Australian Broker Call

Morgans rates ADH as Hold (3) -

Prior to Adairs reporting 1H results on February 26, Morgans lowers its earnings assumptions for FY24 and FY25 due to recent data showing weak spending on household goods in December.

The broker believes the company may have raised its promotional spend in reaction, with negative implications for gross margins.

Despite the lower earnings forecasts, the analysts retain a $1.70 target. It's felt the trading environment will remain challenging and a Hold recommendation is kept.

Target price is $1.70 Current Price is $1.78 Difference: minus $0.08 (current price is over target).
If ADH meets the Morgans target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.65, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Morgans rates ALX as Hold (3) -

Ahead of the 4Q traffic/toll revenue report and FY23 results in late-January and February, respectively, Morgans updates its assumptions (interest rates, currency and DPS) for Atlas Arteria, resulting in a $5.58 target, up from $5.36.

The broker believes the 40cps distribution is sustainable across FY24-25, though forecasts excess corporate cash and capital releases that support the distribution will be exhausted by FY26. It's assumed the DPS falls to around 28cps in FY26. Hold.

Target price is $5.58 Current Price is $5.61 Difference: minus $0.03 (current price is over target).
If ALX meets the Morgans target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.11, suggesting upside of 9.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

UBS rates AMP as Sell (5) -

UBS has assessed the longer-term outlook for the Australian Wealth Platforms sector. It's felt valuations remain fair and reasonable for the growth potential offered by the specialist platforms Hub24 and Netwealth Group.

Sadly, the reverse is true for AMP, according to the analyst, and a Sell rating is retained.

After a mark-to-market exercise following a share market rally over the last two to three months, the target rises to 85c from 82c. Sell.

Target price is $0.85 Current Price is $0.94 Difference: minus $0.085 (current price is over target).
If AMP meets the UBS target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.07, suggesting upside of 15.1% (ex-dividends)

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.1

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

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

Strong coal volumes in the second quarter should prove a positive for freight operator Aurizon Holdings, says Macquarie. Network volumes are above full year targets, particularly in the high-margin Blackwater corridor.

The broker suggests this trends points to potential for a small over-collection in FY24, the first in five years, generating $5-10m near-term earnings upside, but warns it will take sometime for this to translate to an improved payout ratio and yield.

The rating is downgraded to Neutral from Outperform and the target price decreases to $3.88 from $4.04.

Target price is $3.88 Current Price is $3.77 Difference: $0.11
If AZJ meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $3.89, suggesting upside of 4.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.1

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

Ord Minnett rates BHP as Hold (3) -

Ord Minnett raises its target for BHP Group to $43 from $41 due to higher near-term forecasts for iron ore and copper prices.

The broker's forecast for mid-cycle copper prices is raised to US$3.60/lb from US$3.10/lb, due to inflation driving up costs and ongoing supply issues. Hold.

Target price is $43.00 Current Price is $46.50 Difference: minus $3.5 (current price is over target).
If BHP 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 $46.58, suggesting upside of 0.0% (ex-dividends)

The company's fiscal year ends in June.

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: 0.2

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

Bell Potter rates CYG as Buy (1) -

In early FY24 Coventry Group implemented a range of initiatives, explains Bell Potter, including rebate agreements, pricing, store revamps and systems modernisation through the Trade network.

It seems these changes are starting to bear fruit, with the company's 1H trading update exceeding Bell Potter's forecasts. Pre-AASB 16 earnings (EBITDA) rose by 18.1% year-on-year to $9.8m compared to the broker's $9.4m estimate.

A strong margin performance over the last two quarters has restored the analysts' confidence in the trajectory of Konnect Australia (fastening systems). The target rises to $1.80 from $1.45. Buy.

Target price is $1.80 Current Price is $1.48 Difference: $0.325
If CYG meets the Bell Potter target it will return approximately 22% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Citi rates DMP as Buy (1) -

Ahead of Domino's Pizza Enterprises's first half result, Citi warns sales in both Europe and Asia are likely to remain challenged in the near-term.

