Australian Broker Call

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

AGL Energy has acquired Click for around $155m. Macquarie observes Click offers limited strategic value as customers are spread across the eastern seaboard where AGL Energy already has a good position.

Churn in this group is naturally higher and the credit risk is elevated, the broker adds. Nevertheless, this is a low-risk acquisition that provides operating earnings upside of around $30m, funded with cash.

Macquarie observes cyclical pressure on the share price has peaked and upgrades to Neutral from Underperform. The target is lifted to $14.98 from $14.65.

Target price is $14.98 Current Price is $14.80 Difference: $0.18
If AGL meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $15.04, suggesting upside of 0.7% (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

Ord Minnett rates AGL as Accumulate (2) -

AGL Energy will acquire Click Energy for $115m. Ord Minnett suggests this is a sign of consolidation potential in the energy retailing segment that is a positive for large incumbents.

The acquisition increases net profit forecasts by 3-5% and Ord Minnett maintains an Accumulate rating. Target rises to $18.00 from $17.30.

Target price is $18.00 Current Price is $14.80 Difference: $3.2
If AGL meets the Ord Minnett target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $15.04, suggesting upside of 0.7% (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

UBS rates AGL as Neutral (3) -

AGL Energy will be acquiring Amaysim's Click Energy business for $115m. UBS estimates the transaction to be 1-3% earnings accretive and will help the company in scaling up its retail operations to 4.5m customers by FY24.

On the flip side, the broker expects earnings forecast to decline -18% per annum through FY21-23 given its exposure to lower wholesale electricity prices.

UBS analysts note there is a risk Click Energy's earnings base may decline from customers churn and have thus not factored synergies from the acquisition at this stage.

UBS maintains a Neutral rating. Target is increased to $15.60 from $15.25.

Target price is $15.60 Current Price is $14.80 Difference: $0.8
If AGL meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $15.04, suggesting upside of 0.7% (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 AMC as Neutral (3) -

Credit Suisse refines forecasts, noting new disclosures in the annual report. Organic operating earnings growth for the flexibles division has been confirmed at 2-3%. This is lower than the broker was modelling and causes a slight downgrade to estimates.

Still, Credit Suisse is encouraged that the flexibles division is growing organically and not simply sourcing growth from synergy.

Elsewhere, the broker observes North American earnings for more stable and Latin American profitability may swing sharply upwards as these economies recover. Neutral retained. Target is reduced to $15.50 from $16.10.

Target price is $15.50 Current Price is $15.15 Difference: $0.35
If AMC meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $16.89, suggesting upside of 13.5% (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: 0.6

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

Citi rates APT as Neutral (3) -

Citi takes a fresh look at Afterpay and states while the company's growth outlook is solid and there are upside risks to the broker's forecasts, valuation is stretched at current levels. The analyst sees this as a reflection of the recent increase in market multiples for technology/FinTech stocks.

The broker expects the focus to shift to operating metrics, and sees execution as key as the company enters into multiple new markets at the same time.

In a separate note, Citi highlights PayPal in the US has announced a similar product to Afterpay called 'Pay in 4'.

The broker states the key risk is PayPal's network and its almost ubiquitous presence. While the analyst sees potential for two to three BNPL players to coexist, it is a winner takes most market. Additionally, merchant fees could come under pressure and Cit sees upside risk to the level of investment required on co-marketing and product marketing.

Citi states the impact is lessened by Afterpay having a large consumer and merchant network. Additionally, it's strong balance sheet gives it flexibility to step up investment.

The Neutral rating is maintained. The target price is increased to $92.50 from $72.20.

Target price is $92.50 Current Price is $91.44 Difference: $1.06
If APT meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $81.72, suggesting downside of -2.6% (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

Morgans rates ATL as Hold (3) -

The FY20 result for Apollo Tourism & Leisure reflected the significant impacts of covid-19 and the bushfires, with fourth quarter revenue down -94% year-on-year.

The broker notes the company remains focused on growing its revenues from domestic travel, however, this is unlikely to fully offset the significant impact of international travel restrictions. Nonetheless, the company believes it has sufficient liquidity to trade through a prolonged covid-19 downturn.

