Australian Broker Call

UBS rates A2M as Downgrade to Neutral from Buy (3) -

Having analysed Chinese sales records, UBS finds formula prices as having stabilised since December. Yet prices for a2's Platinum brand have risen 11%, the most of any brand. The broker expects demand growth to continue into FY18.

UBS lifts its target to NZ$.3.45 from NZ$2.95 but given a strong share price run this remains short of the trading price, hence a downgrade to Neutral.

Current Price is $3.21. Target price not assessed.

Current consensus price target is $3.10, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

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

Market Sentiment: 0.3

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

Credit Suisse rates AHY as Neutral (3) -

Credit Suisse observes the company has re-confirmed its guidance for low single-digit growth in EBITDA for 2017, the day after the CEO sold a significant portion of of his holding and the CFO resigned.

The broker remains of the view that the guidance can be achieved but is dependent upon the success of two major new products. Neutral rating and $1.75 target retained.

Target price is $1.75 Current Price is $1.60 Difference: $0.155
If AHY meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $1.63, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.3

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

Citi rates AST as Sell (5) -

It appears the bottom line slightly missed Citi's and market expectations with the analysts pointing at higher D&A. Guidance for FY18 with no DRP discount to the FY17 final dividend all suggest growing confidence in the outlook and strength of the balance sheet, suggest the analysts.

Price target lifts 8% to $1.56 on stronger dividend outlook but Citi finds the outlook for cashflows and dividend growth is less than those for peers and for this reason the Sell rating remains in place.

Spark Infra ((SKI)) is most preferred in the sector and it is rated Neutral.

Target price is $1.56 Current Price is $1.76 Difference: minus $0.195 (current price is over target).
If AST meets the Citi target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.71, suggesting downside of -1.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Credit Suisse rates AST as Neutral (3) -

FY17 results were slightly better than Credit Suisse forecast. The broker believes the increased cash dividend and the cancellation of the DRP discount signals a more stable footing for the business.

The company has delivered on FY17 estimates despite disappointing on anticipated operating expenditure efficiencies in electricity distribution relative to what peers have achieved, Credit Suisse notes. Neutral retained. Target is $1.70.

Target price is $1.70 Current Price is $1.76 Difference: minus $0.055 (current price is over target).
If AST 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 $1.71, suggesting downside of -1.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Deutsche Bank rates AST as Hold (3) -

FY17 results slightly missed Deutsche Bank's forecasts as the introduction of lower electricity distribution tariffs in Victoria flowed through to the numbers.

Deutsche Bank considers the stock fully priced and retains a Hold rating. Target is raised to $1.60 from $1.45.

Target price is $1.60 Current Price is $1.76 Difference: minus $0.155 (current price is over target).
If AST meets the Deutsche Bank target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.71, suggesting downside of -1.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Macquarie rates AST as Outperform (1) -

FY17 net profit was better than Macquarie expected. The broker observes the company is differentiated from other regulated utilities by having an improving outlook.

The potential upside comes from renewable development in Victoria, which provides for at least $400m in additional capital expenditure in transmission, if the tenders are won, along with $400m in connection work to the wind/solar farms. Moreover, the Snowy Mountains  expansion is likely to require a material investment in the grid of over $1bn.

Macquarie retains a Outperform rating and raises the target to $1.82 from $1.76.

Target price is $1.82 Current Price is $1.76 Difference: $0.065
If AST meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $1.71, suggesting downside of -1.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

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

Morgan Stanley believes the FY17 result underpins distribution guidance and the solid growth prospects. Nevertheless, the broker suspects a lot of the growth is already in the price.

Equal-weight rating and Cautious industry view retained. Target rises to $1.70 from $1.59.

Target price is $1.70 Current Price is $1.76 Difference: minus $0.055 (current price is over target).
If AST meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.71, suggesting downside of -1.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Morgans rates AST as Hold (3) -

FY17 results were in line with expectations. Morgans increases forecasts for EBITDA across FY18-21 by 2-4% as a result of assumed cost reductions as the company chases efficiencies as well as higher revenue related to adjustments to rebates.

The broker suspects investors may be attracted to the 5% growth in distributions into FY18 and the business reform potential. Hold rating retained. Target rises to $1.76 from $1.55.

