Australian Broker Call

Macquarie rates AFG as Outperform (1) -

Macquarie notes Australian Finance Group's June quarter lodgement activity remained above $20bn for the fifth consecutive quarter. The mix continued to shift towards higher margin AFG Home Loan product.

Macquarie notes that while the level of overall mortgage lodgement activity drives AFG's performance, earnings are also impacted by mix. AFG Home Loan lodgement activity, comprising higher margin AFG Securitisation and AFG White Label product, is exceeding growth of lower margin third-party products.

Outperform and $1.82 target retained.

Target price is $1.82 Current Price is $1.65 Difference: $0.17
If AFG meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $2.27, suggesting upside of 35.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Citi rates ANZ as Buy (1) -

Citi views the proposed $4.9bn takeover of Suncorp's Bank by ANZ (funded via $3.5bn in new equity and excess capital of $1.4bn) as meeting a strategic objective at a reasonable purchase price.

The broker notes the deal is subject to ACCC approval and the transaction will be slightly EPS/ROE accretive with cost synergies estimated at some $260m p.a.

ANZ Bank announced a 4-6 year integration plan and Citi highlights investors may have concerns over the time scale of developing synergies with more details needed for the transition plans.

The broker adjusts earnings forecasts by 3.4% in FY22 and -1.1% in FY23. A Buy rating is maintained and the target price is reduced to $29.00 from $30.75.

Target price is $29.00 Current Price is $21.64 Difference: $7.36
If ANZ meets the Citi target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $27.18, suggesting upside of 25.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Credit Suisse rates ANZ as Outperform (1) -

ANZ Bank has announced a fully underwritten pro rata renounceable entitlement offer to raise around $3.5bn to partially fund the announced -$4.9bn purchase of Suncorp Group's ((SUN)) banking arm.

Credit Suisse sees any talk by management of synergies as irrelevant, as they will take 4-6 years to be realised.

Separately, a 3Q trading update confirms the broker's view that the bank is an early beneficiary of rate rises, with underlying margins rising by 6bps. The Outperform rating and $30.80 target price are unchanged.

Target price is $30.80 Current Price is $21.64 Difference: $9.16
If ANZ meets the Credit Suisse target it will return approximately 42% (excluding dividends, fees and charges).

Current consensus price target is $27.18, suggesting upside of 25.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Macquarie rates ANZ as No Rating (-1) -

ANZ Bank's June quarter update showed operational trends ahead of expectation, Macquarie notes, underpinned by robust margins. The broker was nevertheless surprised ANZ did not add to its loan loss provisions. ANZ's teir one capital is at the bottom end of peers at 11%.

ANZ has given up on MYOB and will attempt to acquire Suncorp's banking division instead, at what the broker notes is a similar multiple to recent sector transactions.

Clearly Macquarie is advising, as it is now on research restriction.

Current Price is $21.64. Target price not assessed.

Current consensus price target is $27.18, suggesting upside of 25.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

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

ANZ Bank reported a 3Q22 trading update alongside the acquisition of Suncorp's Bank noted Morgan Stanley. 

The broker notes that pre-provisions the earnings appear to be in-line with forecasts and the credit quality remains strong.

At a price of $4.9bn, Morgan Stanley believes ANZ Bank is paying a full price and does not view the acquisition as compelling strategically or for earnings.

The broker notes the acquisition will be marginally earnings and ROE accretive once the synergies are achieved. 

Interestingly the broker questions the company's capital management strategies, highlighting ANZ Bank completed a $1.5bn buy-back at $27.71 earlier this year and is now raising $3.5bn via a rights issue at $18.90 to fund the purchase.

Earnings forecasts are lowered by -2% for FY23. The Equal-weight rating is maintained and the price target is reduced to $23.10 from $24.30. Industry View Attractive.

Target price is $23.10 Current Price is $21.64 Difference: $1.46
If ANZ meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $27.18, suggesting upside of 25.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Ord Minnett rates ANZ as Accumulate (2) -

The proposed acquisition of the banking business from Suncorp Group ((SUN)) only gets a lukewarm reception from Ord Minnett.

The broker notes, among several other points, ANZ Bank will not be able to realise synergies until after Year 3, while the ACCC still needs to get on board, while integration costs are front-end loaded.