Morgans lowers EPS forecasts materially to reflect the lower FY20 result and likelihood of continued losses in FY21.

The Hold rating is maintained and the target price is decreased to $0.291 from $0.336.

Target price is $0.29 Current Price is $0.27 Difference: $0.021
If ATL meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Macquarie rates AYS as Outperform (1) -

FY20 earnings were ahead of guidance. Both mobile and energy contributed to the outperformance compared with Macquarie's numbers. No FY21 guidance was provided.

The company has commenced a competitive tender process for its mobile NSA, expected to be completed no later than June 2021.

The sale of the energy business will complete a full circle, the broker observes, as amaysim Australia returns to a pure-play mobile operator. The sale is due for completion on September 30.

Target is raised to $1.00 from $0.64. Outperform maintained.

Target price is $1.00 Current Price is $0.71 Difference: $0.29
If AYS meets the Macquarie target it will return approximately 41% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

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

Boral has reiterated it does not plan an equity raising and will prioritise other avenues for repairing the balance sheet. The intention is to maximise the value of the asset base via optimisation and divestment.

An asset sale is likely, in Morgan Stanley's view, but may not be necessary if Boral can deliver improved earnings. While an equity raising is still possible, the broker acknowledges the option will be used as a last resort.

Equal-weight rating. Target is $4.40. Industry view is Cautious.

Target price is $4.40 Current Price is $4.01 Difference: $0.39
If BLD meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $4.07, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Citi rates BUB as Neutral (3) -

Bubs Australia announced an aspirational goal of $400m in revenue by 2025, which is three times the current Citi forecast. However, the broker explains this target will not be easy to attain given long-term headwinds including domestic Chinese brand resurgence, regulatory uncertainty and geopolitical risks.

The company also outlined an aspirational gross margin goal of 40% by FY25, which the broker does not see as unreasonable.

Citi makes minor earnings adjustments to reflect a greater weighting of growth to the second half FY21, given the ongoing daigou channel pressure in the first half.

The Neutral rating is maintained and the target price is decreased to $0.92 from $1.

Target price is $0.92 Current Price is $0.92 Difference: $0
If BUB meets the Citi target it will return approximately 0% (excluding dividends, fees and charges).

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 COE as Neutral (3) -

FY20 underlying operating earnings were in line. Credit Suisse assesses the valuation is now dependent on the plant performance at Orbost. The broker does not have a particularly good insight into when, or if, Orbost reaches nameplate.

Credit Suisse also assesses the likelihood Cooper Energy could be a takeover target if other industry participants have confidence in Orbost and the synergy potential.

The broker retains a Neutral rating and prefers to remain on the sidelines until there is greater clarity. Target is reduced to $0.33 from $0.40.

Target price is $0.33 Current Price is $0.33 Difference: $0
If COE meets the Credit Suisse target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $0.44, suggesting upside of 26.4% (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

Macquarie rates COE as Neutral (3) -

FY20 earnings were softer than Macquarie expected. Orbost will run at limited capacity and will shut down again in November to reconfigure absorbers.

Management has confirmed it is in the process of arranging extensions to its repayment profile which Macquarie assumes comes at a cost, although considers this prudent given the uncertainty that surrounds the Sole gas ramp up.

As the stock has pulled back the broker believes the risk/reward is looking more skewed to the upside, although it may be more than three months before the market appreciates the results of the absorber reconfiguration. Neutral retained. Target is reduced to $0.36 from $0.44.

Target price is $0.36 Current Price is $0.33 Difference: $0.03
If COE meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $0.44, suggesting upside of 26.4% (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 COE as Accumulate (2) -

Cooper Energy suffered a net loss of -$6.6m, versus Ord Minnett’s expectation of a small profit.

The broker notes issues at the Orbost plant are weighing heavily on the company’s share price and until the company can sell gas on contract prices, the broker feels the stock will trade at a discount to full value. The broker remains positive on the company due to its valuation and exposure to east coast gas prices.

Accumulate recommendation maintained with the target price reduced to $0.58 from $0.62.

Target price is $0.58 Current Price is $0.33 Difference: $0.25
If COE meets the Ord Minnett target it will return approximately 76% (excluding dividends, fees and charges).

