Australian Broker Call

Citi rates A2M as Neutral (3) -

Citi analysts cite from a recent survey in China showing the shift in infant formula sales continues towards local brands Junlebao and Yili.

There is some good news for a2 Milk in that production problems for Abbott have allowed a2 Milk to jump to number 4 in the rankings, from number 5 previously.

Target $4.64. Neutral. Citi recently upgraded (from Sell) on the development of a credible US strategy by management at a2 Milk, but the analysts equally believe downside risks remain.

Target price is $4.64 Current Price is $4.25 Difference: $0.39
If A2M meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $5.45, suggesting upside of 22.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.0

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

Macquarie rates APX as Upgrade to Neutral from Underperform (3) -

Macquarie considers Appen's strategy to diversify its customer base is sound but will take time. Growth will be driven by China and the Appin Ontology Studio.

Consensus expectations still need to be achieved in order to regain market confidence, the broker observes, as the stock is trading below its historical average on earnings multiples.

Macquarie upgrades to Neutral from Underperform and retains a $5.70 target.

Target price is $5.70 Current Price is $5.80 Difference: minus $0.1 (current price is over target).
If APX 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 $6.43, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Ord Minnett rates BVS as Buy (1) -

Bravura Solutions has reiterated its guidance, expecting EBITDA of $45-50m, which implies a flat outcome in the second half. The company has also appointed Libby Roy as its new CEO, effective August 22.

Ord Minnett maintains an Accumulate rating with a $5 target.

Target price is $5.00 Current Price is $1.39 Difference: $3.61
If BVS meets the Ord Minnett target it will return approximately 260% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates COE as Neutral (3) -

Cooper Energy has raised around $450m in new capital to acquire the Orbost gas plant and fund commitments. Macquarie was disappointed at the price paid for the plant, assessing this to be a high multiple of the average/normalise toll rate.

Still, the extra capital now enables the company to meet decommissioning commitments and resume its OP3D project and Otway exploration. The focus is now on the plant performance and gas contracting on OP3D.

Macquarie retains a Neutral rating and reduces the target to $0.26 from $0.28.

Target price is $0.26 Current Price is $0.25 Difference: $0.01
If COE meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $0.29, suggesting upside of 20.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

Macquarie rates COH as Neutral (3) -

Macquarie surveyed 12 US audiologists specialising in cochlear implants which signalled new patient numbers are still below pre-pandemic levels.

The broker notes the market share gains for Cochlear over the past 6-12 months yet a recovery in share for competitor AB is considered likely.

A new processor from Cochlear may provide support, amid expectations this will occur over the next 6-12 months. Neutral maintained. Target is reduced to $197 from $215.

Target price is $197.00 Current Price is $195.63 Difference: $1.37
If COH meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $224.58, suggesting upside of 15.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Citi rates CSL as Buy (1) -

Combining the latest data and industry insights, Citi analysts note plasma collection is now back to pre-covid levels and the price for immunoglobulin products is on the up.

The analysts believe investors' focus will increasingly shift towards the strong underlying demand for plasma product. This should bode well for the CSL share price, according to the report.

Minor adjustments have been made to estimates. Price target loses -$5 to $330. Buy rating retained. Citi does not believe the ongoing antitrust investigation will derail the Vifor acquisition.

Target price is $330.00 Current Price is $267.50 Difference: $62.5
If CSL meets the Citi target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $314.92, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Credit Suisse rates CWY as Underperform (5) -

Credit Suisse downgrades its FY23 and FY24 EPS forecasts for Cleanaway Waste Management by -14%. Around -9% of the downgrade is attributed to lower demand growth and lower margins as price increases lag cost inflation.

The balance of the downgrade relates to the closure (previously temporarily closed) of the company's landfill at New Chum in Ipswich, QLD, due to the after effects of flooding.

The analyst feels bad publicity and community suffering (smell etc) may reduce the prospects of winning the capacity extension for the New Chum site. The target price falls to $2.30 from $2.60 and the Underperform rating is maintained.