Target price is $1.76 Current Price is $1.76 Difference: $0.005
If AST meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $1.71, suggesting downside of -1.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

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

FY17 results were in line with Ord Minnett's estimates.The broker notes the company continues to focus on expanding unregulated businesses through additional transmission lines as well as connecting new renewable generation assets to the grid.

While comfortable with the outlook, the broker reduces its recommendation to Hold from Accumulate on valuation grounds. Target is $1.85.

Target price is $1.85 Current Price is $1.76 Difference: $0.095
If AST meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $1.71, suggesting downside of -1.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Macquarie rates AYS as Resume Coverage with Outperform (1) -

Macquarie resumes coverage following a period of research restrictions, with a $2.50 target and Outperform recommendation. The $120m acquisition of Click Energy was completed on May 1 which diversifies the business into energy retailing.

The broker believes the acquisition rounds out the company's investment strategy and there are cross-selling opportunities which are key to medium-term growth. The broker believes the company is positioned to defend against the challenges from competitors.

Target price is $2.50 Current Price is $1.82 Difference: $0.68
If AYS meets the Macquarie target it will return approximately 37% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Credit Suisse rates BHP as Neutral (3) -

The company intends an independent review of its entire petroleum business. Credit Suisse believes the Australian petroleum interests could be worth up to US$10bn on its numbers.

The broker speculates, conceptually, Woodside ((WPL)) stands out as a logical owner of the company's Australian portfolio. Rather than BHP buying Woodside, which has been suggested as a possibility in the past, the broker suspects the addition of another listed petroleum company of scale would be welcome.

In Credit Suisse's analysis, with operational and financial risks at Santos ((STO)), this makes Woodside and Oil Search ((OSH)) the only real large investment alternatives for some client, while an ASX-listed spin-off should also attract attention.

Neutral rating and $26.50 target retained.

Target price is $26.50 Current Price is $24.02 Difference: $2.48
If BHP meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $27.77, suggesting upside of 14.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

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

Market Sentiment: 0.5

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

Macquarie rates BHP as Outperform (1) -

The company's update suggests it has the potential to boost current production levels by 20%, unlocking latent capacity for aggregate expenditure of US$5bn.

Macquarie is impressed with the potential volume gains and value uplift in the strategy,  although finds only limited data on some of the growth options. The broker now factors in a more aggressive development of US shale.

Outperform rating  retained. Target is raised to $30 from $29.

Target price is $30.00 Current Price is $24.02 Difference: $5.98
If BHP meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $27.77, suggesting upside of 14.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

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

Market Sentiment: 0.5

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

Ord Minnett rates BHP as Hold (3) -

Ord Minnett observes, at a global mining confreence, the company has signalled a pull-back towards conventional petroleum from US onshore investment.

Interestingly too, the broker observes the CEO has not ruled out spinning off of the company's US shale gas assets.

Hold rating and $25 target retained.

Target price is $25.00 Current Price is $24.02 Difference: $0.98
If BHP meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $27.77, suggesting upside of 14.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

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

Market Sentiment: 0.5

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

Macquarie rates BLD as Resume Coverage with Outperform (1) -

Macquarie resumes coverage with an Outperform rating and $7.65 target following the conclusion of the acquisition of Headwaters.

The broker finds the company's recent messages regarding synergies being in excess of US$100m across the businesses are increasingly more confident, having initially started "at around" US$100m.

Despite a strong recent run in the stock price the broker continues to find valuation support. Upcoming catalysts include the May 23 analyst briefing in Australia and updates on the merger process.

Target price is $7.65 Current Price is $6.74 Difference: $0.91
If BLD meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $6.94, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.8

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

Credit Suisse rates CHC as Underperform (5) -

Credit Suisse acknowledges being on the wrong side of the Charter Hall trade. The stock's performance, in part, reflects ongoing direct market valuation gains and also guidance upgrades, which in turn have been primarily driven by low-quality performance and transaction fees, the broker asserts.

Nevertheless, the broker has reason to remain cautious on the stock given the cyclical and structural downside for funds under management. Also, low-multiple performance and transaction fees are driving upside to earnings per share.

The company also remains a purchaser of assets, rather than a creator of them. Underperform rating is maintained. Target is lifted to $4.71 from $4.45.

