Australian Broker Call

Credit Suisse rates APM as Outperform (1) -

Credit Suisse makes some minor adjustments to reflect the error in the DES Star Ratings for APM Human Services International which the broker quoted as 3.92 instead of the actual result of 3.98.

The analyst highlights the March quarter Star Rating across 192 sites rose to 3.98 from 3.93 in the previous quarter and 3.91 a year ago.

Competitors experienced a difficult quarter and Credit Suisse anticipates the company will gain market share from re-allocation from major client the Department of Social Services.

The broker's forecasts for FY22 stand at some 6% above the prospectus forecast and 20% above in FY23.

The Outperform rating and the price target of $4.25 are retained.

Target price is $4.25 Current Price is $3.35 Difference: $0.9
If APM meets the Credit Suisse target it will return approximately 27% (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

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

Appen's June-half update and FY22 guidance sharply disappointed Macquarie's expectations, due to slower growth, poorer margins, the spectre of more investment and decreased certainty on conversion of forward orders.

Poor operating leverage, combined with an FX hit and lower revenue, drove a crash in margins to 4.6% from 14.3%. Cash generation moved to the red, and guidance lacked clarity and confidence, says the broker.

EPS forecasts are cut -65% to -82% across FY22-FY26.

Rating is downgraded to Underperform from Neutral. Target price falls to $3.50 from $5.70.

Target price is $3.50 Current Price is $4.15 Difference: minus $0.65 (current price is over target).
If APX meets the Macquarie target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.70, suggesting upside of 13.8% (ex-dividends)

The company's fiscal year ends in December.

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

Ord Minnett rates APX as Hold (3) -

Following yet another disappointing market update from Appen, Ord Minnett has retained its Hold rating but slashed its price target to $4 from $7.

Not inspiring much of confidence, the broker notes management at the company could not provide any reassurance around near-term prospects for a recovery. Also: all investments in the business are now under review.

Appen is scheduled for formal FY22 release on August 25. Ord Minnett says management needs to provide a clearer framework on how it's going to address the many issues plaguing the company.

Previous forecasts have received the chainsaw treatment.

Target price is $4.00 Current Price is $4.15 Difference: minus $0.15 (current price is over target).
If APX meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.70, suggesting upside of 13.8% (ex-dividends)

The company's fiscal year ends in December.

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 CCP as Add (1) -

After adjusting Credit Corp's FY22 underlying profit for a provision release, Morgans estimates a -4.5% miss versus the broker's forecast.

Full year growth by division included: Australian purchased debt ledger (PDL) of 2%, US PDL 16% and Lending 26%.

Subdued Australian PDL purchasing conditions meant FY23 profit guidance of $90-97m came in around -7% below the analyst's expectation.

Morgans retains its Add rating though lowers its target to $26.80 from $33.85.

Target price is $26.80 Current Price is $23.02 Difference: $3.78
If CCP meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $31.03, suggesting upside of 37.6% (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

Ord Minnett rates CCP as Accumulate (2) -

Credit Corp's FY22 performance was "broadly in line" comments the broker.

The label "broadly in line" usually applies when the result failed to trigger any enthusiasm, might have missed forecasts a little, but it's bot considered important enough to label it a "miss" (see also target price adjustment below).

Further commentary shows revenues disappointed but better-than-expected cost control provided enough compensation.

Alas, guidance for FY23 proved below the broker's forecast with the analyst reminding investors management has a long history of upgrading guidance as the year progresses.

All in all, Ord Minnett retains the view Credit Corp is well-positioned to grab opportunities as they arise. Accumulate. Target price lowered to $28.50 from $36.

Earnings estimates have been reduced., and noticeably so.

Target price is $28.50 Current Price is $23.02 Difference: $5.48
If CCP meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $31.03, suggesting upside of 37.6% (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

Ord Minnett rates CHN as Speculative Buy (1) -

Following a recent site-visit, Ord Minnett is anticipating plenty of exploration news flow over the next month, with Dampier assay results seen as key for the share price outlook.

The broker suggests there are catalysts around the corner that will drive a higher share price ("re-rating").

Speculative Buy. Target $7.

Target price is $7.00 Current Price is $4.64 Difference: $2.36
If CHN meets the Ord Minnett target it will return approximately 51% (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

Credit Suisse rates COF as Outperform (1) -

Centuria Office REIT delivered FY22 earnings of 18.2, down -9% on the previous year which was broadly in line with Credit Suisse and consensus forecasts 

Rising interest costs and higher incentives to grow occupancy rates alongside declining leasing spreads are impacting on the FY23 outlook.

