Australian Broker Call

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

Morgans reviews forecasts and its investment view and believes FY18 will mark a material bounce in earnings after a difficult FY17.

Morgans also increases its FY19 like-for-like sales growth assumptions to 4%. Rating is upgraded to Add from Hold. Target is raised to $2.50 from $2.30.

Target price is $2.50 Current Price is $2.24 Difference: $0.26
If ADH meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Citi rates APA as Neutral (3) -

The company has announced a non-binding indicative proposal has been received from CK Infrastructure at $11 a share. Due diligence has been granted and no recommendation has been made at this stage.

Citi believes the bid price is attractive, at a 35% premium to valuation, and demonstrates ongoing offshore investor appetite for regulated utilities in Australia.

Neutral retained and target is $8.17.

Target price is $8.17 Current Price is $9.66 Difference: minus $1.49 (current price is over target).
If APA meets the Citi target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.81, suggesting upside of 1.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Credit Suisse rates APA as Upgrade to Outperform from Underperform (1) -

Following the news that CKI consortium is offering $11 per share to shareholders, Credit Suisse has double-whammy upgraded to Outperform from Underperform.

The analysts make it clear they think the offer is regarded as "attractive" given their view that new arbitration rules "dramatically" reduce the economic life of APA's assets.

Within the Australian context, the analysts point out CKI has a track record of paying what others won't. FIRB approval remains key. Target price lifts to $11 (was $7.45 pre-bid). Note current forecasts suggest no dividend payouts post the present financial year.

Target price is $11.00 Current Price is $9.66 Difference: $1.34
If APA meets the Credit Suisse target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $9.81, suggesting upside of 1.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Deutsche Bank rates APA as Buy (1) -

Hong Kong based CK Infrastructure has already had initial discussions with the ACCC and FIRB regarding its indicative bid of $11 per share for APA. But the broker suggests final approval is a "tough ask" given CKI already has an extensive footprint in Australia.

Buy and $10.85 target retained.

Target price is $10.85 Current Price is $9.66 Difference: $1.19
If APA meets the Deutsche Bank target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $9.81, suggesting upside of 1.6% (ex-dividends)

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Macquarie rates APA as No Rating (-1) -

The company has received a non-binding indicative offer at $11 a share from CK Infrastructure. The offer is subject to regulatory approvals and due diligence has been granted.

Macquarie notes at this stage, CK Infrastructure is likely to be the first company to test the Security of Critical Infrastructure Act. While the company was approved to own both DUET and Envesta in the past it is untested under this act.

Due to research restrictions Macquarie cannot provide a rating or target at this stage.

Current Price is $9.66. Target price not assessed.

Current consensus price target is $9.81, suggesting upside of 1.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Morgans rates APA as Add (1) -

The company has received a takeover bid from CK Infrastructure at $11 a share. APA has granted access to conduct due diligence, although Morgans notes directors have yet to indicate their support for the bid, which is a condition of the offer.

Morgans estimates the bid price implies a forward distribution yield of 4.3%, an enterprise value/EBITDA of 13.9x and a thin 5% per annum equity return on long-run forecasts.

While other bidders cannot be ruled out the broker suggests they may find it difficult to combat CK Infrastructure's firepower. Add rating maintained. Target rises to $11.00 from $8.52.

Target price is $11.00 Current Price is $9.66 Difference: $1.34
If APA meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $9.81, suggesting upside of 1.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

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

After further review of the bid by CK Infrastructure for APA Group, Ord Minnett has downgraded to Hold from Buy.

The main challenge in getting a deal done, the broker suggests, is approval from the FIRB, even though the stock factors in a 58% likelihood of success. The broker raises the target to $11.00 from $9.55.

Target price is $11.00 Current Price is $9.66 Difference: $1.34
If APA meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $9.81, suggesting upside of 1.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

UBS rates APA as Neutral (3) -

The company has received an unsolicited indicative proposal at $11 a share from a consortium led by CK Infrastructure. Due diligence has been granted.

