Australian Broker Call

June 05, 2017

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COMPANIES DISCUSSED IN THIS ISSUE

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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)

Last Updated: 09:19 AM

Your daily news report on the latest recommendation, valuation, forecast and opinion changes.

This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.

For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE

Today's Upgrades and Downgrades
BPT - BEACH ENERGY Upgrade to Hold from Lighten Ord Minnett
AHG  AUTOMOTIVE HOLDINGS GROUP LIMITED

Automobiles & Components

Overnight Price: $3.02

ADDED

Ord Minnett rates AHG as Accumulate (2) -

The company has reduced earnings guidance for FY17 amid weak new car sales data and tighter credit conditions. The transformation plan  for refrigerated logistics is also behind schedule.

Despite challenging operating conditions Ord Minnett maintains an Accumulate recommendation because of the cost saving opportunities envisaged. Target is reduced to $3.50 from $4.54.

Target price is $3.50 Current Price is $3.02 Difference: $0.48
If AHG meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $3.56, suggesting upside of 17.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Ord Minnett forecasts a full year FY17 dividend of 15.00 cents and EPS of 17.00 cents.
At the last closing share price the estimated dividend yield is 4.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.7, implying annual growth of -12.6%.

Current consensus DPS estimate is 20.1, implying a prospective dividend yield of 6.7%.

Current consensus EPS estimate suggests the PER is 11.8.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 23.00 cents and EPS of 29.00 cents.
At the last closing share price the estimated dividend yield is 7.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.41.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.1, implying annual growth of 13.2%.

Current consensus DPS estimate is 22.0, implying a prospective dividend yield of 7.3%.

Current consensus EPS estimate suggests the PER is 10.4.

Market Sentiment: 0.4

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

ALQ  ALS LIMITED

Mining Sector Contracting

Overnight Price: $6.77

ADDED

Ord Minnett rates ALQ as Hold (3) -

Ord Minnett updates its model following completion of the acquisitions of Marshfield in the US and Oilcheck in Brazil. The broker estimates the acquisitions will contribute to combined annual revenue of around $34m.

FY18 and FY19 estimates for earnings per share rise by less than 1%. The broker upgrades the target to $6.85 from $6.81 and retains a Hold rating. The broker believes the acquisitions are a strategic move but also suggests there is limited upside to valuation.

Target price is $6.85 Current Price is $6.77 Difference: $0.08
If ALQ meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $6.39, suggesting downside of -5.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 16.00 cents and EPS of 28.00 cents.
At the last closing share price the estimated dividend yield is 2.36%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.18.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.9, implying annual growth of N/A.

Current consensus DPS estimate is 16.2, implying a prospective dividend yield of 2.4%.

Current consensus EPS estimate suggests the PER is 24.3.

Forecast for FY19:

Ord Minnett forecasts a full year FY19 dividend of 20.00 cents and EPS of 37.00 cents.
At the last closing share price the estimated dividend yield is 2.95%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 34.8, implying annual growth of 24.7%.

Current consensus DPS estimate is 19.7, implying a prospective dividend yield of 2.9%.

Current consensus EPS estimate suggests the PER is 19.5.

Market Sentiment: 0.3

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

BPT  BEACH ENERGY LIMITED

Crude Oil

Overnight Price: $0.61

ADDED

Ord Minnett rates BPT as Upgrade to Hold from Lighten (3) -

The stock has fallen -32% since December, making the valuation more attractive. Ord Minnett raises its recommendation to Hold from Lighten. Target is $0.65.

The broker envisages the next catalysts are further exploration, that may mean reserve life extensions, mergers or acquisitions, and increased uncommitted production which could mean realisation of attractive domestic gas prices.

Target price is $0.65 Current Price is $0.61 Difference: $0.04
If BPT meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $0.69, suggesting upside of 12.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Ord Minnett forecasts a full year FY17 dividend of 2.00 cents and EPS of 9.00 cents.
At the last closing share price the estimated dividend yield is 3.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.78.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.6, implying annual growth of N/A.

Current consensus DPS estimate is 1.5, implying a prospective dividend yield of 2.5%.

