Australian Broker Call
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May 25, 2018
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)
Last Updated: 10:25 AM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
| ALL - | ARISTOCRAT LEISURE | Upgrade to Outperform from Neutral | Credit Suisse |
| RWC - | RELIANCE WORLDWIDE | Upgrade to Hold from Sell | Deutsche Bank |
| Upgrade to Add from Hold | Morgans | ||
| TLS - | TELSTRA CORP | Upgrade to Buy from Neutral | UBS |
Overnight Price: $30.04
Citi rates ALL as Buy (1) -
The interim result was a clear 'beat' and a quality one too, Citi analysts intimate. Lower taxes and outperformance by Digital and International Class III segments are responsible.
On the flipside, Design & Development costs were some 18% above expectations, but Citi points out this increase was partially offset by lower corporate costs. Forecasts have been lifted by 8-11%.
Citi retains Aristocat Leisure as a Conviction Buy. Price target jumps to $36 from $32.20. The analysts explain, calculating bull and bear scenarios generate valuations of $45.99 and $24.74 respectively.
Target price is $36.00 Current Price is $30.04 Difference: $5.96
If ALL meets the Citi target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $34.16, suggesting upside of 13.7% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 48.00 cents and EPS of 121.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 116.5, implying annual growth of 49.9%. Current consensus DPS estimate is 47.2, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 25.8. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 92.00 cents and EPS of 151.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 139.5, implying annual growth of 19.7%. Current consensus DPS estimate is 65.4, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 21.5. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates ALL as Upgrade to Outperform from Neutral (1) -
Credit Suisse' response to Aristocrat's result is to increase forecast earnings by 13%, increase its target to $35 from $28, and upgrade its rating to Outperform. The standout performance was posted by digital.
The broker sees the potential for the company to scope out a much bigger position in the US mobile games industry from a current 2% market share. Even if this is not the case, strong cash flow will rapidly reduce debt. If it is the case, digital earnings should prove more sustainable than those of machines, for which market share shifts over time, the broker notes.
Target price is $35.00 Current Price is $30.04 Difference: $4.96
If ALL meets the Credit Suisse target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $34.16, suggesting upside of 13.7% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 52.00 cents and EPS of 129.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 116.5, implying annual growth of 49.9%. Current consensus DPS estimate is 47.2, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 25.8. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 66.00 cents and EPS of 147.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 139.5, implying annual growth of 19.7%. Current consensus DPS estimate is 65.4, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 21.5. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates ALL as Buy (1) -
Deutsche Bank is extremely positive about the half-year result as the digital acquisitions are exceeding expectations. The company expects double-digit net profit growth to continue for the remainder of the year.
The broker maintains a Buy rating and raises the target to $38.75 from $33.90.
Target price is $38.75 Current Price is $30.04 Difference: $8.71
If ALL meets the Deutsche Bank target it will return approximately 29% (excluding dividends, fees and charges).
Current consensus price target is $34.16, suggesting upside of 13.7% (ex-dividends)
Forecast for FY18:
Current consensus EPS estimate is 116.5, implying annual growth of 49.9%. Current consensus DPS estimate is 47.2, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 25.8. |
Forecast for FY19:
Current consensus EPS estimate is 139.5, implying annual growth of 19.7%. Current consensus DPS estimate is 65.4, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 21.5. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates ALL as Outperform (1) -
Macquarie observes the North American and digital businesses have strong momentum which underpins confidence in ongoing growth for the company. The broker expects Aristocrat to take further market share.
Macquarie calculates attractive multiples for the stock and upgrades the target to $33.00 from $27.15. Outperform maintained.
Target price is $33.00 Current Price is $30.04 Difference: $2.96
If ALL meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $34.16, suggesting upside of 13.7% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 49.50 cents and EPS of 121.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 116.5, implying annual growth of 49.9%. Current consensus DPS estimate is 47.2, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 25.8. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 60.00 cents and EPS of 148.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 139.5, implying annual growth of 19.7%. Current consensus DPS estimate is 65.4, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 21.5. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates ALL as Equal-weight (3) -
The contribution from digital acquisitions meant first half results beat Morgan Stanley's estimates. Nevertheless, in trying to reconcile this with a weak cash flow, the broker has questions that are unanswered.