The broker predicts 2% same-store sales growth in the first half for Europe (implying  a decline in the last ten weeks), driven by underperformance in France, and a -7% decline for Asia. It does expect Australia can deliver 7% same-store sales growth.

Despite near-term challenges, the broker expects investors are more likely to focus on a result that demonstrates a continuation of franchise profitability improvement and ongoing same-store sales strength in Australia and New Zealand.

The Buy rating and target price of $61.10 are retained.

This report was published on 16 January, 2024.

Target price is $61.10 Current Price is $56.83 Difference: $4.27
If DMP meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $60.18, suggesting upside of 5.9% (ex-dividends)

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

Bell Potter rates DRO as Buy (1) -

Bell Potter assesses a strong finish to the year for DroneShield, following the release of the 4Q business update, which revealed an inaugural year of profit.

The broker had allowed for some warranties and prepaid SaaS subscriptions in 2023 forecasts, but as they will be gradually recognised
in future periods, revenue and profit (PBT) were misses.

The broker highlights the company's strong financial position with $57.9m in cash as at December 31, 2023.

The Buy rating and 50c target are maintained.

Target price is $0.50 Current Price is $0.40 Difference: $0.1
If DRO meets the Bell Potter target it will return approximately 25% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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 DRR as Hold (3) -

Ord Minnett raises its target for Deterra Royalties by 5% to $4.40 due to higher near-term iron ore price forecasts.

The Hold rating is unchanged.

Target price is $4.40 Current Price is $4.85 Difference: minus $0.45 (current price is over target).
If DRR meets the Ord Minnett target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.91, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Morgan Stanley rates DTL as Overweight (1) -

Increased activity and higher interest income at Data#3 were behind management's decision to raise 1H profit before tax (PBT) guidance by around 9%, explains Morgan Stanley.

At the midpoint, 1H guidance for PBT of $30.5m implies to the broker (based upon the 1H skew) upside risk to the earnings trajectory currently forecast by the market.

Overweight.Target $8.20. Industry view is In-Line.

Target price is $8.20 Current Price is $8.41 Difference: minus $0.21 (current price is over target).
If DTL meets the Morgan Stanley target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.97, suggesting downside of -9.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Morgans rates DTL as Hold (3) -

Management at Data#3 has raised 1H profit before tax (PBT) guidance by around 9%, which Morgans believes is largely due to higher interest income.

The broker points out the company will earn more interest income in the 1H of FY24 than for all of FY23.

The Hold rating is maintained and the target rises to $7.50 from $7.00.

Target price is $7.50 Current Price is $8.41 Difference: minus $0.91 (current price is over target).
If DTL meets the Morgans target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.97, suggesting downside of -9.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

UBS rates DTL as Buy (1) -

Largely due to higher interest income from an abnormally high cash balance at June 30, 2023, according to UBS, management at Data#3 has upgraded 1H profit (PBT) guidance to $30-31m from $27-29m. The company also noted increased activity.

The brokers $8.20 target is unchanged on the perhaps conservative assumption interest income will revert in the 2H. The analyst will reassess assumptions (including interest) after reviewing results on February 15.

The Buy rating is maintained.

Target price is $8.20 Current Price is $8.41 Difference: minus $0.21 (current price is over target).
If DTL meets the UBS target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.97, suggesting downside of -9.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Shaw and Partners rates FFM as Buy (1) -

The company formerly known as Auteco has, Shaw and Partners assures us, updated the market with no less but "spectacular grades" of up to 19% copper/gold in the extension of the recently acquired Green Bay copper-gold project.

Apart from all the short-term implications and initiatives undertaken by management, Shaw and Partners points out FireFly will look to bring Green Bay back into production later in the decade, by which time the broker expects the copper price to be "materially higher".

