Australian Broker Call

Ord Minnett rates A2M as Accumulate (2) -

A renewed registration of a2 Milk Co's Chinese label infant formula has been approved through to September 2027. Ord Minnett continues to expect distribution of newly manufactured tins to begin in the first half of FY24.

Still, the shares are expected to trade at a discount as the market remains sceptical about whether an increase in market share can adequately offset the drop in birth rates in China.

Continued success in the Chinese-labelled business is crucial for the company, the broker adds. Accumulate rating and $7.20 target maintained.

Target price is $7.20 Current Price is $5.44 Difference: $1.76
If A2M meets the Ord Minnett target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $5.84, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in June.

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: 0.1

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

Ord Minnett rates ALG as Upgrade to Accumulate from Hold (2) -

As the share price of Ardent Leisure has moved through the trigger level, Ord Minnett upgrades to Accumulate from Hold. Target is $0.60.

Target price is $0.60 Current Price is $0.49 Difference: $0.115
If ALG meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Citi rates ASX as Neutral (3) -

Citi asserts the priorities of ASX for the short term are regulatory responses and modernising its technology, which will come at the expense of shareholder returns. Growth initiatives are on the back burner as a result.

ASX has a high EBIT margin and cost growth is not as much of an issue as it is for lower-margin entities, yet Citi notes costs are elevated because of a multi-year investment program to ramp up capabilities, and the level of payouts is likely to be a casualty.

Neutral rating maintained. Target is reduced to $64 from $70.

Target price is $64.00 Current Price is $60.64 Difference: $3.36
If ASX meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $66.53, suggesting upside of 8.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Macquarie rates ASX as Outperform (1) -

ASX expects growth in operating expenditure of 12% in FY23 and 12-15% in FY24. The dividend payout ratio has been cut to 80-90% of net profit from FY24. Furthermore, $200-300m in capital notes will be raised in the first half of FY24.

Macquarie updates forecasts to include the latter in its modelling and reduces earnings estimates for FY23 by -1.5% and by -3.6% for FY24.

Target is reduced to $66.50 from $72.00 and an Outperform rating is maintained as the stock is still seen as providing relative stability in a more difficult macro economic outlook.

Target price is $66.50 Current Price is $60.64 Difference: $5.86
If ASX meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $66.53, suggesting upside of 8.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

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

Morgan Stanley believes it will take some time for investors to regain confidence in management at the ASX after higher costs and a weaker capital position than expected were revealed at yesterday's investor day.

The company revised down the dividend payout ratio to 85% from 90% and made a new debt issue of $200-300m.

The broker suggests new management is taking a conservative stance on costs and capital to address the CHESS and other technology upgrades.

Cost growth guidance was 7-8% higher than the consensus forecast and capex guidance rose to -$110-140m versus the -$126m forecast by Morgan Stanley.

The analyst forecasts low single-digit revenue growth from FY22-25 while costs are expected to grow at a more than 10% compound annual growth rate (CAGR).

Morgan Stanley's Equal-weight rating is unchanged, while its target falls to $62.40 from $68.90. Industry view: In-Line.

Target price is $62.40 Current Price is $60.64 Difference: $1.76
If ASX meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $66.53, suggesting upside of 8.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

UBS rates ASX as Downgrade to Sell from Neutral (5) -

ASX has emphasised the investment required in its ageing systems, and guidance for both operating and capital expenditure was materially increased.

UBS assesses the modernisation and a backlog of postponed projects will be more expensive and time-consuming than previously envisaged.

While the broker believes ASX is an ideal platform to kickstart new financial technology, this does not appear to be high on the agenda for now.

UBS reduces EBIT margin forecasts to 58-59% in FY24-25 and downgrades to Sell from Neutral. Target is reduced to $59 from $70.

Target price is $59.00 Current Price is $60.64 Difference: minus $1.64 (current price is over target).
If ASX meets the UBS target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $66.53, suggesting upside of 8.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Citi rates BBN as Downgrade to Sell from Neutral (5) -

As sales momentum deteriorates, Citi questions whether Baby Bunting's category is as non-discretionary as previously presumed. Hence, the outlook for FY24 is increasingly of concern, as the decline in sales comes at a time when costs are intensifying.

