Australian Broker Call

Credit Suisse rates ALL as Outperform (1) -

FY18 results were in line with expectations but Credit Suisse believes it is now time to be more conservative. The broker reduces estimates for earnings per share by -4-10% over the forecast period.

Previously, the broker was excited by the digital prospects but now expects growth could taper in time. The broker believes the company should still be able to de-leverage rapidly and the balance sheet drive further growth.

Outperform rating maintained. Target is reduced to $30 from $35.

Target price is $30.00 Current Price is $23.83 Difference: $6.17
If ALL meets the Credit Suisse target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $32.48, suggesting upside of 36.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Deutsche Bank rates ALL as Buy (1) -

Deutsche Bank considers the full year result was mixed, with the positives of operating cash flow and digital acquisitions offset by lower-than-expected margins in the Americas.

Commentary remains positive and the broker notes the skew to the second half and $100m increase in digital expenditure are in line with expectations. Buy rating maintained. Target is reduced -9% to $37.85.

Target price is $37.85 Current Price is $23.83 Difference: $14.02
If ALL meets the Deutsche Bank target it will return approximately 59% (excluding dividends, fees and charges).

Current consensus price target is $32.48, suggesting upside of 36.3% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Macquarie rates ALL as Outperform (1) -

Aristocrat's 34% increase in profit fell short of expectations. The company is investing for the future, the broker notes, which means higher costs in FY19 but growth opportunities in the Americas and digital from FY20 onwards.

The broker sees those growth opportunities as outweighing the cost impact in the short term. Target falls to $30 from $34 but on current multiples the broker finds the stock attractive. Outperform retained.

Target price is $30.00 Current Price is $23.83 Difference: $6.17
If ALL meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $32.48, suggesting upside of 36.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

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

FY18 results were broadly in line with Morgan Stanley's estimates. The Americas performed strongly while the digital business was mixed. Still, the broker envisages little downside.

The broker forecasts land-based growth in earnings will moderate to 8% in FY19 and 2% in FY20. Digital operating earnings growth (EBIT) is expected to be 26% in FY19, boosted by full year contributions from Big Fish and Plarium.

Equal-weight. Target is $29. Industry view: Cautious.

Target price is $29.00 Current Price is $23.83 Difference: $5.17
If ALL meets the Morgan Stanley target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $32.48, suggesting upside of 36.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Morgans rates ALL as Add (1) -

FY18 results were in line with expectations at the top line but margins were weaker than forecast. Morgans finds plenty to like about the company as it retains a dominant market position.

Additionally, the broker expects leverage from the Product Madness division and 30% growth in digital in FY19. Add rating maintained.

Following recent share market declines the broker reduces the target to $30.50 from $34.89.

Target price is $30.50 Current Price is $23.83 Difference: $6.67
If ALL meets the Morgans target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $32.48, suggesting upside of 36.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Ord Minnett rates ALL as Accumulate (2) -

The company reported net profit growth of 34.3% with strong results across the digital and Americas divisions, although the results missed Ord Minnett's forecasts.

The company has significantly increased its digital exposure and continues to develop titles for both land-based and digital platforms.

Ord Minnett reduces net profit estimates by -1.7% for FY19 and -0.5% in FY20, reducing the target to $32.45 from $35.00.

The risk/reward ratio remains attractive at present and the broker maintains an Accumulate rating.

Target price is $32.45 Current Price is $23.83 Difference: $8.62
If ALL meets the Ord Minnett target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $32.48, suggesting upside of 36.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

UBS rates ALL as Buy (1) -

The company reported a strong result which was in line with UBS forecasts. The highlight was a 7% increase in the US installed base in the second half.

Cash flow conversion of 92% in the second half allowed the company to de-gear to 1.7x and UBS expects gearing will drop below 1.0x within two years. This should open up potential for capital management or acquisitions.

UBS now forecasts 16% compound earnings growth over the next three years. Buy rating maintained. Target is reduced to $34 from $37.