Current consensus price target is $0.44, suggesting upside of 26.4% (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

Citi rates EVT as Neutral (3) -

Citi was not surprised by material weakness in cinemas and hotels, revealed in the FY20 result for Event Hospitality and Entertainment.

Underlying profit was -34% below consensus. The broker highlights some negatives including -$63m of impairments and write-offs due to covid-19 impacts and net debt increased to $421m, with facilities increased to $750m. Additionally, property earnings were -11% below the analyst's forecast due to provisions for rent receivables. Positive takeaways included Hotel earnings exceeding the broker's estimates and a stronger operating cashflow than anticipated.

No quantitative outlook was provided by management for FY21.

The Neutral rating and target price of $9.75 are retained. The broker awaits further details from the company conference call.

Target price is $9.75 Current Price is $8.31 Difference: $1.44
If EVT meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).

Market Sentiment: 0.5

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

UBS rates FPH as Sell (5) -

Fisher and Paykel Healthcare Corp sees home respiratory as a major opportunity to double its revenue over the medium term. UBS considers Resmed's ((RMD)) entry in this segment (via its product Lumis HFT) as an endorsement of the market opportunity.

The broker notes even growing strongly, home high-flow nasal cannula therapy (HFNC) sales for the company are a small part of its homecare division. UBS believes wider reimbursement across US and Europe is essential to full commercialisation.

UBS reaffirms its Sell rating with a target price of NZ$20.20.

Current Price is $33.54. Target price not assessed.

Current consensus price target is N/A

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: -0.5

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

Morgans rates GDG as Add (1) -

The FY20 underlying profit for Generation Development Group was in-line with consensus, according to Morgans.

The broker calculates a similar level of FUM growth for FY21 as for FY20, based on management guiding to similar sales growth for both years.

Morgans believes the company remains well positioned to deliver a compound earnings growth story over time.

The Add rating is maintained and the target price is increased to $0.94 from $0.829.

Target price is $0.94 Current Price is $0.78 Difference: $0.16
If GDG meets the Morgans target it will return approximately 21% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates IAG as Upgrade to Outperform from Neutral (1) -

Macquarie believes concerns about the potential for a new CEO to re-base earnings are overdone and business interruption losses are over estimated.

The broker calculates probable business interruption losses at -$125m but estimates, at current levels, the market is pricing in a -$1.9bn loss post reinsurance for Insurance Australia Group, which is considered highly unlikely.

 The broker believes the valuation has finally become attractive and upgrades to Outperform from Neutral. Target is $5.50.

Target price is $5.50 Current Price is $4.77 Difference: $0.73
If IAG meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $5.89, suggesting upside of 22.7% (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

Credit Suisse rates IFL as Outperform (1) -

FY20 underlying net profit was down -35% yet in line with Credit Suisse estimates. IOOF has announced a significant equity raising and the acquisition of MLC Wealth for $1.4bn. The deal will be funded 72% by equity and 28% by debt.

This is a long-dated deal with approval likely to take up to 10 months and full integration a further three years. Credit Suisse downgrades FY21 estimates by -40% to account for the equity raising, noting the mismatch with the closure of the deal.

The target is reduced to $5.00 from $5.50. The share price is expected to be volatile as debate continues about the merits of the acquisition. Nevertheless, there is significant valuation upside and the broker retains an Outperform rating.

Target price is $5.00 Current Price is $4.63 Difference: $0.37
If IFL meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $4.78, suggesting upside of 3.1% (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

Macquarie rates IFL as No Rating (-1) -

FY20 results were in line with previously reported ranges. IOOF is acquiring MLC Wealth which is expected to be more than 20% accretive post synergies.

The acquisition will be funded with $1.04bn of new equity, $250m of debt, a $200m subordinated loan to National Australia Bank and $40m of existing cash.

Macquarie notes the operating environment is challenging and margin pressures persist across all divisions. The broker is on research restrictions and cannot provide a rating or target at present.

Current Price is $4.63. Target price not assessed.

Current consensus price target is $4.78, suggesting upside of 3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

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

IOOF will buy MLC Wealth from National Australia Bank Bank ((NAB)). Morgan Stanley notes this is a large deal with compelling synergies, although there are some execution risks as IOOF needs to turn around the MLC outflows.