Current consensus EPS estimate suggests the PER is 8.0.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 2.00 cents and EPS of 8.00 cents.
At the last closing share price the estimated dividend yield is 3.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.1, implying annual growth of 6.6%.

Current consensus DPS estimate is 1.8, implying a prospective dividend yield of 3.0%.

Current consensus EPS estimate suggests the PER is 7.5.

Market Sentiment: 0.0

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

COH  COCHLEAR LIMITED

Medical Equipment & Devices

Overnight Price: $152.70

Credit Suisse rates COH as Underperform (5) -

Credit Suisse updates its global cochlear implant market model, with associated upgrades to unit sales for the company over the forecast period.The broker's analysis suggests market share will be 54.7% at the end of FY17, up from 51.3% in FY16.

While noting potential disparities in terms of the contribution from processor upgrades and accessories, the broker still believes the current share price factors in unit sales of almost double the rate seen in FY05-16.

Underperform retained. Target rises to $133.90 from $129.00.

Target price is $133.90 Current Price is $152.70 Difference: minus $18.8 (current price is over target).
If COH meets the Credit Suisse target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $127.93, suggesting downside of -16.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Credit Suisse forecasts a full year FY17 dividend of 273.00 cents and EPS of 387.00 cents.
At the last closing share price the estimated dividend yield is 1.79%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 39.46.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 386.8, implying annual growth of 17.0%.

Current consensus DPS estimate is 271.0, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 39.5.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 323.00 cents and EPS of 457.00 cents.
At the last closing share price the estimated dividend yield is 2.12%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 33.41.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 438.1, implying annual growth of 13.3%.

Current consensus DPS estimate is 308.0, implying a prospective dividend yield of 2.0%.

Current consensus EPS estimate suggests the PER is 34.9.

Market Sentiment: -0.3

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

HUB  HUB24 LIMITED

Wealth Management & Investments

Overnight Price: $5.73

ADDED

Ord Minnett rates HUB as Buy (1) -

Net inflows in April and May were up 70% on the first half run rate and substantially above Ord Minnett's expectations. The broker believes these flows are a vital measure of success in assessing early-stage asset-based fee business.

The broker retains the stock as a high conviction Buy recommendation, noting the shift to independence by financial advisers is real and independent platforms are winning. Target is raised to $6.85 from $6.41.

Target price is $6.85 Current Price is $5.73 Difference: $1.12
If HUB meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Ord Minnett forecasts a full year FY17 dividend of 0.00 cents and EPS of 5.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 102.32.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 10.80 cents and EPS of 18.50 cents.
At the last closing share price the estimated dividend yield is 1.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.97.

Market Sentiment: 1.0

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

ISU  ISELECT LIMITED

Insurance

Overnight Price: $2.08

Credit Suisse rates ISU as Outperform (1) -

The stock has re-rated strongly over the past 12 months but Credit Suisse believes it is inexpensive relative to stocks with a similar growth outlook.

The broker observes consumer pressure points, such as rising energy costs and health insurance affordability, drive increased demand for price comparisons. Investments made during FY17 support further revenue growth and future margin expansion, in the broker's view.

Outperform retained.Target is raised to $2.40 from $2.15.

Target price is $2.40 Current Price is $2.08 Difference: $0.32
If ISU meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Credit Suisse forecasts a full year FY17 dividend of 4.50 cents and EPS of 8.01 cents.
At the last closing share price the estimated dividend yield is 2.16%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.97.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 6.00 cents and EPS of 10.07 cents.
At the last closing share price the estimated dividend yield is 2.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.66.

Market Sentiment: 1.0

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

NHC  NEW HOPE CORPORATION LIMITED

Coal

Overnight Price: $1.61

Credit Suisse rates NHC as Neutral (3) -

The Queensland Land Court has recommended that the mining lease for Acland stage 3 not be granted. Two areas of concern are groundwater and the risk perceived to farmers/landholders regarding noise limits.

Despite the recommendation from the court, Credit Suisse observes it is unclear when a state government decision will be forthcoming. The longer the time to a final decision, the greater the likely period between production ending at stage 2 and commencing at stage 3, if indeed stage 3 proceeds.

Neutral retained. Target falls to $1.60 from $1.75.