Target price is $34.00 Current Price is $23.83 Difference: $10.17
If ALL meets the UBS target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $32.48, suggesting upside of 36.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Macquarie rates APA as Neutral (3) -

The CKI bid at $11 has been abandoned and Macquarie returns from restriction to resume coverage with a Neutral rating on APA, down from a prior Outperform. The company has reiterated FY19 earnings and distribution guidance. Target set at $9.18, up from a prior $8.67.

In the absence of another takeover approach, the broker sees fair value at $9.18, reflecting steady top-line growth held back by tax and regulatory issues and a change in the broker's long term bond rate assumption to 4%.

Target price is $9.18 Current Price is $8.85 Difference: $0.33
If APA meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $10.14, suggesting upside of 14.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Citi rates BAL as Buy (1) -

Bellamy's has outlined strategies to reach its FY21 revenue target of $500m or more. The main driver of growth is infant formula in China while the reformulation of the English-labelled product in early 2019 is a short-term catalyst.

Uncertainty surrounding registration means strategies for China outside of the online market have not progressed. Bellamy's plans to take direct control of trade marketing and sub-distributor relationships in China.

Citi maintains a Buy rating and $12.10 target.

Target price is $12.10 Current Price is $7.33 Difference: $4.77
If BAL meets the Citi target it will return approximately 65% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Macquarie rates BAP as Outperform (1) -

Bapcor has acquired Commercial Truck Parts Group, which is a conglomerate specialising in selling Japanese truck parts in ten locations across the country. It is a sound strategic fit, the broker suggests, establishing Bapcor as a scale player in the growing truck parts sector.

Bapcor has underperformed the small industrials in falling some -20% since September compared to -10%. Concern over cyclical risks with regard consumer softness are warranted but the broker sees value at the current price. Outperform and $7.80 target retained.

Target price is $7.80 Current Price is $6.14 Difference: $1.66
If BAP meets the Macquarie target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $7.44, suggesting upside of 21.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Morgan Stanley rates BAP as Overweight (1) -

The company will acquire a commercial truck parts business with the seven months contribution in FY19 expected to exceed the pre-tax profit delivered in FY18 by the divested TRS business.

Morgan Stanley calculates the total purchase price was $72m. Overweight rating. Target is $8.00. Industry view: In-line.

Target price is $8.00 Current Price is $6.14 Difference: $1.86
If BAP meets the Morgan Stanley target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $7.44, suggesting upside of 21.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

UBS rates BAP as Buy (1) -

The company will acquire five businesses that specialise in the sale and distribution of Japanese truck parts. UBS observes this will strengthen its position in supplying parts to small and medium-size commercial vans and trucks that are experiencing strong growth in demand from the rise of online retail deliveries.

Conditions remain tough, and the broker concedes it is possible that consumers could be delaying car servicing, but this is not expected to materially affect demand over a rolling 12-18 months period. Buy rating and $7.05 target maintained.

Target price is $7.05 Current Price is $6.14 Difference: $0.91
If BAP meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $7.44, suggesting upside of 21.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Macquarie rates BIN as Outperform (1) -

The ACCC has raised competition concerns with regard Bingo's proposed takeover of Dial-a-Dump. Given the Eastern Creek facility is key to Bingo's vision, the broker expects the company to negotiate with the regulator and see what adjustments to either the deal or Bingo's asset base can be made to achieve approval.

While believing the deal will still go ahead in some form, uncertainty and the fact that form is unknown leads the broker to reduce its target to $2.75 from $3.15. A solid growth profile in other markets and share price weakness mean Outperform retained.

Target price is $2.75 Current Price is $2.22 Difference: $0.53
If BIN meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

UBS rates BIN as Buy (1) -

The ACCC has released a statement of issues regarding concerns around the lessening of competition in the proposed acquisition of Dial-a-Dump. The concerns centre on both the building & demolition waste processing in Sydney's east and inner west and also the dry waste landfill segment.

The ACCC is also investigating potential vertical integration issues. A final decision is scheduled for February 21. The company remains firmly of the view that the acquisition will not cause a lessening of competition within the greater Sydney market.

Buy rating and $3.45 target maintained.

