Australian Broker Call

Citi rates ALG as Buy (1) -

Citi expects Ardent Leisure Group's first half FY22 like-for-like sales to increase 60%, and notes Main Event, which is recovering on the back of the vaccine rollout, is cycling undemanding comparable company performance of -35% in the previous period.

Citi also forecasts 2H21 theme park sales to increase 25% on the previous period, noting the business is cycling week comparable numbers (-52%) as the park was closed late March 2020 for the remainder of FY20.

Driven by improving momentum in Main Event, Citi is forecasting an FY21 underlying net loss of -$83m, 23% ahead of consensus.

The broker is also forecasting an FY22 underlying net loss of -$44m.

Buy rating and $1.30 target are maintained.

Target price is $1.30 Current Price is $0.97 Difference: $0.33
If ALG meets the Citi target it will return approximately 34% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Ord Minnett rates ANZ as Accumulate (2) -

Leading into August results, Ord Minnett makes a number of changes to its forecasts for the major banks, including adjustments to capital management assumptions.

The broker considers the sector is modestly cheap, given the recent pull-back in share prices, with capital management the near-term catalyst.

The broker sees an outside chance that ANZ Bank launches a $2bn initial on-market buy-back, shortly after August. However, the current covid-19 lockdowns do raise the prospect of delays to this timing.

The bank leads Ord Minnett's preferences among the majors and the broker retains its Accumulate rating and $30 target price. 

Target price is $30.00 Current Price is $27.49 Difference: $2.51
If ANZ meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $30.00, suggesting upside of 9.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Credit Suisse rates ARB as Neutral (3) -

Credit Suisse believes that 4WD/pick up penetration is a long-term structural growth story for ARB Corporation in both Australia and offshore.

Credit Suisse thinks that first half FY22 sets up well given the strong order book, favourable forex, and the contribution from Truckman acquisition. But the broker believes the visibility beyond this remains low and sees some risk to end-demand as international travel resumes, which would likely be felt initially in key export markets such as the US.

Overall, the net outcome sees 22%, 26%, and 18% earnings per share revisions over FY21, FY22, and FY23 respectively.

The broker's earnings changes largely reflect the flow-through of the higher FY21 base post today’s update, plus a less aggressive demand fade-away given the solid order book heading into H1 of FY22 and continued FX benefit.

Neutral rating is retained and the target price increases to $44.40 from $37.00

Target price is $44.40 Current Price is $44.38 Difference: $0.02
If ARB meets the Credit Suisse target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $44.16, suggesting downside of -3.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Morgans rates BBT as No Rating (-1) -

Morgans initiates coverage of BlueBet Holdings with an Add rating and $2.03 target price. With funds from the recent IPO, a step-change in marketing investment is expected. An Australian market share of around 2.2% is estimated in FY24.

Based on the initial five US states identified by management, the broker estimates a potential revenue opportunity of US$30-45m by FY25/26. The company has recently secured its first Skin agreement in Iowa and negotiations in other states are ongoing.

The analyst values the Australian operations at $1.42 per share and the potential US opportunity at $0.50 per share, with cash making up  the balance.

Target price is $2.03 Current Price is $1.69 Difference: $0.34
If BBT meets the Morgans target it will return approximately 20% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Credit Suisse rates BKL as Neutral (3) -

Credit Suisse notes a recent press report which suggested Blackmores engaged a takeover defense strategy.

Credit Suisse believes a  takeover proposal could offer upside to the broker's existing valuation levels.

The broker believes the most comparable transaction in recent years was Nestle’s acquisition of the US leading, branded vitamin/supplements producer, The Bountiful Co for US$5.75bn on 16.8x last 12 months' earnings.

The broker believes applying this multiple to FY23 earnings would result in a $95/share valuation, and on FY22 earnings, the Nestle/Bountiful deals suggest a Blackmores valuation of $80/share.

Neutral rating and target price of $77 both remain unchanged.