Target price is $2.30 Current Price is $2.56 Difference: minus $0.26 (current price is over target).
If CWY meets the Credit Suisse target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.05, suggesting upside of 21.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Morgan Stanley rates FBU as Overweight (1) -

Following a reiteration of guidance by Fletcher Building, Morgan Stanley believes the current share price and consensus estimates are underestimating the demand and earnings prospects. A low mutiple and attractive yield are thought to add to the investment thesis.

Management set a target for FY23 earnings (EBIT) to increase by NZ$100m or more (relative to FY22 levels), assuming broadly flat market activity. 

The Overweight rating and NZ$8.70 target are retained. Industry view is In-Line.

Current Price is $4.58. Target price not assessed.

Current consensus price target is $7.50, suggesting upside of 63.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Credit Suisse rates FPH as Neutral (3) -

Credit Suisse points out confirmed influenza cases are currently tracking 10x the pre-covid five-year average and above peak levels for the last severe flu season in 2017. In NSW, hospital admissions are already 4x the pre-covid average rate.

The analyst estimates Fisher & Paykel Healthcare's nasal highflow (NHF) installed base has nearly doubled since FY19 though utilisation is at low levels.

Average hardware utilisation and demand may be expected to pick up in the event of a strong northern hemisphere flu season in the 2H of 2023, suggests the broker., though it's probably too early to get bullish. The Neutral rating and $21.10 target are retained.

Target price is $21.10 Current Price is $17.76 Difference: $3.34
If FPH meets the Credit Suisse target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $21.10, suggesting upside of 14.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

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

Growthpoint Properties Australia has upgraded FFO FY22 guidance to at least 27.7c per security, which Macquarie expects was driven by both acquisitions and the underlying performance.

The upgrade provides evidence of defensive cash flows despite the slowdown in the macro economic environment, the broker adds.

Additional upside is possible as the balance sheet is deployed and Macquarie retains an Outperform rating. Target is raised to $4.57 from $4.47.

Target price is $4.57 Current Price is $3.49 Difference: $1.08
If GOZ meets the Macquarie target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $4.28, suggesting upside of 19.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Macquarie rates HAS as Outperform (1) -

Hastings Technology Metals is acquiring the 30% of Yangibana tenements it does not own for $9m. The acquisition is funded via the issue of shares.

Macquarie believes this will simplify the long-term development plan and enable the company to focus on exploration.

The broker updates its modelling to reflect the 20-for-1 share consolidation and now has a target of $6.40. Outperform rating unchanged.

Target price is $6.40 Current Price is $0.20 Difference: $6.2
If HAS meets the Macquarie target it will return approximately 3100% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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) -

Macquarie welcomes the update from Mincor Resources, which includes the payment for first nickel concentrate, capital outlay and successful ramp up of mining.

Net proceeds of $25.3m have been received from BHP Nickel West ((BHP)), which represents 90%, with the final 10% due August. Cassini has been delivered -8% under budget for an outlay of $98m and a steady ramp up is expected to continue throughout FY23.

Macquarie maintains an Outperform rating with a target of $2.20.

Target price is $2.20 Current Price is $1.66 Difference: $0.54
If MCR meets the Macquarie target it will return approximately 33% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Ord Minnett rates MP1 as Hold (3) -

Megaport has materially underperformed over the year to date, Ord Minnett observes, amid disappointing revenue growth and a rotation out of "unprofitable" technology which led to significant multiple compression.

The broker believes there are several items the company needs to address in the short term including better cost control and stabilising sales revenue.

Any "green shoots" in the channel strategy would be considered a bonus. Hence, Ord Minnett remains cautious and retains a Hold rating, reducing the target to $5.50 from $11.00.

Target price is $5.50 Current Price is $4.83 Difference: $0.67
If MP1 meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $13.23, suggesting upside of 135.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Credit Suisse rates MTS as Outperform (1) -

As Metcash reports its FY22 result on June 27, Credit Suisse notes the potential for upside from 2H wholesale food price inflation and a good sales performance for IGA retail.

