Australian Broker Call

Citi rates A2M as Buy (1) -

The company reports strong momentum continues, reflecting a seasonal build up ahead of key e-commerce sales events in China. Citi expects further A2 Platinum market share gains.

The broker expects consensus earnings upgrades, despite a degree of caution in the company's outlook around seasonality amid plans to increase marketing.

The delay of the Lion court case until next year removes one key short-term uncertainty, Citi suggests, upgrading FY18-20 forecasts by 17-44%.

The broker retains a Buy rating. Target is raised to $8.85 from $6.00.

Target price is $8.85 Current Price is $7.84 Difference: $1.01
If A2M meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $8.85, suggesting upside of 12.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

This company reports in NZD. 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

Credit Suisse rates A2M as Downgrade to Neutral from Outperform (3) -

The company has delivered 69% revenue growth year-on-year so far, ahead of Credit Suisse estimates. This is because of larger-than-expected infant formula sales ahead of the major retail events in China.

Credit Suisse raises estimates for operating earnings in FY18-20 by 8-12%. The broker believes growth projections for FY18 and FY19 are substantially reflected in current multiples and downgrades to Neutral from Outperform.

Target raised to NZ$8.50 from NZ$7.65.

Current Price is $7.84. Target price not assessed.

Current consensus price target is $8.85, suggesting upside of 12.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

This company reports in NZD. 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

Deutsche Bank rates A2M as Hold (3) -

Deutsche Bank observes the business is travelling well and the only constraints appear to be the supply of infant formula. The company has had success in expanding its Chinese MBS channel distribution, while the US is tracking to expectations.

Deutsche Bank upgrades revenue forecasts to include a higher income per can for infant formula, partly offset by higher marketing expenditure as the distribution footprint is expanded in China.  Hold rating retained. Target rises to NZ$8.10 from NZ$7.00.

Current Price is $7.84. Target price not assessed.

Current consensus price target is $8.85, suggesting upside of 12.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

This company reports in NZD. 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

Macquarie rates A2M as Outperform (1) -

A2's AGM update highlighted a 69% increase in sales in the first four months of FY18 over the equivalent period last year, a 121% increase in earnings and 138% increase in profit. China's Singles Day helped, the broker notes, but A&NZ, the US and UK are also contributing.

And A2 has not yet received Chinese regulatory approval. The broker cannot see anything more than more of the same ahead in FY18-19. Outperform retained, target rises to NZ$9.20 from NZ$8.40.

Current Price is $7.84. Target price not assessed.

Current consensus price target is $8.85, suggesting upside of 12.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

This company reports in NZD. 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 ACX as Downgrade to Neutral from Buy (3) -

Citi believes the sale cycle will be longer than most anticipate and this, in turn, will result in sales momentum taking longer to be realised in financials. The broker downgrades to Neutral from Buy.

The company has begun signing contracts with Chinese enterprises and will increase its marketing intensity in the US to match peers. Target is raised to $5.32 from $4.82, because of the expansion in peer multiples.

Target price is $5.32 Current Price is $5.15 Difference: $0.17
If ACX meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $4.41, suggesting downside of -14.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.2

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

Morgan Stanley rates ACX as Overweight (1) -

Morgan Stanley suggests investors should have greater conviction in the 20% sales growth trajectory after the analysts briefing.

The Connected Cost product is considered a large opportunity albeit longer dated. Morgan Stanley believes it too early to extrapolate how Connected Cost will move the dial in coming years.

Overweight retained. Industry view is In-line. Target is $5.50.

Target price is $5.50 Current Price is $5.15 Difference: $0.35
If ACX meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $4.41, suggesting downside of -14.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.2

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

UBS rates ACX as Neutral (3) -

UBS welcomed the further detail on business initiatives and strategy from the investor briefing. The broker is encouraged by the depth of the company's product and the continued investment to strengthen its market position.

UBS likes the value proposition of the company's Connected Cost product, which enables cost controls as well as the ability to process progress claims. Execution remains key and the broker maintains a Neutral rating. Target is $4.25.