Target price is $77.00 Current Price is $77.02 Difference: minus $0.02 (current price is over target).
If BKL 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 $73.83, suggesting downside of -6.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.2

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

Morgan Stanley rates BSL as Overweight (1) -

According to Morgan Stanley the BlueScope Steel share price may benefit from current steel spread record highs, which have historically shared a strong correlation.

Prices for hot rolled coil (HRC) have broken US$2,000 per tonne in the US and rallied back above US$900 per tonne in China. 

The Overweight rating and target price of $27.00 are retained. The industry view is In-Line.

Target price is $27.00 Current Price is $22.49 Difference: $4.51
If BSL meets the Morgan Stanley target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $24.49, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Ord Minnett rates CBA as Hold (3) -

Leading into August results, Ord Minnett makes a number of changes to its forecasts for the major banks, including adjustments to capital management assumptions.

The broker considers the sector is modestly cheap, given the recent pull-back in share prices, with capital management the near-term catalyst.

The broker expects Commonwealth Bank to announce a $5bn off-market buy-back at its result, with $4bn of buy-backs over the following 12 months (on market). Ord Minnett lifts the price target to $92 from $91 and retains the Hold rating.

Target price is $92.00 Current Price is $98.31 Difference: minus $6.31 (current price is over target).
If CBA 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 $89.33, suggesting downside of -9.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.5

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

Macquarie rates CCX as Outperform (1) -

The recent US-listing of Torrid, a peer of City Chic Collective, provides Macquarie with key comparisons. The listing reinforces the broker's long-term investment thesis, particularly the tailwinds from the plus-size market, which remains relatively under serviced.

The analyst believes higher multiples for City Chic Collective reflect higher margins, greater geographic diversification (UK, A&NZ) and no exposure to US store leases. Additionally, there's considered greater M&A optionality with net cash of around $80m as at December 2020.

Macquarie retains its Outperform rating and $5.20 price target.

Target price is $5.20 Current Price is $5.30 Difference: minus $0.1 (current price is over target).
If CCX meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.94, suggesting downside of -8.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Citi rates CPU as Sell (5) -

Having concluded that Computershare's near-term outlook is likely to be reasonably tough, Citi has lowered FY22 earnings per share (EPS) forecasts by -6%.

Citi notes, while leverage to short-dated interest rates is very significant (excluding its recent CTS acquisition), the broker still expects margin income to fall in FY22.

The broker's analysis inside suggests steady growth in Issuer Services and ongoing growth in Plans. While cost saves should also help, the broker suspects there are likely offsetting wage inflation pressures.

Citi's new estimate of 3% FY22 EPS growth implies 11% earnings growth pre-margin income.

The broker expects the tussle between a focus on near-term earnings pressure and the inflation hedge - provided by extensive medium-term leverage to rising short-dated rates - to continue to play out in the stock, with the potential for FY22 guidance to disappoint.

Sell rating is retained and the target is raised to $15.00 from $13.90.

Target price is $15.00 Current Price is $16.34 Difference: minus $1.34 (current price is over target).
If CPU meets the Citi target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.53, suggesting upside of 2.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.3

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

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

Macquarie assesses Dacian Gold had a softer end to FY21, with a modest guidance miss. A materially higher capex forecast at Mt Morgans in FY22 leads the broker to lower the rating to Underperform from Outperform. The target price also falls to $0.28 from $0.32.

FY22 production estimates, however, were in-line with the analyst's forecast. The company will release a new life-of-mine plan for Mt Morgans in the first quarter FY22.

Target price is $0.28 Current Price is $0.30 Difference: minus $0.02 (current price is over target).
If DCN meets the Macquarie target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -1.0

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

Ord Minnett rates EVN as Hold (3) -

Evolution Mining released its quarterly performance update this morning, accompanied by a three-year outlook. Macquarie, upon first assessment, notes production missed expectations by some -11% while costs were higher.

