Australian Broker Call

Morgan Stanley rates 3PL as Overweight (1) -

3P Learning's FY20 result did not surprise Morgan Stanley with revenue and operating income (EBITDA) slightly better than expected.

The company did not provide any guidance for the year ahead, but stated the focus will be on sales execution. An all-cash takeover offer from IXL Learning is regarded as a positive surprise. 

Morgan Stanley considers 3P Learning as a "compelling risk-reward play" with relatively cheap valuation and material upside potential. 

The broker maintains its Overweight rating with a target price of $1.10. Industry view: In-line.

Target price is $1.10 Current Price is $1.35 Difference: minus $0.25 (current price is over target).
If 3PL meets the Morgan Stanley target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgan Stanley rates AGL as Underweight (5) -

The next three years are expected to be challenging for AGL, states Morgan Stanley highlighting green shoots in the form of FY24 targets for carbon transition, customers and cross-sell.

The circa -$150m gas margin headwind in AGL's FY21 guidance surprised the broker who expected a ramp down rather than a cliff.

Investors will likely remain wary over the next 12-months, expects the broker, due to pool price backwardation and uncertainty from Portland smelter expiry in June 2021.

Morgan Stanley reiterates its Underweight rating with the target price decreasing to $14.14 from $15.68. Industry view: Cautious.

Target price is $14.14 Current Price is $15.32 Difference: minus $1.18 (current price is over target).
If AGL meets the Morgan Stanley target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.84, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.4

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

Ord Minnett rates ALU as Lighten (4) -

At face value, Ord Minnett notes today's released FY20 operational performance (EBITDA) is some 4% better than market consensus. The broker believes one-offs are responsible.

Gross operating cash flow missed the broker's forecast by some -12%. Management refrained from providing FY21 guidance, and stuck with its FY25 ambitions, albeit with caveats.

Ord Minnett had a Lighten rating and has now placed it under review.

Target price is $29.50 Current Price is $33.47 Difference: minus $3.97 (current price is over target).
If ALU meets the Ord Minnett target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.2

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

Ord Minnett rates AQR as Accumulate (2) -

APN Convenience Retail has announced the acquisition of three Coles ((COL)) Express sites in Queensland for a total of -$27.5m at an average cap rate of 6.3%.

Ord Minnett forecasts the acquisitions to be around 0.4% accretive to FY21 earnings and highlights the continued strength in the service station market.

The Accumulate rating is maintained and the target price is unchanged at $3.72.

Target price is $3.72 Current Price is $3.67 Difference: $0.05
If AQR meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Macquarie rates BBN as Outperform (1) -

FY20 net profit was in line with prior guidance. Macquarie notes trading accelerated through the second half because of elevated consumables demand.

The store network target has been upgraded to over 100 stores and an assessment of New Zealand is being undertaken.

While the pandemic presents some uncertainty, the outlook is considered very strong, as the first six weeks of the first half of FY21 have like-for-like sales up 20% despite a softening in Melbourne. Outperform retained. Target is $4.50.

Target price is $4.50 Current Price is $4.15 Difference: $0.35
If BBN meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $4.42, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgan Stanley rates BBN as Overweight (1) -

Baby Bunting Group's FY20 result, while pre-guided, impressed Morgan Stanley in terms of sales growth, particularly online sales. The broker is also impressed with the strong start to FY21.

The broker thinks the exceptional start to the year made providing guidance difficult. Earnings growth forecast upgraded for FY21-22.

On account of the group's potential expansion into New Zealand and a transformational program likely to lift margins, Morgan Stanley retains its Overweight rating with the target price increasing to $5.05 from $3.70. Industry view: In-line.

Target price is $5.05 Current Price is $4.15 Difference: $0.9
If BBN meets the Morgan Stanley target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $4.42, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates BBN as Add (1) -

Baby Bunting’s FY20 profit (NPAT) result demonstrated to Morgans another period of strong growth, with the dividend of 6.4 cents beating the Morgans forecast.

No FY21 guidance was provided by the company due to the uncertain environment caused by covid-19, however, the analyst points to continued strong demand.

The company maintained its long-term earnings (EBITDA) margin target of 10%, which Morgans states can be achieved via multiple avenues.

The company offers the highest growth profile in the broker’s retail coverage universe and continues to tick most boxes including balance sheet, defensive attributes, store growth potential, gross margin upside and operating expense leverage with scale.

