Australian Broker Call

Shaw and Partners rates A1M as Buy (1) -

AIC Mines has outlined a significant resource and reserve upgrade at its Lens 6 site. The mineral resource is increased 74% to 1.1m tonnes at 3.1% copper, with reserve increased 119% to 0.8m tonnes at 2.8% copper. 

Shaw and Partners points out Lens 6 will be fast-tracked to production, with underground development having already commenced. Elsewhere, the company is taking a cautious approach to development at Jericho, given the current inflationary environment.

The Buy rating and target price of 80 cents are retained.

Target price is $0.80 Current Price is $0.34 Difference: $0.46
If A1M meets the Shaw and Partners target it will return approximately 135% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Macquarie - Cessation of coverage

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.7

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

Citi rates ASK as Buy (1) -

Abacus Storage King provided a trading update at its AGM highlighting growth in both rent and revenue per available square metre in the established portfolio. Developments remain on plan with gearing within target, Citi notes.

Distribution guidance for FY24 of 6cps with a target payout range of 90% to 100% of funds from operations was reiterated. The REIT trades at a -33% discount to net tangible asset valuation and a forecast FY24 yield of 5.7%, Citi calculates.

Buy and $1.20 target retained.

Target price is $1.20 Current Price is $1.05 Difference: $0.15
If ASK meets the Citi target it will return approximately 14% (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

Morgan Stanley rates ASX as Underweight (5) -

There have been two consecutive months of double-digit growth in volume for interest rate futures on the ASX, according to tracking performed by Morgan Stanley.

Volumes for the November-rate futures are up 22% year-on-year, which suggests to the broker conditions are improving.

Assuming this outcome reflects total futures volumes, total interest rate futures are on track to rise by 16% for the 2H of 2024 compared to the 12.5% expected by the broker.

The $53.50 target and Underweight rating for the ASX are unchanged. Industry view: In-Line.

Target price is $53.50 Current Price is $57.10 Difference: minus $3.6 (current price is over target).
If ASX meets the Morgan Stanley target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $60.62, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.1

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

Ord Minnett rates AX1 as Initiation of coverage with Accumulate (2) -

Ord Minnett has initiated coverage of A&NZ footwear and apparel retailer Accent Group with an accumulate rating and a fair value of $2.40. At current prices, the broker suggests Accent is significantly undervalued.

The market has become fixated on near-term cyclical headwinds and under-appreciates the company's mid-cycle prospects in Ord Minnett's view.

2024 is shaping up to be a tough year, but the broker anticipates a strong recovery from 2025, featuring mid-single digit sales growth and a brisk store rollout.

Target price is $2.40 Current Price is $1.77 Difference: $0.635
If AX1 meets the Ord Minnett target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $2.19, suggesting upside of 25.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Bell Potter rates BKW as Buy (1) -

Brickworks AGM trading update for building products appears to have both pleased and displeased Bell Potter, the company reporting resilient revenue, improved housing starts in October and improved margins as cost pressures ease. But management advised backlogs were softening.

The company also provided an out-of-cycle revaluation (a small shock to the broker), management forecasting a 110 basis point increase in the average cap rate across its portfolio from 4.1% to 5.2% - at the high end of peer averages.

The good news is the broker expects this devaluation represents the final devaluation for Brickworks, while peers still have some way to go. FY24 EPS forecasts fall sharply.

Buy rating retained. Target price falls to $27.80 from $28.50.

Target price is $27.80 Current Price is $25.04 Difference: $2.76
If BKW meets the Bell Potter target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $27.27, suggesting upside of 8.8% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

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

Following City Chic Collective's AGM trading update for the first 20 weeks of FY24, Morgan Stanley notes the 1H is tracking below expectation. For the 1Q and the 2Q-to-date, revenue growth fell by -32% and -29%, respectively.

However, FY24 guidance was reitereated including the promise of a return to profitability in the 2H, and to remain cash positive at the close of FY24, observes the broker. The group gross margin is tracking according to the consensus expectation.

The 45c target and Equal-weight rating are unchanged. Industry view: In line.

