Australian Broker Call

Macquarie rates AIA as Outperform (1) -

Auckland International Airport  announced a precinct-wide infrastructure plan, which will be tailored to the international aviation recovery. The priority development will be the $1bn new domestic facility, integrated into the existing international terminal.

The intention is to reinitiate four of the eight core projects, having put a $2 billion infrastructure plan on-hold following the outbreak of
covid-19. Maquarie retains its Outperform rating and target price of NZ$8.20.

Current Price is $6.90. Target price not assessed.

Current consensus price target is $6.80, suggesting downside of -1.7% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates AMI as Buy (1) -

While Aurelia Metals fourth quarter FY21 and guidance proved mixed and complex, Ord Minnett was happy with the controllable aspects of performance but notes the FY22 outlook for production was not as ambitious as the broker had hoped.

The broker believes the company remains misunderstood, and notes it is not a gold miner, but a polymetallic concentrate producer.

While the FY22 outlook showed a 10% year-on-year increase in total metal to 217koz of gold equivalent, the broker believes investors had some sticker shock on the costs of $1600/oz which were up 58% year-on-year.

The fourth quarter FY21 result and FY22 guidance results in a -17-20% reduction in the broker's earnings estimates over FY21/22.

Ord Minnett maintains a Buy rating and lowers the price target to $0.95 from $1.05.

Target price is $0.95 Current Price is $0.35 Difference: $0.6
If AMI meets the Ord Minnett target it will return approximately 171% (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 ANN as Accumulate (2) -

After the trading update provided in late April, Ord Minnett expects Ansell to report a strong result again supported by extraordinary covid-driven demand for personal protective equipment along with a recovery in demand for mechanical and surgical gloves.

The broker expects continued strong volumes along with higher prices to ensure a strong lift in second-half margins given the impact of higher input costs.

Due to falling prices as exam glove supply catches up with demand, the broker expects margins to drop in FY22, especially for the healthcare division.

Accumulate rating and target price of $46.60 are both retained.

Target price is $46.60 Current Price is $40.35 Difference: $6.25
If ANN meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $45.01, suggesting upside of 9.8% (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: 0.5

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

Citi rates AZJ as Neutral (3) -

Despite the small beat, due in part to coal volumes responding to elevated second half prices less than thought, Citi views Aurizon Holdings FY21 result overall as slightly soft.

On analysis of bulks transformation, Citi finds the majority of the improvement in profitability has come from lower
depreciation. Additionally, Citi finds the revenue growth underwhelming given the contributions of acquisitions and what the broker thought was an elevated demand environment for iron ore, base metals, and agricultural volumes.

Overall, Citi expects limited growth given coal and network headwinds, while the broker expects a re-rating may be difficult given the view that bulk earnings are lower quality.

Citi retains a Neutral rating on the stock and the target price reduces to $4.25 from $4.28.

Target price is $4.25 Current Price is $4.13 Difference: $0.12
If AZJ meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $4.51, suggesting upside of 13.3% (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

Credit Suisse rates AZJ as Outperform (1) -

FY21 earnings were ahead of Credit Suisse forecasts. In the coal segment, Aurizon expects 5% volume growth while cost-cutting benefits will be offset by lower contract pricing in FY22.

Contrary to the broker's expectations there was no buyback announcement. Credit Suisse suspects management is saving the capacity to fund growth opportunities in bulks.

Aurizon is seeking to double bulk earnings within the next 10 years. As a result, the broker removes a FY22 $400m buyback from forecasts. Outperform maintained. Target is reduced to $5.30 from $5.55.

Target price is $5.30 Current Price is $4.13 Difference: $1.17
If AZJ meets the Credit Suisse target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $4.51, suggesting upside of 13.3% (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 AZJ as Outperform (1) -

FY21 earnings (EBITDA) for Aurizon Holdings were $1,482m versus the $1,457 estimated by Macquarie and consensus. Profit jumped with a better Network performance, and there were strong opearting cash flows of $1.1bn, highlights the broker.

At a time when the company has balance sheet flexibilty, the analyst notes Bulk has immediate bidding opportunities. There's considered to be a stable yield of around 7%, and upside as coal volumes rebound. Outperform rating and the target price falls to $4.27 from $4.32.

Target price is $4.27 Current Price is $4.13 Difference: $0.14
If AZJ meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $4.51, suggesting upside of 13.3% (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

Morgan Stanley rates AZJ as Downgrade to Underweight from Equal-weight (5) -

While Aurizon Holdings' near-term earnings and growth outlook are sound, it is Morgan Stanley's view that a fossil fuel reliance will impact investor appeal. The broker anticipates continued share price underperformance. 

Morgan Stanley highlights Aurizon Holdings' high earnings linkage to fossil fuels of around 88% will see the stock excluded from many investor mandates.

The company reported underlying earnings for FY21 for $903m, up 1% on Morgan Stanley's forecast, with net profit of $533m, a 6% beat on the broker's forecast.

The rating is downgraded to Underweight and the target price decreases to $3.92 from $4.03. Industry view: Cautious.