Operations at Mt Carlton performed better-than-expected, but everywhere else disappointment rules, on assessment by the broker. Guidance for FY22 is weaker than expected too.

The company has guided towards higher-than-expected capital spending (capex) over the next three years. Macquarie has placed its estimates under review; higher costs are the big negative from today's update.

Neutral. Target $4.90.

Target price is $4.90 Current Price is $4.95 Difference: minus $0.05 (current price is over target).
If EVN meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.63, suggesting downside of -1.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Citi rates EVT as Neutral (3) -

To account for the closure of Cinemas Germany for the majority of second half FY21 and the adverse impact of the NSW lockdown and lower interstate mobility on Australian Cinemas, Hotels and Thredbo, Citi has cut Event Hospitality & Entertainment's FY21 and FY22 net profit estimates by -8% and -41% respectively.

The broker sees upside from property sales being offset by further covid related disruptions to the cinema and hotel sector.

Citi seeks further clarification on how Event is managing profitability during the Sydney lockdown, noting around 35% of Event’s cinemas are in NSW and Jobkeeper is no longer available.

The Neutral rating is retained and the target price is lowered to $12.65 from $12.80.

Target price is $12.65 Current Price is $11.87 Difference: $0.78
If EVT meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Ord Minnett rates GPT as Accumulate (2) -

Ord Minnett has moderated office sector incentives forecasts and assumes a return to market rent growth from 2024. More modest devaluations in office assets of -5% versus -12% previously have also been assumed.

As a result, the broker's 2023-24 funds from operations (FFO) forecasts for GPT Group lift by 1%. The adjusted FFO (after one-off items and incentives) per share estimates also increase by 2% and 5%, respectively.

Ord Minnett's target price rises to $5.20 from $5 and its Accumulate rating is unchanged.

Target price is $5.20 Current Price is $4.74 Difference: $0.46
If GPT meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $4.73, suggesting upside of 0.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgan Stanley rates IEL as Overweight (1) -

It is Morgan Stanley's view that the near-term outlook is improving for IDP Education and that the company is well-positioned to capture demand and accelerate market share gains.

Morgan Stanley is expecting a sharp bounce in student placement for the Fall semester and evidence of student placement share growth, but notes Australia is IDP Education's biggest destination market and the reopening of the country is a key risk to Morgan Stanley's view. 

IDP Education's stock price is up around 50% year-to-date following the acquisition of British Council's Indian IELTS operations, and the broker expects a strong bounce in Indian IELTS volumes in July and August. 

The Overweight rating and target price of $33.00 are retained. The industry view is In-Line.

Target price is $33.00 Current Price is $29.80 Difference: $3.2
If IEL meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $31.67, suggesting upside of 5.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates MCR as Outperform (1) -

As part of the mining plan for Durkin North and Long, Mincor Resources has commenced a diamond drilling program at Golden Mile. The second hole returned an around 0.5m intersection of high-grade massive sulphides. Assays for the intersection have yet to be received.

Macquarie notes discoveries like Golden Mile could push back the development timing for Miitel. Given the likely lower capex, this could
significantly enhance the broker's cash flow forecasts and valuation for Mincor Resources.

Macquarie maintains its Outperform rating and $1.30 target price.

Target price is $1.30 Current Price is $1.14 Difference: $0.16
If MCR meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

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

Morgans raises the rating to Add from Hold and maintains its $5.85 target price. It's considered the $79m capital raising will further strengthen the balance sheet position, and the broker now forecasts FY22 net debt of just $54.7m.

Along with total debt facilities, recently increased to $300m, the company is now free to pursue further M&A opportunities, believes the analyst. The broker makes modest EPS forecast downgrades, as the placement dilution is partially offset by lower net interest costs.

Target price is $5.85 Current Price is $5.00 Difference: $0.85
If MGH meets the Morgans target it will return approximately 17% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Ord Minnett rates NAB as Hold (3) -

Leading into August results, Ord Minnett makes a number of changes to its forecasts for the major banks, including adjustments to capital management assumptions.