Target price is $1.60 Current Price is $1.61 Difference: minus $0.005 (current price is over target).
If NHC meets the Credit Suisse target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.95, suggesting upside of 21.5% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Credit Suisse forecasts a full year FY17 dividend of 5.50 cents and EPS of 18.30 cents.
At the last closing share price the estimated dividend yield is 3.43%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.9, implying annual growth of 3277.4%.

Current consensus DPS estimate is 7.3, implying a prospective dividend yield of 4.5%.

Current consensus EPS estimate suggests the PER is 9.0.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 2.00 cents and EPS of 22.01 cents.
At the last closing share price the estimated dividend yield is 1.25%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.29.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.5, implying annual growth of 20.1%.

Current consensus DPS estimate is 7.9, implying a prospective dividend yield of 4.9%.

Current consensus EPS estimate suggests the PER is 7.5.

Market Sentiment: 0.3

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

QUB  QUBE HOLDINGS LIMITED

Transportation & Logistics

Overnight Price: $2.64

Morgans rates QUB as Hold (3) -

The company's $350m capital raising will have a minor impact on metrics and valuation, Morgans observes. The capital raising includes a $228m entitlement offer and a $122m placement.

The purpose will be to fund over $80m in new warehousing at Moorebank as well as $70m in growth capital  for the broader business.

Morgans observes the Moorebank development is growing in momentum, while earnings in the Patrick business should lift as cost reductions and productivity gains offset weaker volumes.

Hold rating retained. Target drops to $2.70  from $2.74.

Target price is $2.70 Current Price is $2.64 Difference: $0.06
If QUB meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $2.65, suggesting upside of 0.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgans forecasts a full year FY17 dividend of 5.50 cents and EPS of 6.00 cents.
At the last closing share price the estimated dividend yield is 2.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 44.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.6, implying annual growth of -7.2%.

Current consensus DPS estimate is 5.6, implying a prospective dividend yield of 2.1%.

Current consensus EPS estimate suggests the PER is 34.7.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 5.50 cents and EPS of 7.00 cents.
At the last closing share price the estimated dividend yield is 2.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 37.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.0, implying annual growth of 18.4%.

Current consensus DPS estimate is 5.9, implying a prospective dividend yield of 2.2%.

Current consensus EPS estimate suggests the PER is 29.3.

Market Sentiment: 0.4

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

RFG  RETAIL FOOD GROUP LIMITED

Food, Beverages & Tobacco

Overnight Price: $4.63

UBS rates RFG as Sell (5) -

Operating leases will now be consolidated on balance sheet in FY19 under IFRS 16.

UBS does not believe cash flows will be affected by the accounting changes but any increased disclosure could highlight that the company is liable for lease payments should a franchisee come under financial difficulty.

Sell rating retained. Target drops to $4.70 from $5.70.

Target price is $4.70 Current Price is $4.63 Difference: $0.07
If RFG meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $4.70, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 30.30 cents and EPS of 45.20 cents.
At the last closing share price the estimated dividend yield is 6.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.24.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 43.4, implying annual growth of 16.0%.

Current consensus DPS estimate is 29.8, implying a prospective dividend yield of 6.4%.

Current consensus EPS estimate suggests the PER is 10.7.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 31.30 cents and EPS of 47.00 cents.
At the last closing share price the estimated dividend yield is 6.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 48.5, implying annual growth of 11.8%.

Current consensus DPS estimate is 32.2, implying a prospective dividend yield of 7.0%.

Current consensus EPS estimate suggests the PER is 9.5.

Market Sentiment: -1.0

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

S32  SOUTH32 LIMITED

Mining

Overnight Price: $2.62

UBS rates S32 as Buy (1) -

UBS observes, in the wake of the CEO's meeting with analysts, that the company's focus is on generating cash in returns and not on copper-equivalent growth for the sake of it. It appears that capital expenditure will step up in FY18 because of carryover from FY17.

The CEO has also indicated that, should past empowerment deals in South Africa not be recognised in the upcoming changes mooted to the mining charter, that it would seek court involvement. UBS suspects uncertainty around the charter has affected the share price of late.

Buy and $2.80 target retained.