The offer will permit distribution of up to $0.24 per share in respect of the earnings for the six months to June 2018. UBS observes the acquisition would increase CK Infrastructure's exposure to the Australian gas transmission sector.

Important drivers of the value of APA to a strategic buyer will be the expected synergies and its cost of capital, the broker suggests. UBS maintains a Neutral rating and $8.45 target.

Target price is $8.45 Current Price is $9.66 Difference: minus $1.21 (current price is over target).
If APA meets the UBS target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.81, suggesting upside of 1.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

UBS rates AZJ as Upgrade to Buy from Neutral (1) -

UBS believes heated and protracted negotiations over the draft decision by the Queensland regulator have skewed sentiment to an extreme negative such that an improvement is now more likely.

The broker suggests the stock is approaching a realistic floor of $3.75 based on the network being worth its regulated asset base, less debt. Therefore, UBS upgrades to Buy from Neutral. Target is reduced to $4.60 from $4.90.

Target price is $4.60 Current Price is $4.36 Difference: $0.24
If AZJ meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $4.42, suggesting upside of 1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Ord Minnett rates BLD as Accumulate (2) -

German building materials manufacturer, Knauf, will acquire USG Corp. The focus for Boral now is on its right to acquire USG's 50% share of their joint-venture in Asia-Pacific.

Under a scenario where there would be no asset sales, Ord Minnett estimates earnings accretion in FY20 could be 7-8% but would be broadly value-neutral.

Accumulate rating maintained. Target is $7.70.

Target price is $7.70 Current Price is $6.37 Difference: $1.33
If BLD meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $7.57, suggesting upside of 18.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Citi rates CGF as Buy (1) -

Citi lowers estimates for EPS in FY19 by -3% and FY20 by -5%, given the company intends to shift its asset allocation by reducing property exposure and increasing fixed income exposure.

As this moves Challenger to a less capital-intensive model, with greater ability to self fund growth, there are some offsetting positives and Citi maintains a Buy rating and $13.60 target.

Target price is $13.60 Current Price is $12.56 Difference: $1.04
If CGF meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $12.23, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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

Credit Suisse rates CGF as Outperform (1) -

Rising property valuations, driven by lower risk premiums and strong demand from offshore capital, have caused the company to sell some of its property assets.

While technically, Credit Suisse observes, this will lead to a lower normalised COE margin it will likely be partly offset by the positive investment experience when selling an asset at above book value.

Less property exposure should also provide investors with increased comfort around the risk to the company's portfolio in a rising interest-rate environment, the broker adds. Net profit estimates are downgraded by -3% for FY19 and -4% for FY20.

Outperform and $13.20 target retained.

Target price is $13.20 Current Price is $12.56 Difference: $0.64
If CGF meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $12.23, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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

Deutsche Bank rates CGF as Hold (3) -

At its investor day, Challenger reconfirmed its strategy to develop and grow the annuity market in Australia and continue to develop the Fidante Partners business, including support for launching fixed interest ETFs, the broker reports. FY18 guidance was reiterated.

The broker sees value as fair, retaining Hold and an $11.70 target.

Target price is $11.70 Current Price is $12.56 Difference: minus $0.86 (current price is over target).
If CGF meets the Deutsche Bank target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.23, suggesting downside of -2.6% (ex-dividends)

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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

Macquarie rates CGF as Outperform (1) -

Over the next 12 months Challenger plans to reduce its property allocation. This will reduce capital intensity at the expense of some near-term earnings, Macquarie observes.

The recent performance in the share price has eroded some valuation upside but the broker believes a continuation of the benign credit environment and favourable regulatory backdrop should support the current multiple.

Outperform rating and $13 target maintained.

Target price is $13.00 Current Price is $12.56 Difference: $0.44
If CGF meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $12.23, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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

Morgan Stanley rates CGF as Underweight (5) -

The company has reaffirmed FY18 guidance and indicated its life investment portfolio will re-allocate away from property into fixed income. Property allocation is expected to reduce to the mid teens over the next 12 months.

