Australian Broker Call

Morgan Stanley rates ALL as Overweight (1) -

Eilers-Fantini central game performance database (GPD) tracks relative slot machine performance data for individual North American casinos.

According to the data collected in February, Aristocrat Leisure premium leased games generated about 2.6x the zone average theoretical net win in February 2021, well ahead of key competitors.

Also, the company's games account for 18 of the top 25 performing premium leased games in the North American participation gaming market. 

The target price is $38 with an Overweight rating.

Target price is $38.00 Current Price is $34.16 Difference: $3.84
If ALL meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $36.40, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Macquarie rates ANZ as Outperform (1) -

ANZ Bank has re-rated since the beginning of the year, although on a relative basis it continues to offer more upside than peers, Macquarie observes.

The broker continues to expect comparably better results and retains an Outperform rating. Target is raised to $30.00 from $28.50.

Target price is $30.00 Current Price is $28.00 Difference: $2
If ANZ meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $28.56, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Macquarie rates APT as Neutral (3) -

Macquarie asserts Afterpay will face industry consolidation in the wake of the extensive growth experienced over the past few years. This should be followed by a better longer-term outlook.

The broker points out other industries that have experienced boom/bust cycles typically end up stronger in the long run. The broker lowers the terminal growth rate forecast to 3% from 4.5% and cuts the target to $120 from $140. Neutral rating maintained.

Target price is $120.00 Current Price is $107.14 Difference: $12.86
If APT meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $122.87, suggesting upside of 14.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

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

Macquarie believes the regional banks are more leveraged to improving deposit pricing and following a period of underperformance upgrades Bendigo & Adelaide Bank to Outperform from Neutral.

The main downside risk stems from smaller margin benefits from improved pricing compared with estimates. Estimates for earnings per share are increased by up to 7% for FY21-23. Target is raised to $11.00 from $10.25.

Target price is $11.00 Current Price is $9.63 Difference: $1.37
If BEN meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $10.27, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Macquarie rates CBA as Upgrade to Neutral from Underperform (3) -

Macquarie earnings estimates for the major banks by 1-2%. While stretched valuations and longer-term headwinds make it difficult to be bullish, the broker recognises the relative appeal of banks in the current environment.

Macquarie switches its preference to regional banks over the majors while upgrading Commonwealth Bank to Neutral from Underperform following recent underperformance. Target is raised to $81.50 from $80.00.

Target price is $81.50 Current Price is $84.77 Difference: minus $3.27 (current price is over target).
If CBA meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $80.71, suggesting downside of -6.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.3

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

Credit Suisse rates CSL as Upgrade to Outperform from Neutral (1) -

Today's upgrade by Credit Suisse is eye-catching for two reasons: firstly, the broker's forecasts for FY22 sit -11% below market consensus, with the analysts not excluding market consensus remains cum further downgrades.

Secondly, Credit Suisse addresses the upcoming competition threat from argenx FcRn CIDP product-in-development which could, theoretically, upend the global plasma market.

Bottom line: Credit Suisse believes even if FcRn would prove extremely successful, global plasma would regardless continue growing. The broker has formulated scenarios of 10% per annum or 7% growth per annum (bear case).

Upgrade to Outperform from Neutral with a price target of $315 (versus $320 previously). Small changes have been made to forecasts.

Target price is $315.00 Current Price is $261.00 Difference: $54
If CSL meets the Credit Suisse target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $297.30, suggesting upside of 11.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.6

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

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

Macquarie, after surveying real estate agents nationally to understand their preferences regarding REA Group's and Domain Holdings' platforms, asserts the shift in mix is benefiting the former.

The survey points to usage of higher depth tiers being greater for REA Group. The broker downgrades Domain Holdings to Neutral from Outperform. Target is reduced to $4.33 from $5.81.

Strong revenue growth from the residential cycle is considered a positive but this is offset by relatively softer yield growth, in the broker's view.