Ord Minnett does see the strategic rationale but this deal is unlikely to help closing the present valuation gap, in the broker's view.

Target price reduced to $24.20 from $25.10. Accumulate.

Target price is $24.20 Current Price is $21.64 Difference: $2.56
If ANZ meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $27.18, suggesting upside of 25.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

UBS rates ANZ as Buy (1) -

In a 3Q update, ANZ Bank revealed a better-than-expected net interest margin (NIM), assesses UBS. At the same time, the bank announced a $3.5bn equity raise to partially fund the -$4.9bn acquisition of Suncorp Group's banking arm.

The broker leaves forecasts relating to the proposed acquisition unchanged, and suggests there's room for further NIM upside surprises. The Buy rating and $30 target price are unchanged.

Target price is $30.00 Current Price is $21.64 Difference: $8.36
If ANZ meets the UBS target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $27.18, suggesting upside of 25.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Ord Minnett rates ASX as Hold (3) -

The ASX is scheduled to release its FY22 financials on August 18 and Ord Minnett, while previewing the result, is sticking with a Hold rating and a price target of $84.86, up from $84.41 prior.

Among many items highlighted (rising interest rates, management turnover, etc) the broker concludes current negatives offset the fact the ASX offers "defensive exposure in volatile markets and some upside from rising bond yields".

One of the observations made: that much talked about distributed ledger project has been delayed, yet again. Earnings estimates have risen.

Target price is $84.86 Current Price is $84.59 Difference: $0.27
If ASX meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $81.96, suggesting downside of -2.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.3

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

Macquarie rates BHP as Outperform (1) -

Earlier today, BHP Group released its quarterly market update and Macquarie, in an initial response, thinks the performance on display is "solid", though realised pricing is labeled as "mixed".

The broker observes the company's FY23 production guidance remains in-line with its own projections, with copper the primary driver for volume growth next year.

Macquarie notes the stock is trading on a FY23 free cash flow yield of 17% on its current forecasts. Target $50. Outperform.

Target price is $50.00 Current Price is $36.97 Difference: $13.03
If BHP meets the Macquarie target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $44.34, suggesting upside of 21.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.4

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

Ord Minnett rates BHP as Hold (3) -

In an initial response to today's quarterly update, Ord Minnett reports iron ore shipments proved 3% ahead of forecast, but achieved pricing proved disappointing.

FY23 guidance matches the broker's forecast across all divisions except coal, which is slightly weaker.

Overall, concludes the broker, this was a reasonably strong quarter for BHP Group. Hold. Target price $44.00.

Target price is $44.00 Current Price is $36.97 Difference: $7.03
If BHP meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $44.34, suggesting upside of 21.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.4

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

UBS rates CBA as Neutral (3) -

UBS highlights notable differences among the banks' exposures and approach for the environmental component of ESG. The resource and agriculture focus of Australia is considered to introduce specific climate change risks for the sector.

CommBank, National Australia Bank and Macquarie Group are more advanced than peers, in the broker's opinion.

The Neutral rating and $105 target are unchanged for CommBank.

Target price is $105.00 Current Price is $94.24 Difference: $10.76
If CBA meets the UBS target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $88.05, suggesting downside of -7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.6

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

Credit Suisse rates CSL as No Rating (-1) -

Ahead of FY22 results for CSL, Credit Suisse forecasts profit of US$2,279m, ahead of the top-end of the guidance range for US$2,150-2,250m.

The broker is expecting strong growth in FY23 and increases its FY22/23 EPS forecasts by 1-2% and lifts the FY24 estimate by 5% on a stronger margin recovery.

Due to research restrictions Credit Suisse has not provided a rating or target price. 

Current Price is $296.66. Target price not assessed.

Current consensus price target is $318.72, suggesting upside of 10.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.9

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

Macquarie rates DRR as Outperform (1) -

As part of its quarterly production update, BHP Group today reported strong production at Mining Area C while confirming the ongoing ramp-up of South Flank.

Macquarie notes the positives for Deterra Royalties, though recent weakness in the price of iron ore has had a negative impact on the implied outlook for earnings.

The Outperform rating and $5.00 target price are maintained.

Target price is $5.00 Current Price is $4.08 Difference: $0.92
If DRR meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $4.93, suggesting upside of 20.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Macquarie rates DXS as Outperform (1) -

Unitholders of AMP Capital Wholesale Office Fund have voted to shift management to Mirvac Group ((MGR)).

