Australian Broker Call

Bell Potter rates ALC as Buy (1) -

Bell Potter transfers coverage of Alcidion Group to Thomas Wakim and retains a Buy rating, lowering the target to $0.12 from $0.20. Attention is on the upcoming fourth quarter update.

While negative FY23 EBITDA has been guided, the focus will also be on the opening balance for contracted revenue in FY24.

The broker notes in recent years the company has broadened its customer base and expanded its product offering, and remains well-positioned to leverage its investments, particularly in the UK.

Target price is $0.12 Current Price is $0.10 Difference: $0.023
If ALC meets the Bell Potter target it will return approximately 24% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Morgan Stanley rates CBA as Underweight (5) -

Morgan Stanley believes mortgage loss rates will remain modest for CommBank, but consumer unsecured loss rates will rise.

The broker suggests investors will be looking for any early signs of weaker consumer credit quality in the bank's FY23 result.

The Underweight rating and $82 target are maintained. Industry View: In-Line.

Target price is $82.00 Current Price is $99.62 Difference: minus $17.62 (current price is over target).
If CBA meets the Morgan Stanley target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $89.60, suggesting downside of -10.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.5

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

Macquarie rates CMM as Outperform (1) -

From Capricorn Metals' preliminary Q4 metrics, Macquarie determines underlying free cash (and bullion) build was a $13.4m beat, while gold production from Karlawinda was a -7% miss.

Gold sales and gold price received were misses and beats of -3% and 9%, respectively, against the analyst's forecasts.

The broker's target rises to $4.90 from $4.80 on improving near-term earnings, while the Outperform rating is unchanged.

Target price is $4.90 Current Price is $4.39 Difference: $0.51
If CMM meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Ord Minnett rates COS as Buy (1) -

Ord Minnett only initiated coverage of Cosol in March this year. By now, the company has announced a major contract renewal, with Ok Tedi in PNG, worth $17m over three years.

Renewal had already been assumed and thus the announcement triggers no changes. The broker does highlight this contract represents circa 6.5% of forecast FY24 revenues.

Ord Minnett's comfort with projections has received a boost. Target remains at $1.07. Rating remains Buy.

Target price is $1.07 Current Price is $0.83 Difference: $0.245
If COS meets the Ord Minnett target it will return approximately 30% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Morgans rates HMC as Add (1) -

HMC Capital's five platforms comprise three unlisted funds and two listed REITs, which Morgans expects to drive growth in assets under management (AUM).

Following a trading update, the analyst notes the REIT's unlisted fund raising activities are tracking in line with forecasts. FY23 DPS guidance was unchanged and AUM is on track to reach $10bn by the end of 2023. No EPS guidance was provided.

The Add rating and $5.18 target are maintained.

Target price is $5.18 Current Price is $4.78 Difference: $0.4
If HMC meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $4.91, suggesting upside of 2.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

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

Morgan Stanley's June quarter survey on premiums reveals personal lines pricing remains at peak levels, while new business pricing in Home accelerated to 22% year-on-year and Motor eased to 21%.

The broker highlights Insurance Australia Group appears to be pricing more aggressively on Home while Suncorp Group had larger increases in Motor. Pricing for compulsory third party (CTP) remained broadly flat.

The $4.75 target and Equal-weight rating are unchanged. Industry View: In-Line.

Target price is $4.75 Current Price is $5.76 Difference: minus $1.01 (current price is over target).
If IAG meets the Morgan Stanley target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.46, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Bell Potter rates JHG as Hold (3) -

Janus Henderson is due to report its first half results on August 1 and Bell Potter adjusts forecasts, expecting investment returns will be positive and forecasting outflows of -US$3.9bn over the June quarter.

As a result, earnings forecasts increase by 4.6% for FY23 and by 2.9% for FY24. At some stage, the broker expects the company's new strategy will lead to stronger operating results and a positive impact on the share price.

Hold maintained. Target is raised to $42.64 from $41.29.

Target price is $42.64 Current Price is $41.07 Difference: $1.57
If JHG meets the Bell Potter target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $40.02, suggesting downside of -2.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

This company reports in USD. 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

Macquarie rates JIN as Outperform (1) -

In the lead up to FY23 results for Jumbo Interactive, Macquarie forecasts a 48% EBITDA margin (excluding Stride and StarVale), which is at the low-end of the 48-50% guidance range.

For FY24, the analyst forecasts $74m EBITDA, an increase of 29% year-on-year, which is broadly consistent with the consensus estimate. Growth in FY24 is thought to be underpinned by lottery volumes normalisation and a price increase in mid-May 2023.

