Australian Broker Call

Shaw and Partners rates ACF as Buy (1) -

Acrow announced a successful bid for the second-largest industrial access contract, valued at $42m, for Perdaman's Project Ceres urea plant in the Burrup Strategic Industrial Area.

Shaw and Partners highlights Ceres Urea Plant is expected to become Australia's largest gas stream ammonia-urea plant and one of the largest globally.

The broker believes the contract was secured through a competitive bidding process and will last 2.5 years. No change was made to management's FY25 guidance.

Buy rating. High risk. Target price $1.30. The analyst retains earnings forecasts.

Target price is $1.30 Current Price is $1.09 Difference: $0.21
If ACF meets the Shaw and Partners target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $1.30, suggesting upside of 20.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Ord Minnett rates ALD as Buy (1) -

Following a period of research restriction, Ord Minnett resumes coverage of Ampol with a $34.50 target, down from $36.50, reflecting the latest debt issuance and a recent softer trading update.

The broker notes a special dividend in February is now unlikely, given the debt-to-operating earnings (EBITDA) ratio of approximately 2.6 times for 2024, which exceeds management's target range of 2.0-2.5.

The Buy rating is unchanged.

Target price is $34.50 Current Price is $28.03 Difference: $6.47
If ALD meets the Ord Minnett target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $32.84, suggesting upside of 17.5% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Morgan Stanley rates ANZ as Underweight (5) -

Morgan Stanley notes the appointment of Nuno Matos, former CEO of Wealth and Personal Banking at HSBC, as ANZ Bank's next CEO, succeeding Shayne Elliott in July 2025, addresses a key source of uncertainty for the bank.

The broker believes the choice of a retail banker with global experience underscores the bank's focus on strengthening its retail franchise and competitive position.

ANZ Bank is rated Underweight with a target price of $27.80. The industry view remains In-Line.

Target price is $27.80 Current Price is $30.03 Difference: minus $2.23 (current price is over target).
If ANZ 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 $27.88, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.7

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

Ord Minnett rates ANZ as Hold (3) -

Ord Minnett does not foresee significant changes to ANZ Bank's strategy following the appointment of Nuno Matos as CEO, succeeding Shayne Elliott, effective 3rd July next year.

With this appointment date, the broker expects the new CEO will not address the market before the bank's FY25 results in November, which could leave investors cautious in the interim.

Ord Minnett maintains a Hold rating with a $27.50 target.

Target price is $27.50 Current Price is $30.03 Difference: minus $2.53 (current price is over target).
If ANZ meets the Ord Minnett target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $27.88, suggesting downside of -5.8% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.7

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

Citi rates ARB as Buy (1) -

Citi suggests ARB Corp's second-half FY25 Australian Aftermarket sales could face headwinds due to potential market share gains by the popular BYD Shark 6, the first plug-in hybrid ute available in the market.

The broker notes ARB currently lacks products for the Shark 6, which has new orders representing circa 2% of the Australian pick-up/cab-chassis 4×4 market in 2023.

Citi retains a Buy rating with a $50 target price.

Target price is $50.00 Current Price is $40.06 Difference: $9.94
If ARB meets the Citi target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $43.20, suggesting upside of 8.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

UBS rates BHP as Neutral (3) -

In research prepared and distributed before the latest stimulus announcement by China, UBS's global basic materials research team expressed the view that the outlook for commodities had arguably deteriorated, also because of Trump's love for import tariffs.

UBS's preference lays with commodities underpinned by "compelling supply dynamics" and by demand supported by the energy transition, i.e. copper and aluminium, as well as gold.

UBS's constructive view on gold is based on prospect for lower real bond yields, heightened geopolitical uncertainty and rising allocations by central banks.

The pricing for thermal coal is expected to remain range-bound, with a more positive outlook for met coal while fundamentals continue to deteriorate for iron ore, the team suggests.

For reasons illogical and unclear, UBS's price targets for BHP Group are solely in GBP and ZAR, respectively GBP22 and ZAR540, both lowered by -2%. Neutral rating remains unchanged.

Current Price is $40.59. Target price not assessed.

Current consensus price target is $45.55, suggesting upside of 8.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

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

Market Sentiment: 0.8

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

Macquarie rates BSL as Outperform (1) -

Macquarie points to ongoing pressure in the steel industry, with spreads near lows in both Asia and the US and minimal improvement in Asian steel prices expected.