Target price is $3.92 Current Price is $4.13 Difference: minus $0.21 (current price is over target).
If AZJ 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 $4.51, suggesting upside of 13.3% (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

Morgans rates AZJ as Downgrade to Hold from Add (3) -

Aurizon Holdings FY21 result beat Morgans expectations, while first-time FY22 earnings guidance was in-line. The broker lowers its rating to Hold from Add on recent share price strength and lowers the target price to $4.06 from $4.09.

The anlyst reminds investors of the balance between long-term sustainability issues facing Coal and Network, and the generation of strong cashflow to support a pivot into Bulk.

The second half dividend of 14.4 cps (70% franked) was above Morgans forecast of 13.7cps.

Target price is $4.06 Current Price is $4.13 Difference: minus $0.07 (current price is over target).
If AZJ meets the Morgans target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.51, suggesting upside of 13.3% (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

Morgan Stanley rates BEN as Underweight (5) -

Morgan Stanley is expecting a solid second half result and strong volume growth from Bendigo and Adelaide Bank.

Given stronger loan growth, Morgan Stanley raises earnings per share forecasts by 5-6% in FY22 and FY23, despite expecting management to guide to a growth decline in FY22. 

The Underweight rating is retained and the target price increases to $10.40 from $9.90. Industry view: In-Line.

Target price is $10.40 Current Price is $10.70 Difference: minus $0.3 (current price is over target).
If BEN meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $10.50, suggesting downside of -3.3% (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

Macquarie rates BHP as Outperform (1) -

Macquarie updates earnings forecasts for BHP Group to incorporate the Shenzi North approval and adjustments to the Atlantis Phase 3 production ramp-up assumptions. Despite solid production upgrades, forecasts barely change as iron-ore continues to dominate earnings.

The group is set to release its FY21 result on 17 August. The broker retains its Outperform rating and $60 target price.

Target price is $60.00 Current Price is $51.69 Difference: $8.31
If BHP meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $51.06, suggesting downside of -1.5% (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: 0.4

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

Morgan Stanley rates BHP as Overweight (1) -

Morgan Stanley reports BHP Group is set to report record free cash flow of US$15.5bn for FY21. The broker expects this to reduce net debt to US$7.4bn and support a minimum dividend of US$3.00 per share. 

The broker notes potential for continued elevated returns, given possible net cash in the next twelve months and a moderate pipeline. Morgan Stanley is forecasting approximate 70% dividend payouts between FY22-24. 

Morgan Stanley also notes there is a possibility of BHP Group exiting fossil fuel commodities, which would boost the company's ESG credentials and potentially trigger a share re-rating.

The Overweight rating and target price of $53.95 are retained. Industry view: Attractive. 

Target price is $53.95 Current Price is $51.69 Difference: $2.26
If BHP meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $51.06, suggesting downside of -1.5% (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: 0.4

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

Citi rates BKW as Buy (1) -

Within a trading update, Brickworks Ltd highlighted the disruption caused by the NSW construction lockdowns with reduced on-site capacity expected to moderate activity levels and push out the sales lift.

However, Citi notes that while lockdowns have also impacted development activity within the Trust, asset values should continue to
surprise to the upside.

The broker expects lockdowns to have little impact to prior FY21 earnings comments provided 9 July 2021 and notes the key swing factor is property earnings which are now expected to be $250m in FY21, at the mid-point of the $240-260m guidance range.

Citi expects the binding agreement to acquire privately owned Illinois Brick Company (IBC) for US$51.1m be low single-digit earnings per share accretive in years one and two.

Buy rating and target of $27.20 both retained.

Target price is $27.20 Current Price is $24.79 Difference: $2.41
If BKW meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $24.96, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Macquarie rates BKW as Neutral (3) -

Brickworks provided an update on FY21, which was in-line with Macquarie's expectations. Any uncertainty under state lockdowns is likely to have some impact in the first half of FY22.

The broker retains its Neutral rating and raises the target price to $24.10 from $22.40. The company is trading at -3% price earnings discount to the ASX200 Industrials versus the 8% long-run premium as the cycle matures, explains the analyst.

Macquarie doesn't see current covid impacts as a fundamental disruption to medium-term earnings, given strong domestic pipelines and strong US demand.

Target price is $24.10 Current Price is $24.79 Difference: minus $0.69 (current price is over target).
If BKW meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $24.96, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Morgans rates BKW as Hold (3) -

After a FY21 earnings update, Morgans notes guidance for Building Products Australia (BPA) and Building Products Norther America (BPNA) was slightly softer than expected, while Property guidance was in-line.

Management noted it requires a full re-opening of construction activity across the state to improve its own forecasting accuracy, as NSW covid restrictions are starting to have a significant impact on the BPA business.

The analyst revises BPA forecasts to take into account the weaker FY21 result and softer first half FY22 outlook and maintains the Hold rating. The target price rises to $24.37 from $23.50.

With leading detached residential construction indicators remaining supportive, the broker expects the market will continue to look through the short-term disruption.