Morgan Stanley calculates that, all else being equal, this will reduce margins but lift multiples. Underweight rating. Target is $11.00. Industry view: In-line.

Target price is $11.00 Current Price is $12.56 Difference: minus $1.56 (current price is over target).
If CGF meets the Morgan Stanley target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.23, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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

Morgans rates CGF as Hold (3) -

The company hosted an investor briefing and reaffirmed FY18 guidance for pre-tax profit of $545-565m. In the near term the business will re-weight towards fixed income investments given the better relative value.

Morgans observes this will cause a hit to FY19 earnings but also release capital. The broker downgrades future year earnings forecast by -5-6% on lower COE margin assumptions. Hold rating maintained. Target is raised to $13.17 from $13.02.

Target price is $13.17 Current Price is $12.56 Difference: $0.61
If CGF meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $12.23, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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

Ord Minnett rates CGF as Lighten (4) -

Management has cited asset yield pressures in property and equities, leading to a reduction in its exposure for property to the mid teens from 21% of the book as of the first half of FY18.

Ord Minnett is supportive of the move to de-risk the asset portfolio, although the changes by themselves ultimately provide a headwind to earnings. The broker retains a Lighten rating and raises the target to $9.50 from $9.00.

Target price is $9.50 Current Price is $12.56 Difference: minus $3.06 (current price is over target).
If CGF meets the Ord Minnett target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.23, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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

UBS rates CGF as Neutral (3) -

Reduced risk premiums across growth assets, coupled with rising capital demands as the annuity book accelerates, has led the company to reduce risk asset allocations.

UBS notes, while this comes at a near-term cost to earnings, it provides a more sustainable footing for funding longer-term book growth and reduces the reliance on future equity injections. Neutral rating maintained. Target is reduced to $12.65 from $12.85.

Target price is $12.65 Current Price is $12.56 Difference: $0.09
If CGF meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $12.23, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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

Morgans rates FCT as Initiation of coverage with Add (1) -

Morgans notes cyber security remains one of the largest challenges facing businesses today. Firstwave Cloud Technology offers enterprise-grade cyber security for small-and medium-sized businesses.

Morgans acknowledges this is not a self-funding business so access to capital remains a key risk. Upside should come, in the broker's opinion, from generating revenue across the cloud platform with existing and new channel partners.

The broker initiates coverage with an Add rating and $0.33 target.

Target price is $0.33 Current Price is $0.27 Difference: $0.06
If FCT meets the Morgans target it will return approximately 22% (excluding dividends, fees and charges).

Market Sentiment: 1.0

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

Credit Suisse rates GNC as Outperform (1) -

Initial forecasts from ABARES for the 2018/19 crop confirm expectations of another seasonally weak year for the east coast. Credit Suisse calculates that, with capital expenditure reducing in 2019 as growth projects reach completion, free cash flow is adequate to continue the de-gearing.

FY19 estimates for earnings are downgraded on a reduced crop forecast and the dividend is reduced in line with earnings. Outperform maintained. Target is reduced to $8.78 from $8.80.

Target price is $8.78 Current Price is $7.88 Difference: $0.9
If GNC meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $8.49, suggesting upside of 7.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Deutsche Bank rates GNC as Buy (1) -

The initial ABARES estimate for the FY19 winter crop is worse than the broker had feared. It suggests a -1% decline from a weak FY18 crop.

Low expectations are nevertheless already priced in, the broker suggests, hence there is upside risk if, closer to the time, the crop outlook improves. Buy and $9.10 target retained.

Target price is $9.10 Current Price is $7.88 Difference: $1.22
If GNC meets the Deutsche Bank target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $8.49, suggesting upside of 7.8% (ex-dividends)

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Macquarie rates GTY as Outperform (1) -

Hometown has submitted a non-binding indicative proposal to acquire the business for $2.10 a share. Due diligence has not been granted at this stage.