The broker assumes 2% 2H organic sales growth in the Supermarkets division. It's also estimated the expansion of Total Tools will add $55m to earnings (EBIT) through to FY25 (from a FY21 base).

The Outperform rating and $4.70 target are retained.

Target price is $4.70 Current Price is $4.13 Difference: $0.57
If MTS meets the Credit Suisse target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $4.19, suggesting upside of 1.2% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Ord Minnett rates MTS as Buy (1) -

Metcash will report its FY22 result on June 27, the first under the new CEO Doug Jones. Ord Minnett expects a strong result with EBIT of $461m and earnings per share of 29.1c.

The main focus is on the leverage to grocery inflation and the demand environment. The broker is also keen to find out the outlook for trade hardware, given a slowing housing market. Total Tools is expected to deliver second half EBIT of $32m, broadly in line with the first half.

Ord Minnett retains a Buy rating with a $2.35 target.

Target price is $2.35 Current Price is $4.13 Difference: minus $1.78 (current price is over target).
If MTS meets the Ord Minnett target it will return approximately minus 43% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.19, suggesting upside of 1.2% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

UBS rates MTS as Buy (1) -

With Metcash set to report its full year results in coming days, UBS anticipates the company will deliver total sales of $17.1bn, earnings of $451m, and net profit of $261m. 

The broker in anticipating food and supermarket sales of $9.4bn, up 0.6% year-on-year, while food inflation should benefit moving forward.

Projected Hardware sales of $3.0bn would be up 15.8% year-on-year, while a continuing Total Tools rollout should offer further upside. The Buy rating and target price of $5.00 are retained.

Target price is $5.00 Current Price is $4.13 Difference: $0.87
If MTS meets the UBS target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $4.19, suggesting upside of 1.2% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Macquarie rates PLS as Outperform (1) -

Pilbara Minerals has completed the pre-auction sale, with the realised price 7% higher than the sale in late May. Macquarie notes the company is rapidly expanding production, with the ramp up of Ngungaju forecast to lift spodumene output to over 550,000tpa by FY24.

The broker calculates the share price is factoring in a lithium carbonate price below US$13,000/t, around -80% below current spot prices. Outperform rating and $3.90 target maintained.

Target price is $3.90 Current Price is $2.05 Difference: $1.85
If PLS meets the Macquarie target it will return approximately 90% (excluding dividends, fees and charges).

Current consensus price target is $3.69, suggesting upside of 66.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Ord Minnett rates PLS as Buy (1) -

Ord Minnett considers the pre-auction sale of 5000t of spodumene concentrate at more than US$7000/t is a positive indicator for prices to remain elevated in the short to medium term.

In the broker's coverage, Pilbara Minerals screens cheaply, with at least 75% potential upside. While the marginal buyer may be reluctant to move into stocks in a peak price environment, the broker believes a floor is approaching and conviction has been renewed on a medium-term view. Buy rating and $4.25 target maintained.

Target price is $4.25 Current Price is $2.05 Difference: $2.2
If PLS meets the Ord Minnett target it will return approximately 107% (excluding dividends, fees and charges).

Current consensus price target is $3.69, suggesting upside of 66.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Macquarie rates RMS as Outperform (1) -

Ramelius Resources expects FY22 production will come to just below the previous guidance range, at 255-260,000 ounces. Macquarie was not surprised by the slippage, given the company had flagged a shortage of truck drivers, and trims expectations by -4000 ounces.

Despite a reduction in the four-year outlook the broker notes costs remain competitive compared with other Australian mid-cap gold miners. Outperform maintained. Target is reduced to $1.30 from $1.50.

Target price is $1.30 Current Price is $1.00 Difference: $0.3
If RMS meets the Macquarie target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $1.57, suggesting upside of 55.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Macquarie rates TCL as Outperform (1) -

The NSW government is revising its toll strategy, and Macquarie suspects the new policy may become part of an election strategy. The starting point for Transurban Group is that it not be penalised. The government's stated plan is to address regional inequity.