Nevertheless, IOOF has a strong track record of prior merger integration, albeit the broker notes it is still integrating the ANZ acquisition.

Morgan Stanley is currently restricted on rating and target. Industry view: In-Line.

Current Price is $4.63. Target price not assessed.

Current consensus price target is $4.78, suggesting upside of 3.1% (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

Ord Minnett rates IFL as Hold (3) -

Ord Minnett notes IOOF Holdings' pre-guided FY20 result showed margin pressure in the platforms and advice business. The net profit was in-line with the broker's forecast. A final dividend of 11.5c was declared which takes the full-year payout to 27.5cps, slightly below its 29c estimate.

The company will be acquiring National Australia Bank's ((NAB)) MLC Wealth business. The broker notes the deal to be EPS accretive and believes the market will react to it favourably.

Ord Minnett retains its Hold recommendation with the target price lowered to $4.60 from $5.00.

Target price is $4.60 Current Price is $4.63 Difference: minus $0.03 (current price is over target).
If IFL meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.78, suggesting upside of 3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

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

Morgan Stanley assesses Inghams has navigated the second half changes to channels and demand better than expected. The broker assumes there will be benefits from the non-recurrence of processing inefficiencies that were experienced in the first quarter of FY20.

Feed costs remain elevated but the company has noted more favourable cropping conditions, although there is a typical lag within the supply chain and the benefits are only likely to be evident from FY22.

Equal-weight rating. Target is reduced to $3.50 from $3.60. Industry view: Cautious.

Target price is $3.50 Current Price is $3.22 Difference: $0.28
If ING meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.60, suggesting upside of 13.3% (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

Citi rates LLC as Buy (1) -

The strategy briefing from Lendlease was in line with what Citi anticipated. The sale of the engineering business appears close to fruition. Management expects development to grow to over $8bn per annum which would be a 80% or more increase of the levels over the previous 4-5 years.

The development should generate around $55bn of investment product and increase current funds under management by around 150%, Citi assesses.

The broker found other reasons to be positive, noting a simpler business profile, better earnings quality and the potential for the pay-out target to be raised as earnings shift towards more recurring sources. Citi reiterates a Buy rating. Target is $15.27.

Target price is $15.27 Current Price is $11.62 Difference: $3.65
If LLC meets the Citi target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $13.96, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

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 LLC as Outperform (1) -

The new strategy outlined by Lendlease makes sense to Credit Suisse as development production is ramped up. This in turn should in increase predictable annuity-style earnings and may lead to a re-rating.

The broker's suggests a focus on operating earnings should be welcomed as this improves perceptions of earnings quality.

Credit Suisse continues to envisage the stock as leveraged to the global urbanisation theme, and this is now about executing on the strategy. In the short term, market conditions are challenging. Outperform rating and $13.31 target maintained.

Target price is $13.31 Current Price is $11.62 Difference: $1.69
If LLC meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $13.96, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

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

Macquarie rates LLC as Outperform (1) -

From the strategy briefing Macquarie notes Lendlease intends to double development production but suspects end-user demand, as opposed to third-party capital, will be the constraint in the near term.

Lendlease is also looking to grow funds under management to around $100bn within eight years, spearheaded by new ventures.

The broker assesses the company's targets point to significant upside to earnings and valuation. Outperform retained. Target rises to $13.98 from $13.94.

Target price is $13.98 Current Price is $11.62 Difference: $2.36
If LLC meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $13.96, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

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

Morgan Stanley rates LLC as No Rating (-1) -

The company's strategy update provided more clarity on what the next eight years could be like. Lendlease intends to raise annual production to $8bn or more from around $4.3bn historically.

Morgan Stanley envisages the main impediment will be market conditions and whether or not there is leasing demand. The company is keen to expand its funds management business.

Financial close of the engineering business is still ahead and Lendlease has also confirmed the sale process for the retirement business.

Morgan Stanley is under research restriction. Industry view: In-line.

Current Price is $11.62. Target price not assessed.

Current consensus price target is $13.96, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates LLC as Hold (3) -

Lendlease has provided a strategy update outlining an intention to ramp up development completions. Ord Minnett would have preferred greater visibility on the development pipeline and completion timeframe.

