Australian Broker Call

Citi rates ABC as Neutral (3) -

Adbri has extended its existing lime supply contract with South32 ((S32)), slated to expire originally in 2024, by another five years to 2029. Citi notes this contract represents sales of $224m or an average $45m pa over the five-year term. 

The broker estimates the contract will drive 20% of Adbri’s total annual lime production. Although smaller than the Alcoa contract, the economics of the South32 contract appear more favourable with a lock-in price 60% higher than the Alcoa contract.

Citi considers the extension of the South32 contract provides volume stability and removes contract risk. 

Neutral rating retained with a target of $3.50.

Target price is $3.50 Current Price is $3.11 Difference: $0.39
If ABC meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $2.97, suggesting downside of -2.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.4

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

Macquarie rates BHP as Outperform (1) -

Macquarie has marked to market December quarter commodity prices and foreign exchange rates and remains positive on copper exposure going into 2021.

Copper has been a base metal outperformer since mid-2020 and the broker expects the trend to continue into 2021 on global stimulus and electrification. In addition, Chinese demand is remaining buoyant and the ex-China stimulus is ramping up.

While copper is a positive contributor to earnings and accounts for 14% of net present value (NPV) for BHP Group, the major driver for the diversified miner remains buoyant iron ore prices.

The outperform rating and target price of $51 are unchanged.

Target price is $51.00 Current Price is $46.82 Difference: $4.18
If BHP meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $45.91, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Morgan Stanley rates BHP as Overweight (1) -

According to some news reports, BHP Group’s Cerro Colorado copper operations in Chile could be impacted after the country's supreme court upheld local complaints on the project's overuse of water resources affecting the local wetlands.

The mine will continue to operate while a new environmental review is conducted.

Morgan Stanley notes the risk to BHP Group is relatively small since Cerro Colorado mine's copper cathode production for FY21 is slated to form 5% of the total group copper production with the expected operating income expected from the mine 1% of the group operating income.

Overweight rating is retained with a target price of $46.25. Industry view: Attractive.

Target price is $46.25 Current Price is $46.82 Difference: minus $0.57 (current price is over target).
If BHP 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 $45.91, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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 BHP as Buy (1) -

Ord Minnett has marked-to-market its forward-curve-based commodity forecasts with estimates for nickel, gold, coal and steel increasing by 7-10% across the forecast period. Barring a higher than expected Australian dollar in 2021, Ord Minnett is positive on the sector in the post-covid recovery.

Among large caps, the broker prefers iron ore stocks like BHP Group for its strong free cash flow (FCF), dividend yields and the upside to consensus earnings estimates.

Buy rating retained with the target rising to $53 from $50.

Target price is $53.00 Current Price is $46.82 Difference: $6.18
If BHP meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $45.91, suggesting upside of 1.0% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

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

Citi rates BPT as Downgrade to Neutral from Buy (3) -

Energy analysts at Citi have increased price expectations for cude oil and LNG. The 2021 Brent oil price forecast moved to US$59/bbl from US$52/bbl. The team sees oil peaking at US$61/bbl in 1Q22.

The offsetting observation is that, on a long-term horizon, Citi analysts believe most share prices in the sector are relatively fairly valued. They also suggest the sector overall is likely to remain well supported for the near term.

Beach Energy's rating has been downgraded to Neutral from Buy with a slightly weaker share price target; $1.94 instead of $1.98.

Target price is $1.94 Current Price is $1.96 Difference: minus $0.02 (current price is over target).
If BPT 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 $2.02, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Ord Minnett rates EVN as Upgrade to Hold from Sell (3) -

Ord Minnett has marked-to-market its forward-curve-based commodity forecasts with estimates for nickel, gold, coal and steel increasing by 7-10% across the forecast period. Barring a higher than expected Australian dollar in 2021, Ord Minnett is positive on the mining sector in the post-covid recovery.

With improving yield curves putting gold back under pressure, the strong start to 2021 was short-lived but Ord Minnett remains positive on the sector.

The broker has upgraded its rating for Evolution Mining to Hold from Sell. The target rises to $4.40 from $4.30.

Target price is $4.40 Current Price is $4.61 Difference: minus $0.21 (current price is over target).
If EVN 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 $4.89, suggesting upside of 7.8% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

UBS rates FCL as Buy (1) -

Ahead of first half results in late February 2021, UBS assesses recent sector developments and feedback.