Target price is $4.71 Current Price is $5.81 Difference: minus $1.1 (current price is over target).
If CHC meets the Credit Suisse target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.53, suggesting downside of -5.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Citi rates CYB as Sell (5) -

Interim financials missed expectations and Citi analysts seem to be blaming exceptional costs with the added remark this is probably more a timing issue. Regardless, the UK market remains tough and market consensus is anticipated to reset lower by single digit percentage.

Underlying costs were in-line, emphasise the analysts. Provisions proved higher than predicted. CYBG continues to grow faster than market average in mortgages. Citi retains the Sell rating. Target remains GBP2.20.

Current Price is $5.01. Target price not assessed.

Current consensus price target is $4.80, suggesting upside of 0.6% (ex-dividends)

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.5

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

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

While the headline first half result disappointed Credit Suisse, estimates for outer years are upgraded by 1%.

The broker elects to reduce its rating to Neutral from Outperform to reflect a view that the valuation is relatively full amid the absence of near-term positive catalysts. Target is $5.25.

Target price is $5.25 Current Price is $5.01 Difference: $0.24
If CYB meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $4.80, suggesting upside of 0.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.5

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

Macquarie rates CYB as Neutral (3) -

First half results slightly missed Macquarie's estimates.The targets that were released at the capital market briefing remain unchanged and were reaffirmed.

Some cost inflation was noted in the quarter on the defined benefit scheme which is currently undergoing a review. Macquarie observes the results deliver on management's guidance. Neutral rating retained. Target is $4.95.

Target price is $4.95 Current Price is $5.01 Difference: minus $0.06 (current price is over target).
If CYB meets the Macquarie target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.80, suggesting upside of 0.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.5

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

Morgans rates CYB as Hold (3) -

Underlying net profit in the first half was lower than Morgans expected. The broker believes there is potential for significant weakness in the share price in the near term if the speculation about the company bidding for The Co-operative Bank disappears.

On a 12-month view the broker expects the potential IRB accreditation will drift into focus and lead to positive sentiment. Hold rating and $4.83 target retained.

Target price is $4.83 Current Price is $5.01 Difference: minus $0.18 (current price is over target).
If CYB meets the Morgans target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.80, suggesting upside of 0.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.5

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

Morgans rates FMG as Upgrade to Add from Hold (1) -

Morgans has become more positive on the stock now the factors affecting the marketability of lower grade iron ore are starting to reverse.

The broker expects steel mills will no longer seek to minimise coke usage and instead increase low-grade iron ore usage in their mills to defend margins against declining steel prices.

This should mean the company's low price realisations normalise back towards more typical levels. Morgans upgrades to Add from Hold following the sell-off in the share price and the early signs of improving fundamentals. Target is $5.95.

Target price is $5.95 Current Price is $4.82 Difference: $1.13
If FMG meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $6.34, suggesting upside of 28.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

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

Citi rates HVN as Sell (5) -

Harvey Norman's trading update for the first ten months revealed a slowing in like-for-like sales, point out the analysts. The update also missed Citi's expectations.

Citi analysts are expecting accelerated growth in the final months of the financial year, assisted by small businesses taking advantage of depreciation measures promoted by Canberra's budget.

Short term Citi analysts are suggesting here might be a trading opportunity, but medium to longer term they'd recommend investors demand a larger margin for safety given the outlook for housing and the pending arrival of Amazon. Sell. Target $3.20.

Target price is $3.20 Current Price is $3.92 Difference: minus $0.72 (current price is over target).
If HVN 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 $4.77, suggesting upside of 23.7% (ex-dividends)

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

Deutsche Bank rates HVN as Buy (1) -

The company's update on the Australian business indicates in the four months to April like-for-like sales were up 4.8%. This is largely in line with the growth in the second quarter of 4.1% and first quarter of 5.4%.

While bears will point to the slowing in March and April, Deutsche Bank believes it should be noted that sales in January and February were boosted by very large sales of air-conditioners and industry feedback suggests the company sold comparatively more because it had more inventory on hand.

The broker continues to expect double-digit profit growth in FY17. Buy rating and $5.75 target retained.

Target price is $5.75 Current Price is $3.92 Difference: $1.83
If HVN meets the Deutsche Bank target it will return approximately 47% (excluding dividends, fees and charges).