Target price is $0.45 Current Price is $0.34 Difference: $0.11
If CCX meets the Morgan Stanley target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $0.53, suggesting upside of 55.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Macquarie rates DOW as Neutral (3) -

Downer EDI's mixed trading update for the FY24 year to October 31 appears to have fallen just shy of Macquarie's forecasts, the company reporting a larger than usual skew to the June half due to challenging conditions for utilities and the timing of cost-outs.

But the broker observes plenty of positives, including improved productivity in Transport, partly offset by lower spending from Victorian and South Australian Transport Agencies; and management advises it is on track with its FY24 cost-out target of $100m.

EPS forecasts fall -3% in FY24; -4% in FY25; and -4% in FY26.

Neutral rating retained. Target price eases to $4.10 from $4.15.

Target price is $4.10 Current Price is $4.13 Difference: minus $0.03 (current price is over target).
If DOW meets the Macquarie target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.75, suggesting upside of 11.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

UBS rates DOW as Neutral (3) -

Downer EDI has reiterated its view that FY24 is a "transition year" at its recent annual general, expecting to cycle loss-making and low-margin contracts, alongside implementing a -$100m cost out. 

While this leaves Downer EDI with a second half weighting for the year, UBS calculates year-to-date earnings are tracking on the previous year.

The broker anticipates 14% growth over FY24, underpinned by the utilities business returning to modest profit in the second half. 

The Neutral rating is retained and the target price increased to $4.55 from $4.50.

Target price is $4.55 Current Price is $4.13 Difference: $0.42
If DOW meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $4.75, suggesting upside of 11.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Citi rates EBO as Sell (5) -

Ebos Group has updated the market on the discussions regarding a potential strategic transaction related to its Animal Care segment. These discussions have now concluded and a transaction will not proceed. No reason was given, Citi notes.

The company also provided a trading update indicating revenue and earnings growth have accelerated in October. For the first four months of FY24, underlying revenue growth was up 8.2% year on year, and underlying earnings 8.8%, in line with consensus.

Sell and $32 target retained.

Target price is $32.00 Current Price is $33.11 Difference: minus $1.11 (current price is over target).
If EBO meets the Citi target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $35.49, suggesting upside of 9.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Ord Minnett rates EBO as Lighten (4) -

After six days of trading halt, Ebos Group has abandoned its attempt to acquire vet business Greencross. Ord Minnett believes it is prudent for Ebos to be disciplined in its growth strategy and capital allocation.

A trading update for the first four months of FY24 highlighted resilient margins. The broker believes this is due to cost control and acquisitions in higher-margin medical technology offsetting cost pressures in labour and freight.

Believing the industry will remain challenging, Ord Minnett retains a Lighten rating. Fair value rises to $28.50 from $28.00.

Target price is $28.50 Current Price is $33.11 Difference: minus $4.61 (current price is over target).
If EBO 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 $35.49, suggesting upside of 9.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Bell Potter rates FMG as Sell (5) -

Fortescue Metals has announced Final Investment Decisions for the Gladstone PEM50 Project in Queensland; the Green Iron Trial Commercial Plant in Western Australia; and the Phoenix Hydrogen Hub in Arizona in the US.

The company advises three green energy projects (hydrogen) will be also accelerated: Holmaneset in Norway; Project Chui in Kenya; and Pecem in Brazil.

Bell Potter advises the total investment in the FID-approved projects is -US$750m, the largest being the Phoenix Hydrogen Hub in the US at a cost of -US$550m (first production is pegged for 2026).

The broker reads the update as a positive given it improves transparency and quantifies investment. Bell Potter also considers the capital expenditure commitments to be relievingly modest, leaving money for dividend distributions.

On the downside, commercial and operating parameters are still unknown so the projects have a way to go before being de-risked.

EPS forecasts rise 13% in FY24; 5% in FY25 and 5% in FY26, to reflect rising iron ore prices.

Sell rating retained. Target price rises to $17.37 from $16.21.