The broker continues to see a re-rating opportunity for the company's shares from jackpot activity, digital penetration growth and the re-pricing, and raises its target to $17.45 from $17.20.

Target price is $17.45 Current Price is $13.87 Difference: $3.58
If JIN meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $18.38, suggesting upside of 28.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Macquarie rates MP1 as Neutral (3) -

Macquarie's target for Megaport jumps to $9 from $6 after management upgraded FY23 earnings (EBITDA) guidance by 18%. There was  faster-than-expected cost out and lower churn than anticipated from virtual cross connects (VXC) re-pricing. 

Management wasn't specific but noted FY24 guidance will be higher. The analyst suggests reinvestment may impact FY24 earnings and the company is currently working out the extent of investment required to grow its distribution strategy.

The execution of this distribution strategy remains a key risk, according to the Neutral-rated broker, and may result in 6-12 months of slower than historical revenue growth.

Target price is $9.00 Current Price is $8.99 Difference: $0.01
If MP1 meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $10.03, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Morgans rates MP1 as Add (1) -

Even after incurring -$2.6m in redundancy costs, Megaport generated positive free cash flow (FCF) in Q4 and Morgans notes the company is now generating around $15m per annum of FCF. This is considered a huge milestone for the company.

As a result of higher revenue and lower costs, management upgraded FY23 normalised earnings (EBITDA) guidance to $19-21m from $16-18m. A guidance upgrade for FY24 will follow in a month or so, according to the analyst.

The target rises to $10 from $9 and the Add rating is unchanged. While the analyst expects positive FCF in FY24, some will be invested in late-FY24 into sales and marketing to re-stimulate revenue growth.

Target price is $10.00 Current Price is $8.99 Difference: $1.01
If MP1 meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $10.03, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

UBS rates MP1 as Buy (1) -

Megaport has upgraded guidance (and expects to upgrade FY24 guidance) after moving to net cash flow positive, and UBS sees this as a sign the company's strategy is working and that the result has been de-risked. 

The company reported a surge in financial performance and operating metrics. The broker suspects the results will reveal lower churn and more services per customer.

While the outlook for FY24 is less clear, the broker expects that if the net cash flow position in the June quarter is continued into FY24, the odds of a capital raising fall sharply (the company terminated its $25m HSBC debt facility, considering it unnecessary).

Buy rating retained. Target price rises to $12.50 from $11.40.

Target price is $12.50 Current Price is $8.99 Difference: $3.51
If MP1 meets the UBS target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $10.03, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Morgan Stanley rates RIO as Overweight (1) -

Analysts at Morgan Stanley are currently on a site vist to Rio Tinto's Oyu Tolgoi operations in Mongolia. Meetings with policymakers unveiled a substantially improved relationship with the Mongolian government and a strengthened social license.

A presentation by Rio reconfirmed management's production and cost targets and highlighted growth optionality, in the broker's view.

Production targets for Oyu Tolgoi were a 5% beat compared to consensus, explains the broker, and were for an average copper output of circa 340kt during 2023-28 and about 500kt during 2029-2036.

The Overweight rating and $124 target are unchanged. Sector view is Attractive.

Target price is $124.00 Current Price is $111.91 Difference: $12.09
If RIO meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $113.17, suggesting downside of -0.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.2

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

Morgan Stanley rates SUN as Overweight (1) -

Morgan Stanley's June quarter survey on premiums reveals personal lines pricing remains at peak levels, while new business pricing in Home accelerated to 22% year-on-year and Motor eased to 21%.

The broker highlights Insurance Australia Group appears to be pricing more aggressively on Home while Suncorp Group had larger increases in Motor. Pricing for compulsory third party (CTP) remained broadly flat.

The $14.50 target and Overweight rating are unchanged. Industry View: In-Line.

Target price is $14.50 Current Price is $13.42 Difference: $1.08
If SUN meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $14.62, suggesting upside of 8.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Macquarie rates TLC as Neutral (3) -

Lottery Corp's FY23 result is due on August 23 and Macquarie forecasts $736m for earnings (EBITDA), down from $749m, which compares to the consensus estimate of $745m.

The broker doesn't expect FY24 consensus to materially change. Earnings sensitivities are driven by views on lottery volumes and
digital penetration.

The Neutral rating and $5.35 target are maintained. The analyst considers Lottery Corp a high-quality defensive business that is currently fully valued.

Target price is $5.35 Current Price is $5.12 Difference: $0.23
If TLC meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $5.48, suggesting upside of 7.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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