Morgan Stanley envisages little risk to FY18 growth but considers the upside is priced into the stock. Equal-weight and target raised to $29 from $26. Industry view: Cautious.
Target price is $29.00 Current Price is $30.04 Difference: minus $1.04 (current price is over target).
If ALL meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $34.16, suggesting upside of 13.7% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 48.00 cents and EPS of 116.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 116.5, implying annual growth of 49.9%. Current consensus DPS estimate is 47.2, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 25.8. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 80.00 cents and EPS of 133.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 139.5, implying annual growth of 19.7%. Current consensus DPS estimate is 65.4, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 21.5. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates ALL as Add (1) -
First half results were comfortably ahead of expectations. The digital division stood out for Morgans and the strength of this is expected to alleviate investor concerns regarding the recent acquisitions.
The broker upgrades forecasts for FY18 and FY19 by 7.3% and 6.0% respectively. Add rating is maintained. Target is raised to $33.57 from $30.41.
Target price is $33.57 Current Price is $30.04 Difference: $3.53
If ALL meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $34.16, suggesting upside of 13.7% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 48.00 cents and EPS of 121.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 116.5, implying annual growth of 49.9%. Current consensus DPS estimate is 47.2, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 25.8. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 57.00 cents and EPS of 142.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 139.5, implying annual growth of 19.7%. Current consensus DPS estimate is 65.4, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 21.5. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates ALL as Accumulate (2) -
Ord Minnett notes the company has increased its digital exposure to 26% of first half earnings, up from 13% in FY17.
Combined with strong execution and a scarcity of earnings growth in the market the broker believes the risk/reward ratio remains attractive.
Ord Minnett maintains an Accumulate rating and raises the target to $31.75 from $29.00.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $31.75 Current Price is $30.04 Difference: $1.71
If ALL meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $34.16, suggesting upside of 13.7% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 46.00 cents and EPS of 91.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 116.5, implying annual growth of 49.9%. Current consensus DPS estimate is 47.2, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 25.8. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 54.00 cents and EPS of 110.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 139.5, implying annual growth of 19.7%. Current consensus DPS estimate is 65.4, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 21.5. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates ALL as Buy (1) -
First half net profit was up 32% and well ahead of forecasts. The highlight of the result was the first disclosure around Plarium and Big Fish, which grew operating earnings by 60% and 34% respectively.
UBS believes the reduction in near-term downside risk from these businesses removes an overhang from the stock. The broker continues to believe Aristocrat is under-penetrated in core markets with the exception of Australia and Asia.
Target is raised to $36.20 from $30.50. Buy retained.
Target price is $36.20 Current Price is $30.04 Difference: $6.16
If ALL meets the UBS target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $34.16, suggesting upside of 13.7% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 39.00 cents and EPS of 115.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 116.5, implying annual growth of 49.9%. Current consensus DPS estimate is 47.2, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 25.8. |
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 49.00 cents and EPS of 145.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 139.5, implying annual growth of 19.7%. Current consensus DPS estimate is 65.4, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 21.5. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
CSL CSL LIMITED
Pharmaceuticals & Biotech/Lifesciences
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Overnight Price: $183.10
Macquarie rates CSL as Outperform (1) -
Macquarie reviews the growth opportunities, including the R&D pipeline as well as recent acquisitions, and considers the long-term upside potential is substantial.
In the near to medium-term the broker considers the stock well positioned for robust earnings growth that will be underpinned by the approval of Privigen/Hizentra, amid further positive contributions from Seqirus and a strong patient uptake for both Idelvion and Haegarda.
Outperform maintained. Target is raised to $193.50 from $190.00.