Prior to any margin expansion, Macquarie estimates the loss of AWOF will be broadly earnings-neutral for Dexus, and as a result of the structure of the consideration to be paid by Dexus to AMP ((AMP)).

Macquarie notes the strategic significance of AWOF given potential for additional growth in office funds under management. While the remainder of the platform should generate higher fees, the growth outlook may be more challenging.

The broker is cautious but sees the current valuation as overly pessimistic. Outperform and $10.41 target retained.

Target price is $10.41 Current Price is $9.33 Difference: $1.08
If DXS meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $10.71, suggesting upside of 14.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Citi rates HUB as Buy (1) -

Citi notes Hub24 4Q22 earnings update will be announced on July 19 (today) and forecasts net inflows of $2.6bn for 4Q22 and funds under administration (FuA) of $53.1bn, up 28% over the year and 4% on the quarter.

The broker highlights risks to FuA  from market weakness with the ASX300 down -13% year-to-date but sees the possible rise in net inflows after Netwealth announced improving inflow momentum towards the end of the last quarter.

Hub24 added 30 new adviser in 3Q22, according to Citi, the lowest since 1Q19.

A Buy rating is maintained and the price target is $26.40.

Target price is $26.40 Current Price is $23.72 Difference: $2.68
If HUB meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $29.88, suggesting upside of 32.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

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

Morgan Stanley notes ahead of the July/August earnings results they see several risks for InvoCare.

Short term the broker highlights a number of headwinds from absenteeism, wet weather impacts on the east coast, increased labour costs and supply chain problems.

The broker believes the risk/reward between the  challenges for InvoCare  of the capex refurbishment program and covid are balanced with the long-term growth in the death market with improved operational execution.

Earnings will be weighted to the 2H22 with pent up cemetery and crematorium demand, upside in volumes and margins from covid lows as well as a slow down in capex, says Morgan Stanley.

Accordingly the Equal-weight rating is maintained alongside a $11.25 price target. Industry view is In-Line.

Target price is $11.25 Current Price is $10.71 Difference: $0.54
If IVC meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $12.70, suggesting upside of 21.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Macquarie rates JRV as Outperform (1) -

Jervois Global has now closed the acquisition of 100% of the Sao Miguel Paulista (SMP) nickel cobalt refinery in Brazil. Macquarie forecasts earnings tripling over three years.

The Jervois Finland expansion and SMP stage 2 expansion, both of which are expected this year, present the key near term catalysts, Macquarie suggests.

Outperform and 70c target retained.

Target price is $0.70 Current Price is $0.51 Difference: $0.19
If JRV meets the Macquarie target it will return approximately 37% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates LYC as Outperform (1) -

Lynas Rare Earths' June quarter result was mixed, Macquarie  notes, with lower overall rare earth oxide production and sales but better price realisation due to a favourable product mix.

Both Mt Weld and Kalgoorlie are progressing to plan. Lynas also secured a Heavy Rare Earth contract with the US Department of Defense in June.

Updates on the water recycling program in Malaysia present a near term catalyst, Macquarie suggests. Outperform and $12.50 target retained.

Target price is $12.50 Current Price is $8.12 Difference: $4.38
If LYC meets the Macquarie target it will return approximately 54% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Credit Suisse rates MGR as Outperform (1) -

Credit Suisse expects modest earnings accretion for Mirvac Group when management rights over the AMP ((AMP)) Capital Wholesale Office Fund are obtained. After the rights transfer in mid-October, funds under management (FUM) are expected to rise by $7.7bn.

While this transaction doesn't shift the earnings dial meaningfully, the broker suggests Mirvac Group stock may appeal to value-focused investors, with a longer-term view. Outperform. The target falls to $2.49 from $2.66.

Target price is $2.49 Current Price is $2.07 Difference: $0.42
If MGR meets the Credit Suisse target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $2.54, suggesting upside of 22.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Macquarie rates MGR as Outperform (1) -

Mirvac Group will become the manager of the AMP Wholesale Office Fund, taking over from Dexus, adding some $7.7bn of external funds under management. Strategically this aids Mirvac, Macquarie suggests, inclusive of the development pipeline.