Target price is $17.37 Current Price is $25.44 Difference: minus $8.07 (current price is over target).
If FMG meets the Bell Potter target it will return approximately minus 32% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $17.96, suggesting downside of -27.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: -0.9

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

Citi rates HLS as Neutral (3) -

Healius announced a $187m equity raising at a -35% discount of $1.20/share, provided a Sep Q trading update and introduced FY24 guidance. The capital raising brings gearing back to 2.3x in FY24, but at a great cost to shareholders, Citi notes.

FY24 earnings guidance was -32% below consensus, pre-raising.

Citi does not think the capital raise will fundamentally change the economics of a potential Healius-Australian Clinical labs ((ACL)) merger, but it puts Healius in a stronger financial position.

Target falls to $1.25 from $1.99, Neutral retained.

Target price is $1.25 Current Price is $1.23 Difference: $0.025
If HLS meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $2.07, suggesting upside of 63.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

UBS rates IPH as Buy (1) -

IPH has acquired Canadian patent filer ROBIC for -$124m, in a move UBS describes as consistent with the company's strategy to further consolidate the IP market in Canada. 

The purchase takes IPH's Canadian market share to 27%, from 21%, putting it well ahead of its closest competitor which holds 12% market share. The broker continues to see potential for further acquisitions. 

The Buy rating is retained and the target price decreases to $9.00 from $9.10.

Target price is $9.00 Current Price is $6.79 Difference: $2.21
If IPH meets the UBS target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $10.29, suggesting upside of 53.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Morgans rates KAR as Add (1) -

Karoon Energy's acquisition of a minority non-operated interest in Who Dat (Gulf of Mexico) for -US$720m, and associated US$300m capital raising, will be earnings and value dilutive, assesses Morgans.

The quality of the assets upgrades Karoon's fundamentals, in the broker's view, with the 10-year earnings outlook improving markedly, which should support a higher multiple.

The target drops to $3.00 from $3.30. Add.

Target price is $3.00 Current Price is $2.16 Difference: $0.84
If KAR meets the Morgans target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $3.01, suggesting upside of 41.1% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.9

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

Citi rates LOV as Neutral (3) -

Following Lovisa Holdings' AGM, Citi has cut its FY24-26 earnings forecasts by -7-14% to reflect a slower store rollout, revisions to D&A assumptions and higher costs associated with entry into new markets including China and Vietnam.

The global rollout means it's easy to achieve significant long-term earnings growth, but Citi's research suggests there might be a lack of understanding around in-store execution in some key offshore markets, as well as quality of new stores versus old stores.

Target falls to $19.70 from $20.68, Neutral retained.

Target price is $19.70 Current Price is $18.37 Difference: $1.33
If LOV meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $23.59, suggesting upside of 25.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Morgan Stanley rates LOV as Overweight (1) -

Store quality is potentially improving, according to Morgan Stanley, after reviewing the trading update by Lovisa Holdings for the first 20 weeks of FY24. Results show in-line revenue growth, despite misses for comparable sales growth and store rollout.

In line with consensus, total sales grew by 17% compared to 13.1% for the first seven weeks of FY24, while comparable sales growth was -6.2% versus -5.8%. There were 35 net stores added versus 13 in the first seven weeks. The consensus estimate for the 1H is 87.

The broker believes the investment thesis for a long and expanding runway for new store growth remains, as does the Overweight rating, especially with Lovisa about to launch in China.

Target 25.25. Industry View: In-Line.

Target price is $25.25 Current Price is $18.37 Difference: $6.88
If LOV meets the Morgan Stanley target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $23.59, suggesting upside of 25.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

UBS rates LOV as Buy (1) -

Total sales year-to-date for Lovisa Holdings are up 17% year-on-year, with like-for-like sales up 6.2%. UBS points out total sales picked up momentum from the first seven weeks of the year, while like-for-like sales slowed, reflective of 35 net store openings. 

The broker found the announced entry to mainland China a positive, extending the long term store network growth potential. UBS expects the retailer's entry to be cautious, with a measured rate of store openings. 

The Buy rating and target price of $23.00 are retained.