Target price is $193.50 Current Price is $183.10 Difference: $10.4
If CSL meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $189.13, suggesting upside of 3.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 217.15 cents and EPS of 482.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 503.7, implying annual growth of N/A. Current consensus DPS estimate is 219.3, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 36.4. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 258.80 cents and EPS of 574.98 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 576.0, implying annual growth of 14.4%. Current consensus DPS estimate is 253.4, implying a prospective dividend yield of 1.4%. Current consensus EPS estimate suggests the PER is 31.8. |
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
DHG DOMAIN HOLDINGS AUSTRALIA LIMITED
Real Estate
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Overnight Price: $3.29
Citi rates DHG as Sell (5) -
Detailed analysis of industry ad volumes suggests to Citi REA Group continues to exert its dominance, leaving but a few bright spots for Domain Holdings to lead over its bigger competitor.
This suggests to Citi Domain will have to start spending a lot more on marketing. Or else. The direct result of this is that REA Group is expected to show stronger growth for FY18.
Most importantly, the research has confirmed Citi's concerns whether Domain will be able to simultaneously achieve market share growth and margin expansion in its digital division. Target $2.80. Sell.
Target price is $2.80 Current Price is $3.29 Difference: minus $0.49 (current price is over target).
If DHG meets the Citi target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $3.29, suggesting downside of -0.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 8.00 cents and EPS of 9.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 9.3, implying annual growth of N/A. Current consensus DPS estimate is 6.4, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 35.4. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 9.00 cents and EPS of 11.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.5, implying annual growth of 23.7%. Current consensus DPS estimate is 7.0, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 28.6. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.34
Morgans rates EHL as Add (1) -
The company has announced it will acquire Matilda Equipment for $80m. Matilda is a niche rental supplier of ancillary mining equipment, comprising mostly new model dozers and civil/services vehicles.
Incorporating the acquisition and a capital raising means Morgans raises FY19 and FY20 operating earnings forecasts by 11% and 16% respectively.
The broker expects strong cash accumulation and rapid balance sheet de-gearing. Add rating maintained. Target is raised to $0.39 from $0.34.
Target price is $0.39 Current Price is $0.34 Difference: $0.05
If EHL meets the Morgans target it will return approximately 15% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 0.00 cents and EPS of 0.10 cents. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 0.00 cents and EPS of 1.80 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $8.77
Ord Minnett rates IEL as Hold (3) -
Ord Minnett re-evaluates the implications of the company's digital platform, which is on the verge of completion. The broker believes a strategy to digitise the student placement process is the right approach.
The stock deserves a premium to the market but the broker also believes the current share price does not adequately account for the risks, and there are plenty.
Ord Minnett maintains a Hold rating and raises the target to $7.81 from $6.64.
Target price is $7.81 Current Price is $8.77 Difference: minus $0.96 (current price is over target).
If IEL meets the Ord Minnett target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $7.55, suggesting downside of -13.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 15.70 cents and EPS of 20.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.2, implying annual growth of 27.9%. Current consensus DPS estimate is 15.5, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 41.4. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 18.20 cents and EPS of 24.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.4, implying annual growth of 15.1%. Current consensus DPS estimate is 18.3, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 35.9. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $9.75
Macquarie rates ORG as Outperform (1) -
The company has announced the sale of Acumen, its meter reading business, for $267m. Macquarie observes the company has not completed its divestment program but has shrunk the business and brought the balance sheet back to a more acceptable level of leverage.
This should be settled in FY19 and then the opportunity will be for growth in areas like Shoalhaven and Ironbark. Outperform rating and $10.02 target maintained.
Target price is $10.02 Current Price is $9.75 Difference: $0.27
If ORG meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $9.96, suggesting upside of 2.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 10.00 cents and EPS of 57.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 53.5, implying annual growth of N/A. Current consensus DPS estimate is 4.4, implying a prospective dividend yield of 0.5%. Current consensus EPS estimate suggests the PER is 18.2. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 44.00 cents and EPS of 74.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 75.7, implying annual growth of 41.5%. Current consensus DPS estimate is 24.6, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 12.9. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates ORG as Overweight (1) -
The company has announced the sale of Acumen, its digital meter installation and servicing business. The proceeds of $267m will accelerate the company's de-leveraging.