Nevertheless, the update is considered a meaningful step in redefining strategic parameters and positioning for the next phase of growth.

The broker retains a Hold rating and $13.25 target. Ord Minnett notes the company has progressed the sell down of the retirement division and has sold US Telco Towers for $350m.

Target price is $13.25 Current Price is $11.62 Difference: $1.63
If LLC meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $13.96, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates LLC as Buy (1) -

Lendlease Group has redefined its operating earnings to exclude investment revaluations to improve earnings quality and reduce volatility, notes UBS. The broker assumes this will increase consensus estimates near term but believes investors do not attribute value to revaluations.

The group will be increasing production leading to an almost doubling of output but the relationship to earnings still isn’t clear to the broker.

Buy rating retained with a target price of $14.00.

Target price is $14.00 Current Price is $11.62 Difference: $2.38
If LLC meets the UBS target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $13.96, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

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

Morgans rates MWY as Hold (3) -

The leading Australian forestry company Midway delivered a FY20 result in-line with Morgans forecast. However, operating cashflow was stronger than expected, which resulted in a net debt position lower than Morgans forecast.

The broker believes operating conditions may be bottoming and notes the company expects earnings growth in FY21, after an extremely difficult 12 months during FY20.

The analyst explains the company has proactively reduced its cost base, is focused on diversifying the business and has ruled out the need for further equity.

The Hold rating is maintained and the target price is decreased to $1.12 from $1.25.

Target price is $1.12 Current Price is $0.98 Difference: $0.14
If MWY meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Macquarie rates NAB as Underperform (5) -

National Australia Bank has reached an agreement to sell MLC Wealth to IOOF for $1.4bn. While Macquarie likes the long-term investment thesis for the bank, limited scope is envisaged for outperformance over the next 12 months.

The broker remains concerned about the risks stemming from deteriorating credit quality. Underperform retained. Target is $17.50.

Target price is $17.50 Current Price is $17.93 Difference: minus $0.43 (current price is over target).
If NAB meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.27, suggesting upside of 16.1% (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 will sell MLC Wealth to IOOF ((IFL)) which Morgan Stanley notes is consistent with the bank's strategy. The price of $1.44bn equates to 17.3x annualised first half cash earnings.

The sale will lift the bank's pro forma CET1 ratio by more than 30 basis points to 11.9%. Equal-weight rating. Target is $17.70. Industry view: In-line.

Target price is $17.70 Current Price is $17.93 Difference: minus $0.23 (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 $20.27, suggesting upside of 16.1% (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 announced it has agreed to sell the MLC Wealth business.

The broker calculates this is expected to result in a pro forma 30 June 2020 CET1 ratio of around 11.9%. This is considerably stronger than APRA’s ‘unquestionably strong’ CET1 benchmark of 10.5%.

The analysts reduce the FY21 dividend forecast due to the expected post-tax loss of around $400m associated with the sale.

The Add rating is maintained and the target price remains at $20.50.

Target price is $20.50 Current Price is $17.93 Difference: $2.57
If NAB meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $20.27, suggesting upside of 16.1% (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) -

National Australia Bank will be selling its MLC Wealth business to IOOF Holdings ((IFL)) for $1.44bn. This will add 30 basis points to the bank's level 2 common equity tier-one (CET1) ratio, reports the broker.

Also, the sale will take the bank's pro-forma CET1 ratio to 11.9%. This, states Ord Minnett, will provide a very significant buffer and take away a lot of the capital risk.

Ord Minnett considers the transaction makes strategic sense, is a relatively clean exit and will help the bank simplify the group.

Ord Minnett maintains its Accumulate recommendation with a target price of $20.90. 

Target price is $20.90 Current Price is $17.93 Difference: $2.97
If NAB meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $20.27, suggesting upside of 16.1% (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 will be selling its wealth management business to IOOF Holdings ((IFL)) for $1,440m, generating a loss of circa -$400m. UBS views this as a good exit since wealth management has been a troublesome business that has not delivered the expected returns for many years.

The broker expects this will release around 30bps in CET1 and take its pro-forma CET1 ratio to around 11.9%. When coupled with its $4.25bn capital raising in April, the broker notes this will provide the bank with sufficient capital to absorb the expected increase in provisioning.