Target price is $4.25 Current Price is $5.15 Difference: minus $0.9 (current price is over target).
If ACX meets the UBS target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.41, suggesting downside of -14.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.2

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

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

First half net profit was below expectations while Credit Suisse considers the FY18 guidance to be soft. Management remains optimistic regarding continued recovery in commodities.

Given the strong share price performance and the potential slowdown in earnings growth for the next six months, the broker downgrades to Neutral from Outperform. $7.80 target retained.

Target price is $7.80 Current Price is $7.35 Difference: $0.45
If ALQ meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $7.14, suggesting downside of -2.8% (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 ALQ as Downgrade to Lighten from Hold (4) -

After the first half result Ord Minnett believes the opportunities for acquisitions and organic growth in life sciences, and potential for upgrades from the recovering resource market, have diminished.

The broker now believes there is some risk to FY19 forecasts. Net profit estimates for FY18 and FY19 are lowered by -6% and -13% respectively.

The broker downgrades to Lighten from Hold. Target drops to $6.50 from $6.88.

Target price is $6.50 Current Price is $7.35 Difference: minus $0.85 (current price is over target).
If ALQ meets the Ord Minnett target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.14, suggesting downside of -2.8% (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 CYB as Outperform (1) -

Following the FY17 result Credit Suisse upgrades FY19 estimates for cash earnings by 2%. The broker believes the results comfortably delivered on the cost restructuring story.

Outperform. Target is $6.00.

Target price is $6.00 Current Price is $5.43 Difference: $0.57
If CYB meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $5.16, suggesting downside of -5.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

This company reports in GBP. 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

Macquarie rates CYB as Neutral (3) -

CYBG's result was in line with the broker and consensus. Cost control was strong and impairments lower, while margins were steady.

Return on tangible equity has grown to 7.5% from 5.2% in FY16 and the broker can see further growth on management actions alone. Neutral and $4.88 target retained.

Target price is $4.88 Current Price is $5.43 Difference: minus $0.55 (current price is over target).
If CYB meets the Macquarie target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.16, suggesting downside of -5.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

This company reports in GBP. 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

Morgans rates CYB as Hold (3) -

FY17 underlying net profit was better than Morgans expected. The broker remains mindful that conduct-related provisions will need to be strengthened, in consideration of any capital release stemming from potential IRB accreditation.

The bank hopes to achieve IRB accreditation for its mortgage book by the end of FY18. Hold. Target is raised $5.00 from $4.83.

Target price is $5.00 Current Price is $5.43 Difference: minus $0.43 (current price is over target).
If CYB meets the Morgans target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.16, suggesting downside of -5.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

This company reports in GBP. 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

Deutsche Bank rates DOW as Buy (1) -

The company will sell its freight rail business to Progress Rail for $109m. The two companies have worked together for almost 7 decades and will maintain an ongoing relationship in Australia.

As a result of the transaction Downer will incur a non-cash impairment of $40m relating to goodwill and legacy assets. Deutsche Bank expects the sale to be accretive, given the company will benefit from lower net interest costs and receive some lease income.

Buy rating retained. Target rises to $7.72 from $7.45.

Target price is $7.72 Current Price is $6.70 Difference: $1.02
If DOW meets the Deutsche Bank target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $7.10, suggesting upside of 6.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Ord Minnett rates DOW as Lighten (4) -

The company will sell its freight division to Progress Rail for $109m. Ord Minnett considers the transaction a small positive which implies a reduction to net debt. The broker makes no changes to earnings estimates ahead of the expected trading update on November 27 relating to the Spotless acquisition.

The broker believes the company will need to either downgrade guidance set by the previous Spotless management for net profit in FY18, or accept a lower cash flow conversion for the combined entity.

The broker maintains a Lighten rating with a $6.20 target.

Target price is $6.20 Current Price is $6.70 Difference: minus $0.5 (current price is over target).
If DOW meets the Ord Minnett target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.10, suggesting upside of 6.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Credit Suisse rates FAR as Outperform (1) -

The company has signalled the A2 and A5 blocks in The Gambia may contain a prospective resource of 1.1bn barrels. Drilling is to commence in the second half of 2018.

Credit Suisse notes the location gives the opportunity a better chance of success although emphasises these are early days.