Meanwhile, typical signs regarding bond movements suggest the stock should underperform. Macquarie points out the main difference this time around is positive leverage to inflation and a debt book with an eight-year duration.

Hence, earnings are expected to remain robust and the broker retains an Outperform rating. Target is $14.97, reduced from $15.01.

Target price is $14.97 Current Price is $14.10 Difference: $0.87
If TCL meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $14.54, suggesting upside of 2.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Credit Suisse rates TPG as Neutral (3) -

Following an investor day for TPG Telecom, Credit Suisse assesses good momentum in the Mobile business, driven by benefits from upselling and price changes, as well as the return of roaming revenues.

While management confirmed capex guidance for FY22, elevated capex is expected to last until the middle of the decade and the broker lowers its target price to $5.80 from $5.95 as a result. The Neutral rating is retained.

Target price is $5.80 Current Price is $5.86 Difference: minus $0.06 (current price is over target).
If TPG meets the Credit Suisse target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.02, suggesting upside of 14.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Macquarie rates TPG as Outperform (1) -

The TPG Telecom trading update was in line with Macquarie's expectations, with up-sellling opportunities in consumer and enterprise encouraging, albeit at an early stage.

While the company would not comment on the intentions of major shareholders, the broker believes JVCo (Vodafone/Hutchison), a holder of 28%, is unlikely to be a seller below $7.72, given the amount of debt inherited from the merger of Vodafone Australia and TPG Telecom.

Macquarie retains an Outperform rating and lowers the target to $7.50 from $8.00.

Target price is $7.50 Current Price is $5.86 Difference: $1.64
If TPG meets the Macquarie target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $7.02, suggesting upside of 14.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Morgans rates TPG as Hold (3) -

At its investor day, TPG Telecom reiterated its target of 160k fixed wireless subscribers by the end of FY22 and also reiterated its Enterprise target for $1bn of revenue by FY25.

Morgans leaves underlying forecasts largely unchanged though now includes an around $375m gain on a tower sale, which has the effect of increasing the target to $6.24 from $6.01. The Add rating is retained. 

Target price is $6.24 Current Price is $5.86 Difference: $0.38
If TPG meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $7.02, suggesting upside of 14.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Ord Minnett rates TPG as Buy (1) -

TPG Telecom has focused on growth opportunities in its investor briefing. Mobile subscribers are expected to grow by 120,000 in the June half which represents the first half of growth since December 2019.

Ord Minnett believes the business is in a unique position, given the options for growth in service revenue which could come from raising prices or growing subscriber numbers. The broker also notes the balance sheet remains comfortably within leverage metrics.

Buy recommendation retained. Target price is steady at $7.50.

Target price is $7.50 Current Price is $5.86 Difference: $1.64
If TPG meets the Ord Minnett target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $7.02, suggesting upside of 14.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

UBS rates TPG as Buy (1) -

Following TPG Telecom's recent Investor Day, UBS continues to see past the near-term headwinds, to the company's longer-term potential, including benefits from a more rational mobile competitive environment and its Telstra ((TLS)) roaming agreement, and merger synergies.

With TPG Telecom guiding to full year capital expenditure of $1.0-1.5bn, the company also provided a breakdown on expenditure dispersion, including maintenance capex of $350-400m, transform capex of $500-550m, and growth capex of $100-200m. 

The Buy rating is retained and the target price decreases to $6.90 from $7.10.

Target price is $6.90 Current Price is $5.86 Difference: $1.04
If TPG meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $7.02, suggesting upside of 14.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Morgan Stanley rates WDS as Overweight (1) -

Morgan Stanley retains its Attractive industry view following a review by the North American energy team on risks posed by a recession for the sector. It's felt structural tailwinds and current valuations will offset a near-term fall in energy prices.

The broker also highlights there is no guarantee we are entering a recession. The Overweight rating and $40 target are retained for Woodside Energy.

Target price is $40.00 Current Price is $31.14 Difference: $8.86
If WDS meets the Morgan Stanley target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $33.52, suggesting upside of 9.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.6

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