Competitor Majesco recently announced the acquisition of ClaimVantage (another Fineos Corporation competitor specialising in IDAM) for an undisclosed amount. IDAM is integrated disability and absence management.

While Majesco remains P&C (Property & Casualty) focused (now 72% of revenue), this acquisition creates the most complete LA&H (Life, Accident & Health) product suite outside of Fineos Corp.

Given the size of the LA&H market opportunity, the broker expects competitive intensity to remain elevated, but views the company as best placed (market reputation / tier 1 client list, best-of-breed claims and front-end products).

The analyst believes investors remain focussed on the company's near-term deal pipeline, the potential for further services revenue deferrals and the pathway to free cashflow break-even.

The Buy rating and $5.10 target price are unchanged.

Target price is $5.10 Current Price is $3.86 Difference: $1.24
If FCL meets the UBS target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $4.86, suggesting upside of 25.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.9

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

Ord Minnett rates FMG as Upgrade to Buy from Accumulate (1) -

Ord Minnett has marked-to-market its forward-curve-based commodity forecasts with estimates for nickel, gold, coal and steel increasing by 7-10% across the forecast period. Barring a higher than expected Australian dollar in 2021, Ord Minnett is positive on the sector in the post-covid recovery.

The broker expects commodity market conditions to remain strong heading into 2021 and is attracted to Fortescue Metals on the belief excess cash will be generated throughout 2021.

Rating is upgraded to Buy from Accumulate. Target rises to $29 from $28.80.

Target price is $29.00 Current Price is $25.18 Difference: $3.82
If FMG meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $21.22, suggesting downside of -14.4% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.3

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

Ord Minnett rates GOR as Buy (1) -

Ord Minnett has marked-to-market its forward-curve-based commodity forecasts with estimates for nickel, gold, coal and steel increasing by 7-10% across the forecast period. Barring a higher than expected Australian dollar in 2021, Ord Minnett is positive on the sector in the post-covid recovery.

Gold Road Resources (GOR) and Newcrest Mining ((NCM)) remain the broker's preferred gold stocks.

Buy rating retained with the target rising to $2.20 from $2.15.

Target price is $2.20 Current Price is $1.23 Difference: $0.97
If GOR meets the Ord Minnett target it will return approximately 79% (excluding dividends, fees and charges).

Market Sentiment: 1.0

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

Ord Minnett rates GXY as Hold (3) -

Ord Minnett has marked-to-market its forward-curve-based commodity forecasts with estimates for nickel, gold, coal and steel increasing by 7-10% across the forecast period. Barring a higher than expected Australian dollar in 2021, Ord Minnett is positive on the sector in the post-covid recovery.

December sales volumes from Galaxy Resources beat estimates and Ord Minnett has increased its medium-term prices significantly. 

Hold rating is maintained with the target rising to $2.40 from $1.80.

Target price is $2.40 Current Price is $2.80 Difference: minus $0.4 (current price is over target).
If GXY meets the Ord Minnett target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.96, suggesting downside of -29.8% (ex-dividends)

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: -0.2

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

Morgan Stanley rates IEL as Overweight (1) -

Ahead of the February reporting season, Morgan Stanley believes IDP Education offers the biggest potential small-mid cap catalyst in 2021.

Any deal between the company and the British Council in a bid to rationalise the distribution of the IELTS will be highly cost synergistic, assesses the broker.

The broker also highlights the company's competitive position has improved with a combination of student pent-up demand and financially stressed universities and agents rendering IDP Education well-placed for re-opening.

Morgan Stanley maintains its Overweight rating with a target price of $24. Industry view: In-line.

Target price is $24.00 Current Price is $19.73 Difference: $4.27
If IEL meets the Morgan Stanley target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $22.66, suggesting upside of 12.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

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

Investor focus on Lendlease Group will centre around the delivery of its $100bn urbanisation pipeline, suggests Morgan Stanley.

While targeting a per annum production of $8bn, the broker notes the group is limited by operating conditions regarding leasing and capital partnering.

In the short term, the broker anticipates a soft first half and forecasts net profit at $181.3m, implying a 39%/61% first half/second half profit split.

Equal-weight rating is maintained with the target rising to $13.98 from $13.55. Industry view: In-line.

