Australian Broker Call

Citi rates ANN as Buy (1) -

Citi expects Ansell will be net cash by the end of FY23. Beyond the pandemic, the ungeared balance sheet provides further upside potential from either M&A and/or share buybacks, which the broker does not include in forecasts.

Sales are expected to normalise in FY23 when growth rates return to normal. Buy rating and $46.50 target maintained.

Target price is $46.50 Current Price is $36.73 Difference: $9.77
If ANN meets the Citi target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $43.84, suggesting upside of 20.3% (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: 0.5

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

Macquarie rates BGL as Resume Coverage with Outperform (1) -

Macquarie resumed coverage of Bellevue Gold after a short hiatus with an Outperform rating and $I.40 target.

The stage 2 study has boosted production in the first five years to 200,000 ounces per annum and a $306m funding package will now mean the project can advance to production. Reducing exploration expenditure improves the broker's estimates for FY22 by 37%.

Current Price is $0.85. Target price not assessed.

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

Morgans rates COF as Hold (3) -

Centuria Office has acquired two assets in Sydney and Melbourne for $273.1m. The acquisitions will be funded via an entitlement issue and debt. Morgans observes the portfolio is stable and investor demand is still strong.

A successful roll-out of vaccines will continue to improve sentiment regarding a return to the office as well as increase confidence in the economic outlook.

FY22 guidance is unchanged with a distribution of 16.6c. Morgans retains a Hold rating and reduces the target to $2.48 from $2.50.

Target price is $2.48 Current Price is $2.46 Difference: $0.02
If COF meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $2.48, suggesting upside of 0.3% (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

Citi rates FMG as Upgrade to Buy from Neutral (1) -

Citi upgrades Fortescue Metals to Buy from Neutral and reduces the target to $18.50 from $19.50. The broker suspects iron ore could hold at levels over US$100/t for longer than the market is currently factoring.

Longer-dated market concerns regarding large-scale iron ore exports from Guinea now look much less certain. Moreover, China's leading indicators are stabilising and have headed higher from recent lows.

Target price is $18.50 Current Price is $17.92 Difference: $0.58
If FMG meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $21.18, suggesting upside of 18.6% (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: 0.1

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

UBS rates GNC as Buy (1) -

ABARES has estimated a 26.5mt winter crop on the east cost in FY22. This remains below the bumper crop of 29.9mt in FY21 yet UBS highlights ABARES delivered two further upgrades to its second crop estimate in FY21.

The broker raises its FY22 EBITDA forecasts for GrainCorp by 14% to $290m. A Buy rating is retained despite the strong share price performance, given the chance of further upgrades should ABARES lift forecasts again, which also increasingly de-risks FY23.

There is also potential for capital management and an undemanding valuation. Target is raised to $7.20 from $7.00.

Target price is $7.20 Current Price is $6.40 Difference: $0.8
If GNC meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $6.86, suggesting upside of 8.2% (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 IMD as Upgrade to Outperform from Neutral (1) -

Macquarie considers the earnings outlook is positive given the latest data that show a continuation of favourable industry inputs. Rating is upgraded to Outperform from Neutral.

The main risks to the rating include a material downturn in gold and copper prices or disruptions caused by the pandemic to operations in Australia and North America. Target is raised to $2.65 from $2.56.

Target price is $2.65 Current Price is $2.33 Difference: $0.32
If IMD meets the Macquarie target it will return approximately 14% (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

Ord Minnett rates INR as Buy (1) -

Ord Minnett expects momentum can be maintained amidst a tight lithium market. The price of litium continues to surge, up 150% in the year to date. Inventory levels appear low and peak sesasonal demand is approaching.

The broker considers the stock unique and strategically positioned and reiterates a Speculative Buy rating. Target is raised to $0.75 from $0.55.

Target price is $0.75 Current Price is $0.66 Difference: $0.09
If INR meets the Ord Minnett target it will return approximately 14% (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 MIN as Outperform (1) -

The Lockyer Deep-1 well has successfully encountered gas in the Perth Basin. Macquarie is encouraged by the announcement and should the flow test prove successful Mineral Resources will be able to accelerate its plans to switch to LNG from diesel fuel at its mining operations throughout Western Australia.

The broker does not include any value currently for the well or the switch to LNG, yet incorporates the sale of the investment in Pilbara Minerals ((PLS)). Outperform rating and $77 target maintained.

Target price is $77.00 Current Price is $51.70 Difference: $25.3
If MIN meets the Macquarie target it will return approximately 49% (excluding dividends, fees and charges).

Current consensus price target is $60.12, suggesting upside of 19.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Citi rates MQG as Sell (5) -

Macquarie Group has guided to first half net profit to be slightly lower than the prior half which, Citi suggests, implies a range of $I.8-2.0bn.

The broker expects earnings will moderate in the second half of FY22 as the gain on the UK metres sale and buoyant capital markets are cycled.

The stock has reacted in a positive way to the improved outlook and Citi considers it expensive, retaining a Sell rating. Target is raised to $153 from $140.

Target price is $153.00 Current Price is $179.13 Difference: minus $26.13 (current price is over target).
If MQG meets the Citi target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $174.82, suggesting downside of -0.1% (ex-dividends)

The company's fiscal year ends in March.

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

Credit Suisse rates MQG as Neutral (3) -

Macquarie Group has provided a positive update for the first half and Credit Suisse notes improved trading conditions as well as increased balance sheet deployment, which should drive earnings in the future from investment realisations.