Target price is $4.33 Current Price is $4.34 Difference: minus $0.01 (current price is over target).
If DHG meets the Macquarie target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.83, suggesting upside of 12.3% (ex-dividends)

The company's fiscal year ends in May.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Macquarie rates KMD as Neutral (3) -

Operating earnings were pre-released and in line with Macquarie's forecasts while net profit beat estimates in the first half. Margins at Rip Curl improved to 19.4% amid restructuring and synergy savings.

Some of the margin expansion, Macquarie suspects, is a one-off and margins are expected to settle in the mid-teens.

The broker is reassured by the company's commentary, although a resolution on the CEO is still in train and strong comparables will be cycled over winter.

Neutral rating maintained. Target is raised to $1.30 from $1.25.

Target price is $1.30 Current Price is $1.24 Difference: $0.06
If KMD meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $1.38, suggesting upside of 10.9% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

This company reports in NZD. 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

Citi rates NHC as Neutral (3) -

First half results were in line with Citi's forecasts. The main surprise was the 4c interim dividend which reflects an improving coal price.

Citi markets to market first half 2021 benchmark thermal coal prices to US$79/t from US$64/t and raises FY21 estimates for operating earnings by 4%.

The broker retains a Neutral rating and $1.55 target.

Target price is $1.55 Current Price is $1.35 Difference: $0.2
If NHC meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $1.46, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Credit Suisse rates NHC as Neutral (3) -

New Hope Corp's first-half numbers were a small beat versus Credit Suisse's forecast and consensus and reflect better than assumed realised pricing.

The net debt marginally reduced to circa $265m from circa $290m and Credit Suisse expects the company's gearing to fall further from the current 14%. Dividends resumed earlier than expected but the broker isn't surprised given the market backdrop. 

Credit Suisse has lifted its earnings forecast for FY21 by circa 20% but prefers Whitehaven Coal ((WHC)) given the higher operation and financial leverage currently.

Neutral rating and $1.30 target retained.

Target price is $1.30 Current Price is $1.35 Difference: minus $0.05 (current price is over target).
If NHC meets the Credit Suisse target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.46, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Macquarie rates NHC as Neutral (3) -

First half results was stronger than Macquarie expected, supported by lower costs. Nevertheless, impairments at New Acland and redundancies affected net profit.

The broker notes thermal coal prices have increased around 100% since the lows of mid 2020 and there is upside to be gained in a spot price scenario.

The broker notes currency, the weather and legal issues are providing headwinds and maintains a Neutral rating. Target is $1.30.

Target price is $1.30 Current Price is $1.35 Difference: minus $0.05 (current price is over target).
If NHC meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.46, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgans rates NHC as Add (1) -

First half  revenue and underlying earnings (EBITDA) were around $30-40m ahead of Morgans forecasts, driven by higher than expected realised prices and a cost reduction at Bengalla. The 4 cent dividend was also considered a surprise, supported by a strong 2H outlook.

In relation to NSW flooding, the broker notes there will be a deferral of sales/cash flow as exports are halted though cash flow impacts are likely to be offset by higher prices.

Add rating and target increases to $1.70 from $1.60. Morgans considers the company is conservatively valued on the 80% owned Bengalla's cash flows only while hard assets and growth options are still for free.

Target price is $1.70 Current Price is $1.35 Difference: $0.35
If NHC meets the Morgans target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $1.46, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Ord Minnett rates PAC as Buy (1) -

Ord Minnett observes the underlying trends are positive although notes the declines in performance fees in the recent first half result. The broker believes there is value in the business, given a pivot to private markets, but investor patience is required.

Pacific Current expects to grow management fee profitability in the second half and the broker argues efficiencies in corporate expenses witnessed in the first half seem sustainable.

Following a change of analyst, Ord Minnett retains a Buy rating and reduces the target to $6.70 from $7.60.

Target price is $6.70 Current Price is $5.60 Difference: $1.1
If PAC meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

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

Macquarie, after surveying real estate agents nationally to understand their preferences regarding REA Group's and Domain Holdings' platforms, asserts the shift in mix is benefiting the former.