The Add rating is maintained. The target price is increased to $4.51 from $3.79.

Target price is $4.51 Current Price is $4.15 Difference: $0.36
If BBN meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $4.42, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates BPT as Neutral (3) -

Judging from Macquarie's initial response, today's FY20 release by Beach Energy was slightly better-than-expected, for both Macquarie and market consensus.

One surprise came in the form of Beach Energy publicly commenting on its intentions to sell gas to the North West Shelf JV from its Waitsia project, highlights the broker.

Macquarie intends to stick with its Neutral rating and notes M&A remains the wild card for this company's outlook.

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

Current consensus price target is $1.84, suggesting upside of 16.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Ord Minnett rates BSL as Accumulate (2) -

In initial response to today's FY20 release, Ord Minnett observes key financial metrics all seem in line with expectations. Some of it had already been pre-released.

There is no share buyback, the analysts observe, with no concrete guidance given too much uncertainty. Ord Minnett does find BlueScope Steel's general commentary on volumes positive.

Target price is $15.00 Current Price is $12.07 Difference: $2.93
If BSL meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $12.53, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Morgan Stanley rates COH as Overweight (1) -

Cochlear will be reporting its FY20 result on August 18. Morgan Stanley does not expect any dividends. 

For FY21, the broker expects net profit (NPAT) to grow by 95% to $234m led by restarting cochlear implant (CI) surgeries, new product launches and adoption of remote patient monitoring tools.

Morgan Stanley rates the stock as Overweight with the target price increasing to $211 from $208. Industry view: In-line.

Target price is $211.00 Current Price is $199.77 Difference: $11.23
If COH meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $187.04, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Credit Suisse rates CQR as Outperform (1) -

FY20 results were largely in line with Credit Suisse forecasts. As gearing is at the lower end of the target, the company can undertake further debt-funded acquisitions to drive growth.

Nevertheless, while this provides upside for earnings, Credit Suisse is aware that some investors may not be so impressed with the increased use of geared investments to generate growth.

The broker considers the company's earnings defensive and retains an Outperform rating. Target is raised to $3.48 from $3.41.

Target price is $3.48 Current Price is $3.25 Difference: $0.23
If CQR meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.37, suggesting upside of 3.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Credit Suisse rates DMP as Underperform (5) -

Credit Suisse observes the company's franchisees have coped with the pandemic with varying degrees of success, while franchisee subsidies and a low rate of new store openings may lead to relatively low profit leverage on sales revenue growth.

The broker considers the stock expensive and retains an Underperform rating. After revising valuation assumptions, the target is raised to $53.19 from $51.86. Domino's Pizza will report its results on August 19.

Target price is $53.19 Current Price is $76.28 Difference: minus $23.09 (current price is over target).
If DMP meets the Credit Suisse target it will return approximately minus 30% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $61.50, suggesting downside of -17.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.4

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

Ord Minnett rates EVN as Sell (5) -

Evolution Mining reported an underlying net profit of $405m (excluding the -$101m Mt Carlton impairment) which was -4% below Ord Minnett's forecast.

The broker believes the company's optionality has increased due to the larger, higher-grade and near-surface resource announcement for Red Lake. Despite this, the result and three year guidance leads the broker to lower earnings forecasts by -5% in FY21 and -10% in FY22.

Ord Minnett continues to have questions around the medium-term production profile and what the value of the rest of the profile will be in about five years time.

The Sell rating is maintained. The target price is decreased to $4.20 from $4.30.

Target price is $4.20 Current Price is $6.09 Difference: minus $1.89 (current price is over target).
If EVN meets the Ord Minnett target it will return approximately minus 31% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.88, suggesting downside of -20.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.7

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

UBS rates FLT as Buy (1) -

Flight Centre has guided to a FY20 loss before tax of -$475-525m. UBS is pleased with the less than expected monthly cash burn in July.

The broker considers the company to have adequate liquidity and forecasts a full recovery in total transaction value by end of FY23.

Near term is a different story as with the dividend suspended and uncertainty on restrictions, the broker sees few catalysts.   

Buy rating maintained. Target is reduced to $15.10 from $16.60.