Target price is $24.37 Current Price is $24.79 Difference: minus $0.42 (current price is over target).
If BKW meets the Morgans target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $24.96, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Ord Minnett rates BKW as Accumulate (2) -

Based on a Brickworks update which noted the lockdown in NSW had adversely impacted the company's building products
business in Australia in first half FY22, Ord Minnett has lowered earnings estimates in FY22/FY23 by -12%/-4% to reflect the current disruption to its operations.

In the medium term, the broker expects an earnings rebound given strong underlying demand from Australian housing markets.

Ord Minnett notes in the US, conditions in non-residential construction are slowly improving, with Brickworks’ property operations remaining a key area of upside for the company, with strong demand for industrial property.

Accumulate rating is retained, and the target price is lowered to $25.50 from $26.00.

Target price is $25.50 Current Price is $24.79 Difference: $0.71
If BKW meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $24.96, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Citi rates CGF as Neutral (3) -

In an initial response to FY21 results, Citi  notes few surprises, although the departure of CEO Richard Howes in March 2022 after a relatively short tenure was not expected.

The margin outlook for Life seems to be a little better than expected though offset by a slightly worse outlook for Funds Management, explains the broker. It's estimated normalised profit (NPBT) is in-line and consistent with the bottom-end of  the guidance range.

Management reiterates FY22 profit guidance of $430-480m versus the broker's $460m estimate. The final dividend of 10.5cps fully franked is largely in-line with consensus, according to the analyst. Citi maintains its Neutral rating and $6 target price.

Target price is $6.00 Current Price is $5.78 Difference: $0.22
If CGF meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $6.01, suggesting upside of 2.3% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates CLW as Buy (1) -

Charter Hall Long Wale REIT’s FY21 result was in-line with guidance and Citi's estimates.

While FY22 guidance was left unchanged, the broker sees upside to guidance given that it does not include full impact of recent transactions, conservative assumptions around income from a Brisbane office asset, and does not include any future acquisition activity.

As a result, Citi is 2%, and 1% ahead of FY22 guidance and consensus.

Overall, Citi believes the result was a reminder of the REIT's secure long lease income, with a quality tenant base.

Citi maintains its Buy rating. Target increases to $5.68 from $5.64.

Target price is $5.68 Current Price is $5.12 Difference: $0.56
If CLW meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $5.33, suggesting upside of 3.9% (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

Macquarie rates CLW as Outperform (1) -

Charter Hall Long Wale REIT reported FY21 results. Operating EPS of 29.2cps represented growth of 3.2% versus the previous corresponding period, and was directly in-line with guidance and Macquarie's forecast.

FY22 guidance was reaffirmed at no less than 4.5% growth in operating EPS. This implies operating EPS of at least 30.5cps versus the 30.7cps forecast by the broker.

Balance sheet leverage provides $265m of deployment capacity though there is a risk of an equity raise for a major acquisition, points out the analyst. The Outperform rating is unchanged and the target price lifts to $5.21 from $5.18.

Target price is $5.21 Current Price is $5.12 Difference: $0.09
If CLW meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $5.33, suggesting upside of 3.9% (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

Morgan Stanley rates CLW as Overweight (1) -

Morgan Stanley considers Charter Hall Long Wale REIT's minimum 4.5% earnings per share growth target for FY22 achievable, implying at least 30.5 cents per share.

The broker points to approximate contracted rent growth of 3% and 31.4% gearing as growth drivers, and notes the growth rate could be upgraded if new assets were added to the portfolio. Morgan Stanley is forecasting 4.8% growth for FY22.

The company reported FY21 earnings of 29.2 cents per share, in line with both guidance and Morgan Stanley expectations. 

The Overweight rating and target price of $5.51 are retained. Industry view: In-Line. 

Target price is $5.51 Current Price is $5.12 Difference: $0.39
If CLW meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $5.33, suggesting upside of 3.9% (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

UBS rates CLW as Neutral (3) -

Charter Hall Long WALE was active in FY21, growing the portfolio by $2bn, with $1.4bn in acquisitions. Results were in line with expectations.

Guidance has been maintained for growth of more than 4.5% in FY22, which is below UBS expectations. Still, the broker acknowledges this provides scope for upgrades or equity-funded acquisitions.

The broker expects regular equity issuance and the market's concerns regarding rising long-term bond yields will constrain relative performance.

Neutral rating maintained. Target rises to $5.30 from $5.00.

Target price is $5.30 Current Price is $5.12 Difference: $0.18
If CLW meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $5.33, suggesting upside of 3.9% (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

Ord Minnett rates COH as Hold (3) -

With a solid recovery in demand evident across the medical technology sector, Ord Minnett expects Cochlear to report another strong half, well up on the covid impacted comparable period.

However, with emerging markets still challenged by covid and the potential for the delta strain to impact elective surgery in developed markets, the broker expects the outlook commentary to be cautious, limiting the potential for a positive surprise.

Management has guided to lower margins due to the sharp rise in the Australian dollar in FY21, and Ord Minnett also expects profit margins to remain below the 18% target in FY22.