The deal is accretive to earnings and valuation but raises gearing to 24.5%.

Yet Macquarie believes that trading at a -25% discount to net tangible asset valuation, Mirvac is not being ascribed value to accretive funds management or development earnings.

Outerform retained, target rises to $2.39 from $2.34.

Target price is $2.39 Current Price is $2.07 Difference: $0.32
If MGR meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $2.54, suggesting upside of 22.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

UBS rates MQG as Neutral (3) -

UBS highlights notable differences among the banks' exposures and approach for the environmental component of ESG. The resource and agriculture focus of Australia is considered to introduce specific climate change risks for the sector.

CommBank, National Australia Bank and Macquarie Group are more advanced than peers, in the broker's opinion.

The Neutral rating and $200 target are unchanged for Macquarie Group.

Target price is $200.00 Current Price is $173.33 Difference: $26.67
If MQG meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $202.50, suggesting upside of 21.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

UBS rates NAB as Neutral (3) -

UBS highlights notable differences among the banks' exposures and approach for the environmental component of ESG. The resource and agriculture focus of Australia is considered to introduce specific climate change risks for the sector.

CommBank, National Australia Bank and Macquarie Group are more advanced than peers, in the broker's opinion.

The Neutral rating and $33 target are unchanged for National Australia Bank.

Target price is $33.00 Current Price is $29.00 Difference: $4
If NAB meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $31.18, suggesting upside of 6.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Morgans rates PDL as Hold (3) -

Morgans notes investment performance and net outflows impacted the 3Q for Pendal Group. Funds under management (FUM) fell by -11% to $124.9bn, while net outflows of circa -3.4% of FUM were considered broad and above market expectations.

The analyst believes earnings and sentiment will continue to be impacted by ongoing US outflows. After marking-to-market the June FUM and applying a lower valuation multiple, the target price is set at $4.80, down from $5.76. The Hold rating is unchanged.

Target price is $4.80 Current Price is $4.11 Difference: $0.69
If PDL meets the Morgans target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $4.61, suggesting upside of 4.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Ord Minnett rates PPS as Buy (1) -

Ord Minnett spotted a below-expectations quarterly update but blames Powerwrap while SMA's flows are seen as "reasonable" within a tough environment.

The upcoming FY22 results should offer more insights about the Australian operations post the sale of the international business, says the broker with optimistic anticipation.

Ord Minnett expects to find a profitable, growing business with a strong balance sheet. Buy rating reiterated. Target price 90c (was $1.10).

Target price is $0.90 Current Price is $0.68 Difference: $0.22
If PPS meets the Ord Minnett target it will return approximately 32% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Morgans rates RIO as Upgrade to Add from Hold (1) -

Morgans upgrades its rating for Rio Tinto to Add from Hold after recent share price weakness. By late 2022 and heading into 2023, a better outlook for metals is expected as Chinese growth starts to recover.

The broker makes minor changes to assumptions following last week's 2Q result and the target price falls to $113 from $114.

Target price is $113.00 Current Price is $95.27 Difference: $17.73
If RIO meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $111.36, suggesting upside of 16.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.7

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

UBS rates RIO as Neutral (3) -

Despite operational improvements in the 2Q, weaker realised iron ore prices and higher costs in the Aluminium division drive another downgrade to earnings estimates by UBS.

At a time when the broker anticipates further downside to iron ore prices, the company is aiming to lift capex in 2023. Hence, materially lower cash flow and returns are expected over the next 12 months and the target is lowered to $92 from $98. Neutral.

Target price is $92.00 Current Price is $95.27 Difference: minus $3.27 (current price is over target).
If RIO meets the UBS target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $111.36, suggesting upside of 16.6% (ex-dividends)

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.7

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

Citi rates SUN as Buy (1) -

Citi views the sale of Suncorp Group's bank to ANZ Bank as strategically sensible, but highlights the divestment is dilutive to earnings with no increase in valuation for the company.

The sale will allow for a possible capital return to Suncorp shareholders and allow management to focus on the core general insurance business says Citi.

The broker decreases earnings forecasts by -15% and -4% for FY22 & FY23, respectively and Suncorp Group's valuation falls due to the increase in the forecast long bond yield.

The Buy rating stays and the target price is reduced to $13.00 from $13.60.