Target price is $13.98 Current Price is $12.77 Difference: $1.21
If LLC meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $14.21, suggesting upside of 12.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Credit Suisse rates MHJ as Outperform (1) -

Michael Hill International's first-half operating income guidance at $41-45m represents an increase of 34% versus the prior period. Wage subsidy benefits further increased guidance to $56-60m.

Credit Suisse considers the guidance impressive given headwinds from 44 temporary covid-related store closures in the first quarter and 21 temporary store closures in Canada during the second quarter.

The broker increases its FY21 net profit forecast by $9.8mn reflecting the first half guidance upgrade.

Driven by near term gross margin momentum, Credit Suisse raises the target price to NZ$1 from NZ$0.93. Outperform rating maintained.

Current Price is $0.73. Target price not assessed.

Current consensus price target is $0.69, suggesting downside of -3.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Ord Minnett rates MIN as Hold (3) -

Ord Minnett has marked-to-market its forward-curve-based commodity forecasts with estimates for nickel, gold, coal and steel increasing by 7-10% across the forecast period. Barring a higher than expected Australian dollar in 2021, Ord Minnett is positive on the sector in the post-covid recovery.

Target rises to $36 from $35.2. Hold rating is retained.

Target price is $36.00 Current Price is $39.83 Difference: minus $3.83 (current price is over target).
If MIN 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 $36.53, suggesting downside of -5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Ord Minnett rates NCM as Accumulate (2) -

Ord Minnett has marked-to-market its forward-curve-based commodity forecasts with estimates for nickel, gold, coal and steel increasing by 7-10% across the forecast period. Barring a higher than expected Australian dollar in 2021, Ord Minnett is positive on the sector in the post-covid recovery.

Gold Road Resources (GOR) and Newcrest Mining ((NCM)) remain the broker's preferred gold stocks.

Accumulate rating retained. Target price rises to $36.50 from $34.70.

Target price is $36.50 Current Price is $26.68 Difference: $9.82
If NCM meets the Ord Minnett target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $32.93, suggesting upside of 25.7% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

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 NGI as Outperform (1) -

December 2020 funds under management for Navigator Global Investments materially outperformed Macquarie's expectations as market performance added US$1.57b versus June 2020.

The company has guided to higher than normal performance fee revenue to be recognised in the first half, adding around US$4.5m at the earnings (EBITDA) level. 

The broker makes only small adjustments for FY22 and beyond and maintains the Outperform rating. The target price is $2.25. 

Target price is $2.25 Current Price is $1.99 Difference: $0.26
If NGI meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

This company reports in USD. 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

Ord Minnett rates NGI as Buy (1) -

Navigator Global Investments' quarterly performance was strong, observes Ord Minnett, with assets under management and administration increasing 9.5% in the quarter while generating an additional $9m in performance fees in the first half.

Also, flows were positive for the first time in over 2 years, well ahead of the broker's expectations. Ord Minnett believes the outlook for the Lighthouse platform appears to be improving.

Buy rating retained with the target price rising to $2.40 from $2.20.

Target price is $2.40 Current Price is $1.99 Difference: $0.41
If NGI meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

This company reports in USD. 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

Ord Minnett rates NST as Hold (3) -

Ord Minnett has marked-to-market its forward-curve-based commodity forecasts with estimates for nickel, gold, coal and steel increasing by 7-10% across the forecast period. Barring a higher than expected Australian dollar in 2021, Ord Minnett is positive on the sector in the post-covid recovery.

With improving yield curves putting gold back under pressure, the strong start to 2021 was short-lived but Ord Minnett remains positive on the sector.

The broker retains its Hold rating with the target rising to $14 from $13.40.

Target price is $14.00 Current Price is $12.72 Difference: $1.28
If NST meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $13.47, suggesting upside of 4.5% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Ord Minnett rates OGC as Accumulate (2) -

Ord Minnett has marked-to-market its forward-curve-based commodity forecasts with estimates for nickel, gold, coal and steel increasing by 7-10% across the forecast period. Barring a higher than expected Australian dollar in 2021, Ord Minnett is positive on the sector in the post-covid recovery.

With improving yield curves putting gold back under pressure, the strong start to 2021 was short-lived but Ord Minnett remains positive on the sector.

Accumulate retained. Target rises to $3.60 from $3.25.