The broker retains its Hold rating and target price of $230.

Target price is $230.00 Current Price is $252.76 Difference: minus $22.76 (current price is over target).
If COH meets the Ord Minnett target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $221.87, suggesting downside of -12.0% (ex-dividends)

The company's fiscal year ends in June.

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

Morgan Stanley rates DOW as Overweight (1) -

Morgan Stanley awaits Downer EDI's FY21 results, noting performance of the transport segment following a weak first half will be important given the segment will account for around 50% of underlying earnings following divestment. 

According to the broker, strong transport recovery and a complete mining divestment could see shares rise 7-10% and lift earnings estimates through to FY23. On the other hand, no recovery in the transport segment and no mining divestment could see shares fall -3-6%. 

Morgan Stanley's base case is modest transport earnings recovery with no mining divestment, with shares rising 3-6%. 

The Overweight rating and target price of $6.40 are retained. Industry view: In-line. 

Target price is $6.40 Current Price is $5.43 Difference: $0.97
If DOW meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $6.09, suggesting upside of 11.6% (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

Morgan Stanley rates ELO as Overweight (1) -

Elmo Software is guiding to annual recurring revenue for FY22 of $105-111m, a beat on Morgan Stanley's forecasts of $105.4m. The broker has raised its forecast by 2% to $108m accordingly. 

Despite this, the broker notes Elmo software is still in the investment phase, and a path to free cash flow without additional capital remains unclear. Further, the FY21 cash balance was -$12m lighter than expected.

Morgan Stanley considers Elmo Software stock underrated, but sees a limit to re-rating until a self-funding model is clear. The Overweight rating is retained and the target price decreases to $7.80 from $9.70. Industry view: In-line.

Target price is $7.80 Current Price is $4.97 Difference: $2.83
If ELO meets the Morgan Stanley target it will return approximately 57% (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 GXY as Buy (1) -

Ord Minnett has raised its long term-lithium spodumene price assumption by 31% to US$850 per tonne from US$650/t.

Ord Minnett has also launched a new supply-demand model, highlighting a tight market for the foreseeable future, leading to an increase in the broker's medium-term price forecasts.

After factoring in higher price forecasts, the broker's valuations have increased materially for the lithium miners. Ord Minnett notes the lithium commodity complex is one of the few remaining in the broker's coverage where it sees meaningful potential upside in the
medium-term, given the strong demand backdrop.

Based on these updates, Ord Minnett retains a Buy on Galaxy Resources, with the target price increasing to $4.88 from $4.80.

Target price is $4.88 Current Price is $4.88 Difference: $0
If GXY meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $4.06, suggesting downside of -23.5% (ex-dividends)

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: 0.3

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

Credit Suisse rates HUO as Neutral (3) -

Huon Aquaculture has an agreement with JBS, a Brazilian meat processor, for the acquisition of 100% of Huon shares at $3.85 each.

The board intends to declare a fully franked special dividend of $0.125 prior to implementation. Founding shareholders intend to vote in favour of the scheme.

Credit Suisse considers there is a relatively low likelihood of a competing bid as the company had disclosed back in February it was attracting interest from potential partners. Equally, there is also low likelihood of the acquisition not proceeding.

The broker retains a Neutral rating and raises the target to $3.85 from $3.20.

Target price is $3.85 Current Price is $3.90 Difference: minus $0.05 (current price is over target).
If HUO meets the Credit Suisse target it will return approximately minus 1% (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: 0.0

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

Citi rates JHX as Neutral (3) -

Upon first glance following today's market update, first quarter earnings were up 45% and ahead of Citi's estimates. The main highlight were volume trends in North America, driven by 23% growth in exteriors and 13% growth in interiors.

Profitability in Europe also improved. James Hardie expects FY22 net profit of US$550-590m, an upgrade of 5% from guidance provided in May. Citi retains a Neutral rating, believing the upgrade is already factored into estimates. Target is $46.20.

Target price is $46.20 Current Price is $47.93 Difference: minus $1.73 (current price is over target).
If JHX meets the Citi target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $47.79, suggesting downside of -3.2% (ex-dividends)

The company's fiscal year ends in March.

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: 0.6

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

Ord Minnett rates JHX as Accumulate (2) -

On initial observations the first quarter across all segments was well ahead of Ord Minnett's expectations. The broker found little to fault in the results, and while cost pressures are evident, they are well accounted for.

Accumulate rating and $50 target maintained.

Target price is $50.00 Current Price is $47.93 Difference: $2.07
If JHX meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $47.79, suggesting downside of -3.2% (ex-dividends)

The company's fiscal year ends in March.

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: 0.6

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

Macquarie rates LFS as Outperform (1) -

Macquarie expects the $200m acquistion of Symple by Latitude Group will be accretive, with management guiding to circa 8% cash EPS accretion on an annualised basis in FY23. It will be funded evenly by cash and scrip.

Management plans to accelerate the growth of the personal lending business through the migration to the Symple Platform, with a target reduction in turnaround times to circa two days from five. The broker raises its target price to $3.15 from $3. Outperform unchanged.