The broker considers the sector is modestly cheap, given the recent pull-back in share prices, with capital management the near-term catalyst.

For National Australia Bank, the analyst includes cost headwinds related to anti-money-laundering remediation and investment, though still manages to raise its target price to $27.8 from $27.50. The Hold rating is unchanged.

Target price is $27.80 Current Price is $26.02 Difference: $1.78
If NAB meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $27.38, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Credit Suisse rates PDL as Outperform (1) -

Predominantly driven by positive market movements, Pendal Group reported third quarter FY21 funds under management of $106.7bn, up 4.9% in the quarter and in line with Credit Suisse.

The broker notes after three years of sluggish flows in the Hambro retail business, flows are now positive with the Hambro retail business reporting its best flows since mid-2017.

Credit Suisse has upgraded earnings per share by 1% in FY21-23 for higher FuM in Hambro, and notes Pendal remains the broker's most preferred exposure amongst the asset managers.

With an accretive deal in the US-based Thompson, Siegel & Walmsley (TSW) acquisition and improving fund flows on the back of better fund performance, the broker believes a P/E re-rate could be on the cards.

The Outperform rating and target price of $8.90 are both retained.

Target price is $8.90 Current Price is $8.17 Difference: $0.73
If PDL meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $8.62, suggesting upside of 5.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Morgan Stanley rates PDL as Overweight (1) -

Despite reporting outflows of -$0.7bn in the third quarter, Morgan Stanley views Pendal Group's quarterly update as modestly positive. The company recorded higher funds under management totaling $106.7bn and strong investment performance. 

Australian inflows of $0.4bn were in line with Morgan Stanley's expectations, with the US also reporting inflows of $0.8bn for the quarter. 

The Overweight rating and target price of $8.50 are retained. The industry view is In-Line. 

Target price is $8.50 Current Price is $8.17 Difference: $0.33
If PDL meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $8.62, suggesting upside of 5.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Morgans rates PDL as Add (1) -

Pendal Group reported third quarter funds under management (FUM) of $106.7bn, up 4.9% for the quarter and 19.3% on the pcp. After incorporating SPP funds (8% of shares issued in June), Morgans downgrades EPS forecasts for FY21-23 by -0.2%, -5.5% and -3.3%.

The broker's target price falls to $8.80 from $8.94 and the Add rating is unchanged. Group net outflows were -$0.7bn, including a large -$1.9bn cash product outflow in Pendal Australia.

The analyst highlights another quarter of stable performance for JOHCM, with inflows of $0.8bn.

Target price is $8.80 Current Price is $8.17 Difference: $0.63
If PDL meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $8.62, suggesting upside of 5.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Ord Minnett rates PDL as Accumulate (2) -

Ord Minnett believes the current Pendal Group share price presents attractive risk/reward relative to other listed-ASX asset managers over the medium term. This comes as the group reported third-quarter FY21 funds under management (FUM), up 5% on the prior quarter.

The broker highlights JO Hambro Capital Management (JOHCM) returned positive net flows for the third quarter over the past year, reversing the net outflow trend which started in December 2017.

The analyst believes investor focus remains on the JOHCM EUKA business, which is much more leveraged to performance fees, which crystallise in December. The broker lifts its target price to $9.20 from $8.70 and maintains its Accumulate rating.

Target price is $9.20 Current Price is $8.17 Difference: $1.03
If PDL meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $8.62, suggesting upside of 5.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Macquarie rates PNV as Outperform (1) -

NovoSorb BTM sales of $25.5m for FY21 were around -7% below Macquarie's forecasts though exit rates into FY22 appear positive. Additionally, the broker notes re-engagement with hospitals, impacted by covid-19.

Macquarie lowers its EPS forecasts in FY22 and FY23 by -15% and -1%, to reflect revised BTM assumptions and updated currency forecasts.