Target price is $3.60 Current Price is $2.36 Difference: $1.24
If OGC meets the Ord Minnett target it will return approximately 53% (excluding dividends, fees and charges).

Current consensus price target is $2.88, suggesting upside of 26.1% (ex-dividends)

Forecast for FY20:

Forecast for FY21:

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 ORG as Buy (1) -

Energy analysts at Citi have increased price expectations for cude oil and LNG. The 2021 Brent oil price forecast moved to US$59/bbl from US$52/bbl. The team sees oil peaking at US$61/bbl in 1Q22.

The offsetting observation is that, on a long-term horizon, Citi analysts believe most share prices in the sector are relatively fairly valued. They also suggest the sector overall is likely to remain well supported for the near term.

Origin Energy's price target has declined, to $6.55 from $6.78, while the rating remains Buy on the expectation that electricity prices have bottomed.

Target price is $6.55 Current Price is $5.13 Difference: $1.42
If ORG meets the Citi target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $6.10, suggesting upside of 20.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Citi rates OSH as Neutral (3) -

Energy analysts at Citi have increased price expectations for cude oil and LNG. The 2021 Brent oil price forecast moved to US$59/bbl from US$52/bbl. The team sees oil peaking at US$61/bbl in 1Q22.

The offsetting observation is that, on a long-term horizon, Citi analysts believe most share prices in the sector are relatively fairly valued. They also suggest the sector overall is likely to remain well supported for the near term.

For Oil Search, the price target has lifted to $4.45 from $4. Rating remains Neutral.

Target price is $4.45 Current Price is $4.41 Difference: $0.04
If OSH meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.90, suggesting downside of -9.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: -0.1

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

Macquarie rates OZL as Outperform (1) -

Macquarie has marked to market December quarter commodity prices and foreign exchange rates and remains positive on copper exposure going into 2021.

Copper has been a base metal outperformer since mid-2020 and the broker expects the trend to continue into 2021 on global stimulus and electrification. In addition, Chinese demand is remaining buoyant and the ex-China stimulus is ramping up.

OZ Minerals remains the broker's preferred exposure to copper with the company boasting several key organic catalysts headlined by the options at both Prominent Hill and Carrapateena.

The analyst highlights significant leverage to copper prices, with 2021 and 2022 earnings 35% and 100% higher than base case forecasts in a spot price scenario.

The Outperform rating and target price of $22 are unchanged and modest decreases have been made to earnings forecasts.

Target price is $22.00 Current Price is $20.32 Difference: $1.68
If OZL meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $17.88, suggesting downside of -10.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Citi rates PDL as Neutral (3) -

Citi considers Pendal Group's first-quarter update "a bit soft" with net outflows resuming for JO Hambro funds. The broker is not concerned at this stage and notes the outflows were impacted by lumpy items.

Also, investment performance improved with funds under management (FUM) as at December 2020 rising by 5.4% on a quarterly basis to $97.4bn.

With any material rebound in fund flows not expected before FY22, Citi maintains its Neutral stance with the target price rising to $6.80 from $6.40.

Target price is $6.80 Current Price is $6.48 Difference: $0.32
If PDL meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $7.00, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Credit Suisse rates PDL as Neutral (3) -

Pendal Group reported first-quarter funds under management of $97.4bn, up 5.4% over the previous quarter. The growth was driven by positive market movements which more than offset outflows of -$1.6bn.

The quarter was the 12th quarter of outflows in the last 3.5 years with outflows largely driven by JO Hambro (-$1.4bn). 

While expecting flows to remain negative in the second quarter, Credit Suisse sees scope for a potential improvement in the second half led by improving 1-year fund performance.

The broker expects to see Hambro shift back into inflows at the Group level in the second half of FY21.

Credit Suisse retains its Neutral rating with the target rising to $6.50 from $5.90.

Target price is $6.50 Current Price is $6.48 Difference: $0.02
If PDL meets the Credit Suisse target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $7.00, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Morgan Stanley rates PDL as Overweight (1) -

Pendal Group's December quarter was mixed, observes Morgan Stanley, with better than expected funds under management (mainly driven by investment performance) offset by lower than anticipated total quarter flows.

Outflows were seen in most of the channels except Westpac Other and Australian wholesale-retail. 

Overweight rating retained with a target of $7.30. Industry view: In-line.