Target price is $3.15 Current Price is $2.42 Difference: $0.73
If LFS meets the Macquarie target it will return approximately 30% (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 MIN as Upgrade to Buy from Hold (1) -

Ord Minnett has raised its long term-lithium spodumene price assumption by 31% to US$850 per tonne from US$650/t.

Ord Minnett has also launched a new supply-demand model, highlighting a tight market for the foreseeable future, leading to an increase in the broker's medium-term price forecasts.

After factoring in higher price forecasts, the broker's valuations have increased materially for the lithium miners. Ord Minnett notes the lithium commodity complex is one of the few remaining in the broker's coverage where it sees meaningful potential upside in the
medium-term, given the strong demand backdrop.

Based on these updates, Ord Minnett has upgraded Mineral Resources to Buy from Hold, with the target price lowering to $59.03 from $66.00.

Target price is $59.03 Current Price is $59.03 Difference: $0
If MIN meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $58.65, suggesting downside of -2.8% (ex-dividends)

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 MP1 as Hold (3) -

Upon initial assessment following today's FY21 release, Ord Minnett finds the result itself is broadly in-line with expectations, though the analysts also predict consensus forecasts are likely to slightly reset lower post the result update.

The reason for the anticipated downward adjustment is because the company has flagged increased investment, in order to scale up operations, plus an acquisition; InnoEdge.

While operations in North America are performing well, Ord Minnett also points out the slowing Asia Pacific revenue growth, despite recent investment in the region.

Target price is $15.50 Current Price is $17.37 Difference: minus $1.87 (current price is over target).
If MP1 meets the Ord Minnett target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.95, suggesting downside of -5.3% (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

Macquarie rates NAB as Outperform (1) -

National Australia Bank will acquire Citigroup's Australian business. Macquarie does not consider the transaction material as the acquired portfolio is in its core domain and home market and there is relatively low integration risk.

Moreover, the financials underpinning the transactions are broadly favourable. The broker retains an Outperform rating with a $28 target.

The main downside risk is from the potential deterioration in economic conditions, resulting in weakness in the small-medium enterprise franchise.

Target price is $28.00 Current Price is $26.92 Difference: $1.08
If NAB meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $27.38, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

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) -

Morgan Stanley doesn't view the bolt-on acquisition of Citigroup's Australian Consumer business as a compelling transaction. However, it's estimated to bring incremental EPS accretion, additional transaction data and access to more customers.

Management expects the transaction to be "marginally accretive to cash earnings and cash return on equity from completion." The broker estimates around 1% EPS accretion in FY23, with the same from cost synergies, though the latter may be offset by a decline in mortgage revenues.

The Equal-Weight rating and target price of $27.20 are retained. Industry view: In-Line.

Target price is $27.20 Current Price is $26.92 Difference: $0.28
If NAB meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $27.38, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

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 Hold (3) -

National Australia Bank will acquire the Australian consumer business of Citigroup for a premium of $250m of net assets that implies total equity value of $1.2 bn.

In Ord Minnett's view, the proposed acquisition will add scale to consumer unsecured operations and the metrics appears sound, even allowing for attrition of the mortgage book. The transaction is expected to be marginally accretive.

Still, the broker does not believe approval from the Australian Competition and Consumer Commission is guaranteed, as post this integration the big four banks would account for more than 90% of the APRA credit card system. Hold rating and $27.80 target maintained.

Target price is $27.80 Current Price is $26.92 Difference: $0.88
If NAB meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $27.38, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Macquarie rates NCK as Outperform (1) -

First half revenue estimates for FY22 imply a -23.4% contraction in Macquarie's calculations. Forecasts allow for supply chain and lockdown uncertainty, and there is upside risk should the constraints be less than expected.

Still, trading remains encouraging and the rolling out of stores provides momentum. The broker also considers the current balance sheet adequate for small acquisitions. Outperform rating and $13 target maintained.

Target price is $13.00 Current Price is $12.23 Difference: $0.77
If NCK meets the Macquarie target it will return approximately 6% (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

Ord Minnett rates ORE as Buy (1) -

Ord Minnett has raised its long term-lithium spodumene price assumption by 31% to US$850 per tonne from US$650/t.

Ord Minnett has also launched a new supply-demand model, highlighting a tight market for the foreseeable future, leading to an increase in the broker's medium-term price forecasts.

After factoring in higher price forecasts, the broker's valuations have increased materially for the lithium miners. Ord Minnett notes the lithium commodity complex is one of the few remaining in the broker's coverage where it sees meaningful potential upside in the
medium-term, given the strong demand backdrop.

Based on these updates, Ord Minnett retains a Buy on Orocobre with the target price increasing to $8.58 from $8.40.

Target price is $8.58 Current Price is $8.58 Difference: $0
If ORE meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $7.25, suggesting downside of -22.3% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Ord Minnett rates PLS as Upgrade to Buy from Hold (1) -

Ord Minnett has raised its long term-lithium spodumene price assumption by 31% to US$850 per tonne from US$650/t.