Accordingly, the broker's target price falls to $2.95 from $3.20, reflecting both the earnings changes and updated risk-free rates. The Outperform rating is unchanged.

Target price is $2.95 Current Price is $2.10 Difference: $0.85
If PNV meets the Macquarie target it will return approximately 40% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Morgans rates RED as Add (1) -

Morgans assesses a softer fourth quarter of production, driven by labour shortages while establishing the new Great Western open pit. Annual production was 76.1koz at $2,273/oz, the mid-point of revised guidance.

The broker notes FY22 guidance will be reported in the current quarter, and is expected to make the future of the Darlot operation clearer.

There's considered an increasing probability that Darlot will become a satellite mining operation for the lower-cost King of the Hills (KOTH) mill. Morgans' Add rating and $0.31 target price are retained.

Target price is $0.31 Current Price is $0.18 Difference: $0.13
If RED meets the Morgans target it will return approximately 72% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates RIO as Outperform (1) -

Today, Rio Tinto released its Q2 production report and Macquarie, upon initial assessment, finds the performance rather "mixed". Iron ore and aluminium performed in-line with expectations, but it appears both bauxite and copper disappointed.

Iron ore was not a Grand Success story either as cost guidance has now been increased, while total shipments for the year are now expected to come out near the bottom of management's prior guidance.

Copper and bauxite have joined iron ore with a similar guidance reset. Macquarie observes buoyant prices for iron ore are keeping the momentum positive for earnings forecasts.

Outperform. Target $163 or GBP79.

Target price is $163.00 Current Price is $131.14 Difference: $31.86
If RIO meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $135.79, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

Ord Minnett rates RIO as Buy (1) -

It is Ord Minnet's first impression that Rio Tinto, this morning, released a "lacklustre" quarterly performance. Most eye-catching, no doubt, was the fact iron ore shipments are running some -10% below the broker's forecast.

The company has now guided for iron ore shipments to end up near the bottom of its guidance range for the full year. Ord Minnett equally found performances in other divisions "underwhelming".

While the analysts express their disappointment, they also retain a positive view, guided by a cheap looking valuation and an exceptionally high dividend yield.

Target price is $170.00 Current Price is $131.14 Difference: $38.86
If RIO meets the Ord Minnett target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $135.79, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

Morgan Stanley rates SKI as To Equal-weight from under-weight (3) -

In view of potential corporate activity, Morgan Stanley lifts its Spark Infrastructure valuation to Equal-weight from Under-weight, with the target price increasing to $2.68 from $2.06.

Proposals to acquire Spark announced on 15 July 2021 lead Morgan Stanley to adjust the broker's longer-term growth and return assumptions.

The broker estimates that the most recent indicative proposal of $2.7375/security, which Spark has declined, equates to a 27% premium to year-to-date 2021 volume-weighted average price of $2.16/security (prior to yesterday's trading halt).

Aside from Spark's interim earnings result on 24 August 2021, annual Post-Tax Revenue Model updates for the company's regulated businesses, and progress on renewables developments, Morgan Stanley sees developments in the potential corporate activity across its stock coverage as the key investor focus area from here.

Morgan Stanley's industry view is cautious.

Target price is $2.68 Current Price is $2.63 Difference: $0.05
If SKI meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting downside of -4.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgans rates SKI as Downgrade to Hold from Add (3) -

Morgans downgrades its rating to Hold from Add, given the M&A-driven price spike, after Spark Infrastructure Group announced it had received a takeover approach. The broker's target price of $2.80 is set in-line with the bid price.

Given the group is a minority owner in the bidder's companies, the analyst doesn’t foresee the FIRB having issues with the bid consortium. Also, as the group's key electricity network assets are regulated, it's felt there shouldn’t be issues with the ACCC’s review of the bid.

Target price is $2.80 Current Price is $2.63 Difference: $0.17
If SKI meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting downside of -4.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Ord Minnett rates SKI as Hold (3) -

Spark Infrastructure Group has received a bid from an overseas consortium. Rejection of the conditional offer was surprising to Ord Minnett, given the price is a significant premium to consensus valuations and where shares have traded over several years.