Target price is $15.10 Current Price is $12.22 Difference: $2.88
If FLT meets the UBS target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $13.47, suggesting upside of 12.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Citi rates GWA as Neutral (3) -

Upon initial glance, GWA Group's FY20 performance missed both Citi's and market consensus expectations. It seems lockdowns in New Zealand and the UK are to blame.

The final fully franked dividend of 3.5c is equally below consensus expectations of 5.4c per share, point out the analysts.

Citi notes the company is working hard to deliver cost savings given the challenging outlook ahead, but also that construction activity is expected to slow in 2H21 in all end-markets. Neutral rating retained.

Target price is $2.90 Current Price is $2.76 Difference: $0.14
If GWA meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $2.91, suggesting upside of 17.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

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

Ord Minnett increases estimates by 2% for FY20 and 8% for FY21. Retailer success is considered a result of lower expenditure in other consumption categories and this should drive solid results when the company reports on August 28.

The broker upgrades to Accumulate from Hold as Harvey Norman is likely to benefit from operating leverage and housing. Target is raised to $4.75 from $3.85.

Target price is $4.75 Current Price is $4.10 Difference: $0.65
If HVN meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $4.30, suggesting upside of 1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Credit Suisse rates ILU as Outperform (1) -

The first half result was considered "clean" but without much to review and Credit Suisse highlights the upcoming catalysts, including the spin-out of the MAC royalty.

The broker notes, prudently, the dividend has been scrapped, although market commentary remained consistent with the June quarter.

Outperform rating and $10 target maintained.

Target price is $10.00 Current Price is $9.60 Difference: $0.4
If ILU meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $9.69, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Macquarie rates ILU as No Rating (-1) -

First half results were mixed although generally in line, Macquarie observes, while cash flow had been previously disclosed.

The de-merger of the Mining Area C (MAC) royalty will be named Deterra Royalties and a shareholder vote is expected in October.

Macquarie reduces 2020 earnings estimates by -9% but lifts 2021 and 2022 by 5% and 1%, respectively.

The broker is restricted on research and cannot provide a rating or target at present.

Current Price is $9.60. Target price not assessed.

Current consensus price target is $9.69, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Morgan Stanley rates ILU as Overweight (1) -

Iluka Resources' first half group operating income was about 7% ahead of Morgan Stanley estimates while net profit was below expectations. 

The miner will be increasing retained ownership of the MAC royalty business to 20% from 15% due to covid-19 led uncertainties. The demerged entity will be named Deterra Royalties.

Morgan Stanley does not expect the increased ownership will impact the premium paid by the market. The miner did not announce any dividend, which is in-line with the broker's expectation. Balranald results will be declared in September

Morgan Stanley retains its Overweight rating with a target price of $9.90. Industry view: Attractive.

Target price is $9.90 Current Price is $9.60 Difference: $0.3
If ILU meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $9.69, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Ord Minnett rates ILU as Hold (3) -

First half earnings were ahead of Ord Minnett's forecasts. Cash generation was low, despite deferred capital expenditure. No interim dividend was declared.

The broker believes detail on the Deterra Royalties structure and the outlook for the remaining mineral sands business will be key value drivers for the stock.

Iluka has decided to retain 20%, not 15%, of Deterra Royalties which causes the broker to ponder whether the de-merger should occur at all.

Ord Minnett retains a Hold rating and raises the target to $9.10 from $8.90.

Target price is $9.10 Current Price is $9.60 Difference: minus $0.5 (current price is over target).
If ILU meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.69, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

UBS rates ILU as Neutral (3) -

Iluka Resources’ interim result was mostly in-line and while UBS is surprised the company did not announce any dividends, the broker considers it prudent. An update on the MAC royalty demerger notes the booklet is expected in September with a vote by the end of October. 

UBS considers the market for high-grade feedstock and zircon to be stabilising but notes the miner remains cautious on the outlook due to the risk of secondary lockdowns.

UBS retains its Neutral rating with a target price of $10.

Target price is $10.00 Current Price is $9.60 Difference: $0.4
If ILU meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $9.69, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Citi rates JBH as Neutral (3) -

Upon initial assessment, Citi finds JB Hi-Fi's FY20 report surprised on the upside with market consensus at lower profits and expecting a lower dividend.

Gross margin contraction is seen as a negative, but sales momentum is exceptionally strong. Citi anticipates consensus forecasts are set to rise by circa 5% post today's release.