Target price is $2.80 Current Price is $2.62 Difference: $0.18
If S32 meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.01, suggesting upside of 14.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 11.95 cents and EPS of 30.54 cents.
At the last closing share price the estimated dividend yield is 4.56%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.58.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.7, implying annual growth of N/A.

Current consensus DPS estimate is 11.9, implying a prospective dividend yield of 4.5%.

Current consensus EPS estimate suggests the PER is 9.1.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 10.62 cents and EPS of 27.89 cents.
At the last closing share price the estimated dividend yield is 4.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 26.0, implying annual growth of -9.4%.

Current consensus DPS estimate is 12.5, implying a prospective dividend yield of 4.8%.

Current consensus EPS estimate suggests the PER is 10.1.

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

Market Sentiment: 0.8

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

SGM  SIMS METAL MANAGEMENT LIMITED

Steel & Scrap

Overnight Price: $13.92

Citi rates SGM as Buy (1) -

Citi is monitoring US trade data for ferrous scrap export volumes, for evidence of any operating leverage for the company. The broker retains a view that volume is more important to the company's earnings than  scrap pricing.

The broker suggests volume growth has been flat and early momentum established for exports has slowed. This underpins the broker's expectations for low, export-led, single-digit growth in FY17.

Citi reiterates a Buy rating and target of $14.10.

Target price is $14.10 Current Price is $13.92 Difference: $0.18
If SGM meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $13.22, suggesting downside of -5.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Citi forecasts a full year FY17 dividend of 48.00 cents and EPS of 75.80 cents.
At the last closing share price the estimated dividend yield is 3.45%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.36.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 68.4, implying annual growth of 27.4%.

Current consensus DPS estimate is 38.9, implying a prospective dividend yield of 2.8%.

Current consensus EPS estimate suggests the PER is 20.4.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 52.00 cents and EPS of 85.90 cents.
At the last closing share price the estimated dividend yield is 3.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 81.9, implying annual growth of 19.7%.

Current consensus DPS estimate is 41.4, implying a prospective dividend yield of 3.0%.

Current consensus EPS estimate suggests the PER is 17.0.

Market Sentiment: 0.4

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

SUN  SUNCORP GROUP LIMITED

Banks

Overnight Price: $14.13

Macquarie rates SUN as Neutral (3) -

Macquarie observes personal lines pricing has reached growth of mid-single digits while volume trends are now positive, although the company continues to lose market share.

Meanwhile, commercial price has stabilised and the company is retaining business, although the broker suspects these risks will be unprofitable even after re-pricing.

At the investor briefing the company provided no formal guidance other than a statement that business will miss the underlying ITR target of 12% in FY17. Neutral retained. Target is $14.05.

Target price is $14.05 Current Price is $14.13 Difference: minus $0.08 (current price is over target).
If SUN 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 $13.86, suggesting downside of -1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 71.00 cents and EPS of 91.00 cents.
At the last closing share price the estimated dividend yield is 5.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.53.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 89.0, implying annual growth of 9.3%.

Current consensus DPS estimate is 72.9, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 15.9.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 80.00 cents and EPS of 101.30 cents.
At the last closing share price the estimated dividend yield is 5.66%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 96.5, implying annual growth of 8.4%.

Current consensus DPS estimate is 77.3, implying a prospective dividend yield of 5.5%.

Current consensus EPS estimate suggests the PER is 14.6.

Market Sentiment: 0.1

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


Morgan Stanley rates SUN as Underweight (5) -

Morgan Stanley observes the rising catastrophe budget presents headwinds for FY18 underlying margins, although top-line growth is encouraging.

The company has highlighted second half underlying insurance margins are slightly below 12%, which suggests to the broker FY17 cannot exceed 11.5%.

Underweight rating, $12 target and In-Line industry view retained.

Target price is $12.00 Current Price is $14.13 Difference: minus $2.13 (current price is over target).
If SUN meets the Morgan Stanley target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.86, suggesting downside of -1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgan Stanley forecasts a full year FY17 dividend of 76.00 cents and EPS of 90.00 cents.
At the last closing share price the estimated dividend yield is 5.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 89.0, implying annual growth of 9.3%.

Current consensus DPS estimate is 72.9, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 15.9.