Target price is $23.00 Current Price is $18.37 Difference: $4.63
If LOV meets the UBS target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $23.59, suggesting upside of 25.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

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

FY24 guidance for policyholder and claims growth was reiterated at Medibank Private's AGM, and Morgan Stanley highlights non-surgical claims remain well below management's expectation.

Separately, following the release of September APRA statistics, the broker notes another quarter of strong policyholder growth for the industry. Private health insurance (PHI) membership continues to be stickier than the analysts anticipated.

The Equal-weight rating and $3.70 target are unchanged. Industry view is In-Line.

Target price is $3.70 Current Price is $3.46 Difference: $0.24
If MPL meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.78, suggesting upside of 7.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Morgans rates MPL as Hold (3) -

Management reaffirmed FY24 guidance for all key metrics at Medibank Private's generally uneventful AGM, according to Morgans.

The broker also notes the release by APRA of Private Health Insurance industry statistics for the September quarter showing reasonable (2%) industry policyholder growth, though hospital treatment benefit growth appears to be rising.

The Hold rating and $3.74 target are unchanged.

Target price is $3.74 Current Price is $3.46 Difference: $0.28
If MPL meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.78, suggesting upside of 7.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Ord Minnett rates MPL as Hold (3) -

Ord Minnett's forecasts are in line with guidance provided at Medibank Private's AGM. This includes 2% growth in policy numbers, claims rising by 2.6% and another -$30-35m in one-off cyber costs.

Medibank has a strong balance sheet and expects to invest -$150-250m over the next three years, the broker notes, focused on health and wellbeing businesses outside of insurance.

Ord Minnett retains Hold and a $3.50 fair value.

Target price is $3.50 Current Price is $3.46 Difference: $0.04
If MPL meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.78, suggesting upside of 7.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

UBS rates MPL as Buy (1) -

With Medibank Private providing to update to full year guidance at its recent annual general, UBS sees modest upside potential should claims remain lower for longer. 

The company guides to 2.6% inflation for FY24, and the broker expects this low level of inflation may not be priced in. If Medibank Private can sustain low claims inflation, UBS expects the company can benefit from stronger for longer margins and low premium increases. 

The Buy rating and target price of $4.30 are retained.

Target price is $4.30 Current Price is $3.46 Difference: $0.84
If MPL meets the UBS target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $3.78, suggesting upside of 7.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Macquarie rates MVF as Outperform (1) -

Macquarie has used the release of Medicare statistics for October to repeat its view that the IVF sector is enjoying structural and demographic tailwinds.

The broker observes total cycles for October 2023 grew 1.2% and expects FY24 domestic fresh cycles to grow 2.5%.

Macquarie expects reproductive carrier screening, which will be added to the Medicare Benefits Schedule from this November, to sharply boost incremental IVF volume. 

Monash IVF is considered well-positioned to increase market share due to acquisitions and specialist recruitment.

Outperform rating and $1.40 target price retained.

Target price is $1.40 Current Price is $1.30 Difference: $0.1
If MVF meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $1.35, suggesting upside of 6.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Shaw and Partners rates PLY as Buy (1) -

Playside Studios announced a 10% upgrade to revenue guidance, now suggesting revenue of $55-60m. Not only does this suggest 50% year-on-year revenue growth, but Shaw and Partners points out this is the second upgrade, notably before the mid-point of the year. 

The lifted guidance range is based both on year-to-date performance and visibility of contracted revenue. 

The Buy rating and target price of 80 cents are retained.

Target price is $0.80 Current Price is $0.52 Difference: $0.285
If PLY meets the Shaw and Partners target it will return approximately 55% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Macquarie rates PMT as Outperform (1) -

Patriot Battery Metals has announced a spodumene-bearing pegmatite (lithium) discovery at CV9.

Macquarie estimates CV9 could add 4Mt-15Mt of mineralised inventory to the company's maiden mineral resource of 109.2Mt.

Outperform rating and $2.10 target price retained.

Target price is $2.10 Current Price is $1.12 Difference: $0.985
If PMT meets the Macquarie target it will return approximately 88% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in CAD. 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 PPS as Buy (1) -

Praemium provided an update on a range of financial metrics at its AGM, all of which were well below Ord Minnett's expectations. Overall, management expects first half earnings to be down -20% year on year compared to broker's prior forecast of 13% growth.