Centuria Office REIT provided guidance of -13% growth which is well below expectations for the broker and the market consensus.

Credit Suisse earnings forecasts are revised down by -12.2% and -13.1% for FY23 and FY24, respectively.

The Outperform rating is retained and the target price decreases to $1.90 from $2.27.

Target price is $1.90 Current Price is $1.70 Difference: $0.2
If COF meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $2.04, suggesting upside of 24.4% (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

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

Morgan Stanley feels Centuria Office REIT's interest rate strategy has not served the REIT well in the current macro environment following FY23 guidance during its FY22 results presentation.

Funds from operations (FFO) of 15.8cpu and DPS of 14.1cpu guidance for FY23 fell well short of the broker's 17cpu and 15.2cpu forecasts. Heading into FY23, the average hedge duration is less than one year and 56% of debt is hedged.

For FY22, Centuria Office REIT reported FY22 FFO of 18.2cpu (versus the analyst's 18.4cpu) and DPS of 16.6cpu.

The Equal-weight rating and $1.95 target are retained. Industry View: In-Line.

Target price is $1.95 Current Price is $1.70 Difference: $0.25
If COF meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $2.04, suggesting upside of 24.4% (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

Citi rates CQR as Neutral (3) -

Having recently upgraded forecasts for Australian supermarket stocks, Citi suggests investors may also gain exposure via supermarket specialist landlord Charter Hall Retail REIT.

Retail inflation is supporting continued revenue growth from retail tenants, explains the analyst. The higher inflation is also passed through to tenants through CPI linked leases while lease re-negotiations are aided by stronger total occupancy cost ratios.

The Neutral rating and $3.98 target are retained.

Target price is $3.98 Current Price is $4.07 Difference: minus $0.09 (current price is over target).
If CQR 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 $4.08, suggesting upside of 2.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

Morgan Stanley rates CSL as Overweight (1) -

All regulatory clearances have been received by CSL for the acquisition of Vifor Pharma and completion is expected by August 9. Using this completion date, Morgan Stanley estimates 6.6% EPS accretion to its FY23 forecast.

The Overweight rating and $312 target are unchanged. Industry View: In-line.

Target price is $312.00 Current Price is $296.85 Difference: $15.15
If CSL meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $322.32, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.9

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

Ord Minnett rates CSL as Accumulate (2) -

Following confirmation from the company that regulatory approval has been obtained, Ord Minnett has updated its forecasts for CSL including the acquisiton of Vifor Pharma.

At present, Ord Minnett's FY22 forecasts imply net profit growth of 6% with the broker of the intention to review forecasts for Vifor post Vifor's market briefing scheduled for October 17.

The delayed approval for the acquisition has shaved -1%-2% off the broker's forecasts for FY22 and FY23. More optimism regarding the outlook for plasma is apparent.

Accumulate. Price target $315, up from $312 previously.

Target price is $315.00 Current Price is $296.85 Difference: $18.15
If CSL meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $322.32, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.9

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

Macquarie rates EVN as Neutral (3) -

Macquarie's site tour of Evolution Mining suggests the integration of Kundana is on track, labour pressures are subsiding and the company has allocated $20m to exploration of the Mungari district in FY23. Steady as she goes.

Neutral and $2.60 target retained.

Target price is $2.60 Current Price is $2.68 Difference: minus $0.08 (current price is over target).
If EVN 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 $2.79, suggesting upside of 4.3% (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 IFL as Outperform (1) -

Credit Suisse reviews forecasts following the 4Q22 trading update from Insignia Financial in a positive light with mostly minor changes to earnings forecasts.

The broker highlights the better than expected performance of the platform flows, the slower growth in remediation payments and the loss of -82 advisers is not expected to impact on profits as there were no client losses.

Gearing levels are expected to peak in FY23 based on the current earnings forecasts.

Credit Suisse maintains the Outperform rating and $4.30 price target.

Target price is $4.30 Current Price is $3.14 Difference: $1.16
If IFL meets the Credit Suisse target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $3.93, suggesting upside of 24.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Ord Minnett rates INR as Speculative Buy (1) -

Ord Minnett's update is simply an administrative update, with minor adjustments put in place.

Speculative Buy rating retained. Target price remains 70c.