Target price is $13.00 Current Price is $11.78 Difference: $1.22
If SUN meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $13.17, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Credit Suisse rates SUN as Outperform (1) -

Based on listed peer multiples, Credit Suisse assesses the sale of Suncorp Group's banking arm to ANZ Bank ((ANZ)) for $4.9bn is a good result for Suncorp Group shareholders.

Management intends to return the majority of the proceeds to shareholders in the form of a pro-rata capital return. The broker suggests the share register may broaden with investors who prefer a pure-play insurer.

After allowing for the sale in forecasts (and applying a -5% valuation discount for regulatory approval risk), the analyst sets a $14.09 target, up from $11.78. Outperform.

Target price is $14.09 Current Price is $11.78 Difference: $2.31
If SUN meets the Credit Suisse target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $13.17, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Macquarie rates SUN as No Rating (-1) -

Suncorp has announced the sale of its banking division to ANZ Bank for $4.9b. Completion is targeted by the second half of 2023, pending regulatory approval.

Macquarie is now on research restriction.

Current Price is $11.78. Target price not assessed.

Current consensus price target is $13.17, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Morgan Stanley rates SUN as Underweight (5) -

Morgan Stanley sees the sale of Suncorp Group's bank as positive in the short term with the capital injection, but notes the company's long-term growth options will be reduced.

The broker highlights the regulatory approval may reshape the deal and the divestment leaves Suncorp Group's insurance business with the highest catastrophe exposure, notably Queensland.

The Underweight rating and $10.25 target are maintained. 

Target price is $10.25 Current Price is $11.78 Difference: minus $1.53 (current price is over target).
If SUN meets the Morgan Stanley target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.17, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Morgans rates SUN as Add (1) -

After reviewing the deal multiples, Morgans is broadly positive on Suncorp Group's decision to sell its banking business to ANZ Bank ((ANZ)) for $4.9bn.

Management stated the majority of the proceeds will be returned to investors, mostly through a pro-rata capital return. Greater focus on the insurance business is expected to drive improved performance.

The broker makes no changes to forecasts pending regulatory approval. The target rises to $14.00 from $13.42 on a valuation roll forward. Add.

Target price is $14.00 Current Price is $11.78 Difference: $2.22
If SUN meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $13.17, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Ord Minnett rates SUN as Downgrade to Hold from Buy (3) -

Ord Minnett is not overly enthusiastic about the move to sell the banking operations to ANZ Bank ((ANZ)); and that's putting it mildly.

The broker highlights the lack of large takeover premium, significant transaction costs, uncertainty on regulatory approval, on top of a number of dis-synergies.

In addition, and separate to the deal, Ord Minnett harbours concerns around reinsurance and perils costs in FY23 delaying a return to 10–12% margins for the insurance business.

Downgrade to Hold from Buy. Target price drops to $13.25 from $14.

Target price is $13.25 Current Price is $11.78 Difference: $1.47
If SUN meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $13.17, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

UBS rates SUN as Buy (1) -

UBS sees a simplified investment case for Suncorp Group, should the $4.9bn sale of its banking arm to ANZ Bank proceed, and retains its Buy rating and $14.40 target price.

After reflecting upon higher multiples for Insurance Australia Group ((IAG)), the analyst feels multiples for Suncorp Group should rise if the transaction completes, and the majority of net proceeds are returned to shareholders.

Target price is $14.40 Current Price is $11.78 Difference: $2.62
If SUN meets the UBS target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $13.17, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Citi rates WHC as Upgrade to Buy from Neutral (1) -

Whitehaven Coal's June quarter & FY22 coal production proved in-line with guidance, observes Citi.

The broker highlights the link between rising thermal coal prices and the switch by European countries to bring back more coal plants due to the Russian gas restrictions and gas supply outages (Freemont).

Citi expects the global seaborne coal market to remain tight with an EU ban on Russian coal expected in mid-August.

Accordingly, the broker has upgraded thermal coal estimates for FY22/23 by 60/100%, respectively to US$350/$210t and earnings forecasts by 50% and 350%, for FY22/FY23, respectively.

If the coal price forecasts are correct, Citi believes there is more upside scope for the shares on valuations of circa 0.6x DCF, despite the 100% increase in the last 6 months.

Target price rises to $7.85 from $4.90. Rating is upgraded to Buy from Neutral.