The broker has cut earnings forecasts accordingly. Given the -35% share price decline, Ord Minnett sees the stock as being vulnerable to takeover.

The company is profitable, has an installed base of high-quality clients, has a market value of $145m net of cash, and operates in a sector with a strong structural growth thematic where scale is important, the broker comments.

Buy (Higher Risk) retained, target falls to 80c from $1.00.

Target price is $0.80 Current Price is $0.38 Difference: $0.425
If PPS meets the Ord Minnett target it will return approximately 113% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Morgan Stanley rates PXA as Overweight (1) -

Pexa Group's investor day produced a positive, in Morgan Stanley's view, in the form of reaffirmed FY24 guidance. But management commentary on the sustainability of recent growth in Australian property transfers was more cautious than expected.

Additionally, there was still no commitment on what the broker considers the key investment debate: when do PEXA UK's earnings (EBITDA) losses peak and break-even?

The $14 target and Overweight rating are retained. Industry view: Attractive.

Target price is $14.00 Current Price is $11.60 Difference: $2.4
If PXA meets the Morgan Stanley target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $14.62, suggesting upside of 22.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.9

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

Morgan Stanley rates QBE as Overweight (1) -

Morgan Stanley highlights the US crop insurance business is a significant portion of QBE Insurance's North American operations, and corn and soy are key crops.

While crops of corn and soy prices are currently down -1% and -21%, respectively, compared to insured prices, the broker points out the buffer provided by farmers shouldering 15-25% of the risk. Additionally, harvest yields are higher compared to five-year averages.

The Overweight rating and $18.30 target are retained. Industry View: In-Line.

Target price is $18.30 Current Price is $15.19 Difference: $3.11
If QBE meets the Morgan Stanley target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $17.16, suggesting upside of 12.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

UBS rates RIC as Buy (1) -

While UBS has reiterated its forecasts for Ridley Corp's full year following an update from the company at its recent annual general, the broker did make some compositional changes.

The bulk stockfeeds segment is tracking better than UBS had anticipated, with the broker surprised by early feed sales despite drier conditions. The broker anticipates 9% year-on-year earnings growth over FY24, to $96.5m. 

The Buy rating is retained and the target price increases to $2.60 from $2.50.

Target price is $2.60 Current Price is $2.25 Difference: $0.35
If RIC meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Macquarie rates SFR as Outperform (1) -

Cuprious Capital has sold Khoemacau for US$1875m to Melbourne-headquartered, Hong-Kong-listed MMG and Macquarie reads through to Australian copper producers, observing they screen cheaply in comparison.

Macquarie observes Australian producers are trading at a discount to reserves at a time when merger-and-acquisition activity is heating up.

The broker takes the opportunity to reiterate its Outperform rating and $7.50 target price for Sandfire Resources.

Macquarie says back-calculating Sandfire Resources's share price to equal the EV/lb reserve of US$135/lb then the broker's valuation rises to $11.

Back-calculating the price to equal EV/Production of US37,500/t (from US24,118/t) would yield a $10.50 outcome. The broker says neither scenarios are incorporated in its current base-case rating.

The broker says both 29Metals ((29M)) and Aeris Resources ((AIS)) have similar strong implied upside based on the same calculations.

Target price is $7.50 Current Price is $6.26 Difference: $1.24
If SFR meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $6.93, suggesting upside of 12.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.5

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

UBS rates SSR as Buy (1) -

SSR Mining has flagged 2024 production will be lower than 2023 production as the company prioritises development projects. With this in mind, UBS is assuming a run rate of 600-620,000 ounces of gold equivalent per annum through to 2027.

Given this three-year investment cycle, the broker's near term earnings and free cash flow assumptions are significantly reduced. Despite lowering its target price, UBS reaffirmed it sees value in SSR Mining's growth and portfolio optionality. 

The Buy rating is retained and the target price decreases to $20.00 from $25.60.