The broker sticks with its Sell rating and $42.10 price target.

Target price is $42.10 Current Price is $47.33 Difference: minus $5.23 (current price is over target).
If JBH meets the Citi target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $41.99, suggesting downside of -15.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Macquarie rates JBH as Neutral (3) -

In an initial response to today's released FY20, Macquarie analysts believe JB Hi-Fi's performance is stronger than expected, with very strong momentum in July, which, the analysts surmise, won't be sustained.

No guidance was provided.

Target price is $41.00 Current Price is $47.33 Difference: minus $6.33 (current price is over target).
If JBH meets the Macquarie target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $41.99, suggesting downside of -15.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Ord Minnett rates JBH as Hold (3) -

It appears, upon first assessment, today's FY20 release by JB Hi-Fi slightly missed Ord Minnett's expectations on most items, but the broker maintains this is yet another strong performance.

No guidance is provided. The broker notes August sales momentum remains strong, while Melbourne is in lockdown.

Separately, the broker has used a general sector preview to lift its target to $46 from $44.

Target price is $46.00 Current Price is $47.33 Difference: minus $1.33 (current price is over target).
If JBH meets the Ord Minnett target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $41.99, suggesting downside of -15.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Macquarie rates LLC as Outperform (1) -

Lendlease had pre-announced FY20 financials, and today's official release is in line with the earlier signals, comment Macquarie analysts in an initial response.

Macquarie is prepared to stick with its Outperform rating, while noting uncertainty remains with Lendlease's EPS to remain under pressure in the short term.

Target price is $14.24 Current Price is $11.52 Difference: $2.72
If LLC meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $14.16, suggesting upside of 21.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Credit Suisse rates MTS as Upgrade to Outperform from Neutral (1) -

Macro factors are expected to support expenditure on food retail. Metcash is also expected to experience mid-high single digit sales growth.

Credit Suisse expects shopping behaviour will become more localised over the short term, benefiting independent food stores.

Housing-related expenditure is a potential cyclical headwind for hardware, but that risk is expected to become more obvious in 2021-22.

Rating is upgraded to Outperform from Neutral and the target raised to $3.47 from $3.07. A trading update is expected at the AGM on August 26.

Target price is $3.47 Current Price is $3.04 Difference: $0.43
If MTS meets the Credit Suisse target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $3.25, suggesting upside of 8.3% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Credit Suisse rates NAB as Outperform (1) -

Credit Suisse increases second half estimates following the trading update.

The bank has indicated it had $58bn of loan deferrals as of June 30, 2020 and since that time a decline in housing deferrals has been observed while business deferrals remain stable.

Estimates for FY21 and FY22 have been lowered by -3% to reflect higher costs. Outperform rating and $21.30 target maintained.

Target price is $21.30 Current Price is $18.22 Difference: $3.08
If NAB meets the Credit Suisse target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $20.31, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Macquarie rates NAB as Underperform (5) -

Macquarie struggles to recall when the bank has surprised to the extent National Australia Bank did with its quarterly update. A beat on revenue estimates was driven entirely by volatile markets and trading income.

However, management has reiterated that cost reductions in the current environment appear unrealistic. Hence, the broker envisages limited scope for outperformance over the next 12 months. Underperform rating retained. Target is $17.50.

Target price is $17.50 Current Price is $18.22 Difference: minus $0.72 (current price is over target).
If NAB meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.31, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

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

National Australia Bank’s third-quarter cash profit rose to circa $1.55bn (ex notable items), ahead of Morgan Stanley's expected circa $1.2bn. If collective provisions and income from treasury and markets are excluded, the profit was about -3% below the broker's forecast. 

The margins were broadly stable but the bank expects a decline in the second half. The bank also admits achieving cost target for FY20 will be "increasingly challenging". The broker notes deteriorating retail asset quality and re-ratings across non-retail exposures. 

Morgan Stanley reiterates its Equal-weight rating with a target price of $18. Industry view: In-line.

Target price is $18.00 Current Price is $18.22 Difference: minus $0.22 (current price is over target).
If NAB meets the Morgan Stanley target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.31, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Morgans rates NAB as Add (1) -

National Australia Bank's unaudited third quarter cash earnings of $1.55bn are better than Morgans expected, largely due to a quicker recovery in Markets & Treasury income.