The broker would like further disclosure on bank covenants to mitigate the uncertainty. A new CEO starting in October also clouds the strategic direction.

The broker reduces FY23-25 estimates by -36-58% and lowers the target to $1.10 from $2.40. Rating is downgraded to Sell from Neutral.

Target price is $1.10 Current Price is $1.48 Difference: minus $0.38 (current price is over target).
If BBN meets the Citi target it will return approximately minus 26% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.93, suggesting upside of 40.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Macquarie rates BBN as Neutral (3) -

Baby Bunting has downgraded profit guidance for FY23 by -37% at the mid point, to $13.5-15.0m. Sales are expected to be in the range of $509-513m, with the midpoint of this guidance -4.7% below Macquarie's expectations.

The update disappointed the broker and estimates for EPS are lowered by -37% in FY23 and -26% for FY24. Target is lowered to $1.55 from $2.45 and a Neutral rating is maintained.

Target price is $1.55 Current Price is $1.48 Difference: $0.07
If BBN meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $1.93, suggesting upside of 40.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Morgan Stanley rates BBN as Overweight (1) -

Morgan Stanley and consensus were already doubtful about Baby Bunting's prior profit guidance as it required a significant 2H skew.

Despite holding this view, the broker was still surprised by the extent of yesterday's guidance downgrade, which suggests trading has deteriorated materially in the last few months.

Profit guidance of $13.5-15m missed the analyst's forecasts by -30% and was -37% below prior guidance.

Overweight rating. Target price $3.50. Industry view: In Line.

Target price is $3.50 Current Price is $1.48 Difference: $2.02
If BBN meets the Morgan Stanley target it will return approximately 136% (excluding dividends, fees and charges).

Current consensus price target is $1.93, suggesting upside of 40.9% (ex-dividends)

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Morgans rates BBN as Hold (3) -

Morgans lowers its FY23 and FY24 profit forecasts by -35% and -39%, respectively, after Baby Bunting lowered FY23 profit guidance to $13.5-15m from $21.5-24m.

The fixed cost base nature of the physical stores means a -4% reduction in the broker's FY23 sales forecast flows through to a -14% reduction in forecast earnings (EBITDA) and the -35% reduction in profit estimate.

In recent weeks, store and online traffic has decreased, observes the broker, causing sales in the company’s all-important end of financial year promotional event to be ‘well below expectations’. 

The target falls to $1.90 from $2.50, while Morgans' Hold rating is unchanged. It’s felt the apparent downshift in consumer discretionary expenditure will not be short-lived.

Target price is $1.90 Current Price is $1.48 Difference: $0.42
If BBN meets the Morgans target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $1.93, suggesting upside of 40.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Ord Minnett rates BBN as Hold (3) -

While Ord Minnett had a forecast for Baby Bunting's FY23 net profit that was -13% below the midpoint of prior guidance the trading update and downgrade is even weaker than expected, now -28% below.

The June promotional event has meant trading in stores and online has been -21% lower than the prior corresponding period.

The broker believes the stock has long-term growth potential but in the short term its performance is challenged, at the same time the business is undertaking new initiatives which are further diluting margins and returns.

Hold rating maintained. Target is reduced to $1.60 from $2.45.

Target price is $1.60 Current Price is $1.48 Difference: $0.12
If BBN meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $1.93, suggesting upside of 40.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Shaw and Partners rates BC8 as Buy (1) -

Black Cat Syndicate has released further results from underground drilling at Paulsens. These results were not included in the recent resource upgrade and Shaw and Partners believes they will provide confidence in resource growth.

A study is expected in coming weeks and then a decision to re-commence mining operations in mid 2023.

The broker estimates it will cost around -$15-20m to refurbish the mill which has been on care and maintenance. The overall funding to bring the mine back into production is likely to be around -$40m.

Buy recommendation and 77c target price retained.

Target price is $0.77 Current Price is $0.38 Difference: $0.395
If BC8 meets the Shaw and Partners target it will return approximately 105% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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

UBS rates BRG as Buy (1) -

Following the recent market update from Breville Group UBS reduces estimates for EPS by -1% for FY23 and -4% for FY24. Americas constant currency sales growth for the second half is reduced to 4% from 10% to reflect the lack of sales to Bed, Bath & Beyond.

EMEA  sales growth estimates are lifted to 24% from 11% because of weak comparables. The broker then assumes a normal operating period in FY25.