While the broker feels management may come under pressure to engage, it doesn't recommend investors buy the stock in anticipation of a higher bid price. The offer price appears fair and there's circa -14% potential downside to consensus valuation.

The analyst also cautions that the group has minority interests in the consortium's three largest assets, which could preclude many potential interlopers. Ord Minnett's target price rises to $2.73 and its Hold rating is unchanged.

Target price is $2.73 Current Price is $2.63 Difference: $0.1
If SKI meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting downside of -4.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Macquarie rates SLK as Neutral (3) -

Maquarie reiterates its view that Transit Systems, owned by Sealink Travel Group, is in the box seat to secure Region 9, given the synergies with the adjacent Region 6. This relates to the Melbourne Metropolitan bus franchise.

Transit Systems has a 5% market share in Melbourne and the analyst doesn't view securing this contract (which represents 30% market share) to be of concern to regulators, in terms of market competition. The broker's Neutral rating and $9.50 target are retained. 

Target price is $9.50 Current Price is $9.12 Difference: $0.38
If SLK meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Citi rates SYD as Neutral (3) -

Citi expects the infrastructure consortium or another potential bidder to eventually acquire Sydney Airport, albeit at a slightly higher price.

While there could be other institutional owners in the mix, Citi believes the size of the deal, restrictions on foreign ownership (up to 49%) could limit the number of possible bidders outside of those having currently shown interest.

The broker cites recent media reports, which concluded both boards may be willing to engage at a bid of $9 per share or above.

Neutral rating unchanged and target price increases to $8.25 from $6.61, in line with the initial bid price.

Target price is $8.25 Current Price is $7.81 Difference: $0.44
If SYD meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $8.21, suggesting upside of 3.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Morgans rates SYD as Hold (3) -

Morgans feels the rejection of the $8.25 takeover offer is a signal of optimism for the future by Sydney Airport's board. It's suspected this is not the last takeover approach, while the share price languishes due to covid.

The broker agrees with management comments around the quality of the company. These include its strong performance prior to the sharp negative impact of covid on its volumes and earnings and the strong balance sheet. Morgans' Hold rating and $8.25 target are maintained.

Target price is $8.25 Current Price is $7.81 Difference: $0.44
If SYD meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $8.21, suggesting upside of 3.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Citi rates VVA as Buy (1) -

Driven by greenfield rollout, acquisitions, franchise buy-backs, and margin expansion, Citi forecasts Viva Leisure's earnings to more than triple between FY20 and FY23.

The broker expects the rollout to ramp-up in FY22 with 35 greenfield health clubs and the acquisition of 24 existing health clubs, as the company targets 400-plus corporate-owned locations by FY25.

Viva Leisure has provided FY21 earnings guidance in the range of $81m to $83m. Citi has cut FY22 and FY23 net profit estimates by -19% and -1% respectively to account for a 2-month lockdown in NSW.

Buy rating is retained and the target price is lowered to $2.85 from $3.15.

Target price is $2.85 Current Price is $1.78 Difference: $1.07
If VVA meets the Citi target it will return approximately 60% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Ord Minnett rates WBC as Hold (3) -

Leading into August results, Ord Minnett makes a number of changes to its forecasts for the major banks, including adjustments to capital management assumptions.

The broker considers the sector is modestly cheap, given the recent pull-back in share prices, with capital management the near-term catalyst. 

Ord Minnett's biggest adjustments related to Westpac Bank, with cuts to the net interest margin (NIM) forecasts and an increase in estimated second-half FY21 costs. Also, costs related to the Forum Finance court proceedings were factored-in.

Ord Minnett's target price falls to $27 from $27.50 and the Hold rating is maintained.