Target price is $0.70 Current Price is $0.53 Difference: $0.17
If INR meets the Ord Minnett target it will return approximately 32% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates LYC as Outperform (1) -

Macquarie's site tour of Lynas Rare Earths' Kalgoorlie site suggests progress is continuing apace with the project nearly 50% complete, and there are no changes to capital expenditure forecasts. 

Discussions on the Malaysian Operating Licence are continuing.

The broker notes rare-earth prices are trading below its forecasts, suggesting possible near-term weakness.

Outperform rating and $12.50 target price retained.

Target price is $12.50 Current Price is $8.88 Difference: $3.62
If LYC meets the Macquarie target it will return approximately 41% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Ord Minnett rates LYC as Lighten (4) -

Ord Minnett's first ever visit to Lynas Rare Earths' facility in Kalgoorlie had the analysts "impressed". Both analysts do remain cautious on execution risks, while noting cost overruns are mitigated by the company's "substantial" cash position.

The June-quarter proved a rather weak ending to FY22, but the broker says it mattered little given elevated prices pushed cash levels to a record high for the company.

Lighten rating retained, while the target pushes up to $5, up from $4.70 previously, but still well below where the shares are trading.

Target price is $5.00 Current Price is $8.88 Difference: minus $3.88 (current price is over target).
If LYC meets the Ord Minnett target it will return approximately minus 44% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Macquarie rates MGH as Outperform (1) -

Maas Group's FY22 result outpaced Macquarie's estimates by 6%, the company posting progress across all core segments and delivering top-end of guidance.

Management guides to FY23 earnings (EBITDA) growth of 44% to 60%, ex acquisitions-pending (three under negotiation), thanks to project wins in its Civil Cosntruction & Hire division (50% of target is secured), 360-400 residential settlements, construction material volumes, marturation of the commercial property portfolio and a forecast improvement in the Manufacturing segment's operating environment.

Macquarie admires the balance sheet after the recent equity raising, net debt at the close of FY22 settling at $265m.

EPS forecasts rise 7.6% in FY22, fall -1.6% in FY23 and rise 2.0% in FY24.

Outperform rating retained. Target price rises to $5.60, which compares with the last June entry in the FNArena database of $5.20.

Target price is $5.60 Current Price is $4.10 Difference: $1.5
If MGH meets the Macquarie target it will return approximately 37% (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

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

In anticipation of National Australia Bank's 3Q trading update on August 9, Morgan Stanley increases its FY22-24 EPS estimates by around 1-2% due to better near-term margin trends and raises its target to $27.20 from $26.60. 

The broker forecasts a cash profit of $1.8bn, 5% revenue growth, 4% expense growth and around 6% pre-provision profit growth.

The Equal-weight rating is unchanged. Industry view: Attractive.

Target price is $27.20 Current Price is $30.96 Difference: minus $3.76 (current price is over target).
If NAB 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 $31.26, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Citi rates NHC as Buy (1) -

Post Citi's update on coal price forecasts, a valuation of $4.50 is reached for New Hope. Once $1.50 of dividend payments are taken into account over a 12-month period, the broker's target price is set at $3.00, down from $3.50.

The broker raises its Newcastle 2022/23 thermal coal estimates by around 60%/100% to US$350/US$210/t. Despite lower production and higher costs, the sharp lift in forecast prices results in material forecast earnings upgrades.

Target price is $3.00 Current Price is $4.31 Difference: minus $1.31 (current price is over target).
If NHC meets the Citi target it will return approximately minus 30% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.40, suggesting upside of 1.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates ORG as Outperform (1) -

Macquarie believes the review of the Australian domestic gas security mechanism is a minor risk for Origin Energy (few surprises there), although medium-term the scenario could be different.

However, the broker says the government could yet introduce a pricing mechanism with a stronger affect on the Australian Pacific LNG market.

All up, the broker spies -3% to -5% earnings risk in FY23, which it expects is likely to be cushioned by a 4% move in the Brent oil price.

Outperform rating and $6.87 target price retained.

Target price is $6.87 Current Price is $6.03 Difference: $0.84
If ORG meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $6.40, suggesting upside of 6.2% (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 PNI as Outperform (1) -

Pinnacle Investment Management's FY22 result nosed out Macquarie's forecasts by 1%, an improved funds-under-management (FUM) mix delivering a higher average base fee margin.

The broker notes the percentage of FUM under performance fee rose to 36% of total FUM from 32% in FY21.