Forecast for FY18:

Morgan Stanley forecasts a full year FY18 dividend of 81.00 cents and EPS of 97.00 cents.
At the last closing share price the estimated dividend yield is 5.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 96.5, implying annual growth of 8.4%.

Current consensus DPS estimate is 77.3, implying a prospective dividend yield of 5.5%.

Current consensus EPS estimate suggests the PER is 14.6.

Market Sentiment: 0.1

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


Morgans rates SUN as Hold (3) -

At its investor briefing the company indicated an improvement in general insurance underlying margins in the second half.

Other key points that Morgans observed include a potential increase in the FY18 natural hazard budget while FY17 perils are tracking at around $680m at the end of April, with $60m in aggregate remaining until the end of the financial year.

Commentary also suggests the CTP book, in aggregate, would currently dilute the general insurance underlying margin. Morgans retains a  Hold rating. Target rises to $14.24 from $13.71.

Target price is $14.24 Current Price is $14.13 Difference: $0.11
If SUN meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $13.86, suggesting downside of -1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgans forecasts a full year FY17 dividend of 75.00 cents and EPS of 94.20 cents.
At the last closing share price the estimated dividend yield is 5.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 89.0, implying annual growth of 9.3%.

Current consensus DPS estimate is 72.9, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 15.9.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 80.20 cents and EPS of 100.90 cents.
At the last closing share price the estimated dividend yield is 5.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 96.5, implying annual growth of 8.4%.

Current consensus DPS estimate is 77.3, implying a prospective dividend yield of 5.5%.

Current consensus EPS estimate suggests the PER is 14.6.

Market Sentiment: 0.1

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

VCX  VICINITY CENTRES

REITs

Overnight Price: $2.82

Citi rates VCX as Buy (1) -

Citi observes the share price is lagging its peers. The stock has been the worst performer in the year to date, down -7%.

While investor caution surrounding retail property is understandable, the broker believes market pricing can create anomalies in times of volatility.

Citi believes some investors are pricing the stock at a discount to peers despite the metrics pointing to operating performances that are in line, if not better than peers.

Buy rating and $3.22 target retained.

Target price is $3.22 Current Price is $2.82 Difference: $0.4
If VCX meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $3.00, suggesting upside of 6.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Citi forecasts a full year FY17 dividend of 17.40 cents and EPS of 19.00 cents.
At the last closing share price the estimated dividend yield is 6.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.6, implying annual growth of -15.1%.

Current consensus DPS estimate is 17.6, implying a prospective dividend yield of 6.2%.

Current consensus EPS estimate suggests the PER is 13.7.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 18.10 cents and EPS of 19.70 cents.
At the last closing share price the estimated dividend yield is 6.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.31.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.9, implying annual growth of -8.3%.

Current consensus DPS estimate is 17.9, implying a prospective dividend yield of 6.3%.

Current consensus EPS estimate suggests the PER is 14.9.

Market Sentiment: -0.1

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

Summaries
AHG - AUTOMOTIVE HOLDINGS Accumulate - Ord Minnett Overnight Price $3.02
ALQ - ALS LIMITED Hold - Ord Minnett Overnight Price $6.77
BPT - BEACH ENERGY Upgrade to Hold from Lighten - Ord Minnett Overnight Price $0.61
COH - COCHLEAR Underperform - Credit Suisse Overnight Price $152.70
HUB - HUB24 Buy - Ord Minnett Overnight Price $5.73
ISU - ISELECT Outperform - Credit Suisse Overnight Price $2.08
NHC - NEW HOPE CORP Neutral - Credit Suisse Overnight Price $1.61
QUB - QUBE HOLDINGS Hold - Morgans Overnight Price $2.64
RFG - RETAIL FOOD GROUP Sell - UBS Overnight Price $4.63
S32 - SOUTH32 Buy - UBS Overnight Price $2.62
SGM - SIMS METAL MANAGEMENT Buy - Citi Overnight Price $13.92
SUN - SUNCORP Neutral - Macquarie Overnight Price $14.13
Underweight - Morgan Stanley Overnight Price $14.13
Hold - Morgans Overnight Price $14.13
VCX - VICINITY CENTRES Buy - Citi Overnight Price $2.82
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

5

2. Accumulate

1

3. Hold

6

5. Sell

3

Tuesday 06 June 2017

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