Ord Minnett has also launched a new supply-demand model, highlighting a tight market for the foreseeable future, leading to an increase in the broker's medium-term price forecasts.

After factoring in higher price forecasts, the broker's valuations have increased materially for the lithium miners. Ord Minnett notes the lithium commodity complex is one of the few remaining in the broker's coverage where it sees meaningful potential upside in the
medium-term, given the strong demand backdrop.

Based on these updates, Ord Minnett has upgraded Pilbara Resources to Buy from Hold, with the target price increasing to $2.10 from $1.60.

Target price is $2.10 Current Price is $2.10 Difference: $0
If PLS meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $1.70, suggesting downside of -27.3% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Macquarie rates REG as Outperform (1) -

Regis Healthcare has announced the potential underpayment of employee entitlements, stemming from the past six years. Management expects a pre-tax impact of -$6-7m in FY21 with the balance to be recorded as prior period restatements.

Combining this with assumptions regarding occupancy over the short term, Macquarie makes material downward revisions to earnings estimates.

Nevertheless, the broker considers the medium-longer term outlook is favourable. Outperform maintained. Target is reduced to $2.50 from $2.95.

Target price is $2.50 Current Price is $1.98 Difference: $0.52
If REG meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $2.18, suggesting upside of 9.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Macquarie rates RMS as Outperform (1) -

The company's updated mine plan incorporates 1.84m ounces of production over seven years and now includes the stage 3 cutback at Edna May.

Macquarie does not include Edna May stage 3 in its base case but adds 240,000 ounces to the forecasts for Mount Magnet. Outperform rating maintained. Target is reduced to $1.80 from $1.90.

Target price is $1.80 Current Price is $1.61 Difference: $0.19
If RMS meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $2.08, suggesting upside of 37.1% (ex-dividends)

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

Citi rates SUN as Downgrade to Neutral from Buy (3) -

Following Suncorp Group's strong rally and with further significant improvement unlikely before second-half FY22, Citi pulls back to Neutral from a Buy and the target price lifts to $12.80 from $11.80.

Following underlying insurance margins of 7.4% in second half FY21, the group has now clarified that it expects margins to remain broadly in line or "hopefully a little better" in first-half FY22, before expanding in second half FY22 as strategic initiative benefits kick in.

While Citi still believes the group's banking target of a 50% cost to income ratio will be hard to achieve, the broker sees the return to growth in mortgage lending as a positive sign.

The $250m buyback is largely as anticipated and is now factored into Citi's forecasts, and the broker continues to expect the group to
deliver on its FY23 margin guidance of 10%-12%.

Target price is $12.80 Current Price is $12.79 Difference: $0.01
If SUN meets the Citi target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $13.32, suggesting upside of 4.1% (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

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

FY21 results were very strong, Credit Suisse observes. Suncorp Group has maintained guidance for an FY23 return of 10-12% and a costs-to-income ratio of 50% for the bank.

Credit Suisse expects further growth in earnings and distributions, given the excess capital. With mortgage processing times now better than most major banks and a higher retention than market average, the broker expects strong growth from FY22 onwards while benign bad debts should add further upside.

Rating is upgraded to Outperform from Neutral and the target raised $14.00 from $12.20.

Target price is $14.00 Current Price is $12.79 Difference: $1.21
If SUN meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $13.32, suggesting upside of 4.1% (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 SUN as Outperform (1) -

Suncorp has announced a $250m buyback in addition to an $0.08 special dividend and $0.40 ordinary dividend. FY21 results were strong, Macquarie notes and, even post the capital return initiatives, excess capital is still envisaged at around $400m.

The main risks to the broker's outlook are volatility in catastrophe experience, business interruption provisioning and bond yield exposure. Outperform maintained. Target rises to $13.60 from $12.80.

Target price is $13.60 Current Price is $12.79 Difference: $0.81
If SUN meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $13.32, suggesting upside of 4.1% (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

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

The Suncorp Group FY21 result delivered better trends in the bank, stronger top-line growth in the insurer and more confidence on business insurance claims, assesses Morgan Stanley. There were also ongoing reserve releases and a return of capital.

However, the broker points out the path to a greater than 10% insurance margin remains unclear.  Also, there's considered uncertainty over when additional excess capital will be generated.

The FY21 dividend of 66cps beat consensus by 10% and the special dividend of 8cps and $250m buyback were not expected, according to the broker. Equal-weight rating. Morgan Stanley's price target increases to $11.90 from $11.25. Industry view: In-line.

Target price is $11.90 Current Price is $12.79 Difference: minus $0.89 (current price is over target).
If SUN meets the Morgan Stanley target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.32, suggesting upside of 4.1% (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

Morgans rates SUN as Hold (3) -

After FY21 results Morgans leaves EPS forecasts largely unchanged, with slightly reduced earnings forecasts offset by incorporation of the $250m buyback. 

The analyst highlights stronger-than-expected capital returns, with the second half dividend of 40cps being 5cps above consensus, while a 8cps special dividend was declared.

