Australian Broker Call

Morgans rates APE as Add (1) -

Overall, Morgans assesses industry dynamics are relatively challenging for Auto dealers in the short-term. Make/model oversupply issues continue to be worked through and OEM delivery numbers show high variance between brands, note the analysts.

The broker makes minor negative changes to gross margin assumptions for the Auto Retailers leading to around -3-5% EPS forecast revisions.

For Eagers Automotive, the target price falls to $14.00 from $14.10. Add.

Target price is $14.00 Current Price is $11.21 Difference: $2.79
If APE meets the Morgans target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $11.87, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Bell Potter rates BOE as Buy (1) -

Bell Potter attended the opening ceremony for the Alta Mesa site which is co-owned by Boss Energy and enCore Energy under a 70/30 joint venture.

Alta Mesa commenced production in June as an in-situ recovery style operation in South Texas. The analyst explains the key difference with this asset and Honeymoon is the leaching process.

Observing increasing interest in uranium stocks, Bell Potter highlights Boss Energy is highly leveraged to the spot uranium price as the company is largely uncontracted.

At a US$82lb spot price in perpetuity, the analyst values the company at $1.845bn or $4.50 per share, offering an attractive valuation against global peers. Execution at Honeymoon remains "critical" the broker states.

Buy rated with a $5.70 target price.

Target price is $5.70 Current Price is $3.42 Difference: $2.28
If BOE meets the Bell Potter target it will return approximately 67% (excluding dividends, fees and charges).

Current consensus price target is $4.28, suggesting upside of 24.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.8

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

Morgan Stanley rates GYG as Overweight (1) -

Morgan Stanley observed Guzman y Gomez reported 1Q25 same store sales growth of 8.7% versus 7.4% for the first seven weeks of the FY25.

This means the company is achieving results about the broker's 1H25 forecast of 7.5% growth but below the 1Q24 same store sales growth of 11.7%.

Group sales reported a rise of 20.7% against 32.8% in the previous corresponding period with 5 new store openings and management reconfirming the FY25 target of 31 new restaurants.

The US operation performed in line with expectations, Morgan Stanley highlights, with sales from new stores contributing.

The AGM is scheduled for Nov 14. No change to the broker's earnings forecasts. Target price remains at $38.50. Overweight retained. Industry view: In Line.

Target price is $38.50 Current Price is $38.71 Difference: minus $0.21 (current price is over target).
If GYG meets the Morgan Stanley target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $39.48, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

Morgans rates GYG as Hold (3) -

Operationally, "Guzman y Gomez is flying", according to Morgans, after a 1Q trading update showed Australian (including Singapore and Japan) network sales rising by 21.1%, compared to the 19.4% consensus forecast.

For weeks 8-13, comparative sales growth accelerated to 10.2%, up from 7.4% in the first seven weeks. According to management, the uptick was due a strong delivery performance and successful execution of the ‘Clean is the New Healthy’ campaign.

Also, customer demand for value menu items such as the $12 Chicken Mini Meal provided a boost.

Morgans raises its underlying earnings (EBITDA) forecasts across FY25-27 by 7.4%, 6%, and 5.7%, respectively. The target is increased to $41.40 from $37.70. Hold.

Target price is $41.40 Current Price is $38.71 Difference: $2.69
If GYG meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $39.48, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

UBS rates GYG as Sell (5) -

Guzman y Gomez released better-than-expected Q1 sales growth and UBS analysts have increased forecasts in response.

With five new restaurants opened in Australia, the broker highlights management has reiterated FY25 Prospectus estimates including 31 new restaurants in Australia.

But all the good news is already well and truly in the share price, the broker argues, hence that Sell rating remains in place. Target $37, up from $35.

Target price is $37.00 Current Price is $38.71 Difference: minus $1.71 (current price is over target).
If GYG meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $39.48, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

Bell Potter rates IPG as Buy (1) -

Bell Potter has reviewed the outlook for IPD Group in FY25 with data centres, EV charging and the recently acquired CMI operations all important earnings drivers for the group.

