of moderating inflation in Food, though in many other areas inflation remains elevated.

The broker makes only minor forecast changes and lowers its target to $38.50 from $38.55. Hold.

Target price is $38.50 Current Price is $38.58 Difference: minus $0.08 (current price is over target).
If WOW meets the Morgans target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $35.86, suggesting downside of -7.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

Ord Minnett rates WOW as Sell (5) -

Woolworths Group's FY23 March-quarter sales grew 8% and just nosed out those of Coles Group ((COL)) but Ord Minnett observes inflation remained the key drive of sales growth at both chains, where food shelf prices rose 6%.

The broker notes Woolworths Group's volumes started to trend up again in mid January but observes this lagged population growth.

On the upside, Ord Minnett expects inflation to subside in the December half.

The broker observes the company's shares remain overvalued, possibly reflecting its defensive characteristics in a volatile market, and expects earnings (EBIT) margins to soften this year as rising costs clash with lower inflation.

Ord Minnett also observes a rise in the company's own-brand products as consumers succumb to higher household costs, but believes this could favour competitors such as Aldi, which has a higher private label penetration.

Sell rating and $27 target price retained.

Target price is $27.00 Current Price is $38.58 Difference: minus $11.58 (current price is over target).
If WOW 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 $35.86, suggesting downside of -7.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

UBS rates WOW as Neutral (3) -

March quarter sales at Woolworths Group were below UBS estimates. Australian food sales were up 7.6% with food inflation 5.8%. Big W sales were up 5.7%. The broker observes volumes improved and food inflation remains elevated.

Trading down is occurring, with less affluent consumers heading for the "value" ranges. Online growth surprised UBS as it was above store growth, as consumers continue to seek convenience.

Food inflation is expected to moderate but remains the primary driver of like-for-like sales growth in 2023. UBS retains a Neutral rating and $38.50 target.

Target price is $38.25 Current Price is $38.58 Difference: minus $0.33 (current price is over target).
If WOW meets the UBS target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $35.86, suggesting downside of -7.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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