Current consensus price target is $4.77, suggesting upside of 23.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

Morgan Stanley rates HVN as Underweight (5) -

The trading update revealed sales for the four months to April from Australian franchisee business were up 4.8%. While the company indicated sales growth from January to February was 7.4%, based on estimated seasonality Morgan Stanley believes growth has therefore slowed to around 2.3%.

The broker suspects slowing house price growth, falling auction clearance rates and out-of-cycle interest rate increases by the banks point to further earnings risk. Underweight rating and In-Line industry view retained. Target is $4.30.

Target price is $4.30 Current Price is $3.92 Difference: $0.38
If HVN meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $4.77, suggesting upside of 23.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

Ord Minnett rates HVN as Lighten (4) -

Australian franchisee like-for-like sales were up 4.8% in the four months to April. Ord Minnett suggest this indicates a slowing in March and April to around 2.1% from the 7.4% growth rate experienced in January and February.

The broker believes the company has enjoyed a supportive external backdrop, including rising house prices and initiatives such as store closures and cost reductions.

Supportive factors are now moderating and, given concerns regarding the entry of Amazon weighing on multiples for the sector, the broker retains a Lighten rating. Target is $4.60.

Target price is $4.60 Current Price is $3.92 Difference: $0.68
If HVN meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $4.77, suggesting upside of 23.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

UBS rates HVN as Buy (1) -

A trading update revealed franchisee sales are running at 6% growth so far in the second half, above the FY run-rate of 5.5%. The broker believes Harvey Norman is executing well in its core businesses, winning share and providing upside potential from an efficiency drive.

On the flipside, concerns over the franchisee structure remain, as do concerns over a slowing housing market and Amazon. At the current share price the broker nevertheless sees value as undemanding and retains Buy with a $5.40 target.

Target price is $5.40 Current Price is $3.92 Difference: $1.48
If HVN meets the UBS target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $4.77, suggesting upside of 23.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

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

Macquarie has made some material reductions to nickel price forecasts, lowering 2017 estimates by -14% and 2018-20 by -8-10%.Supply in Indonesia and the Philippines is increasing now political barriers have been removed. Meanwhile, Chinese stainless steel demand is declining.

The impact on the outlook for nickel producers is significant and Independence Group earnings estimates are reduced -10-20%. Rating is downgraded to Neutral from Outperform.Target is reduced to $3.30 from $3.80.

Target price is $3.30 Current Price is $3.19 Difference: $0.11
If IGO meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $3.90, suggesting upside of 24.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.7

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

Morgans rates KSL as Add (1) -

The company has encountered a delay in finding a permanent US dollar corresponding banking arrangement for its foreign exchange operations. On the positive side, Morgans observes loan growth remains strong as does credit quality.

The broker downgrades FY17 and FY18 forecasts for earnings per share by -27% and -10% respectively, given the foreign exchange issue. Add rating retained. Target is reduced to $1.27 from $1.39.

Target price is $1.27 Current Price is $0.84 Difference: $0.43
If KSL meets the Morgans target it will return approximately 51% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

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

Despite being distorted by the impact of Easter  and public holidays, the quarterly private health insurance statistics from APRA highlight a 41 basis points decline in the industry net margin on premium growth, Credit Suisse observes.

The broker does not believe the share price is justified at current levels and, as a result, downgrades to Underperform from Neutral. Target is $2.80.

Target price is $2.80 Current Price is $2.92 Difference: minus $0.12 (current price is over target).
If MPL meets the Credit Suisse target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.71, suggesting downside of -5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

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

Despite being distorted by the impact of Easter and public holidays, the quarterly private health insurance statistics from APRA highlight a 41 basis points decline in the industry net margin on premium growth, Credit Suisse observes.

The broker does not believe the share price is justified at current levels and, as a result, downgrades to Underperform from Neutral. Target is $5.50.

Target price is $5.50 Current Price is $6.07 Difference: minus $0.57 (current price is over target).
If NHF meets the Credit Suisse target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.26, suggesting downside of -5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

Citi rates ORI as Neutral (3) -

Orica's interim performance slightly beat expectations and Citi analysts point out opposing forces of a drag from increased environmental provisions and the sale of some assets during the period.