Data centre revenues doubled in FY24 with the analyst forecasting 25% growth in FY25, while the market is viewed as understating the potential upside to EV charging from the integration of Addelec/Gemtek.

CMI operations are showing an improvement back to FY23 levels with "record" order books the analyst notes.

Bell Potter lifts EPS forecasts slightly by 1% in FY25 and 2% in FY26.

Target price rises to $6.20 from $6 due a lowering of the weighted cost of capital. Buy rating unchanged.

Target price is $6.20 Current Price is $4.86 Difference: $1.34
If IPG meets the Bell Potter target it will return approximately 28% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Shaw and Partners rates LM8 as Buy, High Risk (1) -

In the ongoing search for nickel and gold in the Kamabalda region of WA, Lunnon Metals has been inspired to expand the gold program in the Foster belt after initial significant (according to Shaw and Partners) high grade, near-surface results at Lady Herial.

The Buy, High Risk rating and 60c target are unchanged.

Target price is $0.60 Current Price is $0.27 Difference: $0.33
If LM8 meets the Shaw and Partners target it will return approximately 122% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Morgans rates LTM as Downgrade to Hold from Add (3) -

Having initiated coverage of Arcadium Lithium with an Add rating and $5.40 target price earlier this month, Morgans raises the target to $8.60 to align with the takeover price agreed to with Rio Tinto ((RIO)).

As the share price is now approaching this new target price, the broker's rating for Arcadium is downgraded to Hold from Add.

The analysts believe it unlikely a competing offer will emerge, and also unlikely shareholders will vote against the offer.

Target price is $8.60 Current Price is $8.20 Difference: $0.4
If LTM meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $7.02, suggesting downside of -14.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Ord Minnett rates LTM as Downgrade to Hold from Buy (3) -

Matching the takeover offer price by Rio Tinto, Ord Minnett raises its target for Arcadium Lithium to $8.60, positioning the former as the number three lithium miner globally, only behind US-based Abemarle and SQM in Chile.

Management at Arcadium Lithium assessed the offer as “compelling”, which is unsurprising to the broker given the 90% premium to the undisturbed share price on October 4, prior to confirmation of takeover talks.

Ord Minnett downgrades Arcadium to Hold from Buy.

Target price is $8.60 Current Price is $8.20 Difference: $0.4
If LTM meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $7.02, suggesting downside of -14.2% (ex-dividends)

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 NWL as Hold (3) -

Bell Potter highlights Netwealth Group reported 1Q25 fund flows up 33% to funds under administration of $117.9bn which was ahead of the broker's expectations.

Net inflows of $3.9bn for the quarter were a record and exceeded the Bell Potter estimate. An improvement in momentum is anticipated given that July reported net flow of $1.2bn versus August and September at $1.3bn.

Management commented on significant transactions underway. Although no guidance was offered, the company remains confident on the outlook for FY25. The Flux Corp acquisition for $2.5m offers increased exposure to the emerging affluent with over 430k members.

Bell Potter lifts FY26 EPS forecasts by 2%. FY25 is unchanged. Target price is raised to $26 from $23.90. Hold.

Target price is $26.00 Current Price is $27.16 Difference: minus $1.16 (current price is over target).
If NWL meets the Bell Potter target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $24.93, suggesting downside of -9.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Citi rates NWL as Neutral (3) -

Citi emphasises Netwealth Group reported another "strong" 1Q25 update, including gross inflow growth improving to 51% year-on-year with $7bn under management for the first time.

Investors remain focused on whether the stronger than expected net flows can be extrapolated into the rest of FY25. The analyst notes September usually represents 23% of full year funds flows.