Target price is $7.30 Current Price is $6.48 Difference: $0.82
If PDL meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $7.00, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Ord Minnett rates PDL as Accumulate (2) -

Pendal Group's first-quarter funds under management at $97.4bn showed an increase of 5% over the previous quarter but is down -4% versus last year.

While the December quarter saw a return to net inflows, especially in the JO Hambro Capital Management business, the first quarter of FY21 saw the overall business swinging back to net outflows of -$1.6bn.

The near-term flow outlook remains uncertain, but Ord Minnett considers the current share price attractive and maintains its Accumulate rating with the target rising to $7.60 from $7.40.

Target price is $7.60 Current Price is $6.48 Difference: $1.12
If PDL meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $7.00, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Ord Minnett rates PLS as Sell (5) -

Ord Minnett has marked-to-market its forward-curve-based commodity forecasts with estimates for nickel, gold, coal and steel increasing by 7-10% across the forecast period. Barring a higher than expected Australian dollar in 2021, Ord Minnett is positive on the sector in the post-covid recovery.

The share price of Pilbara Resources has risen 200% since 1 November versus the ASX200 index rising 13%. December sales volumes from the company beat estimates.

Ord Minnett has increased its medium-term prices by 24–30% with valuations lifting 14-33%. The broker maintains a Sell rating and raises the target to $0.50 from $0.35.

Target price is $0.50 Current Price is $1.18 Difference: minus $0.68 (current price is over target).
If PLS meets the Ord Minnett target it will return approximately minus 58% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.53, suggesting downside of -55.2% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.5

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

Macquarie rates RIO as Outperform (1) -

Macquarie has marked to market December quarter commodity prices and foreign exchange rates and remains positive on copper exposure going into 2021.

Copper has been a base metal outperformer since mid-2020 and the broker expects the trend to continue into 2021 on global stimulus and electrification. In addition, Chinese demand is remaining buoyant and the ex-China stimulus is ramping up.

While copper is a positive contributor to earnings and accounts for 9% of net present value (NPV) for Rio Tinto, the major driver for the diversified miner remains buoyant iron ore prices.

The Outperform rating and target of $127 are unchanged.

Target price is $127.00 Current Price is $120.52 Difference: $6.48
If RIO meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $119.29, suggesting upside of 0.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Ord Minnett rates RRL as Upgrade to Buy from Hold (1) -

Ord Minnett has marked-to-market its forward-curve-based commodity forecasts with estimates for nickel, gold, coal and steel increasing by 7-10% across the forecast period. 

With improving yield curves putting gold under pressure and an elevated AUD tempering its higher gold price forecast, the broker notes the strong start to 2021 was short-lived but remains positive on the sector.

Rating for Regis Resources is upgraded to Buy from Hold. Target is increased to $4.50 from $4.20.

Target price is $4.50 Current Price is $3.69 Difference: $0.81
If RRL meets the Ord Minnett target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $4.78, suggesting upside of 29.1% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Citi rates RSG as Buy (1) -

Resolute Mining's headline 2020 production at 395.1koz just missed its revised production guidance although delivered on the cost front. December quarter was a mixed affair with production missing Citi's estimates due to equipment unavailability and industrial disruption.

Citi notes the outlook for 2021 is softer than expected driven by the gold mine at Syama and -US$49m in sustaining capex. 

Buy/High Risk retained. Target is reduced to $1 from $1.10.

Target price is $1.00 Current Price is $0.71 Difference: $0.29
If RSG meets the Citi target it will return approximately 41% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Macquarie rates RSG as Outperform (1) -

Resolute Mining Group has provided a preliminary fourth quarter result along with 2021 guidance, both of which were below Macquarie's expectations.

The fourth quarter result was -9% below the broker's estimates with Syama the key drag due to a lack of mining equipment availability and plant material handling issues. Additionally, there were 15 days of industrial disruption.

The softer result and guidance imply 55% growth in 2020 losses, with 2021 profit falling -50%. The analyst reduces the target price to $1 from $1.05 and maintains the Outperform rating.

Target price is $1.00 Current Price is $0.71 Difference: $0.29
If RSG meets the Macquarie target it will return approximately 41% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Ord Minnett rates S32 as Buy (1) -

Ord Minnett has marked-to-market its forward-curve-based commodity forecasts with estimates for nickel, gold, coal and steel increasing by 7-10% across the forecast period. Barring a higher than expected Australian dollar in 2021, Ord Minnett is positive on the sector in the post-covid recovery.