The broker assumes a price of US$600/t for much of 2025 in Asia and mid-US$800/t prices in the US by the first half of 2026, from current spot prices around US$700/t.

Due to changes in Macquarie's macro strategy team’s commodity price forecasts, the analyst lowers FY25 EPS estimates by -20% and raises the FY26 EPS forecast by 8%.

Target price increases to $24.90 from $23.10 on valuation grounds. Outperform rating unchanged.

Target price is $24.90 Current Price is $21.53 Difference: $3.37
If BSL meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $22.95, suggesting upside of 3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.5

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

Citi rates CAR as Buy (1) -

Aligning with Citi's views following a recent discussion with management at CAR Group, commentary during US-based RV manufacturer Thor Industries' first-quarter results presentation indicates growing confidence in a turning point by mid-2025.

In a potentially positive sign for CAR Group's RVTrader (part of Trader Interactive), Thor reports improved sentiment among consumers and dealers since the US election, with dealers noting increased foot traffic.

The Buy rating and $39.50 target are maintained for CAR Group.

Target price is $39.50 Current Price is $40.22 Difference: minus $0.72 (current price is over target).
If CAR meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $38.67, suggesting downside of -1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.8

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

Ord Minnett rates COL as Accumulate (2) -

Ord Minnett highlights that Woolworths Group has reopened four distribution centres in NSW and Victoria after reaching an agreement with unions on wage increases and performance monitoring.

The broker estimates Coles Group has captured two-thirds of the business lost by Woolworths, leading to upward revisions in its EPS estimates for Coles by 2% for FY25 and 1% for FY26 and FY27.

Ord Minnett maintains an Accumulate rating and a $19.50 target.

Target price is $19.50 Current Price is $19.01 Difference: $0.49
If COL meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $19.54, suggesting upside of 2.8% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.6

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

Citi rates EVT as Buy (1) -

Citi is seeing early signs of a recovery for cinemas in the wake of the Hollywood strikes in 2023.

The broker notes potential upside to its FY25 Australia Entertainment earnings EBIT forecast of $21m for EVT Ltd.

Target $12.73. Buy.

Target price is $12.73 Current Price is $11.82 Difference: $0.91
If EVT meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Macquarie rates GQG as Outperform (1) -

Macquarie observes the funds under management update for November from GQG Partners, rising 0.1% month-on-month and up 41.7% year-on-year.

US equity received fund inflow growth of 8.9% month-on-month, while emerging markets and international funds reported monthly declines of -3.8% and -1.9%, respectively. Global equity reported a rise of 3.8% month-on-month.

Macquarie forecasts US$10.2bn in net flows for 2H24, implying US$0.8bn in net flows for December.

The broker lowers EPS forecasts by -0.7% in 2024 and -4.8% for 2025 and beyond on the back of the funds update.

Target price dips -5% to $3 from $3.15. The stock is seen offering an attractive valuation and over 10% yield. Outperform rating retained.

Target price is $3.00 Current Price is $2.21 Difference: $0.79
If GQG meets the Macquarie target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $2.90, suggesting upside of 28.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.8

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

Ord Minnett rates GQG as Buy (1) -

Ord Minnett lowers its target for GQG Partners to $3.00 from $3.35, reflecting a reduction in underlying earnings estimates by -3% to -8% over the next three years due to a modestly reduced net flow outlook. The Buy rating is maintained.

Net flows of US$0.1bn in November were below the year-to-date average of US$2.0bn but remain positive, considering concerns surrounding Adani exposure.

The broker sees only a modest impact from Adani on the business and maintains a positive outlook, supported by strong investment performance and an expanding distribution network.

Target price is $3.00 Current Price is $2.21 Difference: $0.79
If GQG meets the Ord Minnett target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $2.90, suggesting upside of 28.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.8

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

Macquarie rates ILU as Outperform (1) -

luka Resources has secured an additional $400m in funding for the Eneabba rare earths project from the Australian government.

Macquarie notes the company will contribute another -$214m in cash, with cost overruns shared on a 50:50 basis.

Iluka also announced a delay in first production, with commissioning now planned for 2027, two years later than originally scheduled.

The broker observes the share price reaction to the announcement suggests investors might have preferred cancelation of the project.

Adjusting for changes in funding, Macquarie lowers EPS forecasts by -2% to -13% for 2026-2029.

The $7.10 target price and Outperform rating are maintained.

Target price is $7.10 Current Price is $4.84 Difference: $2.26
If ILU meets the Macquarie target it will return approximately 47% (excluding dividends, fees and charges).