A bullish medium-term view is driven by structural growth in the US market. Buy rating retained. Target eases back to $24.00 from $24.40.

Target price is $24.00 Current Price is $19.61 Difference: $4.39
If BRG meets the UBS target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $23.34, suggesting upside of 18.5% (ex-dividends)

The company's fiscal year ends in June.

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

Morgan Stanley rates CAR as Overweight (1) -

Morgan Stanley cautions the emergence of new technologies (like AI/ChatGPT) has the potential to change consumer and enterprise behaviours. These changes can then lead to changes in total addressable markets, market shares, profit margins and returns.

For Internet/Classifieds stocks under coverage, the broker remains positive overall and notes AI will help better service users and lead to new products though there is potential for major negative disruption.

Threats may emerge should AI strengthen existing peers, completely new entrants and/or even the major US/global tech companies at the forefront of AI development, explain the analysts. These parties may elect to chase the large pool of classified advertising revenues on offer.

Morgan Stanley lowers its price targets for its Internet/Classifieds coverage by -2-3% to reflect the increased uncertainty detailed above.

An Overweight rating is retained for Carsales, while the target slips to $26.50 from $27. Industry View: Attractive.

Target price is $26.50 Current Price is $23.47 Difference: $3.03
If CAR meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $25.08, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in June.

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

Macquarie rates COE as Neutral (3) -

A soft production performance has forced another downgrade from Cooper Energy. Macquarie notes outages and absorber cleans have meant the Orbost plant has been averaging 46.7TJ/d or 69% of utilisation in the financial year to date.

Moreover, the company will start abandonment of BMG in September which will mean it enters a period of elevated cost risk.

The broker believes there is considerable value that could be unlocked from existing assets but this is unlikely  to be recognised until there is a clear line of sight on a final investment decision for OP3D and work on the BMG decommission is completed.

Neutral maintained. Target is reduced to $0.16 from $0.19 target maintained.

Target price is $0.16 Current Price is $0.14 Difference: $0.02
If COE meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $0.20, suggesting upside of 51.3% (ex-dividends)

The company's fiscal year ends in June.

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

Morgans rates COE as Add (1) -

Morgans wasn't overly shocked by lower production and earnings (EBITDAX) guidance by Cooper Energy, given Orbost continues to deliver a mixed performance and last month's outage at the Athena Gas Plant.

The analyst was understanding of the increased abandonment spend budget for the Basker Manta Gummy (BMG) subsea facilities by -$28-32m, given a change in scope as well as cost headwinds.

Shares are trading well below any bearish case Morgans can mount and the Add rating is maintained. The target falls to 23c from 26c.

Target price is $0.23 Current Price is $0.14 Difference: $0.09
If COE meets the Morgans target it will return approximately 64% (excluding dividends, fees and charges).

Current consensus price target is $0.20, suggesting upside of 51.3% (ex-dividends)

The company's fiscal year ends in June.

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

Macquarie rates CSL as Outperform (1) -

Macquarie has surveyed 36 US-based neurologists to understand current CIDP treatments and views on the potential approval of Argenx.

Neurologists require higher efficacy in the trial of Argenx ADHERE versus the Grifols ICE trial to justify switching a patient from immunoglobulin.

The broker's analysis suggests the downside risk to revenue and gross profit from the displacement of Ig volumes in the treatment of CIDP can be more than offset by yield improvements. The outlook for CSL is positive and an Outperform rating and $344 target are retained.

Target price is $344.00 Current Price is $307.72 Difference: $36.28
If CSL meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $339.32, suggesting upside of 9.9% (ex-dividends)

The company's fiscal year ends in June.

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

Morgan Stanley rates CSL as Overweight (1) -

Morgan Stanley reports its proprietary Plasma Collection Centre Data for May show CSL's US and EU centres experienced 4% year-on-year growth.

Overseas fractionators have also recently indicated growing plasma collection volumes.

The Overweight rating and $339 target for CSL are unchanged. Industry View: In-Line.

Target price is $339.00 Current Price is $307.72 Difference: $31.28
If CSL meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $339.32, suggesting upside of 9.9% (ex-dividends)

The company's fiscal year ends in June.