Target price is $7.85 Current Price is $5.90 Difference: $1.95
If WHC meets the Citi target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $7.28, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Credit Suisse rates WHC as Outperform (1) -

Credit Suisse sees ample upside potential to consensus forecasts for Whitehaven Coal in FY23 and FY24, following strong 4Q results. The company ended FY22 with around $1bn net cash compared to -$800m net debt 12 months ago.

Sales of produced coal in the 4Q came in around 4% higher than the consensus estimate, while June thermal coal realisation also surprised the analyst to the upside.

The broker lifts its earnings forecasts for FY22 and FY23 by 16% and 3%, respectively, and the target rises to $7.60 from $7.30. Outperform.

Target price is $7.60 Current Price is $5.90 Difference: $1.7
If WHC meets the Credit Suisse target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $7.28, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates WHC as Outperform (1) -

Whitehaven Coal's production in the June quarter was better than Macquarie expected, driven by Narrabri, while shipments were in line due to lower third-party sales. Realised prices increased 63% from the prior quarter.

Whitehaven expects to report $3bn in earnings at its FY22 result and the focus of investors will be on additional dividends/buy-backs, Macquarie notes.

Buoyant coal prices continue to drive earnings upside momentum, with free cash flow yields increasing to over 60% in a spot price scenario.

Outperform retained, target rises to $6.80 from $6.00.

Target price is $6.80 Current Price is $5.90 Difference: $0.9
If WHC meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $7.28, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Morgan Stanley rates WHC as Overweight (1) -

Whitehaven Coal's 4Q22 production results were 5% ahead of Morgan Stanley's forecasts and 2% better for the FY22.

The broker notes pricing was 9% and 7% higher than forecasts for 4Q22 and FY22, respectively.

Whitehaven Coal is defending the Narrabri Underground Stage 3 Extension consent approval from a client of the Environmental Defenders Office on environmental grounds, points out Morgan Stanley.

The company aims to invest -$400m on the Stage 3 extension with the majority in FY25, highlights the broker.

An Overweight rating and $7.75 price target is maintained. Industry View is Attractive.

Target price is $7.75 Current Price is $5.90 Difference: $1.85
If WHC meets the Morgan Stanley target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $7.28, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Morgans rates WHC as Add (1) -

Morgans highlights unaudited FY22 earnings (EBITDA) for Whitehaven Coal were a 16% beat versus the consensus forecast. Far higher- than-expected pricing offset volume and cost headwinds.

The broker refers to 'staggering' cash accumulation, with $1.4bn generated in the June quarter. At prevailing prices, it's estimated the September quarter will lead to $1.00/share of total net cash accumulation (post tax and capital, but pre-dividends).

The analyst forecasts a 47cps FY22 final dividend and sees clear dividend upside for FY23. The target price rises to $6.70 from $5.25. Add.

Target price is $6.70 Current Price is $5.90 Difference: $0.8
If WHC meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $7.28, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

UBS rates WOW as Neutral (3) -

UBS doesn't expect any material forecast earnings changes after Woolworths Group announced plans to acquire Shopper (a shopper media group) for -$150m.

Shopper complements Woolworths Group's in-store screens with others located throughout shopping centres and extends its reach to 
media buyer customers, explains the analyst.

The Neutral rating and $37 target price are unchanged.

Target price is $37.00 Current Price is $37.42 Difference: minus $0.42 (current price is over target).
If WOW meets the UBS target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $37.22, suggesting upside of 0.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Macquarie rates WTC as Downgrade to Underperform from Neutral (5) -

WiseTech Global has upgraded earnings margin guidance to above consensus expectations for the fourth consecutive period. But having seen earnings margins expand from 30% in FY20 to 50% in FY22, Macquarie sees limited upside from further large expansion.

The operational outlook remains positive, Macquarie suggests, but the catalysts to drive further outperformance are either becoming less material or have unclear timing. Going forward, slowing revenue growth coupled with weaker margin expansion may cause further downward pressure on valuation.

Downgrade to Underperform from Neutral. Target falls to $42 from $44 on a higher risk-free rate.

Target price is $42.00 Current Price is $47.29 Difference: minus $5.29 (current price is over target).
If WTC meets the Macquarie target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $47.21, suggesting upside of 4.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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