The company has over $22m in cash leaving it well funded for future work programs, the broker adds. FireFly Metals is included in the broker's top 10 research ideas for 2024.

Target price is $1.20 Current Price is $0.57 Difference: $0.63
If FFM meets the Shaw and Partners target it will return approximately 111% (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 FMG as Lighten (4) -

Ord Minnett raises its target for Fortescue by 8% to $17.30 due to higher near-term iron ore price forecasts.

The Lighten rating is unchanged.

Target price is $17.30 Current Price is $26.65 Difference: minus $9.35 (current price is over target).
If FMG meets the Ord Minnett target it will return approximately minus 35% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.54, suggesting downside of -23.2% (ex-dividends)

The company's fiscal year ends in June.

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: -0.9

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

Macquarie rates HUB as Neutral (3) -

Hub24 has exceeded Macquarie's expectations with second quarter net flows of $4.5bn. The broker also found a 6.7% increase in advisor numbers in the period to be encouraging. 

Despite Hub24 continuing to deliver on its net flows pipeline, and reporting stable revenue margins at its investor day,  the broker is hesitant to take a more positive view on the stock given elevated expenses and downside risk to the market's revenue margin forecasts.

The Neutral rating is retained and the target price increases to $34.10 from $33.30.

Target price is $34.10 Current Price is $35.95 Difference: minus $1.85 (current price is over target).
If HUB meets the Macquarie target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $38.50, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Morgan Stanley rates HUB as Overweight (1) -

Morgan Stanley now sees upside risk to FY24 consensus forecasts for net inflows for Hub24 based on 2Q net inflows that beat consensus expectations.

The broker's view is also supported by the expected large transition in the 2H resulting from the agreement to provide EQT Holdings ((EQT)) with custodial platform and administration solutions.

Overweight. Target $41. Industry View: In-Line.

Target price is $41.00 Current Price is $35.95 Difference: $5.05
If HUB meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $38.50, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Morgans rates HUB as Hold (3) -

Hub24's total funds under administration (FUA) rose by 10.3% in the December quarter and by 25% on the previous corresponding period. FUA of $72.4bn included $2.9bn from a positive market move and net inflows of $4.5bn.

While Morgans continues to see long-term upside for the share price, a Hold recommendation is maintained. Forecasts for underlying profit are increased between 1-3.5%, lifting the target to $37.20 from $34.55.

Target price is $37.20 Current Price is $35.95 Difference: $1.25
If HUB meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $38.50, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Ord Minnett rates HUB as Buy (1) -

Following better-than-expected 2Q flows for Hub24, Ord Minnett believes the company is on track for a record year due to an improving operating environment, though accelerated investments limit near-term share price upside.

Net platform flows of $4.5bn in the 2Q beat the broker forecast for $4.1bn, largely due to higher-than-expected flows from institutional client Insignia Financial ((IFL)) via their white labelled HUB platform called ‘Rhythm’.

Management reiterated funds under administration (FUA) guidance of $92-100bn by June 2025.

Ord Minnett's target rises to $39 from $37. Buy.

Target price is $39.00 Current Price is $35.95 Difference: $3.05
If HUB meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $38.50, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

UBS rates HUB as Neutral (3) -

UBS has assessed the longer-term outlook for the Australian Wealth Platforms sector. It's felt valuation remains fair and reasonable for the growth potential offered by the specialist platform Hub24.

After a mark-to-market exercise following a sharemarket rally over the last two to three months the target rises to $37.50 from $35. Neutral.

Target price is $37.50 Current Price is $35.95 Difference: $1.55
If HUB meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $38.50, suggesting upside of 5.9% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

UBS rates IFL as Downgrade to Sell from Neutral (5) -

UBS has marked-to-market for the share market rally over the last two to three months, and increases its target for Insignia Financial to $2.05 from $2.00.