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 CY5 as Initiation of coverage with Buy (1) -

Shaw and Partners initiates coverage of Cygnus Metals with a Buy rating and $0.46 target. The lithium exploration company has a 70% interest in the Pontax project and 100% of Auclair, both in the highly prospective James Bay district of Canada.

The broker notes the company is well funded, declaring a maiden resource at the start of May. Shaw and Partners is positive on the lithium price heading into the second half following a challenging period.

Target price is $0.46 Current Price is $0.21 Difference: $0.25
If CY5 meets the Shaw and Partners target it will return approximately 119% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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

Morgan Stanley rates DHG as Downgrade to Equal-weight from Overweight (3) -

Morgan Stanley cautions the emergence of new technologies (like AI/ChatGPT) has the potential to change consumer and enterprise behaviours. These changes can then lead to changes in total addressable markets, market shares, profit margins and returns.

For Internet/Classifieds stocks under coverage, the broker remains positive overall and notes AI will help better service users and lead to new products though there is potential for major negative disruption.

Threats may emerge should AI strengthen existing peers, completely new entrants and/or even the major US/global tech companies at the forefront of AI development, explain the analysts. These parties may elect to chase the large pool of classified advertising revenues on offer.

Morgan Stanley lowers its price targets for its Internet/Classifieds coverage by -2-3% to reflect the increased uncertainty detailed above.

The target for Domain Holdings Australia slips to $3.50 from $3.60. 

Separate to AI concerns, the rating is downgraded to Equal-weight from Overweight on the broker's caution regarding the residential property market. Industry View: Attractive.

Target price is $3.50 Current Price is $3.35 Difference: $0.15
If DHG meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $3.36, suggesting upside of 1.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Morgans rates EBO as Add (1) -

Morgans remains comfortable, based on Ebos Group’s long track record, management will navigate the changing customer mix after announcing the loss of its Chemist Warehouse contract. The Add rating is unchanged.

The new contract, won by Sigma Healthcare ((SIG)), is to supply wholesale PBS medicines from July 2024. As a result, the broker downgrades its FY25 EPS forecast by around -16% and cuts its target to $38.07 from $44.12.

The analyst believes Ebos was likely unwilling to compete against the lower margins Sigma was happy to accept. Sigma also offered Chemist Warehouse a 10.7% equity stake and several non-core assets as part of the transaction.

Management is aiming to expand its pharmacy wholesale services to a range of other branded and independent customers.

Target price is $38.07 Current Price is $33.21 Difference: $4.86
If EBO meets the Morgans target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $35.36, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Ord Minnett rates EBO as Lighten (4) -

Ebos Group has relinquished the PBS contract with Chemist Warehouse to Sigma Healthcare ((SIG)). At the time of obtaining the contract in 2019, the company estimated it would generate sales of around $1bn in FY20. Ord Minnett observes it now generates sales of around $1.9bn per year.

Still, the broker believes Ebos maintains a cost advantage in the form of buying power and economies of scale and the contract is less meaningful as it represents around just 10% of group gross profit.

Instead, Ebos appears to be focusing on its higher-margin animal health care and medical devices distribution business. Lighten rating retained. Target is reduced to $27 from $29.

Target price is $27.00 Current Price is $33.21 Difference: minus $6.21 (current price is over target).
If EBO meets the Ord Minnett target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $35.36, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Shaw and Partners rates ELD as Buy (1) -

Shaw and Partners notes ABARES has indicated national planting to winter crops remains historically high in 2023/24 at 23.3m hectares. After three consecutive record years, Australia's winter crop production is forecast to fall by -34%, -3% below the 10-year average.

Elders has guided to FY23 underlying EBIT of $180-200m, with the broker noting the data from the ABARES report is broadly consistent with expectations. As a result, Buy rating with a $12 target are maintained.

Target price is $12.00 Current Price is $6.30 Difference: $5.7
If ELD meets the Shaw and Partners target it will return approximately 90% (excluding dividends, fees and charges).

Current consensus price target is $8.86, suggesting upside of 40.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Morgans rates FDV as Add (1) -

In 2021, Frontier Digital Ventures fully acquired InfoCasas and Encuentra24. Now, the company has amended earn out consideration with the founders of these companies to equity in Frontier Digital Ventures rather than equity in Frontier Digital Ventures Latin America.