The survey points to usage of higher depth tiers being greater for REA Group. Rating is upgraded to Outperform from Neutral and the target is lifted to $171.70 from $158.00.

Macquarie also believes REA Group can lift prices because of a larger audience and capture a larger share of marketing budgets.

Target price is $171.70 Current Price is $134.05 Difference: $37.65
If REA meets the Macquarie target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $152.40, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Citi rates SIG as Downgrade to Neutral from Buy (3) -

Citi observes the FY21 result was heavily affected by the pandemic, restructuring and the start of the Chemist Warehouse contract. Sigma Healthcare has reiterated an underlying operating earnings target of $100m for FY23.

Citi considers the shares fully valued and downgrades to Neutral from Buy. Management has indicated a focus on M&A now there is greater capacity on the balance sheet.

The focus is also on growth and dividends as opposed to a share buyback although this remains an option. Target is reduced to $0.70 from $0.75.

Target price is $0.70 Current Price is $0.70 Difference: $0
If SIG meets the Citi target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $0.68, suggesting downside of -2.9% (ex-dividends)

The company's fiscal year ends in January.

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

Credit Suisse rates SIG as Outperform (1) -

Credit Suisse expects Sigma Healthcare will achieve an operating income growth (compounded annual growth rate) of 10% between FY21-FY24, driven by cost outs, increased efficiencies and continued above-market growth in its retail and wholesale division.

The broker highlights regulatory headwinds have reduced following post finalisation of the 7CPA and also that Sigma Healthcare now has circa 50% exposure to non-PBS earnings streams which should allow for continued margin expansion.

Operating income estimates for FY22-23 have been lowered by -3-7% but continue to forecast Sigma Healthcare will beat the $100m operating income target in FY23.

Credit Suisse retains its Outperform rating with the target rising to $0.73 from $0.70.

Target price is $0.73 Current Price is $0.70 Difference: $0.03
If SIG meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $0.68, suggesting downside of -2.9% (ex-dividends)

The company's fiscal year ends in January.

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

Macquarie rates SIG as Neutral (3) -

FY21 results were in line and mostly pre-announced. Macquarie continues to envisage medium-term risks, given the company's reliance on sales to Chemist Warehouse and increased competition in front-end sales.

The broker believes pharmacy brands are at risk from competition and the company runs the risk of losing the Chemist Warehouse contract if that business gains sufficient scale to manage its own supply. Neutral maintained. Target is $0.70.

Target price is $0.70 Current Price is $0.70 Difference: $0
If SIG meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $0.68, suggesting downside of -2.9% (ex-dividends)

The company's fiscal year ends in January.

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 SXY as Buy (1) -

Citi completes its modelling for an 8:1 share consolidation, incorporating the latest share count disclosures and revising the rounding formula in future dividend calculations.

As a result the target is now $3.54, up slightly from a recalculated prior target of $3.52. Buy rating retained.

Target price is $3.54 Current Price is $0.36 Difference: $3.18
If SXY meets the Citi target it will return approximately 883% (excluding dividends, fees and charges).

Current consensus price target is $3.73, suggesting upside of 937.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Morgan Stanley rates TPW as Overweight (1) -

While believing Temple & Webster Group can generate attractive long term margins, Morgan Stanley expects higher reinvestment in the near-term.

Having said that, the broker thinks if the group achieved mid-teen margins in the next few years, this could be seen as a negative signal on the long term opportunity.

Overweight rating and $14 target retained. Industry view: In-Line.

Target price is $14.00 Current Price is $10.06 Difference: $3.94
If TPW meets the Morgan Stanley target it will return approximately 39% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Ord Minnett rates URW as Downgrade to Sell from Hold (5) -

Ord Minnett's European research counterparts have recently reduced their target for Unibail-Rodamco-Westfield by -13%. As a result the broker lowers its target to $3.70 from $4.50. This also reflects the impact of a stronger Australian dollar.