EPS forecasts rise 5% in FY2e, 7% in FY24 and 6% in FY25.

Outperform rating retained, Macquarie expecting the above trends should continue. Target price of $10.93 compares with the last entry in the FNArena database in July of $11.90.

Target price is $10.93 Current Price is $10.07 Difference: $0.86
If PNI meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $10.62, suggesting downside of -6.8% (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

Ord Minnett rates PNI as Downgrade to Hold from Accumulate (3) -

Ord Minnett comments Pinnacle Investment Management's FY22 performance proved in-line with expectations, but funds under management (FUM) was better-than-expected and so where funds flows.

The broker sees multiple reasons why profitability is poised for improvement, also supported by increased optimism about Affiliates.

Earnings estimates have gone up by 10%-12%. Alas, the share price has moved too, and Ord Minnett feels obliged to now downgrade to Hold from Accumulate.

Price target improved to $11.50 from $9.50.

Target price is $11.50 Current Price is $10.07 Difference: $1.43
If PNI meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $10.62, suggesting downside of -6.8% (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

UBS rates PNI as Buy (1) -

FY22 results for Pinnacle Investment Management delivered a 5% profit beat compared to the forecast by UBS. A strong underlying result is implied, given the beat included ‘one-off’ seed-pool losses of -$5.7m.

Despite a challenging market backdrop, the broker highlights resilient 4Q net flows, which included positive retail flows in the June quarter.

However, the analyst sees the overall result as mixed given likely FY23 consensus downgrades from higher Horizon 2 costs. Revenue benefits are expected to be longer-dated.

The Buy rating and $10 target price are unchanged.

Target price is $10.00 Current Price is $10.07 Difference: minus $0.07 (current price is over target).
If PNI 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 $10.62, suggesting downside of -6.8% (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

Credit Suisse rates PPT as Outperform (1) -

Credit Suisse retains a positive outlook for Perpetual following the 4Q22 trading update.

Of note the broker highlights Perpetual's Corporate Trust division has received two offers and a sale could possibly deliver funds of $1.4bn to $1.6bn.

Operationally, Perpetual Asset Management achieved a mixed performance with FUM coming in 2% ahead of forecasts; inflows to the Australian equities business were the strongest in over five years and US outflows were disappointing.

Credit Suisse views the stock as attractive at 14x FY23 earnings forecasts with the potential upside from the exposure to growth in ESG and strength in Corporate Trust.

An Outperform rating is retained with a $34 price target.

Target price is $34.00 Current Price is $30.56 Difference: $3.44
If PPT meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $33.40, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Ord Minnett rates PX1 as Upgrade to Buy from Speculative Buy (1) -

Plexure Group has renegotiated contract with McDonald's, a key customer, and Ord Minnett, in response, believes Plexure will be able to reach EBITDA and cash flow profitability in FY23.

Apart from de-risking the company's future, Ord Minnett also believes Plexure is now in a position to invest in the TASK enterprise
offering, which has continued to generate contract wins and offers a growing addressable market in Australia, Asia Pacific and the US.

On the back of higher forecasts, Ord Minnett has upgraded to Buy from Speculative Buy with the valuation lifting to 56c (new target) from 36c.

Target price is $0.56 Current Price is $0.39 Difference: $0.17
If PX1 meets the Ord Minnett target it will return approximately 44% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 1.0

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

Morgan Stanley rates RHC as Underweight (5) -

Morgan Stanley sees additional uncertainty around profits for Ramsay Health Care after it failed to reach a resolution with Bupa. The company's Australian contract is now terminated with Bupa, as per a notice previously given by Ramsay.

Due to portability rules, the broker sees some market share gains for other health insurers and some disruption to Ramsay's volumes.

The Underweight rating and $68.80 target are maintained. Industry View: In-line.

Target price is $68.80 Current Price is $70.57 Difference: minus $1.77 (current price is over target).
If RHC 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 $79.96, suggesting upside of 13.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

Citi rates SCP as Buy (1) -

Having recently upgraded forecast for Australian supermarket stocks, Citi suggests investors may also gain exposure via supermarket specialist landlord Shopping Centres Australasia Property.

Retail inflation is supporting continued revenue growth from retail tenants, explains the analyst. The higher inflation is also passed through to tenants through CPI linked leases while lease re-negotiations are aided by stronger total occupancy cost ratios.

The Buy rating and $3.14 target are retained.