Current consensus price target is $6.52, suggesting upside of 27.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Ord Minnett rates NEM as Hold (3) -

Newmont Corp will receive US$100m upfront and two contingent payments of US$87.5m, pending regulatory approvals, following the sale of the Cripple Creek and Victor projects in Colorado.

The broker highlights this transaction brings the total funds raised from Newmont's 2024 portfolio restructuring program to US$3.9bn, exceeding management's guidance of over US$2bn.

The Hold rating and $77.50 target are maintained.

Target price is $77.50 Current Price is $64.05 Difference: $13.45
If NEM meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

Forecast for FY24:

Forecast for FY25:

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

UBS rates NEM as Neutral (3) -

In research prepared and distributed before the latest stimulus announcement by China, UBS's global basic materials research team expressed the view that the outlook for commodities had arguably deteriorated, also because of Trump's love for import tariffs.

UBS's preference lays with commodities underpinned by "compelling supply dynamics" and by demand supported by the energy transition, i.e. copper and aluminium, as well as gold.

UBS's constructive view on gold is based on prospect for lower real bond yields, heightened geopolitical uncertainty and rising allocations by central banks.

The pricing for thermal coal is expected to remain range-bound, with a more positive outlook for met coal while fundamentals continue to deteriorate for iron ore, the team suggests.

Newmont Corp retains its Neutral rating with unchanged price target of US$54. Future EPS forecasts have been chainsawed as the gold miner continues to divest of assets.

Current Price is $64.05. Target price not assessed.

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Ord Minnett rates POL as Initiation of coverage with Speculative Buy (1) -

Ord Minnett initiates coverage on emerging base metals prospect Polymetals Resources with a Speculative Buy rating and a target price of $1.30.

Management is on track to produce first concentrate next May with the restart of the recently acquired zinc/lead/silver Endeavor mine in the Cobar region of NSW, explains the broker.

The analysts also highlights potential upside via exploration success (e.g. Carpark Lode or Zinc Deeps), toll-treatment or tailings retreatment.

The Speculative Risk qualifier reflects key risks such as the $28m environmental bond (due August 1, 2026), inherent ramp-up risk, and lower levels of liquidity, explains Ord Minnett.

Target price is $1.30 Current Price is $0.89 Difference: $0.41
If POL meets the Ord Minnett target it will return approximately 46% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Citi rates PPT as Buy (1) -

The Australian Tax Office has delivered a nasty surprise for Perpetual and its shareholders with Citi commenting the ATO's view on Perpetual's proposed Scheme of Arrangement transaction looks extremely unfavourable for the deal's prospects with the range of tax outcomes potentially as large as -$493m-$529m.

The range previously suggested by the fund manager was -$106m-227m hence the latest ATO indication is much worse than feared.

The broker suggests the ATO has essentially kyboshed any separation plans and the best option available seems to be to keep everything as is and trust the new CEO to cut costs and revive returns for shareholders.

In addition, Citi expects significant one-off costs have likely been incurred as part of the long-winded process. Buy. Target $22.50.

Target price is $22.50 Current Price is $21.91 Difference: $0.59
If PPT meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $22.70, suggesting upside of 13.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.6

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

UBS rates RIO as Neutral (3) -

In research prepared and distributed before the latest stimulus announcement by China, UBS's global basic materials research team expressed the view that the outlook for commodities had arguably deteriorated, also because of Trump's love for import tariffs.

UBS's preference lays with commodities underpinned by "compelling supply dynamics" and by demand supported by the energy transition, i.e. copper and aluminium, as well as gold.

UBS's constructive view on gold is based on prospect for lower real bond yields, heightened geopolitical uncertainty and rising allocations by central banks.

The pricing for thermal coal is expected to remain range-bound, with a more positive outlook for met coal while fundamentals continue to deteriorate for iron ore, the team suggests.

The broker's Neutral rating for Rio Tinto remains unchanged, as does the GBP52.50 price target.

Target price is $124.00 Current Price is $119.49 Difference: $4.51
If RIO meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $127.17, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

UBS rates S32 as Buy (1) -

In research prepared and distributed before the latest stimulus announcement by China, UBS's global basic materials research team expressed the view that the outlook for commodities had arguably deteriorated, also because of Trump's love for import tariffs.

UBS's preference lays with commodities underpinned by "compelling supply dynamics" and by demand supported by the energy transition, i.e. copper and aluminium, as well as gold.