The analysts anticipate an improved product mix and expect this will be investors' focus post the release. Target price lifts to $18.15 from $17.50, but Neutral rating retained as projected total return is not high enough to warrant an upgrade, explain the analysts.

Target price is $18.15 Current Price is $18.63 Difference: minus $0.48 (current price is over target).
If ORI 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 $17.51, suggesting downside of -5.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

Credit Suisse rates ORI as Neutral (3) -

Credit Suisse observes the heavy lifting in the first half result was done by cost reductions. Increased volumes were evident across most segments.

The result was also boosted by asset sales, without which it missed the broker's forecasts. Nevertheless, Credit Suisse has little doubt that the environment has stabilised which is reflected in the improved volumes across most markets.

Neutral rating retained. Target rises to $18.71 from $16.89.

Target price is $18.71 Current Price is $18.63 Difference: $0.08
If ORI meets the Credit Suisse target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $17.51, suggesting downside of -5.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

Deutsche Bank rates ORI as Buy (1) -

Orica has maintained full year guidance for broadly flat volumes and operating earnings. Deutsche Bank observes the company is increasingly confident that business improvement initiatives will offset the price re-sets and higher input costs.

The broker observes the market outlook is improving, as evidenced by the 4% increase in ammonium nitrate volumes. Buy rating retained. Target rises to $20.60 from $20.00.

Target price is $20.60 Current Price is $18.63 Difference: $1.97
If ORI meets the Deutsche Bank target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $17.51, suggesting downside of -5.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

Macquarie rates ORI as Neutral (3) -

The company's first half net profit beat Macquarie's estimates. The broker observes the environment is getting incrementally better for the company.

Macquarie raises FY17 and FY18 forecasts for earnings per share by 7% and 6% respectively to account for an improved volume in margin outlook in Australia.

Neutral rating retained. Target rises to $19.50 from $17.12.

Target price is $19.50 Current Price is $18.63 Difference: $0.87
If ORI meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $17.51, suggesting downside of -5.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

Morgan Stanley rates ORI as Underweight (5) -

Morgan Stanley calculates, without the benefit of asset sales, first half EBIT fell -4% which highlights the extent of structural headwinds the company faces.

The broker believes the medium-term outlook is challenged, with demand potentially now at risk from weaker bulk commodity prices, higher competitive dynamics among the ammonium nitrate producers and oversupply.

Underweight. Target is $11.59. Industry view is Cautious.

Target price is $11.59 Current Price is $18.63 Difference: minus $7.04 (current price is over target).
If ORI meets the Morgan Stanley target it will return approximately minus 38% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $17.51, suggesting downside of -5.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

Morgans rates ORI as Hold (3) -

First half EBIT was slightly below estimates and net profit marginally ahead because of lower interest expenses.The highlight for Morgans was a performance from the  Australia-Pacific and Indonesian operations.

The broker observes, compared with other mining services companies, the company's first half results highlight a relative resilience to tough conditions but believes the share price has run ahead of near term fundamentals.

Hold rating retained. Target rises to $18.10 from $16.65.

Target price is $18.10 Current Price is $18.63 Difference: minus $0.53 (current price is over target).
If ORI meets the Morgans target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $17.51, suggesting downside of -5.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

Ord Minnett rates ORI as Hold (3) -

First half net profit exceeded Ord Minnett's estimates. The broker believes the growth outlook is challenged, in part because of expected pricing re-sets beyond FY17, with an impending earnings drag from the part-loaded Burrup plant.

The broker acknowledges management's comment that demand conditions have stabilised, in part because miners have reverted to more normal mine plans. Hold rating and $16.80 target retained.

Target price is $16.80 Current Price is $18.63 Difference: minus $1.83 (current price is over target).
If ORI 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 $17.51, suggesting downside of -5.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

UBS rates ORI as Sell (5) -

While asset sales helped lift Orica to a flat result, it was still 2% ahead of the broker. Explosives volumes were a standout but rising input costs and forex offset.

While the outlook for volumes has turned positive, the broker believes latent capacity across customers means margin upside is unlikely for some time. With no real growth options to complement volume growth, the broker sees the stock as expensive. 

Sell and $16.60 target retained.