However, the fundamental outlook for Insignia remains challenging and cost reduction has now become vital, according to the broker. Consequently, the rating is downgraded to Sell from Neutral.

The analyst believes the company will remain at a cost disadvantage compared to more nimble peers, even if management achieves its FY26 -$175-190m cost-out target.

Target price is $2.05 Current Price is $2.24 Difference: minus $0.19 (current price is over target).
If IFL meets the UBS target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.43, suggesting upside of 11.8% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

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

Ord Minnett rates ILU as Accumulate (2) -

Ord Minnett lowers its target for Iluka Resources by -10% to $9.50 due to a combination of lower near-term zircon prices, rising costs at the Eneabba rare earths refinery and a stronger Australian dollar.

The Accumulate rating is maintained.

Target price is $9.50 Current Price is $6.70 Difference: $2.8
If ILU meets the Ord Minnett target it will return approximately 42% (excluding dividends, fees and charges).

Current consensus price target is $8.05, suggesting upside of 21.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Citi rates KAR as Buy (1) -

Karoon Energy's share price has suffered amid "underwhelming" daily production numbers from Bauna, as per Citi. However, the broker points out surface issues, rather than reservoir issues which permanently impact production, may offer a buying opportunity for investors.

The broker explains daily production has been slowed by issues with the dehydrating unit of the gas lift. This dehydrating unit has been replaced, and at no cost to Karoon Energy, but the company is struggling to remove the built up hydrate.

Citi expects this to continue impacting on production through the first quarter. The Buy rating and target price of $3.25 are retained.

Target price is $3.25 Current Price is $1.87 Difference: $1.385
If KAR meets the Citi target it will return approximately 74% (excluding dividends, fees and charges).

Current consensus price target is $2.83, suggesting upside of 55.3% (ex-dividends)

The company's fiscal year ends in June.

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: 0.9

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

Morgans rates KAR as Add (1) -

Morgans reduces its 1H oil production forecasts for Karoon Energy due to a hydrate issue at one of Bauna's smaller wells in Brazil. March quarter Brent and WTI price forecasts are also marked-to-market by -US$4/bbl to US$78/bbl and US$73/bbl, respectively.

The Add-rated broker views the current share price volatility as an opportunity for volatility-tolerant investors. The target is reduced to $2.95 from $3.00.

Target price is $2.95 Current Price is $1.87 Difference: $1.085
If KAR meets the Morgans target it will return approximately 58% (excluding dividends, fees and charges).

Current consensus price target is $2.83, suggesting upside of 55.3% (ex-dividends)

The company's fiscal year ends in June.

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: 0.9

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

Shaw and Partners rates MMI as Buy (1) -

Metro Mining's annual production reached a new record for the company in 2023, though Shaw and Partners had higher expectations. The difference was caused by ten lost days in December triggered by Cyclone Jasper.

The broker points out the operations are now shutdown for the wet season and will resume shipments in late March, weather permitting.

Shaw and Partners is expecting more good news from the company in 2024, which is why Metro Mining is one of the broker's top picks for the year ahead.

The Buy rating and target price of 6 cents are retained.

Target price is $0.06 Current Price is $0.02 Difference: $0.038
If MMI meets the Shaw and Partners target it will return approximately 173% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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 NAB as Upgrade to Equal-weight from Underweight (3) -

Morgan Stanley sees an improvement in the balance of risks for the Australian economy, as well as competition dynamics within the banking industry, and suggests National Australia Bank will be the biggest beneficiary.

The analysts arrive at this conclusion due to the bank's business mix, sound retail and business franchise performance, along with low execution risk on cost management, excess provision levels and strong capital.

The prospect of a 'soft landing' could potentially lift consensus EPS NAB estimates for FY25 by more than 10%, suggests the broker.

Morgan Stanley upgrades its recommendation to Equal-weight from Underweight and raises its target to $30.30 from $27.40. Industry View: In-Line.