As the stock is trading at a significant premium to the new target the rating is downgraded to Sell from Hold.

The broker's counterparts believe the outlook is cloudy as the company is looking to execute on a challenging de-leveraging plan.

Yet, increased confidence surrounding shopping centres should emerge as the pandemic wanes, supporting the shares.

Target price is $3.70 Current Price is $5.14 Difference: minus $1.44 (current price is over target).
If URW meets the Ord Minnett target it will return approximately minus 28% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.26, suggesting downside of -15.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

This company reports in EUR. 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 WBC as Downgrade to Neutral from Outperform (3) -

Increasingly, Macquarie believes upside risk from cost reductions are being captured in estimates. The broker is cautious about the significant management turnover and the effect on the short-term outlook.

Given relative outperformance recently, the rating is downgraded to Neutral from Outperform. The main downside stems from an inability to prevent market share losses without sacrificing margins. Target is raised to $25.75 from $25.50.

Target price is $25.75 Current Price is $24.43 Difference: $1.32
If WBC meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $25.84, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Citi rates WHC as Buy (1) -

Whitehaven Coal has reduced FY21 managed coal production and sales guidance in the wake of the NSW floods to 21.4-22mt and 18.5-19mt, respectively.

While Whitehaven does not expect flooding at any of its operations there is a possibility of temporary inundation of local roads that could disrupt haulage.

Buy/High Risk rating retained with a $2 target.

Target price is $2.00 Current Price is $1.74 Difference: $0.26
If WHC meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $2.07, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Credit Suisse rates WHC as Outperform (1) -

After identifying faults at the SL1 shiploader, Newcastle Coal Infrastructure Group has halted activity and expects a two-week repair period.

Whitehaven Coal now expects 0.5-1mt of less managed coal sales and has consequently downgraded its full year guidance slightly to 18.5-19mt. Despite this, Credit Suisse is pleased to note the miner left its cost guidance unchanged.

While the downgrades are not ideal, the broker expects further spikes in thermal prices as supply is impacted by weather events followed by surging spot prices. The miner remains Credit Suisse's top pick despite volume risks.

The Outperform rating and $1.95 target price are unchanged.

Target price is $1.95 Current Price is $1.74 Difference: $0.21
If WHC meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $2.07, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Macquarie rates WHC as Neutral (3) -

Damage to a shiploader at Newcastle's port amid floods in NSW has affected the company's operations. The top end of guidance is now downgraded. Managed ROM coal production guidance has tightened to 21.4-22.0mt.

A slower ramping up at Narrabri is also expected. Macquarie remains cautious about thermal coal markets but believes there is upside at spot prices. The broker envisages the earnings loss will narrow materially in FY21. Neutral rating and $1.70 target retained.

Target price is $1.70 Current Price is $1.74 Difference: minus $0.04 (current price is over target).
If WHC meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.07, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Morgan Stanley rates WHC as Overweight (1) -

Newcastle Coal Infrastructure Group suspended shiploader 1 on account of faults. The other shiploader sustained damage in November and is expected back in the last quarter of the financial year.

Production guidance has been changed and now sits in-line with Morgan Stanley's estimate while sales guidance is -6% below the broker on current repair estimates.

Overweight rating maintained. Industry view: Attractive. Target is $2.30.

Target price is $2.30 Current Price is $1.74 Difference: $0.56
If WHC meets the Morgan Stanley target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $2.07, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

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

Macquarie assesses the pandemic-affected downgrade is now behind the business and expects revenue growth will moderate to 22% out to FY23, driven by higher base and fewer acquisitions.

Slower growth will allow the company to focus on quality. Macquarie upgrades FY21 growth estimates and, transferring coverage to another analyst, upgrades the rating to Outperform from Neutral. Target is $33.

Target price is $33.00 Current Price is $27.45 Difference: $5.55
If WTC meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $31.00, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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