Target price is $27.00 Current Price is $24.99 Difference: $2.01
If WBC meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $28.28, suggesting upside of 13.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Citi rates WHC as Neutral (3) -

With Narrabri offline for most of the June quarter, Whitehaven's reported production is in line with recent guidance downgrades. The company achieved coal sales of 17.8m tonnes, compared to guidance of 17.9m tonnes. 

Citi notes investors are likely to have concerns regarding sustained performance, despite Narrabri being back up and running.

Maules Creek had strong performance in the quarter, but lower washery yields impacted saleable production. Further, Whitehaven's thermal coal price of US$94 per tonne was a disappointing -14% discount to the US$109 per tonne Newcastle benchmark.

Despite challenges in the June quarter, Citi has tripled profit forecasts for FY22 driven by a sharp run up in coal prices. 

The Neutral rating is retained and the target price increases to $2.30 from $2.20. 

Target price is $2.30 Current Price is $2.07 Difference: $0.23
If WHC meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $2.54, suggesting upside of 17.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Credit Suisse rates WHC as Outperform (1) -

With Maules continuing to deliver strong performance, Narrabri performance expected to improve, and a solid pricing backdrop expected, Credit Suisse expects FY22 to be a better year with strong earnings and free cash flow (FCF) generation for Whitehaven Coal.

Credit Suisse is forecasting FCF yield of around 29% in FY22, which would see its net debt reduce to $200m by year-end.

The Outperform rating and target price of $2.65 were both retained.

Target price is $2.65 Current Price is $2.07 Difference: $0.58
If WHC meets the Credit Suisse target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $2.54, suggesting upside of 17.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Macquarie rates WHC as Outperform (1) -

Macquarie assesses in line run-of-mine (ROM) production results though lower-than-expected sales for the fourth quarter. A tailwind from coal prices is expected in upcoming quarters. The broker's $2.50 target price and Outperform rating are unchanged.

Coal sales were impacted by lower yields, logistical issues and an inventory build-up in the fourth quarter, explains the analyst.

Target price is $2.50 Current Price is $2.07 Difference: $0.43
If WHC meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $2.54, suggesting upside of 17.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Morgan Stanley rates WHC as Overweight (1) -

Morgan Stanley's base case coal forecasts for Whitehaven Coal has a strong free cash flow (FCF) yield of 27% in FY22, with gearing declining from 24% in FY21 to 12% in FY22.

The broker notes if spot prices (US$145/t) are maintained Whitehaven's FCF yield in FY22 is 58% with gearing falling to -4% by FY22.

Morgan Stanley expects more operational consistency in FY22, with longer-term value becoming apparent with project approvals and development, particularly at the Vickery project. 

Morgan Stanley maintains the Overweight rating and $2.70 target price. Industry view: Attractive. 

Target price is $2.70 Current Price is $2.07 Difference: $0.63
If WHC meets the Morgan Stanley target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $2.54, suggesting upside of 17.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Ord Minnett rates WHC as Buy (1) -

Ord Minnett assesses a soft end to FY21, with a lower value product mix and logistics driving a weaker realised price. However, the broker highlights to investors the disconnect between the share price and thermal coal at 10-year highs.

At spot prices, the analyst estimates the stock is generating around 60% free cash flow yield for FY22. Ord Minnett retains the Buy rating and $3 target price.

Target price is $3.00 Current Price is $2.07 Difference: $0.93
If WHC meets the Ord Minnett target it will return approximately 45% (excluding dividends, fees and charges).

Current consensus price target is $2.54, suggesting upside of 17.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Citi rates WPL as Neutral (3) -

Second quarter production of 22.7m barrels of oil equivalent was a -6% miss for Woodside Petroleum on Citi's forecast. The broker notes LNG output was impacted by facility maintenance and bad weather. 

Citi has downgraded first half earnings to US$585m based on the production miss coupled with increased costs guidance that includes Kitimat exit costs. 

Despite this Citi's bullish commodity price deck is driving its earnings estimates for second half and full year 2021 earnings 13% and 7% above consensus respectively. 