Target price is $30.30 Current Price is $30.73 Difference: minus $0.43 (current price is over target).
If NAB meets the Morgan Stanley target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.11, suggesting downside of -8.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

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

Ord Minnett rates NEM as Buy (1) -

Ord Minnett increases its target for Newmont by 2% to $81. The broker explains gold prices have risen on hope for a peak in interest rates.

The broker highlights the company's shares are the cheapest under its coverage of the Gold sector, and are trading at a -30% discount to fair value.The Buy rating is maintained.

Target price is $81.00 Current Price is $56.22 Difference: $24.78
If NEM meets the Ord Minnett target it will return approximately 44% (excluding dividends, fees and charges).

Current consensus price target is $70.00, suggesting upside of 31.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Ord Minnett rates NHC as Hold (3) -

Ord Minnett lowers its target for New Hope by -7% to $5.70 due to lower thermal coal prices and a stronger Australian dollar.

The Hold rating is unchanged.

Target price is $5.70 Current Price is $5.31 Difference: $0.39
If NHC meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $5.10, suggesting downside of -1.5% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

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

UBS rates NWL as Buy (1) -

UBS has assessed the longer-term outlook for the Australian Wealth Platforms sector. It's felt valuation remains fair and reasonable for the growth potential offered by the specialist platform Netwealth Group.

After a mark-to-market exercise following a share market rally over the last two to three months, the target rises to $18.40 from $16.20. Buy.

Target price is $18.40 Current Price is $16.13 Difference: $2.27
If NWL meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $15.83, suggesting downside of -4.2% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Citi rates RIO as Buy (1) -

With Rio Tinto's Kitimat asset returning to full capacity, and underground production ramping up at Oyu Tolgoi, the company delivered an in-line production result over the December quarter. Iron ore production increased 2% year-on-year, aluminium 9%, and mined copper 2%. 

While guidance for 2024 Pilbara shipments is retained, the broker has decreased its 2023 earnings and net profit expectations to reflect higher costs and lower production.

The Buy rating and target price of $139.00 are retained.

Target price is $139.00 Current Price is $126.66 Difference: $12.34
If RIO meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $129.50, suggesting upside of 2.4% (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: 0.3

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

Macquarie rates RIO as Neutral (3) -

A mixed fourth quarter result from Rio Tinto, says Macquarie, with solid iron ore shipments offset by soft copper output. Pilbara iron ore production and shipments of 86.3m tonnes and 87.5m tonnes respectively were within 1% of the broker's expectations.

Mined and refined copper both missed expectations, but realised pricing for copper was better than Macquarie had anticipated, as was realised pricing for aluminium. Despite the misses, the company achieved its full year guidance.

The Neutral rating and target price of $120.00 are retained.

Target price is $120.00 Current Price is $126.66 Difference: minus $6.66 (current price is over target).
If RIO meets the Macquarie target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $129.50, suggesting upside of 2.4% (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: 0.3

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

Morgan Stanley rates RIO as Overweight (1) -

Morgan Stanley assesses a "solid" 4Q operating performance by Rio Tinto broadly in line with forecasts by the broker. Production guidance for 2024 was unchanged.

Pilbara iron ore shipments were in-line, production was 1% ahead, while aluminium/bauxite beat estimates. Copper missed expectations on lower production at Escondida, which was partly offset by higher output at Kennecott and Oyu Tolgoi.

Due to slightly better price realisations, there should be around 1% upside to Morgan Stanley's FY23 earnings (EBITDA) forecast.

Target $145. Overweight. Industry view is Attractive.

Target price is $145.00 Current Price is $126.66 Difference: $18.34
If RIO meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $129.50, suggesting upside of 2.4% (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: 0.3

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

Ord Minnett rates RIO as Hold (3) -

Ord Minnett raises its target for Rio Tinto by 5% to $116 due to higher near-term forecasts for iron ore and copper prices.