The broker lifts net profit forecasts by 2% in FY25 and 3% in FY26 on the back of higher estimated flow forecasts of 11% growth in FY25 to $15bn and 5% in FY26 to $14.5bn with upside risks if momentum is sustained into 2H25.

Target price rises 32% to $27. Neutral rating unchanged due to the stock's elevated valuation (share price is already where the new target moved to).

Target price is $27.00 Current Price is $27.16 Difference: minus $0.16 (current price is over target).
If NWL 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 $24.93, suggesting downside of -9.3% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Macquarie rates NWL as Neutral (3) -

Following Netwealth Group's September quarterly business update, Macquarie sees limited near-term catalysts for a share price de-rating but points out current valuation multiples have decoupled from the broker's fundamental valuation. A Neutral rating is kept.

Custodial net inflows of $4.0bn beat the analyst's $3.2bn forecast for the quarter, while the cash percentage was broadly stable despite strong market movements.

The broker raises its target by 26% to $26.50 largely due to increased net flows and market movements, along with a valuation roll-forward and after adjusting for the recent small industrials positive re-rating.

Target price is $26.50 Current Price is $27.16 Difference: minus $0.66 (current price is over target).
If NWL 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 $24.93, suggesting downside of -9.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Morgan Stanley rates NWL as Overweight (1) -

Netwealth Group reported record 1Q25 growth in funds under administration due to net inflows of $4bn from $1.2bn in July, Morgan Stanley notes, and boosted by market movements which were well ahead of consensus expectations.

A new CFO is joining on Nov 25, Hayden Stockdale. The broker points to positive statements from management, including conversion remaining robust across segments and different client groups.

Several large group transactions "remain in the early stages", the company states, offering a good level of confidence in net inflows for FY25.

Unchanged Target price of $23.50 with an Overweight rating. Industry view: In-Line.

Target price is $23.50 Current Price is $27.16 Difference: minus $3.66 (current price is over target).
If NWL meets the Morgan Stanley target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $24.93, suggesting downside of -9.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

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

Ord Minnett raises its target for Netwealth Group to $27 from $22 and downgrades to Hold from Accumulate following an "excellent" 1Q trading update. Management has a “high level of confidence” in the net flow outlook for FY25.

Global equity markets provided a strong boost and net flows of $4.0bn beat the $3.5bn forecast by the analysts.

Group funds under management (FUA) of $95.4bn at quarter's end was ahead of the broker's $92.5bn estimate.

Target price is $27.00 Current Price is $27.16 Difference: minus $0.16 (current price is over target).
If NWL meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $24.93, suggesting downside of -9.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Morgans rates PWR as Hold (3) -

Overall, Morgans assesses industry dynamics are relatively challenging for Auto dealers in the short-term. Make/model oversupply issues continue to be worked through and OEM delivery numbers show high variance between brands, note the analysts.

The broker makes minor negative changes to gross margin assumptions for the Auto Retailers leading to around -3-5% EPS forecast revisions.

For Peter Warren Automotive, the target price falls to $1.80 from $1.86. Hold.

Target price is $1.80 Current Price is $1.70 Difference: $0.1
If PWR meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $1.83, suggesting upside of 6.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

Morgan Stanley rates RIO as Overweight (1) -

Morgan Stanley observed post the conference call on the proposed takeover of Arcadium Lithium ((LTM)), Rio Tinto reiterated the dividend policy of a 40%-60% payout ratio.

Management highlighted after an extensive global review, Arcadium was considered to offer the best assets, positioned at the lowest end of the global cost curve.

Synergies are expected to be "technological" in nature and no major changes are anticipated for the US$10bn budget spend at this stage. More details will be available in the future.

Overweight rating is maintained. The target is $135.50. Industry view is Attractive.

Target price is $135.50 Current Price is $119.87 Difference: $15.63
If RIO meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $127.42, suggesting upside of 6.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.7

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

Ord Minnett rates RIO as Buy (1) -

Rio Tinto will become the number three lithium miner globally, only behind US-based Abemarle and SQM in Chile, after the potential takeover of Arcadium Lithium.