Macquarie suggests this means a higher offer is likely to be required. The broker also believes there are other potential bidders. Outperform maintained. Target rises to $2.26 from $1.92.

Target price is $2.26 Current Price is $2.13 Difference: $0.13
If GTY meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

UBS rates GTY as Buy (1) -

The company has received an indicative and non-binding all-in cash takeover bid from Hometown of $2.10 a share. The offer price would be reduced by any further dividends or distributions that are announced.

The board is currently assessing the proposal. UBS maintains a Buy rating and $2.10 target.

Target price is $2.10 Current Price is $2.13 Difference: minus $0.03 (current price is over target).
If GTY meets the UBS 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 FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Ord Minnett rates GUD as Hold (3) -

The company has acquired Disc Brakes Australia, a manufacturer and marketer of disk brake rotors and brake pads, for $20m.

Ord Minnett believes such smaller bolt-on acquisitions will be value accretive to shareholders and genuine synergies will be achieved through scale benefits. The broker maintains a Hold rating and raises the target to $13.00 from $12.25.

Target price is $13.00 Current Price is $13.98 Difference: minus $0.98 (current price is over target).
If GUD meets the Ord Minnett target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.06, suggesting downside of -6.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.2

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

Citi rates IPL as Neutral (3) -

Citi believes the award of an explosives contract from Fortescue Metals ((FMG)) was a much-needed win and management has delivered on its promise to mitigate the hit from the loss of contracts from BHP Billiton ((BHP)) and Roy Hill.

Nevertheless, the broker notes, domestic ammonium nitrate oversupply has set in and contract prices are coming under renewed pressure. Neutral retained. Target is $3.90.

Target price is $3.90 Current Price is $3.48 Difference: $0.42
If IPL meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $3.84, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Deutsche Bank rates IPL as Buy (1) -

Orica has lost its Fortescue Metals ((FMG)) contract for ammonium nitrate supply and services to Incitec Pivot, starting partially from next month and ending entirely by the end of 2019. The broker sees this as a positive as it will reduce forecast losses from the cessation of WA contracts the company has flagged.

This would represent upside to consensus FY19-20 profit forecasts of 2-3%, the broker estimates. Buy and $4.40 target retained.

Target price is $4.40 Current Price is $3.48 Difference: $0.92
If IPL meets the Deutsche Bank target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $3.84, suggesting upside of 10.2% (ex-dividends)

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

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

The company has stated that the Fortescue Metals ((FMG)) contract would mitigate around 50% of the financial impact associated with the previously-announced contract losses in Western Australia in FY19-22.

This is in line with Morgan Stanley's base case assumptions, although the extent to which mitigation is built into consensus estimates is not clear. The broker envisages scope for up to 5% in upgrades to consensus estimates in FY19-22.

Equal-weight rating, Cautious industry view and $3.80 target maintained.

Target price is $3.80 Current Price is $3.48 Difference: $0.32
If IPL meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.84, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Morgans rates LVH as Add (1) -

The company has appointed Christy Forest in the role of CEO. Co-founders will stay with the company in senior executive roles. Morgans does not expect any major changes in strategy or levels of expenditure.

Add rating and $1.14 target maintained.

Target price is $1.14 Current Price is $0.62 Difference: $0.52
If LVH meets the Morgans target it will return approximately 84% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Morgan Stanley rates MIN as Overweight (1) -

Mineral Resources has announced it will acquire the Cliffs tenements along with plant and equipment on site. It will also assume ownership of fixed infrastructure assets at the Port of Esperance.

The amount paid is undisclosed, although Morgan Stanley notes an announcement by Cliffs that indicates the transaction reduces rehabilitation liabilities by -$65-75m.

The infrastructure asset is close to the Mt Marion project and could help Mineral Resources reduce operating costs, the broker suggests, although the company has made no comment in this regard.