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

Target price is $20.50 Current Price is $17.93 Difference: $2.57
If NAB meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $20.27, suggesting upside of 16.1% (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 NIC as Outperform (1) -

Nickel Mines declared a maiden 1c interim dividend which, in Macquarie's view, overshadowed a mixed earnings result. The broker considers the payment a positive de-risking event, nonetheless, and lifts the target 7% to $0.80.

Buoyant nickel prices are underpinning strong earnings momentum and a spot price scenario would generate 2020 and 2021 earnings that are 76% and 139% above Macquarie's forecasts, respectively. Outperform retained.

Target price is $0.80 Current Price is $0.68 Difference: $0.12
If NIC meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

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: 1.0

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

Credit Suisse rates OGC as Outperform (1) -

OceanaGold has reassessed the Haile mine plan and downgraded production to 135-175,000 ounces for 2020. Access to higher grade has now been deferred to 2021.

The company has also entered another gold pre-payment, selling forward 40,000 ounces for delivery between April-June 2021 for US$77m.

While the downgrade to Haile is disappointing, Credit Suisse take comfort in the fact this is not a structural impairment. Target is trimmed to $3.85 from $4.10. Outperform retained.

Target price is $3.85 Current Price is $3.22 Difference: $0.63
If OGC meets the Credit Suisse target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $3.81, suggesting upside of 19.5% (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

Morgans rates PTB as Add (1) -

PTB Group’s FY20 result hit Morgans expectations for net profit before tax, foreign exchange and extraordinary items (NPBTFX) of $8m.

The company managed the difficult trading conditions in the second half by shifting towards engine and parts sales, noted the broker.

The company provided guidance for FY21 NPBTFX of between $11m-$13m.

The broker continues to forecast a fully franked 5cps total dividend in FY21, but notes that in the medium-term dividends may need to be partially franked.

The Add rating is maintained and the target price is increased to $0.86 from $0.77.

Target price is $0.86 Current Price is $0.74 Difference: $0.12
If PTB meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

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 RAP as Add (1) -

The FY20 result for ResApp Health was in-line with Morgans forecasts, excluding performance shares expenses for the handheld and wearable device development.

The company closed the period with $5.8m in cash and no debt.

Morgans continues to suppress potential value for the SleepCheck product and ResApp-DX verticals outside of TeleHealth, noting the early nature and number of commercial questions still to be answered.

The Speculative Buy rating is maintained and the target price is held at $0.24.

Target price is $0.24 Current Price is $0.12 Difference: $0.12
If RAP meets the Morgans target it will return approximately 100% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates RIO as Outperform (1) -

The Oyu Tolgoi technical report has provided clarity on the outlook for the project. Macquarie believes the project is a driver of medium-term volume growth for Rio Tinto although it accounts for less than 2% of valuation.

Buoyant iron ore prices underpin strong upgrade momentum. Macquarie notes, at spot prices, free cash flow yields for 2020 and 2021 and 10% and 16%, respectively.

Free cash flow yields are expected to closely reflect cash returns to shareholders over the next two years. Target is $114. Outperform.

Target price is $114.00 Current Price is $98.00 Difference: $16
If RIO meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $104.00, suggesting upside of 6.4% (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: 0.1

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

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

A new technical report has been published for Oyu Tolgoi with revised timelines, capital expenditure and updated reserves. Morgan Stanley had already reflected much of this in its assessment and finds no meaningful impact on valuation.

The report factors in US$6.8bn of cumulative capital expenditure to develop phase 2, which reflects a budget increase of US$1.5bn. From 2021 the mine will produce 8.8mt of contained copper.

Morgan Stanley retains an Equal-weight rating with a target price of $93. Industry view: In-line.

Target price is $93.00 Current Price is $98.00 Difference: minus $5 (current price is over target).
If RIO meets the Morgan Stanley target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $104.00, suggesting upside of 6.4% (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: 0.1

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

Ord Minnett rates SLK as Buy (1) -

FY20 results were ahead of Ord Minnett's forecasts. The broker assesses the business is transforming to a utility/infrastructure-style company with defensive qualities and growth options.