The broker's forecast for the mid-cycle copper price is raised to US$3.60/lb from US$3.10/lb, due to inflation driving up costs and ongoing supply issues. Hold.

Target price is $116.00 Current Price is $126.66 Difference: minus $10.66 (current price is over target).
If RIO 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 $129.50, suggesting upside of 2.4% (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: 0.3

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

UBS rates RIO as Neutral (3) -

Rio Tinto's 4Q production was in line with expectations held by UBS, while 2024 production guidance was unchanged.

Iron ore slightly shipments were a slight miss against the broker's forecast due to a lift in inventory at Pilbara mines, rails and ports, as well as at Chinese ports.

The Neutral rating and $130 target are maintained.

Target price is $130.00 Current Price is $126.66 Difference: $3.34
If RIO meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $129.50, suggesting upside of 2.4% (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: 0.3

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

Citi rates RMD as Buy (1) -

With ResMed set to report on its second quarter in late January, Citi remains optimistic compared to broker peers, anticipating quarterly earnings per share of US$1.92.

The broker expects the company will report 12% revenue growth, comprised of 9% device growth, 12% mask growth and 23% software as a service growth.

Citi does anticipated focus will be on the impacts of GLP-1 drugs on sleep apnea mask demand. ResMed has already postulated that the use of GLP-1 drugs will likely increase the number of patients and the likelihood of starting CPAP therapy. 

The Buy rating and target price of $29.00 are retained.

Target price is $29.00 Current Price is $25.82 Difference: $3.18
If RMD meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $32.23, suggesting upside of 24.0% (ex-dividends)

The company's fiscal year ends in June.

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 S32 as Hold (3) -

Ord Minnett lowers its target for South32 to $3.80 from $3.90 as lower nickel and silver prices and a stronger Australian dollar outweigh higher zinc and copper prices.

The Hold rating is maintained. 

Target price is $3.80 Current Price is $3.41 Difference: $0.39
If S32 meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $3.96, suggesting upside of 20.7% (ex-dividends)

The company's fiscal year ends in June.

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: 0.7

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

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

Macquarie is anticipating a guidance revision from Seek to the lower end of its range, or earnings of $520m and net profits of $220m, ahead of the company's first half result. 

The company's Job Ad Index was down -20% year-on-year over the December half, and Macquarie is anticipating volumes to decline -18% over the second half, based on the assumption that the unemployment rate reaches 4.25% by the end of the financial year.

The broker retains its position that Seek has the ability to execute on cost out, but sees willingness from Seek as low given references to continued investment over the next five years.

The rating is downgraded to Neutral from Outperform and the target price decreases to $26.00 from $29.00.

Target price is $26.00 Current Price is $25.56 Difference: $0.44
If SEK meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $25.94, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Citi rates TWE as Neutral (3) -

Seemingly worse US retail performance from Treasury Wine Estates in December has driven an increasingly cautious view on the stock for Citi. 

The broker sees potential downside risk to the company's guided earnings skew, given it pre-dates the performance deterioration in US retail and announcement of the timeline of the tariff review. The broker retains its rating while waiting on the result of the tariff review.

The Neutral rating is retained and the target price decreases to $11.00 from $11.80.

Target price is $11.00 Current Price is $10.28 Difference: $0.72
If TWE meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $13.13, suggesting upside of 27.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

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

Despite an improvement in the balance of risks for major Australian banks, Morgan Stanley sees significant execution risks for Westpac around franchise performance, margin management and the outlook for costs.

As Westpac shares have delivered a total return of around 17% since the beginning of November, and a material return on equity (ROE) improvement is unlikely before FY26, the broker downgrades to Underweight from Equal-weight.

The price target rises to $21.70 from $20.90. Industry View: In-Line.

Target price is $21.70 Current Price is $23.07 Difference: minus $1.37 (current price is over target).
If WBC meets the Morgan Stanley target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $22.49, suggesting downside of -1.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

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