Among large caps, the broker likes South32 which is likely to benefit from upticks in manganese and metallurgical coal prices along with the South Africa Energy Coal (SAEC) divestment.

Ord Minnett maintains its Buy recommendation with the target rising to $3.20 from $3.10.

Target price is $3.20 Current Price is $2.68 Difference: $0.52
If S32 meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $2.80, suggesting upside of 8.5% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

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

Macquarie rates SFR as Outperform (1) -

Macquarie has marked to market December quarter commodity prices and foreign exchange rates and remains positive on copper exposure going into 2021.

Copper has been a base metal outperformer since mid-2020 and the broker expects the trend to continue into 2021 on global stimulus and electrification. In addition, Chinese demand is remaining buoyant and the ex-China stimulus is ramping up.

The T3 Motheo project in Botswana has recently been formally approved by Sandfire Resources and the broker believes an expanded development could provide significant upside versus base case forecasts.

In the near-term, DeGrussa continues to provide significant earnings leverage, with EPS forecasts for FY21 and FY22 (potentially) higher by 18% and 180% respectively, in a spot price scenario.

The Outperform rating and target price of $6.10 are unchanged and there have been modest decreases to forecast earnings.

Target price is $6.10 Current Price is $5.25 Difference: $0.85
If SFR meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $5.91, suggesting upside of 17.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Citi rates STO as Downgrade to Neutral from Buy (3) -

Energy analysts at Citi have increased price expectations for cude oil and LNG. The 2021 Brent oil price forecast moved to US$59/bbl from US$52/bbl. The team sees oil peaking at US$61/bbl in 1Q22.

The offsetting observation is that, on a long-term horizon, Citi analysts believe most share prices in the sector are relatively fairly valued. They also suggest the sector overall is likely to remain well supported for the near term.

The new price target for Santos, $7.58 compares with $7.34 previously. Rating has been downgraded to Neutral from Buy.

Target price is $7.58 Current Price is $7.42 Difference: $0.16
If STO meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $7.10, suggesting downside of -3.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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

Citi rates SXY as Buy (1) -

Energy analysts at Citi have increased price expectations for cude oil and LNG. The 2021 Brent oil price forecast moved to US$59/bbl from US$52/bbl. The team sees oil peaking at US$61/bbl in 1Q22.

The offsetting observation is that, on a long-term horizon, Citi analysts believe most share prices in the sector are relatively fairly valued. They also suggest the sector overall is likely to remain well supported for the near term.

Senex Energy remains the broker's top pick in the sector in Australia with free cash flow yield forecast to rise to 8% in FY22. Price target has gained 1c to 44c Buy.

Target price is $0.44 Current Price is $0.37 Difference: $0.07
If SXY meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $0.44, suggesting upside of 21.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Ord Minnett rates WHC as Upgrade to Accumulate from Lighten (2) -

Ord Minnett upgrades Whitehaven Coal to Accumulate from Lighten with the target price doubling to $2 from $1.

With northern Asia consumers scrambling for thermal coal amidst winter, Ord Minnett believes there may be some more price momentum near term but the broker also believes it is unlikely to be sustainable.

Reinforcing its operating and financial leverage, Whitehaven Coal's outlook is now back to profitability. Production guidance remains unchanged with Narrabri problems offset by a strong second half forecast for Maules.

Target price is $2.00 Current Price is $1.79 Difference: $0.21
If WHC meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $2.03, suggesting upside of 15.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Citi rates WPL as Neutral (3) -

Energy analysts at Citi have increased price expectations for cude oil and LNG. The 2021 Brent oil price forecast moved to US$59/bbl from US$52/bbl. The team sees oil peaking at US$61/bbl in 1Q22.

The offsetting observation is that, on a long-term horizon, Citi analysts believe most share prices in the sector are relatively fairly valued. They also suggest the sector overall is likely to remain well supported for the near term.

The broker's price target for Woodside Petroleum has risen to $25.62 from $22.36. The High Risk addition has disappeared from the Neutral rating.

Target price is $25.62 Current Price is $26.76 Difference: minus $1.14 (current price is over target).
If WPL 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 $25.23, suggesting downside of -5.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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