Target price is $3.14 Current Price is $2.94 Difference: $0.2
If SCP meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $2.89, suggesting downside of -0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Ord Minnett rates SHL as Accumulate (2) -

In preview of Sonic Healthcare's FY22 release, Ord Minnett is anticipating a "solid" performance, though the second half was likely negative on an annual comparison, simply because covid-testing volumes retreated.

Given the uncertain outlook, management is not expected to quantify any guidance for FY23. H2 margin has likely been under pressure due to rising costs.

Ord Minnett's attention is focused on costs and how management handles them. Accumulate. $37.50 target.

Target price is $37.50 Current Price is $35.34 Difference: $2.16
If SHL meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $37.13, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Morgan Stanley rates SQ2 as Equal-weight (3) -

Morgan Stanley expects solid 2Q revenue and gross profit growth for Block's Square Seller segment as US consumer spending has remained strong. Recent statistics are also thought to indicate a positive outlook for small business.

However, the broker notes recent indications that consumer spending is shifting to non-discretionary categories like food and gas and away from general merchandise like apparel (the latter benefits Block).

Overall it's felt BNPL demand is holding up well and the Equal-Weight rating and US$110.00 target are retained. Industry view: Attractive.

Current Price is $110.25. Target price not assessed.

Current consensus price target is $97.00, suggesting downside of -16.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.8

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

Macquarie rates STO as Outperform (1) -

Macquarie says the ACCC's forecast gas shortfall of 56PJ in 2023 is higher than the broker had forecast, and that the probability the government will take action is rising with earnings (EBIT) outcomes for Santos ranging between -10% to +10%.

The broker believes that if, as is likely, the Australian domestic gas supply mechanism is triggered, Gladstone LNG may seek to invoke Force Majeure in its contracts but Macquarie is uncertain of the legal outcome, and says the stakes are high.

EPS forecasts rise 6% in FY22, 1% in FY23 and fall -5% in FY23, suggesting a positive view on behalf of the broker, who concedes Santos also has several "burning issues" on key assets.

Outperform rating and $10.05 target price retained.

Target price is $10.05 Current Price is $7.24 Difference: $2.81
If STO meets the Macquarie target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $9.63, suggesting upside of 35.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 1.0

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

Credit Suisse rates TLC as Neutral (3) -

Credit Suisse estimates Lottery Dashboard sales were down -17% in July compared to the previous year and lowered the FY23 revenue because of a weaker jackpot pool prize pool to start the financial year.

The analyst adjusts revenue growth for FY22 to an estimated 9.4% in line with the industry trends.

Lottery Corp is due to report FY22 earnings results on August 24.

Credit Suisse assesses the company will benefit from three factors; higher player bases, wage inflation and an adjustment in OzLotto allowing for a higher incidence of large jackpots.

Earnings forecasts are upgraded by 9.9% and 7.2% in FY22 and FY23, respectively with lower interest and depreciation and amortisation charges.

A Neutral rating and the target price is lowered to $4.55 from $4.60.

Target price is $4.55 Current Price is $4.65 Difference: minus $0.1 (current price is over target).
If TLC meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.07, suggesting upside of 10.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Macquarie rates VUK as Upgrade to Outperform from Neutral (1) -

Virgin Money UK's June-quarter result broadly met Macquarie's forecasts, with margin guidance proving a slight beat and triggering earnings upgrades.

The broker notes the company's balance sheet trends and leverage to interest rates lags peers but notes the buyback is strongly accretive.

Mortgage growth was below system but unsecured lending was strong, and the broker notes the company trades at a -50% three-year price to net-tangible-assets discount to big bank peers.

EPS forecasts rise 6% in FY22 and 4% in FY23. Macquarie upgrades to Outperform from Neutral. Target price is $3.95.

Target price is $3.95 Current Price is $2.55 Difference: $1.4
If VUK meets the Macquarie target it will return approximately 55% (excluding dividends, fees and charges).

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 1.0

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

Ord Minnett rates WBC as Hold (3) -

Ord Minnett's update is simply to account for the sale of Westpac's Australian life insurance business, which reduces FY23 and FY24 forecasts by some -1%.

There is a larger impact for FY22 given the loss on sale of -$1.1bn will be accounted for above the line, explains the broker. Hence the FY22 forecast is impacted by -19%.

Hold rating remains in place. Target $22.

Target price is $22.00 Current Price is $22.00 Difference: $0
If WBC meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $24.23, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in September.

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