Revenue increased by 10% from the first half to the second quarter on a run-rate basis, and this appears to be the key reason why the third quarter cash earnings were stronger than expected, says the broker.

The analyst increases the FY20 cost growth forecast to 2% from 1% and upgrades cash EPS forecasts by 3%, 2% and 0.5% for FY20, FY21 and FY22, respectively.

The Add rating is maintained. The target price is increased to $20.5 from $20.

Target price is $20.50 Current Price is $18.22 Difference: $2.28
If NAB meets the Morgans target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $20.31, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Ord Minnett rates NAB as Accumulate (2) -

Cash earnings in the third quarter were up 24%, with Ord Minnett noting a number of similar trends to those of Commonwealth Bank ((CBA)) at its results, including revenue and cost pressure.

However, markets income for National Australia Bank rebounded very strongly and drove all revenue growth in the quarter.

The broker acknowledges the bank will experience higher credit costs compared with its peers in the current downturn and this is factored into forecasts.

Accumulate rating retained. Target is reduced to $20.90 from $21.00.

Target price is $20.90 Current Price is $18.22 Difference: $2.68
If NAB meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $20.31, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

UBS rates NAB as Buy (1) -

National Australia Bank's third-quarter cash net profit was slightly better than expected due to higher trading income. Revenue grew by 10% on account of a recovery in markets and treasury income, reports UBS. 

The bank is finding it increasingly challenging to keep its FY20 expenses flat and expects covid-19 related costs to continue into FY21. Credit impairment charges were slightly higher than expected and will likely increase in the fourth quarter, expects the broker. 

The bank's decision to remain focused on its balance sheet rather than near term earnings is considered prudent given the current environment.

UBS maintains its Buy rating with a target price of $20.50.

Target price is $20.50 Current Price is $18.22 Difference: $2.28
If NAB meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $20.31, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Citi rates NCM as Neutral (3) -

Citi downgrades the outlook for Lihir but expects grades will lift later in the mine life. Underlying profit in FY20 was up 34% and ahead of Citi's estimates.

FY21 guidance is for gold production of 1.95-2.15m ounces with an all-in sustainable cost at the mid point around US$915/oz. Copper production is expected to be 135-155,000t. All up, Citi notes there is less metal than in FY19, and at higher costs.

The broker retains a Neutral rating and reduces the target to $37 and $38.

Target price is $37.00 Current Price is $34.16 Difference: $2.84
If NCM meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $34.81, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.1

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

Credit Suisse rates NCM as Neutral (3) -

Net profit beat estimates in FY20. The dividend was also better than Credit Suisse expected.

While guidance is largely in line with expectations, Credit Suisse is disappointed that challenges at Lihir are likely to continue beyond the current year and push back the ever elusive target of 1m ozpa.

On a longer-term view the broker finds a lot to like. Neutral retained. Target is $35.30.

Target price is $35.30 Current Price is $34.16 Difference: $1.14
If NCM meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $34.81, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.1

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

Macquarie rates NCM as Underperform (5) -

FY20 results were better than Macquarie expected and the quantum of the 17.5c final dividend was a surprise. Guidance for FY21 is broadly in line with expectations despite the big reduction at Lihir as higher production at Cadia and Fruta del Norte more than compensate.

The broker continues to downgrade Lihir production into FY22 and, in combination with lower Cadia production, this drives a -7% cut to earnings estimates. Underperform rating and $28 target maintained.

Target price is $28.00 Current Price is $34.16 Difference: minus $6.16 (current price is over target).
If NCM meets the Macquarie target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $34.81, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.1

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

Morgan Stanley rates NCM as Overweight (1) -

Newcrest Mining's FY20 result was strong across earnings and cash flow, observes Morgan Stanley. FY20 dividend was 28% above Morgan Stanley estimates.

FY21 guidance is weak with production circa -7% below estimate and higher capex. Lihir continues to suffer from higher stockpiled ores, highlights the broker, while production at Cadia is expected to be lower despite the mill shutdown being delayed to FY22. 

Morgan Stanley maintains its Overweight rating with a target price of $36.60. Industry view: Attractive.