Due to share dilution from raising $8.5m via issuing additional shares at 40c, Morgans' target for Frontier falls to 82c from 94c. 

The broker’s EPS forecasts are raised by 1%-5% over the next couple of years, as near-term losses will be spread over a higher number of shares.

The Add rating is maintained.

Target price is $0.82 Current Price is $0.37 Difference: $0.455
If FDV meets the Morgans target it will return approximately 125% (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

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

As the share price has moved through the trigger level Ord Minnett upgrades Fisher & Paykel Healthcare to Hold from Lighten. Target is $20.50.

Target price is $20.50 Current Price is $21.92 Difference: minus $1.42 (current price is over target).
If FPH 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 $21.47, suggesting downside of -1.5% (ex-dividends)

The company's fiscal year ends in March.

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: 0.3

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

Bell Potter rates GNC as Buy (1) -

Bell Potter observes the June ABARE crop report suggests the winter east-coast crop will remain well above the 13-year average, albeit -19% below the previous year.

Also, ABARE's summer crop forecast has risen for 2022-2023 (receipts fall into FY23 crop receipts observes Bell Potter) and the broker advises GrainCorp typically gains a higher share of summer crop volumes.

Buy rating and $9.45 target price retained, the broker considering the valuation to be undemanding at this point in the cycle.

Target price is $9.45 Current Price is $7.70 Difference: $1.75
If GNC meets the Bell Potter target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $8.78, suggesting upside of 10.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Macquarie rates IPL as Neutral (3) -

Incitec Pivot CEO Jeanne Johns will step down on June 30 and the CFO Paul Victor has been appointed interim CEO while a search is undertaken.

Macquarie observes Jeanne Johns' tenure saw the repositioning of the business towards more consistent and high-value Dyno earnings and this is still a work in progress.

The change in leadership is likely to raise questions regarding the fertiliser demerger. Moreover, gas supply issues are likely to negatively impact the market valuations of the company's fertiliser business, the broker adds.

Macquarie reduces FY23-25 estimates for EPS by -2-6% to reflect the ongoing gas sourcing issues at Phosphate Hill. Neutral maintained. Target edges down to $3.10 from $3.15.

Target price is $3.10 Current Price is $2.95 Difference: $0.15
If IPL meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $3.42, suggesting upside of 21.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

UBS rates OCL as Initiation of coverage with Neutral (3) -

UBS initiates coverage on Objective Corp with a Neutral rating and $15 target after a sharp increase in the share price over the last two weeks.

The broker observes the company has an enviable track record of compounding earnings growth as it provides workflow management software to governments in Australasia and the UK.

This is the key attraction alongside low customer churn and a strong balance sheet. The stock, at a P/FCF multiple of 44x is trading at a -8% discount to peers in the ASX tech sector which UBS believes is a fair discount given the sector's strong recent performance.

Target price is $15.00 Current Price is $13.58 Difference: $1.42
If OCL meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Macquarie rates PRN as Outperform (1) -

Perenti has upgraded FY23 guidance for the fourth time at its strategy briefing. Revenue guidance is $2.9bn, at the top end of prior guidance with EBIT increased to $260-265m.

FY24 guidance will be provided with the results in August. Macquarie notes qualitative targets have been released for the first time, with the company expecting an increase in EBIT margins and revenue in line with FY23. The revenue target for FY25 has also been lifted to $3bn.

Macquarie welcomes the positive update and upgrades its forecasts for FY23-25. Outperform maintained and the target is lifted to $1.70 from $1.50.

Target price is $1.70 Current Price is $1.22 Difference: $0.48
If PRN meets the Macquarie target it will return approximately 39% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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

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

Morgan Stanley cautions the emergence of new technologies (like AI/ChatGPT) has the potential to change consumer and enterprise behaviours. These changes can then lead to changes in total addressable markets, market shares, profit margins and returns.

For Internet/Classifieds stocks under coverage, the broker remains positive overall and notes AI will help better service users and lead to new products though there is potential for major negative disruption.

Threats may emerge should AI strengthen existing peers, completely new entrants and/or even the major US/global tech companies at the forefront of AI development, explain the analysts. These parties may elect to chase the large pool of classified advertising revenues on offer.

Morgan Stanley lowers its price targets for its Internet/Classifieds coverage by -2-3% to reflect the increased uncertainty detailed above.