Target price is $20.00 Current Price is $17.20 Difference: $2.8
If SSR meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Macquarie rates STO as Outperform (1) -

Santos has embarked on a strategic review in a bid to convince the market of the company's value.

Santos' share price has been languishing for years as ESG imprimaturs kick in and court cases continue to delay projects.

At the company's Investor Day, management advised it had started examining "structural alternatives, portfolio optimisation and strategic opportunities" but divulged little about what this might look like.

Macquarie recommends the company should remain whole but encourages certain divestments such as a slice of PNG LNG - unless a takover were to materialise. The future of Barossa (due to hit court) in December is uncertain, says the broker, and Santos has advised it won't issue a final investment decision on Dorado until it receives greater clarity on the approvals process.

Meanwhile, the broker expects the company will double down on Pikka Phase 2 in Alaska, further oiling its profile, but believes this should receive investor approval so long as Scope 1 and Scope 2 emissions reduction continues.

EPS forecasts fall -1% for 2023; and rise 0.4% for FY24; and 2% for FY25. 

Buy rating retained. Target price eases -1% to $9.70 from $9.80.

Target price is $9.70 Current Price is $7.12 Difference: $2.58
If STO meets the Macquarie target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $9.51, suggesting upside of 35.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

Shaw and Partners rates TNE as Hold (3) -

Alongside its full year result, TechnologyOne has pulled forward its $500m annual recurring revenue target to FY25, and reiterated the target to double in size every five years, on top of a strong pipeline for the coming year.

Shaw and Partners points out full year revenue came in 3% ahead of expectations, but this was offset by costs that were 6% ahead of expectations, up 20% year-on-year. 

The Hold rating is retained and the target price increases to $17.30 from $15.70.

Target price is $17.30 Current Price is $15.70 Difference: $1.6
If TNE meets the Shaw and Partners target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $15.89, suggesting upside of 1.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Bell Potter rates TSK as Buy (1) -

Bell Potter feels Task Group's September-half result was mixed, nosing out Bell Potter's forecasts on revenue, but sharply missing on earnings (EBITDA) due mainly to timing of payments, which should now fall in the March half, says the broker.

Operating cash flows sharply outpaced Bell Potter's estimate due to upfront payments from the Plexure division due to associated deferred revenue build, which is also expected to correct itself in the second half.

The company closed September 30 with $31m in cash. No guidance was provided.

Management did expect to commercialise its Payments capability by September 30 and believes it may be able to double Task customer revenue, says the broker.

Buy recommendation retained. Target price falls to 54c from 57c.

Target price is $0.54 Current Price is $0.39 Difference: $0.15
If TSK meets the Bell Potter target it will return approximately 38% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Morgans rates VSL as Initiation of coverage with Add (1) -

Morgans initiates coverage on A&NZ steel distributor and value-added processor Vulcan Steel with an Add rating in the belief the business is at a cyclical low point in earnings.

Manufacturer BlueScope steel ((BSL)) has a greater capital intensity [a return on invested capital (ROIC) of 14.6%] compared to Vulcan with a ROIC of 21.3%, notes the broker.

Vulcan Steel has 70 logistics and processing facilities throughout A&NZ and the business is split between steel and metals.

The Steel division includes processing and distribution of steel beams, plates and coil, while Metals includes stainless steel, engineering steel and aluminium products.

Morgans begins by setting a $9 target.

Target price is $9.00 Current Price is $7.45 Difference: $1.55
If VSL meets the Morgans target it will return approximately 21% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. 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

Citi rates WEB as Buy (1) -

Webjet posted a strong result, Citi suggests, with earnings 4% ahead. Compositionally the result was driven by B2B, while overall B2C was marginally softer than expectations.

Taking a percentage of sales is a great business model when hotel rates are increasing rapidly, Citi notes. The broker estimates across the board rates on average are at least 30% higher than pre-pandemic, and unlike airfares have yet to see any mean reversion.

Citi expects these tailwinds to fade as B2B cycles tough comparables, however it appears the segment is growing 20-30% higher than the hotel industry.

With this growth above the market, the broker is optimistic Webjet can weather tougher comps, however, it will cautiously look for any signs of mean reversion in hotel prices.