Target is $23.60. Overweight retained. Industry view: Attractive.

Target price is $23.60 Current Price is $16.76 Difference: $6.84
If MIN meets the Morgan Stanley target it will return approximately 41% (excluding dividends, fees and charges).

Current consensus price target is $21.03, suggesting upside of 25.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

Deutsche Bank rates ORI as Hold (3) -

Orica has lost its Fortescue Metals ((FMG)) contract for ammonium nitrate supply and services to Incitec Pivot, starting partially from next month and ending entirely by the end of 2019. With Burrup operating under capacity, the broker suggests the initial earnings impact will not be material.

It may be more so in 2020, and the broker hopes the loss does not lead to any irrational behaviour on the part of either company. Hold and $18 target retained.

Target price is $18.00 Current Price is $17.34 Difference: $0.66
If ORI meets the Deutsche Bank target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $18.29, suggesting upside of 5.5% (ex-dividends)

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

UBS rates PRY as Downgrade to Sell from Buy (5) -

UBS changes lead analyst coverage for the stock and remodels earnings drivers. FY19-20 forecasts decline by -8-9% versus previous estimates. The broker also shifts to a DCF-based valuation methodology.

Target reduces to $3.50 from $4.00. Rating is downgraded to Sell from Buy. The broker does not believe the current share price is factoring in the earnings risk as several factors could have a negative impact on FY19.

Target price is $3.50 Current Price is $3.50 Difference: $0
If PRY meets the UBS target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $3.61, suggesting upside of 3.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.6

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

Macquarie rates RCR as Outperform (1) -

Macquarie considers the stock oversold while there is significant upside visible for FY19. Near-term catalysts include rail and solar awards.

The broker estimates around 50% of revenue for FY19 is in hand and the company needs around $500m of contracts to be awarded by the FY18 result in August to have 75% of forecast revenue in hand.

FY18 margins are slightly lower and the broker reduces EPS estimates for FY18 by -4% and FY19 by -9%. Target is reduced by -8% to $4.45 in line with the revised forecasts. The broker retains an Outperform rating.

Target price is $4.45 Current Price is $3.09 Difference: $1.36
If RCR meets the Macquarie target it will return approximately 44% (excluding dividends, fees and charges).

Current consensus price target is $4.58, suggesting upside of 48.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Macquarie rates SEH as Downgrade to Neutral from Outperform (3) -

The company has negotiated an eight-year extension to the Linxing PSC until 2036 but in return has reduced its interest and relinquished some acreage.

Macquarie forecasts a -20% fall in Linxing 2P reserves because of the changes. While the outlook for domestic gas is particularly positive there is also much risk, Macquarie observes.

The broker reduces the target to $0.25 from $0.33 and downgrades to Neutral from Outperform.

Target price is $0.25 Current Price is $0.23 Difference: $0.02
If SEH meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

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

Ord Minnett expects the company to announce an additional $500m-1bn of cost savings and new product bundling initiatives at its strategy briefing on June 20.

There is also the chance of a game-changing announcement such as a structural separation. The broker upgrades to Accumulate from Hold. Target is $3.30.

Target price is $3.30 Current Price is $2.84 Difference: $0.46
If TLS meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $3.38, suggesting upside of 19.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Morgan Stanley rates WEB as Upgrade to Equal-weight from Underweight (3) -

As global hotel trading has provided strong tailwinds to the company's key B2B exposures, Morgan Stanley expects the market will give a free pass on key qualitative issues such as soft cash conversion and higher capital expenditure.

Nevertheless, the broker remains cautious regarding the structural challenge, although envisages little risk to FY18 results.

As the earnings risk is pushed out the broker upgrades to Equal-weight from Underweight. Target is raised to $12.60 from $10.30. Industry View is In-Line.

Target price is $12.60 Current Price is $13.61 Difference: minus $1.01 (current price is over target).
If WEB 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 $13.55, suggesting downside of -0.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.8

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