Target price is $36.60 Current Price is $34.16 Difference: $2.44
If NCM meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $34.81, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.1

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

Morgans rates NCM as Hold (3) -

Morgans describes Newcrest Mining's FY20 result as steady, but says Lihir's outlook disappointed and questions whether Lihir will ever post a consistent performance. FY21 guidance for Lihir points to both an unexpected drop in grade and mill recoveries, explains the broker.

Strength in the gold price, a generally weaker Australian dollar and a late surge in copper prices, helped to offset a mixed year in volume terms for the company overall, according to Morgans.

FY20 earnings (EBITDA) were 8% ahead of estimates by the analyst, while the underlying profit (NPAT) of US$750m allowed for a final dividend of US$0.17. This exceeded the Morgans forecast dividend of US$0.10.

The broker maintains a Hold rating and expects ongoing strength in gold prices to support an improved earnings outlook. The target price is increased to $34.30 from $31.46.

Target price is $34.30 Current Price is $34.16 Difference: $0.14
If NCM meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $34.81, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.1

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

Ord Minnett rates NCM as Hold (3) -

Ord Minnett believes guidance overshadowed a good FY20 result, which was ahead of forecasts. The broker reduces production forecasts by -11% and lowers earnings estimates for FY21 by -20%.

The broker looks forward to the focus returning to growth projects such as Havieron and Red Chris. A Hold rating is retained and the target trimmed to $34 from $35.

Target price is $34.00 Current Price is $34.16 Difference: minus $0.16 (current price is over target).
If NCM meets the Ord Minnett target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $34.81, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.1

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

UBS rates NCM as Buy (1) -

Newcrest Mining's FY21 guidance was weaker than expected, observes UBS, driven by Lihir where production is still being impacted by clay in the mining sequence. The company expects this to persist till early FY22.

UBS notes the miner has a strong pipeline of growth projects which will diversify the company away from the troubled asset. The broker highlights Havieron and Red Chris here, expecting to see positive milestones with respect to both.

UBS maintains its Buy rating driven by upside from both Havieron and Red Chris. Target decreases to $38.50 from $40.60.

Target price is $38.50 Current Price is $34.16 Difference: $4.34
If NCM meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $34.81, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.1

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

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

Premier Investments has executed well through the pandemic, comments Morgan Stanley, as seen by the retailer's pre-guided FY20 sales figures which are materially ahead of the broker's estimates. 

The retailer has guided to FY20 operating income of $184.8-185.8m, 65% ahead of the broker's forecast.

The retailer has navigated a tough period exceptionally well but also cut costs and footprint and the broker feels the retailer needs to increase its visibility.  

Morgan Stanley reiterates its Equal-weight rating with the target price increasing to $17.40 from $14. Industry view: In-Line.

Target price is $17.40 Current Price is $18.07 Difference: minus $0.67 (current price is over target).
If PMV 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 $18.85, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

UBS rates PMV as Buy (1) -

Premier Investments provided a strong FY20 update with operating income (EBIT) guidance circa 30% ahead of UBS estimate, implying second-half growth of circa 11%.

UBS notes most drivers like JobKeeper and rent are unsustainable and highlights near term risks. The broker also acknowledges Premier Investments is one of the best-placed discretionary retailers to capitalise on.

Earnings forecasts for FY20-21 increased. Buy rating maintained. Target is increased to $19.30 from $17.15.

Target price is $19.30 Current Price is $18.07 Difference: $1.23
If PMV meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $18.85, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Morgan Stanley rates QBE as Overweight (1) -

QBE Insurance's first-half result shows more certainty on the second half's catastrophe losses, business interruption claims and reinsurance covers, observes Morgan Stanley. 

The broker expects future US$265m covid-19 claims to be booked further out.

Overweight retained. Target increases to $12.75 from $12.50. Industry view: In-line.

Target price is $12.75 Current Price is $10.98 Difference: $1.77
If QBE meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $11.45, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Ord Minnett rates SHL as Hold (3) -

Sonic Healthcare is due to report its FY20 result on Thursday, August 20 and Ord Minnett forecasts underlying operating earnings (EBITDA) of $1.07bn.

The broker estimates earnings will comfortably exceed consensus estimates.

The Hold rating is maintained and the target price is unchanged at $32.

Target price is $32.00 Current Price is $34.03 Difference: minus $2.03 (current price is over target).
If SHL 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 $31.23, suggesting downside of -6.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Macquarie rates SLK as Outperform (1) -

If Sealink Travel is not awarded the renewal of the Bulim contract in Singapore, Macquarie estimates this will represent a -$16m operating earnings (EBITDA) loss per annum.