On the broker's numbers this is an exciting free option for shareholders. Outperform rating and $0.14 target maintained.

Target price is $0.14 Current Price is $0.08 Difference: $0.06
If FAR meets the Credit Suisse target it will return approximately 75% (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

Citi rates FPH as Neutral (3) -

FY18 net profit guidance has been lifted slightly to NZ$187.5m from NZ$185m while revenue guidance is maintained at around NZ$1bn.

Still, after the first half result Citi suspects operating outcomes are worse than previously anticipated and this represents a small underlying downgrade.

Neutral. Target price lifts to NZ$13.20 from NZ$12.75.

Current Price is $11.25. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

This company reports in NZD. 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

Credit Suisse rates FPH as Underperform (5) -

First half results were in line with estimates, but for Credit Suisse gross margin expansion has lost momentum faster than anticipated.

Realities the broker believes need to be highlighted include the fact that growth will gyrate around the product cycle and there is limited room, given the price of the stock, for interruptions to growth.

Rating is Underperform. Target is NZ$12.00.

Current Price is $11.25. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

This company reports in NZD. 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

Deutsche Bank rates FPH as Hold (3) -

First half sales growth slowed to 8% while underlying net profit growth slowed to 13%. The company has lifted the mid point of FY18 guidance by 2% but Deutsche Bank considers the upgrade to be low quality, mainly driven by lower litigation costs.

The broker believes a period of consolidation is required to allow earnings growth to catch up with the share price. Hold rating. Target is NZ$12.75.

Current Price is $11.25. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

This company reports in NZD. 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

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

F&P Health's result was weaker than Macquarie had expected on lower than forecast mask growth. Management sees the introduction of new products as providing for a pick-up in the second half.

Macquarie still believe F&P is a quality company but a share price that has run up 60% in a year reflects a stretched valuation and a premium to ASX peers. Outperformance from here is thus unlikely. Downgrade to Underperform, noting extreme NZD sensitivity is the biggest risk to this recommendation.

Target rises to NZ$12.00 from NZ$11.00.

Current Price is $11.25. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

This company reports in NZD. 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

UBS rates FPH as Sell (5) -

First half net profit was broadly in line with UBS estimates. The company has narrowed its FY18 net profit guidance range to $185-190m from $180-190m but this now includes lower-than-expected litigation costs.

UBS believes the valuation is artificially stretched by the inclusion in the MSCI index and the market is underestimating the risks facing the company.

Target is raised to NZ$11.55 from NZ$11.35. Sell rating retained.

Current Price is $11.25. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

This company reports in NZD. 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

Credit Suisse rates GNC as Outperform (1) -

Credit Suisse acknowledges it did not get the increase in the final dividend it had forecast, as the company cited risk from lower grain production and capital expenditure commitments in FY18.

In the near-term the FY18 outlook is supported by further efficiency initiatives. While the result was weaker than expected the broker considers there is enough upside to warrant a retention of an Outperform rating. Target is reduced to $9.02 from $9.42.

Target price is $9.02 Current Price is $8.10 Difference: $0.92
If GNC meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $8.99, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Deutsche Bank rates GNC as Buy (1) -

FY17 results were below Deutsche Bank's estimates, affected by weaker outcomes in storage & logistics and oils.

The company has announced a restructuring initiative which is expected to deliver $25-30m in savings over the next two years. A challenging year is expected, given the smaller crop, which will be offset by costs cuts and the contribution from the expansion of malt capacity.

Buy rating retained. Target is $10.

Target price is $10.00 Current Price is $8.10 Difference: $1.9
If GNC meets the Deutsche Bank target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $8.99, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Macquarie rates GNC as Neutral (3) -

Graincorp's 169% profit increase fell short of the broker, albeit cash flow beat and the balance sheet is in better shape. That was the party, now comes the hangover.

A bumper crop in FY17 was always going to be a standout, and FY18 looks like being a poor crop. Graincorp is pulling the levers hard, the broker notes, to balance the impact. The broker expects the share price to be range-bound in coming months. A weaker grains outlook leads to a target decrease to $8.36 from $10.00 and Neutral rating retained.