Morgan Stanley estimates net debt at around $6.6bn for FY18 but believes this can fall faster, in view of the Acumen sale and the support from the oil price.
Overweight rating. Target is $10.88. Industry view: Cautious.
Target price is $10.88 Current Price is $9.75 Difference: $1.13
If ORG meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $9.96, suggesting upside of 2.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 0.00 cents and EPS of 54.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 53.5, implying annual growth of N/A. Current consensus DPS estimate is 4.4, implying a prospective dividend yield of 0.5%. Current consensus EPS estimate suggests the PER is 18.2. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 EPS of 73.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 75.7, implying annual growth of 41.5%. Current consensus DPS estimate is 24.6, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 12.9. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $10.13
UBS rates OZL as Neutral (3) -
UBS is taking a fresh look at OZ Minerals ahead of its strategy briefing on May 30. The broker also transfers coverage to another analyst. A Neutral view is maintained as the stock appears fairly priced for its existing production and development base.
The broker does not believe the market should re-rate the stock higher until the growth options have been proved up or Carrapateena is de-risked. Target is raised to $11.00 from $9.80.
Target price is $11.00 Current Price is $10.13 Difference: $0.87
If OZL meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $10.03, suggesting downside of -1.0% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 20.00 cents and EPS of 71.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 73.2, implying annual growth of -4.9%. Current consensus DPS estimate is 21.3, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 13.8. |
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 20.00 cents and EPS of 61.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 56.7, implying annual growth of -22.5%. Current consensus DPS estimate is 17.1, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 17.9. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $90.85
Citi rates REA as Buy (1) -
Detailed analysis of industry ad volumes suggests to Citi REA Group continues to exert its dominance, leaving but a few spots for Domain Holdings to lead over its bigger competitor, such as in Sydney's eastern suburbs.
This suggests to Citi Domain will have to start spending a lot more on marketing. Or else. The direct result of this is that REA Group is expected to show stronger growth for FY18.
Another interesting item is that Citi believes 'price' remains the primary factor driving revenue growth for Domain Group, while REA Group benefits more from volume growth and mix changes. Buy rating retained, as well as the $90 price target.
Target price is $90.00 Current Price is $90.85 Difference: minus $0.85 (current price is over target).
If REA meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $81.96, suggesting downside of -9.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 97.80 cents and EPS of 215.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 215.1, implying annual growth of 24.1%. Current consensus DPS estimate is 107.4, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 42.2. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 126.80 cents and EPS of 264.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 260.1, implying annual growth of 20.9%. Current consensus DPS estimate is 135.3, implying a prospective dividend yield of 1.5%. Current consensus EPS estimate suggests the PER is 34.9. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
RWC RELIANCE WORLDWIDE CORPORATION LIMITED
Building Products & Services
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Overnight Price: $4.56
Deutsche Bank rates RWC as Upgrade to Hold from Sell (3) -
The company will acquire John Guest, a UK manufacturer of fittings for plumbing, heating and industrial applications. The acquisition make strategic sense to Deutsche Bank, given John Guest's strong PTC offering in Europe.
However, as a word of caution, the acquisition adds further risk to a business that has many strategies, the broker points out. Rating is upgraded to Hold from Sell. Target is raised to $4.35 from $3.90.
Target price is $4.35 Current Price is $4.56 Difference: minus $0.21 (current price is over target).
If RWC meets the Deutsche Bank target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $4.87, suggesting upside of 6.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 7.00 cents and EPS of 16.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 16.2, implying annual growth of 29.6%. Current consensus DPS estimate is 7.5, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 28.1. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 8.00 cents and EPS of 19.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 19.3, implying annual growth of 19.1%. Current consensus DPS estimate is 9.5, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 23.6. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates RWC as No Rating (-1) -
The company will acquire John Guest, a UK-based plastic PTC fitting specialist, for GBP687.5m. The company envisages realising $20m in synergies driven by cost rationalisation, with the full run rate of savings achieved by the end of year one.