The Neutral rating is retained and the target price decreases to $24.34 from $25.38. 

Target price is $24.34 Current Price is $22.97 Difference: $1.37
If WPL meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $27.33, suggesting upside of 20.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.7

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

Macquarie rates WPL as Outperform (1) -

Second quarter production and revenue were both a little weaker than Macquarie had expected. There is no update as yet on Scarborough and Pluto T2 costs. The selldown process is under way and the final investment decision (FID) was reiterated for the second half 2021.

The broker's EPS forecasts for FY21-23 are down -9%,-7% and -8%, respectively, which largely reflects increased trading and shipping costs. Macquarie's target price rises to $28 from $27.75, on a slightly better Corpus Christi contract valuation. Outperform retained.

Target price is $28.00 Current Price is $22.97 Difference: $5.03
If WPL meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $27.33, suggesting upside of 20.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.7

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

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

Woodside's second quarter FY21 production result includes a big uplift in LNG trading costs.

In light of greater trading costs and higher D&A assumptions, Morgan Stanley has reduced estimates by -10% in FY21 and -6% in FY22.

While recent industry transactions demonstrate investor interest in gas infrastructure, Morgan Stanley is looking for more detail on cost estimates and sell-downs, which the broker believes remain binary.

Morgan Stanley retains an Equal-weight rating and target price of $27. Industry view: Attractive. 

Target price is $27.00 Current Price is $22.97 Difference: $4.03
If WPL meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $27.33, suggesting upside of 20.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.7

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

Morgans rates WPL as Add (1) -

Although reporting a softer June quarter result, Morgans points out Woodside Petroleum avoided a worse result through LNG overlift, that helped maintain sales volumes. The quarterly miss was mainly due to lower production from both NWS and Wheatstone. 

Management flagged potential capex increases for both Scarborough and Pluto T2. This was expected by the broker, given labour and raw material cost pressures in WA.

A prevailing level of uncertainty leaves the analyst with low conviction on when the stock might achieve the newly lowered target price of $29.00 from $29.90. The broker's Add rating is unchanged.

Target price is $29.00 Current Price is $22.97 Difference: $6.03
If WPL meets the Morgans target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $27.33, suggesting upside of 20.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.7

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

Ord Minnett rates WPL as Buy (1) -

Ord Minnett assesses a mixed June-quarter production report. Production and realised prices were estimated to be below expectations, while sales volumes and revenue came in above forecast, due to increased third-party sales.

Management provided cost guidance for the upcoming half that implied to the broker a net profit of US$455-682m for the period. This is below the broker's estimate, due to higher operating costs and depreciation.

The company reaffirmed it is looking to sell down Pluto Train 2, ahead of final investment decision (FID), and potentially Scarborough. Ord Minnett raises its target price to $29.30 from $29.10 and retains the Buy rating.

Target price is $29.30 Current Price is $22.97 Difference: $6.33
If WPL meets the Ord Minnett target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $27.33, suggesting upside of 20.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.7

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

UBS rates WPL as Buy (1) -

Woodside Petroleum has exited the second quarter with revenue of $1.29bn, 7% ahead of UBS forecasts, despite facing higher costs through the period associated with exiting Kitimat LNG. Results were driven by higher third-party trading volumes and higher realised oil prices. 

UBS decreases expected earnings per share for 2021 by -18% to reflect higher trading costs, and increases expenditure expectations to account for hedging activities and Kitimat exit costs. 

UBS expects an update on the Scarborough development cost review ahead of first half results, but is forecasting gross capital expenditure of $12.3bn. The broker points to near-term steps to de-risk Scarborough and a new CEO appointment as catalysts to help the stock re-rate. 

The Buy rating is retained and the target price decreases to $26.10 from $26.20.

Target price is $26.10 Current Price is $22.97 Difference: $3.13
If WPL meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $27.33, suggesting upside of 20.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.7

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