Neutral retained.

Target price is $8.36 Current Price is $8.10 Difference: $0.26
If GNC meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $8.99, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Morgans rates GNC as Hold (3) -

FY17 results missed Morgans' estimates because of a poor result from oils and despite a record east coast grain crop. The performance in oils was particularly disappointing in light of all the expenditure.

FY18 is expected to be affected by a below-average grain crop on the east coast, and rising electricity prices will also affect processing businesses.

Morgans believes the share price is yet to fully reflect the deteriorating seasonal conditions and retains a Hold rating. Target is reduced to $8.73 from $8.85.

Target price is $8.73 Current Price is $8.10 Difference: $0.63
If GNC meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $8.99, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

UBS rates GNC as Neutral (3) -

FY17 results were reasonably strong, UBS asserts, albeit below expectations, given the largest east coast crop on record.

The two areas of disappointment were storage & logistics, where there was a protracted industrial dispute, and the lack of synergies in the oils investment to date. UBS reduces long-term earnings estimates by -7%.

Neutral retained. Target falls to $8.85 from $8.95.

Target price is $8.85 Current Price is $8.10 Difference: $0.75
If GNC meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $8.99, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Macquarie rates GUD as Neutral (3) -

GUD will acquire the business of AA Gaskets, which has operations across A&NZ. The company's earnings margin is below that of GUD's auto division but the broker expects stronger revenue and margin growth as AA is integrated into the group.

These smaller auto acquisitions are lifting potential sustainable revenue growth, the broker notes. Target rises to $11.36 from $10.75, Neutral retained.

Target price is $11.36 Current Price is $11.90 Difference: minus $0.54 (current price is over target).
If GUD meets the Macquarie target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.00, suggesting upside of 0.9% (ex-dividends)

The company's fiscal year ends in June.

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 HSO as Equal-weight (3) -

Guidance was affirmed four weeks ago but weak industry data suggests to Morgan Stanley there is cause for concern in the short term.

The company is due to hold an investor briefing at the Northern Beaches Hospital development on November 28 and the broker suggests the investment thesis for the stock pivots on the first 12 months of the hospital's operation.

The broker needs clarity on how the public/private triaging will function and the plans to attract specialists to suites at the hospital.

Rating is Equal-weight. Price target is $1.80. In-Line industry view.

Target price is $1.80 Current Price is $1.87 Difference: minus $0.07 (current price is over target).
If HSO meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.10, suggesting upside of 12.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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

Deutsche Bank rates KMD as Buy (1) -

The company has noted that sales in the first quarter have been affected by lower clearance stock levels over August and September, while sales in October were higher than the prior corresponding month.

NZ sales were particularly weak in the quarter, down -10.3%, while Australian sales were up 2.9%. Deutsche Bank considers the update solid, indicating a more targeted promotion strategy is proving successful in rebuilding brand equity and improving gross margin.

Buy rating retained. Target is raised to NZ$2.65 from NZ$2.50.

Current Price is $2.24. Target price not assessed.

Current consensus price target is $2.37, suggesting upside of 5.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY18:

Forecast for FY19:

This company reports in NZD. 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 KMD as Outperform (1) -

Kathmandu has released a first quarter trading update ahead of its AGM this week, suggesting an improved earnings result. Stronger gross margins were supported by -40% less clearance stock.

Kathmandu has now delivered several consecutive positive results and the broker expect ongoing outperformance on current PE multiples. Target rises to $2.58 from $2.52, Outperform retained.

Target price is $2.58 Current Price is $2.24 Difference: $0.34
If KMD meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $2.37, suggesting upside of 5.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY18:

Forecast for FY19:

This company reports in NZD. 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

Citi rates MHJ as Initiation of coverage with Buy (1) -

Citi considers the company's FY18 price/earnings multiple of 12x to be too low, particularly when there are options around two loss-making businesses.

Backing out losses from Emma & Roe, given turnaround potential, and assuming the US business is sold, the company would be trading on an FY18 price/earnings multiple of 9x.

The broker expects the company's Canadian business to be a major driver of earnings growth over the medium term.

Citi initiates coverage with a $1.70 target and Buy rating.