FY18 operating earnings guidance of $150-155m has been reiterated. Macquarie is restricted on a rating and target at this stage.
Current Price is $4.56. Target price not assessed.
Current consensus price target is $4.87, suggesting upside of 6.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 7.50 cents and EPS of 16.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 16.2, implying annual growth of 29.6%. Current consensus DPS estimate is 7.5, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 28.1. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 10.00 cents and EPS of 19.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 19.3, implying annual growth of 19.1%. Current consensus DPS estimate is 9.5, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 23.6. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates RWC as Upgrade to Add from Hold (1) -
The company will acquire John Guest for GBP687.5m. Morgans believes the acquisition makes strategic sense, providing product, geographic and customer diversification. John Guest is headquartered in the UK and has a strong European distribution platform with operations in the US and Asia Pacific.
The acquisition is expected to complement the company's existing portfolio. If management can execute well then there are multiple long-term growth opportunities, Morgans suggests. The broker upgrades to Add from Hold and the target is raised to $5.46 from $4.33.
Target price is $5.46 Current Price is $4.56 Difference: $0.9
If RWC meets the Morgans target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $4.87, suggesting upside of 6.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 7.50 cents and EPS of 16.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 16.2, implying annual growth of 29.6%. Current consensus DPS estimate is 7.5, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 28.1. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 10.00 cents and EPS of 19.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 19.3, implying annual growth of 19.1%. Current consensus DPS estimate is 9.5, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 23.6. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $2.43
Morgans rates SOM as Hold (3) -
The company has guided to weaker results in FY18 as its new retail arm, Renew Sleep Solutions, fell short of estimates. Management has decided to suspend the rolling out of new centres until 2019.
Morgans continues to await further clarity on the economics of RSS as the clinics mature. Nevertheless, the broker is pleased to see the first signs of the turnaround in North American sales and continued strength in European sales.
Hold rating maintained. Target is reduced to $2.51 from $3.20.
Target price is $2.51 Current Price is $2.43 Difference: $0.08
If SOM meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 16.00 cents. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 2.00 cents. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
TLS TELSTRA CORPORATION LIMITED
Telecommunication
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Overnight Price: $2.79
UBS rates TLS as Upgrade to Buy from Neutral (1) -
UBS continues to believe the $0.22 dividend is unsustainable and a reduction from as early as FY20 is likely. However, with the downside largely known and the full 5G/NBN upside being factored in by the market the broker upgrades to Buy from Neutral.
In the short term the June strategy day could be a positive, as the company has flagged that it will show how its $3bn strategic capital expenditure and cost reduction program will allow it to be more "bold".
UBS speculates on an NBN bypass and an aggressive push on market share. Target is raised to $3.00 from $2.80.
Target price is $3.00 Current Price is $2.79 Difference: $0.21
If TLS meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $3.38, suggesting upside of 21.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 22.00 cents and EPS of 29.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 27.0, implying annual growth of -16.9%. Current consensus DPS estimate is 22.0, implying a prospective dividend yield of 7.9%. Current consensus EPS estimate suggests the PER is 10.3. |
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 22.00 cents and EPS of 29.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.4, implying annual growth of 5.2%. Current consensus DPS estimate is 21.6, implying a prospective dividend yield of 7.7%. Current consensus EPS estimate suggests the PER is 9.8. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $2.03
Ord Minnett rates VVR as Buy (1) -
The company has refinanced $836.7m of unsecured syndicated debt. Ord Minnett updates models and estimates that the refinanced facilities are three basis points cheaper at forecast first half gearing of 33.4%.
A Buy rating is reiterated. Target rises to $2.35 from $2.30.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $2.35 Current Price is $2.03 Difference: $0.32
If VVR meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $2.44, suggesting upside of 20.4% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 14.00 cents and EPS of 14.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.0, implying annual growth of -41.2%. Current consensus DPS estimate is 14.0, implying a prospective dividend yield of 6.9%. Current consensus EPS estimate suggests the PER is 14.5. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 15.00 cents and EPS of 15.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.5, implying annual growth of 3.6%. Current consensus DPS estimate is 14.3, implying a prospective dividend yield of 7.0%. Current consensus EPS estimate suggests the PER is 14.0. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $45.11
Macquarie rates WES as No Rating (-1) -
Media articles signal Alteri Investors and Hilco have made offers for Homebase to Wesfarmers. Endless, a UK PE investor, is no longer in the running according to the speculation.