Target price is $16.60 Current Price is $18.63 Difference: minus $2.03 (current price is over target).
If ORI meets the UBS target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $17.51, suggesting downside of -5.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

Ord Minnett rates PRG as Accumulate (2) -

Ord Minnett observes the stock is down around -10% since the end of its financial year and there is some risk to FY18 estimates, given weak employment growth in Australia.

The sell-off in the share price suggests to the broker that expectations are being lowered ahead of the FY17 results on May 24. The broker believes there is potential for good news to come in terms of working capital inflows from the Skilled division.

Hence, there is an opportunity ahead of the result which, in the absence of a downgrade, could precede a relief rally. Accumulate rating and $2.21 target retained.

Target price is $2.21 Current Price is $1.68 Difference: $0.53
If PRG meets the Ord Minnett target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $2.02, suggesting upside of 20.4% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.7

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

Ord Minnett rates SHL as Downgrade to Lighten from Hold (4) -

Ord Minnett downgrades to Lighten from Hold following a period of outperformance in the stock price. The main downside catalyst is a likely confirmation of the funding reforms planned in Germany and the US.

The broker believes these reductions are not fully reflected in consensus estimates.Nearly half of the 9% growth in EBITDA the broker forecasts in FY18 is attributable to recent acquisitions in Germany. Target is $21.

Target price is $21.00 Current Price is $23.21 Difference: minus $2.21 (current price is over target).
If SHL 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 $22.52, suggesting downside of -2.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Ord Minnett rates SSM as Buy (1) -

The company has upgraded FY17 guidance by 10%, highlighting the NBN is firmly on track with volumes and margins both trending positively. The stock remains Ord Minnett's key pick for leverage to the NBN roll-out and ongoing associated maintenance work.

The broker forecasts double-digit underlying EBITDA growth into FY18 and FY19. Buy rating retained. Target is raised to $1.30 from $1.25.

Target price is $1.30 Current Price is $1.32 Difference: minus $0.02 (current price is over target).
If SSM meets the Ord Minnett target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Morgans rates VLW as Add (1) -

The company has recently raised $30m and issued a $50m corporate bond to facilitate an increase in the scale of its development pipeline. FY17 guidance for earnings per share has been confirmed at 32.5c, while a dividend of 18.5c is expected.

Morgans acknowledges sector conditions are highly supportive but believes the company is building a sustainably higher earnings base via further investment in projects which fit with core competencies. Add rating retained. Target rises to $2.83 from $2.82.

Target price is $2.83 Current Price is $2.31 Difference: $0.52
If VLW meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Deutsche Bank rates VVR as Buy (1) -

The company has reaffirmed FY17 guidance for distributions of 13.07c per security. Deutsche Bank believes this guidance is a little conservative.

The broker continues to expect upside to come from lower management expense ratios versus prospectus and lower debt costs versus expectations, as well as from acquisitions.

Buy rating and $2.52 target retained.

Target price is $2.52 Current Price is $2.34 Difference: $0.18
If VVR meets the Deutsche Bank target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Morgans rates VVR as Add (1) -

The company has reaffirmed FY17 guidance, comprising earnings per share of 13.07c. Morgans expects the near-term news flow will relate to acquisitions and updated re-valuations of the property portfolio.

So far this year the company has announced $26.2m in acquisitions which have now settled. The broker estimates there is around $90m in available debt capacity for future acquisitions.

Morgans considers the distribution yield attractive and retains an Add rating and $2.54 target.

Target price is $2.54 Current Price is $2.34 Difference: $0.2
If VVR meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Macquarie rates WSA as Downgrade to Underperform from Outperform (5) -

Macquarie has made some material reductions to nickel price forecasts, lowering 2017 estimates by -14% and 2018-20 by -8-10%. Supply in Indonesia and the Philippines is increasing now political barriers have been removed. Meanwhile, Chinese stainless steel demand is declining.

The impact on the outlook for nickel producers is significant and Western Areas earnings estimates are reduced -30-50%. Rating is downgraded to Underperform from Outperform.Target is reduced to $2.00 from $2.80.

Target price is $2.00 Current Price is $2.05 Difference: minus $0.05 (current price is over target).
If WSA 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 $2.32, suggesting upside of 14.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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