Target price is $1.70 Current Price is $1.12 Difference: $0.58
If MHJ meets the Citi target it will return approximately 52% (excluding dividends, fees and charges).

Current consensus price target is $1.54, suggesting upside of 37.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.8

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

Citi rates MND as Sell (5) -

Citi increases FY18-20 forecasts for earnings per share by 1-7% as management has guided to revenue growth above 30% year-on-year. The broker's upgrades are partly offset by reductions to assumed margins.

While the broker considers the company well-managed and near-term news flow is potentially supportive, the valuation is considered stretched.

Target is raised to $12.95 from $12.40. Sell rating retained.

Target price is $12.95 Current Price is $19.45 Difference: minus $6.5 (current price is over target).
If MND meets the Citi target it will return approximately minus 33% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.23, suggesting downside of -26.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.8

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

Deutsche Bank rates MND as Sell (5) -

The company has provided maiden first half revenue guidance, expecting growth to exceed 30%.  Sales revenue has been better than anticipated.

The company highlights significant planned capital expenditure in the iron ore industry while expenditure in precious metals and battery metals has been strengthening.

Deutsche Bank increases revenue assumption which leads to increases in earnings estimates of 7-8% between FY18-20.

Sell rating retained. Target is raised to $11.15 from $10.44.

Target price is $11.15 Current Price is $19.45 Difference: minus $8.3 (current price is over target).
If MND meets the Deutsche Bank target it will return approximately minus 43% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.23, suggesting downside of -26.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.8

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

Macquarie rates MND as Underperform (5) -

Management's AGM outlook commentary was an improvement, the broker notes, with Resources & Energy showing signs of a recovery as opposed to "stabilisation" as suggested at the August result. Maintenance, infrastructure and overseas business offer opportunities although margins will continue to be pressured by competition.

Target rises to $17.35 from $12.80 but remains well below the traded price, thus Underperform retained. The Ichthys project will provide a revenue peak in FY18 but leave a hole in FY19, the broker notes. The broker prefers Downer EDI ((DOW)) and Cimic ((CIM)) in the space.

Target price is $17.35 Current Price is $19.45 Difference: minus $2.1 (current price is over target).
If MND meets the Macquarie target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.23, suggesting downside of -26.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.8

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

Ord Minnett rates MND as Hold (3) -

Ord Minnett acknowledges there is strong momentum in the stock and increases net profit estimates by 7% for FY18 and by 6% for FY19. Nevertheless, the broker struggles with valuation and maintains a Hold rating.

On the broker's estimates, the stock is trading at a significant premium to other contractors and there is limited growth expected in FY19 given the uncertainty about oil & gas contracts rolling off. Target is raised to $18.38 from $14.30 because of an increase in earnings forecasts.

Target price is $18.38 Current Price is $19.45 Difference: minus $1.07 (current price is over target).
If MND meets the Ord Minnett target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.23, suggesting downside of -26.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.8

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

Macquarie rates MQA as Outperform (1) -

Mac Atlas intends to seek internalisation of management. Clarity should emerge, the broker suggests, by May next year. Internalisation tends to be positive for share prices, the broker notes, but it depends on the extent of exit costs.

And a complex structure makes for a complex process. On current valuation the broker sees internalisation as value neutral. Target rises to $6.64 from $6.26 on forex adjustments. Outperform retained.

Target price is $6.64 Current Price is $6.20 Difference: $0.44
If MQA meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $6.38, suggesting upside of 2.9% (ex-dividends)

The company's fiscal year ends in December.

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

UBS rates MQA as Upgrade to Buy from Neutral (1) -

The board's decision to commence discussions with Macquarie Group ((MQG)) regarding the internalisation of management is considered a materially positive step.

UBS also makes a number of changes to forecasts to reflect the additional 5% stake acquired in APRR. A weaker outlook for Dulles Greenway traffic pushes out the inaugural distribution assumptions until 2020.

The net result is an increase in the target to $6.65 from $5.80. Rating is upgraded to Buy from Neutral.

Target price is $6.65 Current Price is $6.20 Difference: $0.45
If MQA meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $6.38, suggesting upside of 2.9% (ex-dividends)

The company's fiscal year ends in December.