Macquarie still envisages that while the market will probably be pleased if significant closure costs are avoided, retention of the business is the most likely outcome because of limited saleability in its current state.
The broker is restricted on providing a rating and target at this stage.
Current Price is $45.11. Target price not assessed.
Current consensus price target is $41.98, suggesting downside of -6.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 216.50 cents and EPS of 250.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 232.0, implying annual growth of -8.9%. Current consensus DPS estimate is 215.5, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 19.4. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 245.50 cents and EPS of 272.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 253.0, implying annual growth of 9.1%. Current consensus DPS estimate is 220.0, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 17.8. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
WFD WESTFIELD CORPORATION
Infra & Property Developers
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Overnight Price: $8.79
Macquarie rates WFD as No Rating (-1) -
The company has held its AGM, which included a vote on the Unibail-Rodamco transaction. The transaction was approved and the last day of trading in Westfield on ASX will be May 30.
Macquarie is restricted on ratings and target.
Current Price is $8.79. Target price not assessed.
Current consensus price target is $9.58, suggesting upside of 9.0% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 33.53 cents and EPS of 42.42 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 44.5, implying annual growth of N/A. Current consensus DPS estimate is 33.9, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 19.8. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 34.17 cents and EPS of 44.62 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 48.6, implying annual growth of 9.2%. Current consensus DPS estimate is 29.8, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 18.1. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| ALL | ARISTOCRAT LEISURE | Buy - Citi | Overnight Price $30.04 |
| Upgrade to Outperform from Neutral - Credit Suisse | Overnight Price $30.04 | ||
| Buy - Deutsche Bank | Overnight Price $30.04 | ||
| Outperform - Macquarie | Overnight Price $30.04 | ||
| Equal-weight - Morgan Stanley | Overnight Price $30.04 | ||
| Add - Morgans | Overnight Price $30.04 | ||
| Accumulate - Ord Minnett | Overnight Price $30.04 | ||
| Buy - UBS | Overnight Price $30.04 | ||
| CSL | CSL | Outperform - Macquarie | Overnight Price $183.10 |
| DHG | DOMAIN HOLDINGS | Sell - Citi | Overnight Price $3.29 |
| EHL | EMECO | Add - Morgans | Overnight Price $0.34 |
| IEL | IDP EDUCATION | Hold - Ord Minnett | Overnight Price $8.77 |
| ORG | ORIGIN ENERGY | Outperform - Macquarie | Overnight Price $9.75 |
| Overweight - Morgan Stanley | Overnight Price $9.75 | ||
| OZL | OZ MINERALS | Neutral - UBS | Overnight Price $10.13 |
| REA | REA GROUP | Buy - Citi | Overnight Price $90.85 |
| RWC | RELIANCE WORLDWIDE | Upgrade to Hold from Sell - Deutsche Bank | Overnight Price $4.56 |
| No Rating - Macquarie | Overnight Price $4.56 | ||
| Upgrade to Add from Hold - Morgans | Overnight Price $4.56 | ||
| SOM | SOMNOMED | Hold - Morgans | Overnight Price $2.43 |
| TLS | TELSTRA CORP | Upgrade to Buy from Neutral - UBS | Overnight Price $2.79 |
| VVR | VIVA ENERGY REIT | Buy - Ord Minnett | Overnight Price $2.03 |
| WES | WESFARMERS | No Rating - Macquarie | Overnight Price $45.11 |
| WFD | WESTFIELD CORP | No Rating - Macquarie | Overnight Price $8.79 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 14 |
| 2. Accumulate | 1 |
| 3. Hold | 5 |
| 5. Sell | 1 |
Friday 25 May 2018
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the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe
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This document is provided for informational purposes only. It does not
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