The broker notes the Waddell & Reed acquisition also derived more positive commentary from the company. Neutral rating maintained. Target is raised to $175 from $150.

Target price is $175.00 Current Price is $179.13 Difference: minus $4.13 (current price is over target).
If MQG 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 $174.82, suggesting downside of -0.1% (ex-dividends)

The company's fiscal year ends in March.

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 MQG as Overweight (1) -

First half guidance was ahead of Morgan Stanley's expectations and a positive reaction is expected in the share price. While the stock has outperformed the ASX200 by 8% in the past month the broker retains an Overweight rating given the infrastructure and renewables momentum.

Macquarie Group is guiding for slower commodities earnings, albeit not significantly lower, and there is more confidence in the gains on sales in the pipeline.

The $175 target price is maintained. Industry view in-line.

Target price is $175.00 Current Price is $179.13 Difference: minus $4.13 (current price is over target).
If MQG 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 $174.82, suggesting downside of -0.1% (ex-dividends)

The company's fiscal year ends in March.

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

Morgans rates MQG as Downgrade to Hold from Add (3) -

Morgans upgrades FY22 and FY23 estimates for earnings per share by 8% and 3%, respectively, to reflect Macquarie Group's more positive outlook. Macquarie Group expects first half net profit to be only slightly lower compared with the prior half's strong performance.

The business is exposed to structural growth areas and capitalising well on the current environment, with the broker noting some value accretive acquisitions.

Yet, with the stock running hard and now trading on 20x FY22 PE it is close to fair value and the broker downgrades to Hold from Add. Target is raised to $181.10 from $172.30.

Target price is $181.10 Current Price is $179.13 Difference: $1.97
If MQG meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $174.82, suggesting downside of -0.1% (ex-dividends)

The company's fiscal year ends in March.

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

Ord Minnett rates MQG as Accumulate (2) -

Macquarie Group has guided to first half earnings being "slightly down" on the prior half. Ord Minnett interprets this to mean a near doubling of earnings compared with a year ago.

The broker remains confident in the medium to long-term growth prospects and does not consider the PE multiple stretched versus the ASX200 Industrials.

Ord Minnett maintains an Accumulate rating and raises the target to $190 from $172.

Target price is $190.00 Current Price is $179.13 Difference: $10.87
If MQG meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $174.82, suggesting downside of -0.1% (ex-dividends)

The company's fiscal year ends in March.

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

Macquarie rates NWH as Outperform (1) -

NRW Holdings has secured the $290m EPC contract at Mount Holland. Macquarie observes the order book and outlook for FY22 remain strong and margin improvement is expected.

The tender pipeline of $14.5bn is also considered healthy. The broker highlights the business is highly leveraged to iron ore, coal and lithium expenditure. Outperform rating retained. Target is $2.20.

Target price is $2.20 Current Price is $1.82 Difference: $0.38
If NWH meets the Macquarie target it will return approximately 21% (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 QBE as Neutral (3) -

Macquarie analyses the expense base to assess further cost reduction opportunities. The group cost base is already better than global averages and the broker concludes that the new CEO may find it difficult to remove more costs without negatively affecting revenue.

In the short term the US hurricane season is the most significant catalyst. Macquarie retains a Neutral rating and reduces the target to $12.10 from $12.40.

Target price is $12.10 Current Price is $11.94 Difference: $0.16
If QBE meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $13.94, suggesting upside of 18.4% (ex-dividends)

The company's fiscal year ends in December.

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: 0.8

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

Citi rates QUB as Buy (1) -

Qube Holdings has acquired the Newcastle agricultural terminal, and export grain facility, for $90m. Citi expects the supply chain environment will remain strong and consensus estimates for FY22 will be exceeded because of contract wins, acquisitions and capital management.

Moreover, the recycling of capital will normalise multiples and drive earnings momentum that will attract flows from a larger investor base. Buy rating and $3.45 target maintained.

Target price is $3.45 Current Price is $3.42 Difference: $0.03
If QUB meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.21, suggesting downside of -2.3% (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

Citi rates RIO as Buy (1) -

Citi suspects iron ore could hold at levels over US$100/t for longer than the market is currently factoring.

Longer-dated market concerns regarding large-scale iron ore exports from Guinea now look much less certain. Moreover, China's leading indicators are stabilising and have headed higher from recent lows.

The broker argues the fact steel prices have stayed high points to consumption being driven more by state-imposed production restrictions rather than weakness in underlying demand.

Citi retains a Buy rating and reduces the target to $125 from $135.

Target price is $125.00 Current Price is $108.17 Difference: $16.83
If RIO meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $132.00, suggesting upside of 25.1% (ex-dividends)

The company's fiscal year ends in December.

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: 0.4

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

UBS rates TNE as Downgrade to Neutral from Buy (3) -

UBS resumes coverage with a downgrade to Neutral from Buy and $11.70 price target, transfering coverage to another analyst.

The broker forecasts 14% growth in pre-tax profit in FY21-26 and half of this growth is likely to be driven by the migration of the majority of existing customers to the SaaS platform.

The broker is more cautious on the remaining uplift, which is likely to be driven by product/mix and UK expansion.  While the recent acquisition of Scientia should assist the UK expansion, UBS does not believe it will provide substantial upside.

Target price is $11.70 Current Price is $11.71 Difference: minus $0.01 (current price is over target).
If TNE meets the UBS target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $10.10, suggesting downside of -11.9% (ex-dividends)

The company's fiscal year ends in September.

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