UBS's constructive view on gold is based on prospect for lower real bond yields, heightened geopolitical uncertainty and rising allocations by central banks.

The pricing for thermal coal is expected to remain range-bound, with a more positive outlook for met coal while fundamentals continue to deteriorate for iron ore, the team suggests.

For reasons illogical and unclear, UBS's price targets for South32 are solely in GBP and ZAR, respectively GBP2.25 and ZAR54, both increased by 5%. Buy rating remains unchanged.

Current Price is $3.60. Target price not assessed.

Current consensus price target is $3.99, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

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

Market Sentiment: 0.8

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

Citi rates SHL as Neutral (3) -

Citi highlights Sonic Healthcare's consolidation of its market-leading position with the acquisition of Laboratory Group Dr. Kramer & Colleagues (LADR), a top-five pathology group in Germany, for -EUR423m.

The payment comprises -EUR222m in shares and -EUR201m in cash. The broker estimates the transaction will be 2-4% accretive to its FY26-28 EPS forecasts.

Citi maintains a Neutral rating and raises the target price to $28 from $27.

Target price is $28.00 Current Price is $28.60 Difference: minus $0.6 (current price is over target).
If SHL meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $27.97, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

Ord Minnett rates SHL as Lighten (4) -

Sonic Healthcare has agreed to acquire German laboratory group Dr. Kramer & Colleagues (LADR) for -EUR423m, comprising -EUR222m in Sonic scrip with the remainder in cash.

Management anticipates immediate EPS accretion following transaction completion in the first half of 2025.

The broker highlights LADR is one of the top five laboratory and testing groups in Germany and operates in Poland and Finland through joint ventures.

The Lighten rating and $23.85 target are maintained.

Target price is $23.85 Current Price is $28.60 Difference: minus $4.75 (current price is over target).
If SHL meets the Ord Minnett target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $27.97, suggesting downside of -1.8% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

Shaw and Partners rates SXG as Buy (1) -

Southern Cross Gold has announced further drilling results from the Apollo prospect, Shaw and Partners notes.

The results suggest excellent vertical continuity of high-grade mineralisation, which the analyst believes confirms the resource has global significance.

Drilling results point to mineralisation beyond the existing exploration target. The broker suggests Southern Cross is progressing towards the goal of doubling the target to 3moz gold equivalent by July 2025.

Shaw and Partners retains a target of $3.69 with a Buy, High-risk rating.

Target price is $3.69 Current Price is $3.47 Difference: $0.22
If SXG meets the Shaw and Partners target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Citi rates TWE as Buy (1) -

Treasury Wine Estates has announced the acquisition of Ningxia Stone & Moon Winery Ltd in China for -$27.5m and Citi analysts, in an early response, regard the deal to be largely positive for Treasury Wine shareholders.

Among the reasons cited is the deal increases local sourcing and production capabilities which may help mitigate against the potential for future tariffs from Australia (in case of).

In addition, the broker highlights China produced wines appear to be gaining in popularity among local consumers. Buy. Target $12.97.

Target price is $12.97 Current Price is $11.49 Difference: $1.48
If TWE meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $13.71, suggesting upside of 14.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.8

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

Ord Minnett rates WOW as Hold (3) -

Ord Minnett notes Woolworths Group has reopened four distribution centres in NSW and Victoria following an agreement with unions on wage increases and performance monitoring.

The broker reduces its December-quarter sales forecast by -$200m and lowers its first-half FY25 earnings (EBIT) estimate by -$79m to $1.43bn, compared to management's previous guidance of $1.48-1.53bn.

Ord Minnett maintains a Hold rating and a $32 target.

Target price is $32.00 Current Price is $30.24 Difference: $1.76
If WOW meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $32.84, suggesting upside of 8.2% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.1

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

UBS rates WOW as Neutral (3) -

UBS highlights Woolworths Group has agreed to around 11% wage increases over three years for the striking United Workers Union as part of the individual enterprise agreement relating to the company's four distribution centres.

The broker notes 17 days of industrial action had a -$140m negative impact on food sales, up from an estimated -$50m over 12 days.

At an earnings level, this equates to an estimated impact of -$50m to -$60m from operating de-leverage on sales losses, supply chain costs, and stock losses.

UBS lowers EPS forecasts by -3.7% for FY25 and -0.3% for FY26. The target price is lowered to $30 from $31.25. Neutral rating retained.

Target price is $30.00 Current Price is $30.24 Difference: minus $0.24 (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 $32.84, suggesting upside of 8.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.1

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