While the broker sees this as a strong result and remains optimistic on earnings improvement over the next few years, shares are trading in-line with valuation. There's considered better value elsewhere in the sector.

Morgans Hold rating is unchanged and the target rises to $12.85 from $11.66.

Target price is $12.85 Current Price is $12.79 Difference: $0.06
If SUN meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $13.32, suggesting upside of 4.1% (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

Ord Minnett rates SUN as Hold (3) -

FY21 net profit was ahead of Ord Minnett's forecast. The bank operation benefited from the provision release of $60m and an elevated net interest margin.

The broker finds valuation appeal in the stock, particularly given the buyback and special dividend, but prefers QBE Insurance ((QBE)).

Ord Minnett retains a Hold rating and raises the target to $14.21 from $13.00.

Target price is $14.21 Current Price is $12.79 Difference: $1.42
If SUN meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $13.32, suggesting upside of 4.1% (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

UBS rates SUN as Buy (1) -

FY21 results beat estimates, reflecting provision releases across the general insurer and bank. The underlying margin in insurance of 7.4% in the second half was also stronger than UBS expected.

The broker materially raises earnings estimates for FY22 and FY23 to reflect the underlying margin and stronger top-line growth.

Suncorp Group has $387m of surplus CET1 capital and UBS expects this position will improve to around $550m by June 2022 which in turn could support further capital management.

Buy rating retained. Target is lifted to $13.85 from $12.15.

Target price is $13.85 Current Price is $12.79 Difference: $1.06
If SUN meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $13.32, suggesting upside of 4.1% (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 SXY as Neutral (3) -

Following a review of gas trading conditions in the fourth quarter, Macquarie reduces estimates for FY21 operating earnings (EBITDA) by -12%. The company is due to report its results on August 19.

Macquarie factors in higher third-party purchase costs and notes the difficult trading conditions in the June quarter. The broker retains a Neutral rating and reduces the target to $3.45 from $3.50.

Target price is $3.45 Current Price is $3.21 Difference: $0.24
If SXY meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.83, suggesting upside of 20.0% (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

Citi rates TCL as Neutral (3) -

Transurban Group's FY21 earnings were in-line with consensus, and a DPS was pre-announced.

While the traffic recovery continued in FY21, Citi notes a larger than expected impact from recent lockdowns in Australia, along with a potentially large contribution for West gate tunnel cost overruns impacted the result commentary.

Citi has marginally lowered FY22 earnings/DPS estimates to reflect the lockdown impacts but sees upside to medium-term consensus
changes given the potential for lower debt costs/accretion from growth opportunities.

Neutral rating is unchanged and Citi's target price is lowered to $13.85 from $13.95.

Target price is $13.85 Current Price is $14.03 Difference: minus $0.18 (current price is over target).
If TCL meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.50, suggesting upside of 6.3% (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 TCL as Outperform (1) -

FY21 cash earnings were consistent with Macquarie's expectations. The main positive going forward will be the bounce in road usage once lockdown restrictions are removed. Still, this is the second half FY22 event, the broker suspects.

This will defer some of the earnings and dividend recovery into FY23 which should be a bumper year as volumes normalise. The main attraction for Macquarie is stability of earnings and structural growth drivers, while the company's deep knowledge of networks provides a competitive edge.

Outperform maintained. Target is reduced to $14.91 from $15.20.

Target price is $14.91 Current Price is $14.03 Difference: $0.88
If TCL meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $14.50, suggesting upside of 6.3% (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 TCL as No Rating (-1) -

Transurban Group's FY21 earnings were broadly in-line with Morgan Stanley's forecasts. Management estimated a -$3.3b cost overrun for the West Gate Tunnel Project, lower than sub-contractor claims, but consistent with previous media reports, notes the broker.

The analyst highlights the group's FY22 DPS guidance is consistent with FY21, aiming to be in-line with free cash ex capital releases. On an initial review, it's estimated the growth pipeline remains unchanged.

Morgan Stanley is under research restriction and cannot provide a rating or target. Industry view: Cautious.

Current Price is $14.03. Target price not assessed.

Current consensus price target is $14.50, suggesting upside of 6.3% (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 TCL as Hold (3) -

In the wake of FY21 results, Morgans feels investors may be surprised by the potential size of the financial contribution needed to complete the West Gate Tunnel Project. Results were considered a mixed bag. Hold rating is retained while the target rises to $14.26 from $13.88.

The analyst assumes traffic recovers to trend by 2022 (one year further covid-delayed for the airport-linked roads), and grows at 2% thereafter, until capacity constrained.

Management says it will undertake an entitlement offer, if its consortium is successful in bidding for 49% of WestConnex.

Target price is $14.26 Current Price is $14.03 Difference: $0.23
If TCL meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $14.50, suggesting upside of 6.3% (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 TCL as Buy (1) -

Ord Minnett revises down estimates for free cash flow per share by -16% for in FY22 to 48.4c, assuming material lockdowns in NSW and Victoria in the first half.

The main challenges are lockdowns, which are likely to be elongated in Sydney, as they impact the traffic recovery profile.