The broker resumes coverage on REA Group after a period of research restriction with an unchanged $130 target price.

Separate to AI concerns, the analysts are cautious regarding the residential property market and retain an Equal-weight rating. Industry View: Attractive.

Target price is $130.00 Current Price is $135.99 Difference: minus $5.99 (current price is over target).
If REA meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $125.88, suggesting downside of -6.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.3

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

Morgan Stanley rates SEK as Overweight (1) -

Morgan Stanley cautions the emergence of new technologies (like AI/ChatGPT) has the potential to change consumer and enterprise behaviours. These changes can then lead to changes in total addressable markets, market shares, profit margins and returns.

For Internet/Classifieds stocks under coverage, the broker remains positive overall and notes AI will help better service users and lead to new products though there is potential for major negative disruption.

Threats may emerge should AI strengthen existing peers, completely new entrants and/or even the major US/global tech companies at the forefront of AI development, explain the analysts. These parties may elect to chase the large pool of classified advertising revenues on offer.

Morgan Stanley lowers its price targets for its Internet/Classifieds coverage by -2-3% to reflect the increased uncertainty detailed above.

The target for Seek slips to $29.50 from $30.00, while the Overweight rating is retained. Industry View: Attractive.

Target price is $29.50 Current Price is $22.96 Difference: $6.54
If SEK meets the Morgan Stanley target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $28.34, suggesting upside of 24.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Macquarie rates SIG as Neutral (3) -

Sigma Healthcare has won the PBS supply contract to Chemist Warehouse which is expected to generate an additional $2bn in revenue. In turn, the company will issue 127m shares to Chemist Warehouse and give it rights to assets or cash worth $24.5m.

Despite the win, Macquarie remains cautious on the stock because of a highly competitive market structure and the ERP implementation issues which have led to "frayed customer relationships". Neutral retained. Target rises to $0.82 from $0.65.

Target price is $0.82 Current Price is $0.78 Difference: $0.045
If SIG meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $0.68, suggesting downside of -14.5% (ex-dividends)

The company's fiscal year ends in January.

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 SIG as Hold (3) -

Sigma Healthcare has a new contract with Chemist Warehouse to supply both its PBS medicines and FMCG products for five years from July 2024.

Given the company has decided to sell its hospital distribution business and the new distribution centres have expanded capacity by 67%, Ord Minnett suggests Sigma was best placed, as opposed to Ebos Group ((EBO)),  to negotiate suitable terms with Chemist Warehouse to use excess capacity.

Ord Minnett retains a Hold rating and raises the target to $0.80 from $0.63.

Target price is $0.80 Current Price is $0.78 Difference: $0.025
If SIG meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $0.68, suggesting downside of -14.5% (ex-dividends)

The company's fiscal year ends in January.

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

Shaw and Partners rates SIG as Upgrade to Buy from Hold (1) -

Sigma Healthcare has been awarded a $3bn supply contract with Chemist Warehouse commencing July 1 2024, replacing the current contract worth around $1.1bn.

Sigma Healthcare is the incumbent supplier for fast-moving-consumer-goods (FMCG) product which currently represents around 29% of group net sales revenue.

Shaw and Partners updates forecasts to reflect the announcement and upgrades to Buy from Hold. The broker believes this is an important milestone for the business as it optimises capacity utilisation. Target is raised to $0.90 from $0.65.

Target price is $0.90 Current Price is $0.78 Difference: $0.125
If SIG meets the Shaw and Partners target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $0.68, suggesting downside of -14.5% (ex-dividends)

The company's fiscal year ends in January.

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 SUN as Hold (3) -

Suncorp Group shares have risen around 20% over the last 12 months and, Ord Minnett assesses, reveal a forward PE of 14x and fully franked dividend yield of 5%, so the earnings recovery after some difficult times is finally being priced in.

The broker suspects the market is pricing in the sale of the bank, given most listed banks currently trade at material discount is to fair value estimates.

Still, approval is uncertain, with a decision by the ACCC on the sale to ANZ Bank ((ANZ)) due by the end of July. The broker retains a Hold rating and $13 target.

Target price is $13.00 Current Price is $13.14 Difference: minus $0.14 (current price is over target).
If SUN 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 $14.59, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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