Management at Arcadium Lithium assessed the offer as “compelling”, which is unsurprising to the broker given the 90% premium to the undisturbed share price on October 4, prior to confirmation of takeover talks.

The Buy rating and $133 target are maintained.

Target price is $133.00 Current Price is $119.87 Difference: $13.13
If RIO meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $127.42, suggesting upside of 6.3% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.7

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

Bell Potter rates RPL as Buy (1) -

Regal Partners reported a rise in funds under management to $17.3bn in 3Q24 from $12.3bn in June. Adjusting for pro-forma inclusion of Merricks and Argyle, funds rose 4% from $16.5bn.

Bell Potter notes net inflows of $444m and investment performance of $587m. Net inflows were underwritten by PM Capital's global long/short strategy and Regal Partners Private Fund.

Platinum Asset Management ((PTM)) announced last week engagement with Regal Partners, allowing for due diligence.

Buy rating retained. Target price slips to $4.85 from $4.97 due to a slight decline in the management fee for 2H2024 and the impact on earnings. EPS forecast declines -1% for 2024 and -7.4% for 2025.

Target price is $4.85 Current Price is $3.66 Difference: $1.19
If RPL meets the Bell Potter target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $4.48, suggesting upside of 19.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Bell Potter rates RRL as Buy (1) -

Regis Resources announced a preliminary update for 1Q25 with gold production of 94.5koz which was slightly below Bell Potter's expectations of 101.8koz.

Duketon contributed 57.5koz, below the analyst's estimate and Tropicana Gold mine came in higher than forecast at 37koz, attributable.

The company reported cash and bullion of $380m, up $85m. All-in-sustaining costs were not released.

Bell Potter lifts EPS estimates by 78% in FY25 and 87% in FY26 due to higher gold price forecasts.

Accordingly, the target price rises to $2.48 from $2.02. Buy rating remains.

Target price is $2.48 Current Price is $2.07 Difference: $0.41
If RRL meets the Bell Potter target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $2.11, suggesting downside of -3.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Citi rates TLC as Buy (1) -

While leaving the Buy rating and $5.60 target price unchanged for Lottery Corp, Citi sees upside to its FY26 and FY27 forecasts from further Powerball changes.

Commenting after the company's investor day, the broker highlights management's aim to raise growth in younger audiences (64% of
new customers in FY24 were aged 18-43), focusing on digital offerings including store syndicates.

Target price is $5.60 Current Price is $5.05 Difference: $0.55
If TLC meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $5.54, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.8

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

UBS rates TLC as Buy (1) -

Lottery Corp's investor day has reconfirmed the broker's investment thesis, UBS analysts have concluded upon return.

That thesis relates to top line growth similar to nominal GDP; digital penetration driving better VC margin; a scalable cost base with
operating leverage; and financial leverage plus capital management to drive high single digit EPS/DPS growth.

The price target has gained 10c to $5.70. Buy.

Target price is $5.70 Current Price is $5.05 Difference: $0.65
If TLC meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $5.54, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.8

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

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

Following Woodside Energy's recent acquisitions and the Lousiana LNG final investment decision (FID), Macquarie sees a near doubling in LNG portfolio scale by 2031-32.

Because of the company's aggressive growth strategy which entails a prolonged heavy capex period, the broker expects a lower dividend outlook.

After implementing a dividend cut and selling down -50% of Louisiana LNG, the broker still has Woodside at the top end of its gearing range over 2025-28.

Macquarie lowers its target for Woodside Energy by -18% to $27.00 after assuming a lower multiple to reflect a 35/65 weighting of US/EU peers from the 75/25 split prior. The rating is downgraded to Neutral from Outperform.

Target price is $27.00 Current Price is $25.74 Difference: $1.26
If WDS meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $27.89, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in December.

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: 0.0

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