Still the broker takes comfort in the track record of the company's transit systems in terms of contract renewals to date. Moreover, the pipeline of opportunities may replace potential earnings losses. Outperform rating and $5.02 target maintained.

Target price is $5.02 Current Price is $4.35 Difference: $0.67
If SLK meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Morgans rates SYD as Add (1) -

Sydney Airport Holdings announced a $2bn capital raising as well as the release of its first half results. 

Earnings (EBITDA) were down -53% on the previous corresponding period and reported revenue ex security declined -29%. Free cashflow was -$85m less than Morgans expected as the broker thought capital expenditure of -$182m would be reigned in quicker.

The company is raising capital at $4.56 per share via a 1 for 5.15 entitlement offer (with rights trading for retail investors). The broker explains while the raising is value dilutive, it will increase the company's flexibility to deal with covid-19 and to fund growth opportunities.

No distribution will be paid in FY20 and the broker doesn't think one will be paid until early 2023 and that still depends on an earnings recovery.

The Add rating is maintained. The target price is decreased to $6.56 from $7.11.

Target price is $6.56 Current Price is $5.31 Difference: $1.25
If SYD meets the Morgans target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $5.75, suggesting upside of 6.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Morgan Stanley rates TLS as Underweight (5) -

Morgan Stanley is of the view Telstra can create shareholder value by spinning out its infrastructure assets depending on the price for the sale of InfraCo. 

However, the company stated in a briefing there are no plans to sell Mobile Towers and no decision has been made to separate InfraCo yet.

Underweight rating retained. Target price is $3. Industry view: In-Line.

Target price is $3.00 Current Price is $3.11 Difference: minus $0.11 (current price is over target).
If TLS 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 $3.45, suggesting upside of 12.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Ord Minnett rates TLS as Downgrade to Hold from Accumulate (3) -

FY20 net profit was down -14.4% while underlying operating earnings (EBITDA) increased 11.5%. Ord Minnett makes material reductions to forecasts based on the FY20 financials and FY21 guidance and also transfers coverage to another analyst.

The broker's review highlights significant structural challenges and the dividend yield is not considered overly compelling. Rating is downgraded to Hold from Accumulate and the target lowered to $3.40 from $4.10.

Target price is $3.40 Current Price is $3.11 Difference: $0.29
If TLS meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.45, suggesting upside of 12.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Credit Suisse rates WES as Neutral (3) -

Credit Suisse expects the company's retail market position and solid trading through the fourth quarter will support the FY20 results, due on August 20.

As the Target/Kmart strategy continues to develop, the broker envisages diminishing downside risks to the value of Kmart Group. However, linking of Catch with these businesses is potentially providing an additional engine of growth.

Meanwhile, the industrials performance is likely to be influenced by a range of factors. Neutral rating retained. Target rises to $44.47 from $38.25.

Target price is $44.47 Current Price is $47.61 Difference: minus $3.14 (current price is over target).
If WES meets the Credit Suisse target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $41.65, suggesting downside of -12.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Ord Minnett rates WPR as Buy (1) -

Waypoint REIT upgraded FY20 distributable earnings guidance to 4%-4.25% growth from 3%-3.75% growth and impressed Ord Minnett, considering the current environment.

The upgrade to growth was on the back of the completion of its capital management initiatives and review of operating expenses, according to the broker.

The analyst believes the Trust offers attractive value with a FY21 distribution yield of 6.1%.

The Buy rating is maintained and the target price is unchanged at $2.95.

Target price is $2.95 Current Price is $2.60 Difference: $0.35
If WPR meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $2.70, suggesting upside of 3.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Ord Minnett rates XRO as Lighten (4) -

Xero surprised Ord Minnett with a mid-period update on subscriber numbers at its AGM.

In the first four months of the current half, the company added 96,000 net subscribers. The broker estimates first half net additions could end up lower than this run-rate suggests, due to seasonality.

The Lighten rating is maintained. The target price is unchanged at $60.

Target price is $60.00 Current Price is $94.13 Difference: minus $34.13 (current price is over target).
If XRO meets the Ord Minnett target it will return approximately minus 36% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $77.25, suggesting downside of -15.9% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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