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 OZL as Neutral (3) -

Credit Suisse increases its assumed life for Prominent Hill underground-only mining by seven years.

The company's restatement of annual reserves to June 30, 2017 has delivered a 5mt increase in underground ore tonnage, with gross additions more than exceeding mining depletion.

The mine life extension adds $0.35 per share to valuation. Neutral rating. Target is raised to $8.25 from $7.90.

Target price is $8.25 Current Price is $8.45 Difference: minus $0.2 (current price is over target).
If OZL meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.69, suggesting upside of 2.8% (ex-dividends)

The company's fiscal year ends in December.

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 RWC as Sell (5) -

Deutsche Bank has conducted a survey, highlighting the potential for Tectite to be rolled out beyond the Pacific Northwest in the US, given the limited difference in perceived brand quality and the significant role of retailers in brand awareness.

Given the earnings risks, the broker does not believe the stock's premium is justified. Should Home Depot undertake further de-stocking of SharkBite's PTC product, the broker expects FY18 operating earnings may be reduced by a further -6%.

Sell rating retained. Target is $3.17.

Target price is $3.17 Current Price is $4.19 Difference: minus $1.02 (current price is over target).
If RWC meets the Deutsche Bank target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.77, suggesting downside of -10.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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

Morgans rates SOM as Add (1) -

First quarter sales revealed strong growth, with Europe continuing to be the driver within the core business. Management has reiterated guidance and expects a solid uplift in revenue and operating earnings.

Morgans applies a more conservative outlook on the RSS roll-out in the short term, until there is evidence of the performance and throughput, in order to de-risk this segment as clinics mature.

Add rating retained and target raised to $4.04 from $3.88.

Target price is $4.04 Current Price is $3.60 Difference: $0.44
If SOM meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Ord Minnett rates TCL as Buy (1) -

The NSW government has offered free vehicle registration to eligible owners who spend more than $25 a week on tolls. Ord Minnett believes this will should mean greater use of Sydney's toll road network, to the benefit of Transurban investors.

According to Transurban, only 12% of its NSW toll road users pay $25 or more per week. The main question is what proportion of the 7% that pay more than $15 a week but less than $12 a week might be encouraged to use a toll road more often in order to be eligible for free rego?

Ord Minnett retains a Buy rating and $13.50 target.

Target price is $13.50 Current Price is $12.69 Difference: $0.81
If TCL meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $12.75, suggesting upside of 0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

Macquarie rates TNE as Outperform (1) -

Technology One's FY17 profit growth was not as has been delivered in past years but in line with guidance and subject to contributing factors that the broker sees as one-offs.

Improvement is expected in FY18 on continued momentum in the cloud, improved consulting and ongoing strong demand for the company's IT solutions. Outperform and $5.68 target retained.

Target price is $5.68 Current Price is $5.18 Difference: $0.5
If TNE meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $5.36, suggesting upside of 3.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Morgans rates TNE as Hold (3) -

FY17 net profit was up 8% and in line with recent guidance. Morgans observes significant negative events occurred, such as higher Evolve/conference costs and weaker consulting profits.

Operating cash flow was not as strong as the broker has typically come to expect from the company, as trade receivables rose by $10m year-on-year.

The company remains confident that BCC contract costs are isolated and consulting will improve. The broker upgrades forecasts by 3.5% to incorporate 14% growth in earnings per share.

Target is raised to $5.10 from $4.16. Hold rating retained.

Target price is $5.10 Current Price is $5.18 Difference: minus $0.08 (current price is over target).
If TNE meets the Morgans target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.36, suggesting upside of 3.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

UBS rates TNE as Neutral (3) -

The company reported FY17 net profit of $44.5m, within the guidance range. Strong profit growth is expected to continue in FY18. 

UBS notes cloud momentum is strong and the value proposition suggests a robust medium-term outlook. There are upside risks if consulting can return to 20% margins. Neutral rating maintained. Target is $5.30.

Target price is $5.30 Current Price is $5.18 Difference: $0.12
If TNE meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $5.36, suggesting upside of 3.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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