The TSG bus business acquired in mid-January has potential to drive a significant re-rating in FY21, in the broker's view. Several potential catalysts are envisaged going forward and Ord Minnett retains a Buy rating. Target is raised to $6.08 from $5.25.

Target price is $6.08 Current Price is $4.75 Difference: $1.33
If SLK meets the Ord Minnett target it will return approximately 28% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Ord Minnett rates SZL as Buy (1) -

Sezzle’s first half 2020 result shows strong numbers, observes Ord Minnett, and low bad debts. The broker views 2020 guidance as conservative.

The broker highlights net transaction losses of 0.7% are low and reflect a lower risk profile to the underlying product along with a strong internal credit function.

Ord Minnett retains its Buy rating with the target price increasing to $11.80 from $9.

Target price is $11.80 Current Price is $10.27 Difference: $1.53
If SZL meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

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: 1.0

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

Macquarie rates TPW as Outperform (1) -

FY20 results were underpinned by revenue growth and operating leverage. Macquarie observes recent customer cohorts are performing well, with benefits from pandemic-related expenditure towards at-home categories.

While mindful current growth rates are unlikely to continue for an extended period, Macquarie expects repeat orders to support revenue and margins in the near term.

Macquarie raises the target to $10.50 from $8.80 and maintains an Outperform rating.

Target price is $10.50 Current Price is $9.69 Difference: $0.81
If TPW meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

UBS rates TWE as Neutral (3) -

China is conducting an anti-dumping and countervailing duty investigation on Australian wine exports to China. UBS notes a large tariff would lead to a significant operating income headwind if absorbed or volume hit if passed (before considering offsets)

The market seems to be pricing a circa -$1.9b valuation impact, notes UBS. This implies a circa -$113m operating income (EBIT) impact, translating to a -25% tariff fully absorbed by the company.

The broker views risk/reward to be attractive but retains its Neutral rating due to the wide range of potential outcomes and low confidence. Target is unchanged at $12.50.

Target price is $12.50 Current Price is $9.25 Difference: $3.25
If TWE meets the UBS target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $11.94, suggesting upside of 29.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Macquarie rates WGX as Outperform (1) -

FY20 results were in line with Macquarie's estimates. The broker notes another heavy investment year but expects capital expenditure to reduce over FY21.

Improving production expectations are largely based on Big Bell continuing to ramp up over the year. The broker retains an Outperform rating and raises the target to $2.90 from $2.80.

Target price is $2.90 Current Price is $2.13 Difference: $0.77
If WGX meets the Macquarie target it will return approximately 36% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

UBS rates WHC as Buy (1) -

Whitehaven Coal's operational earnings were down -95% year on year led by weak coal prices, albeit in line with UBS' forecast. No final dividend was declared.

FY21 guidance disappointed the broker with production guidance at 21-22.8mt and expected to be skewed to the second half of FY21. 

While management had indicated previously it had resolved operational and onsite staffing issues, the broker notes this may not be true with guidance suggesting the assets have moved backwards operationally.

UBS reiterates its Buy rating with the target price reducing to $2 from $2.60.

Target price is $2.00 Current Price is $0.93 Difference: $1.07
If WHC meets the UBS target it will return approximately 115% (excluding dividends, fees and charges).

Current consensus price target is $1.65, suggesting upside of 83.3% (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

Citi rates Z1P as Neutral (3) -

Given Zip Co's recent acquisition of QuadPay, Citi highlights PayPal in the US has announced a similar product to QuadPay called 'Pay in 4'.

The broker states the key risk is PayPal's network and its almost ubiquitous presence. While the analyst sees potential for two to three BNPL players to coexist, it is a winner takes most market. Additionally, merchant fees could come under pressure and CitI sees upside risk to the level of investment required on co-marketing and product marketing.

The analyst sees downside risk to QuadPay's net transaction margins, given the company charges users $1 per installment payment for using 'Shop Anywhere'.

The Neutral rating and $6.50 price target are maintained.

Target price is $6.70 Current Price is $9.16 Difference: minus $2.46 (current price is over target).
If Z1P meets the Citi target it will return approximately minus 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.92, suggesting downside of -13.7% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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