Buy retained, target falls to $7.90 from $8.80.

Target price is $7.90 Current Price is $6.67 Difference: $1.23
If WEB meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $8.44, suggesting upside of 23.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Macquarie rates WEB as Outperform (1) -

Webjet's September-half result outpaced consensus and met Macquarie's forecasts thanks to a 9% beat on consensus from WebBeds, the company's revenue rising 50%.

Webjet Online Travel Agency's performance proved a -2% miss, although the broker describes it as solid given challenging conditions.

The broker expects momentum to continue in WebBeds, with all metrics outpacing pre-pandemic levels and the broker observing the Asia Pacific and American markets remain underpenetrated.

Activity has slowed recently in the Middle East and Europe due to geopolitical conflict and FY24 guidance was softened to reflect these factors.

Costs jumped -61% due to an increase investment, but the company expects costs to flatten in the second-half. EPS forecasts fall -2.2% in FY24; -2.5% in FY25; and -1.6% in FY26.

Outperform rating retained. Target price rises 4.2% to $8.37 to reflect higher net cash and earnings forecasts.

Target price is $8.37 Current Price is $6.67 Difference: $1.7
If WEB meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $8.44, suggesting upside of 23.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

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

Morgan Stanley assesses a strong first half result by Webjet with adjusted earnings (EBITDA) of $102.1m beating the broker's $93.6m forecast due to strong yield growth in B2C and a favourable currency swing for B2B. Strong cash flow conversion continued.

Management flagged slowing Q2 growth due to geopolitical tensions and guided to earnings of between $180-190m compared to the forecasts by the broker and consensus of $176m and $174m, respectively.

Equal-weight rating. Target $7.45. Industry View: In-line.

Target price is $7.45 Current Price is $6.67 Difference: $0.78
If WEB meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $8.44, suggesting upside of 23.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Morgans rates WEB as Add (1) -

Following Webjet's 1H results, which beat expectations, Morgans highlights a record result from WebBeds, the overall company's industry-leading margins and strong operating cash flow.

While FY24 earnings (EBITDA) guidance was in line with the broker's outlook, it could prove conservative should the Israel conflict (which has impacted bookings in the last six weeks) be short-lived.

The broker's forecast upgrades for WebBeds are accompanied by downgrades to Webjet Online Travel Agency (OTA) and GoSee as well as higher corporate costs and technology investment losses. The target falls to $8.55 from $8.97. Add.

Target price is $8.55 Current Price is $6.67 Difference: $1.88
If WEB meets the Morgans target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $8.44, suggesting upside of 23.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Ord Minnett rates WEB as Buy (1) -

Webjet's result highlighted to Ord Minnett the B2B division remains a key beneficiary of the fact consumers continue to spend an increasing proportion of their disposable income on holidays post-covid.

While the broker sees this ratio levelling off, this factor alone points to a larger addressable market post-covid for B2B.

Analysis suggests the size of the B2B Hotels Market is much larger than it was pre-covid and Webjet appears to be winning market in the B2B segment.

Webjet is one of the few travel companies globally that is sitting on a material cash balance. Target rises to $9.84 from $9.65, Buy retained.

Target price is $9.84 Current Price is $6.67 Difference: $3.17
If WEB meets the Ord Minnett target it will return approximately 48% (excluding dividends, fees and charges).

Current consensus price target is $8.44, suggesting upside of 23.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

UBS rates WEB as Buy (1) -

Webjet has delivered a solid first half result, says UBS, with revenue and earnings beating UBS's expectations by 6% and 2% respectively. The broker notes strong business to business momentum was key to the result, with bookings up 32% year-on-year. 

UBS sees multiple drivers for business-to-business total transaction value growth, including conversion of existing customer base and continued share gains. It also feels the ramp up of Trip Ninja has potential to materially expand business-to-consumer. 

The Buy rating is retained and the target price decreases to $8.55 from $9.00.

Target price is $8.55 Current Price is $6.67 Difference: $1.88
If WEB meets the UBS target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $8.44, suggesting upside of 23.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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