Nevertheless, traffic is expected to rebound quickly when lockdowns end. Buy rating retained. Target is reduced to $15.50 from $16.00.

Target price is $15.50 Current Price is $14.03 Difference: $1.47
If TCL meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $14.50, suggesting upside of 6.3% (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 TCL as Buy (1) -

UBS notes $470m of free cash flow was generated during the June half. In addition the company banked $280m in capital releases from WestConnex and received $2.2bn in proceeds from the Chesapeake sale.

A change in the outlook for Australia's east coast lockdowns has prompted the broker to downgrade forecasts and the assumption is made that the 50% traffic situation in Sydney does not recover fully until October.

Melbourne and Brisbane assumptions are also moderated. Most important catalyst is the NSW government sale process for its stake in WestConnex, which could mean Transurban and partners increase ownership. Buy rating maintained. Target rises to $15.50 from $14.65.

Target price is $15.50 Current Price is $14.03 Difference: $1.47
If TCL meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $14.50, suggesting upside of 6.3% (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 TLS as Neutral (3) -

The acquisition of MedicalDirector is a sign of Telstra's ambitions in health and it will not affect the return of Telco proceeds to shareholders, UBS observes. Telstra will acquire the business, which is a software service provided to GPs and pharmacies, for $350m.

The broker notes the financials for the acquisition as well as the previous PowerHealth acquisition have not been provided, although understands MedicalDirector is profitable and likely to be accretive to earnings. Neutral rating and $3.90 target maintained.

Target price is $3.90 Current Price is $3.82 Difference: $0.08
If TLS meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $4.14, suggesting upside of 7.2% (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 TYR as Buy (1) -

While aided by the inclusion of Bendigo and Adelaide Bank ((BEN)) volumes, Tyro Payments recorded $2.3bn of transaction value (TV) in July, up 25% on July 2020.

Given the lengthy lockdown in Greater Sydney, and spot lockdowns in Melbourne and other cities that continue to affect small-business trading, Ord Minnett regards the Weekly TV, hovering the $0.5bn range, as robust.

The broker expects a quick recovery following a reopening, similar to that observed in 2020, and believes this could be more pronounced if it coincides with the lead-in to the December shopping period.

The Buy rating and $4.50 target are unchanged.

Target price is $4.50 Current Price is $3.42 Difference: $1.08
If TYR meets the Ord Minnett target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $4.25, suggesting upside of 24.7% (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 WBC as Neutral (3) -

Westpac has divested its life insurance business for $900m to TAL Dai-ichi Life. Macquarie observes a sale brings the bank closer to achieving its simplification objective but the loss on the sale of -$1.3 bn highlights the actual cost to shareholders.

Nevertheless, following the sale there is material surplus capital and scope for buybacks and improved returns. Macquarie retains a Neutral rating and $26.50 target.

Target price is $26.50 Current Price is $25.36 Difference: $1.14
If WBC meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $28.37, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in September.

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

Morgan Stanley rates WBC as Overweight (1) -

Westpac Bank has announced the sale of its Australian Life Insurance business for $900m, and an exclusive 20-year strategic alliance with TAL Dai-ichi Life Australia.

At first glance, the sale price is below expectations, as media reports had suggested a range of $1.2bn to $1.5bn, notes the analyst. The $29.20 target price and Overweight rating are unchanged. Industry view: In-line.

Target price is $29.20 Current Price is $25.36 Difference: $3.84
If WBC meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $28.37, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in September.

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

Morgans rates WBC as Add (1) -

Morgans views the capital management potential for Westpac Bank to be more exciting than the other major banks, after the annnounced sale of the Australian life insurance business. This adds to the bank's surplus CET1 capital position.

The broker makes no changes to forecasts and retains its Add rating and $29.50 target price.

Target price is $29.50 Current Price is $25.36 Difference: $4.14
If WBC meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $28.37, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in September.

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

Ord Minnett rates WBC as Hold (3) -

Westpac has sold its life insurance business for $900m to TAL Dai-ichi Life. The bank has entered a 20-year strategic alliance for the provision of life insurance products to its Australian customers and will receive ongoing payments.

The main asset that remains to be sold in the specialist division is the superannuation, investments and platforms business.

Ord Minnett suggests this will add more fuel to future capital management but does not expect an announcement until final capital rules are forthcoming from the Australian Prudential Regulation Authority.

A $5bn off-market buyback is expected in the first half. Hold rating and $27 target maintained.

Target price is $27.00 Current Price is $25.36 Difference: $1.64
If WBC meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $28.37, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in September.

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

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

Following FY22 and long-term production guidance, Morgan Stanley retains the Equal-weight rating though increases its price target to $2.60 from $2.45. Industry view: Attractive.

Also, based on new long-term guidance, forecast Odysseus production from FY27 onwards is increased. The broker highlights that with spot nickel at around US$8.83/lb, there's upside to the 2022 forecast of US$6.84/lb.

Target price is $2.60 Current Price is $2.48 Difference: $0.12
If WSA meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $2.63, suggesting upside of 4.7% (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