Target price is $3.45 Current Price is $2.22 Difference: $1.23
If BIN meets the UBS target it will return approximately 55% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Morgan Stanley rates COL as Initiation of coverage with Equal-weight (3) -

Morgan Stanley anticipates anaemic earnings growth and rising capital intensity. Coles has under invested in its supply chain and online platform and requires a step up in expenditure over the next few years to modernise and maintain relative in-store experience.

The broker notes Coles has indicated it will pursue two automated distribution centres but is yet to clarify the quantum or timing of expenditure.

Morgan Stanley initiates coverage with an Equal-weight rating and Cautious industry view. Target is $13.

Target price is $13.00 Current Price is $11.86 Difference: $1.14
If COL meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $13.02, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Morgans rates CRN as Initiation of coverage with Add (1) -

Coronado Global Resources exports high-quality metallurgical coal from a portfolio of four hubs, incorporating eight operating mines. It is the largest US metallurgical coal producer by production.

Morgans observes the long life assets support super profitability at cycle highs and resilience to cycle lows. Cash margins are materially lower than metallurgical coal leaders such as BHP ((BHP)) and Teck.

Morgans believes that liquidity, the high ownership concentration and broader macro concerns have hindered the company's performance post-IPO but, ultimately, the business should win market trust and become a default play.

The broker initiates coverage with an Add rating and $4.05 target.

Target price is $4.05 Current Price is $3.07 Difference: $0.98
If CRN meets the Morgans target it will return approximately 32% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Morgan Stanley rates CTX as Underweight (5) -

Morgan Stanley suggests recent oil price declines should be a tailwind for retail margins into the year end. The broker suspects Caltex could deliver at the higher end of guidance - $275-295m - for the retail business.

The main question is whether oil prices retrace to higher levels in 2019. Underweight and $26 target retained. Industry view: Attractive.

Target price is $26.00 Current Price is $27.53 Difference: minus $1.53 (current price is over target).
If CTX 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 $32.08, suggesting upside of 16.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

Macquarie rates CYB as Outperform (1) -

As CYBG has left the market in the dark about margins, leaving investors to understandably question the rationale of the Virgin Money acquisition, the broker has attempted to derive its own margin expectations. The broker forecasts a sustainable margin of 1.65% and a return on tangible equity of 12%. The broker sees VM as 4% dilutive to earnings in FY21.

Management nevertheless expects "material earnings accretion", thus suggesting upside risk if this can be delivered. In the meantime the broker expects near term price pressures from portfolio rebalancing but longer term value at current levels. Outperform retained. Target falls to $5.00 from $5.50.

Target price is $5.00 Current Price is $3.61 Difference: $1.39
If CYB meets the Macquarie target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $5.43, suggesting upside of 50.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

This company reports in GBP. 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 FNP as Buy (1) -

Freedom Foods has reiterated guidance for sales of $500-530m and expects momentum to accelerate in the second half. Citi believes a stronger second half is likely, given the timing of capital expenditure at Shepparton.

Guidance is considered conservative because it does not account for protein fractionation or the launch of  yoghurt and any new contracts won in Southeast Asia.

The broker trims FY19-21 estimates for earnings per share by -3%. Target is reduced to $7.65 from $7.70. Buy rating maintained.

Target price is $7.65 Current Price is $5.22 Difference: $2.43
If FNP meets the Citi target it will return approximately 47% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

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

The impact of lost methamphetamine testing revenue is materially greater than Morgans expected. New revenue is lower margin and the geotechnical business remains challenged.

The broker was very disappointed with the company's update. HRL has quantified the expected earnings impact from the reduction in methamphetamine testing volumes, with revenue expected to decline by around -$2.7m.

The broker suspects the market may question the timeliness in quantifying the extent of the earnings impact and plans to revisit M&A are likely to be put on hold in the short term.

The strength of the Analytical business should provide some near-term valuation support. Rating is downgraded to Hold from Add. Target is reduced to $0.12 from $0.22.

Target price is $0.12 Current Price is $0.11 Difference: $0.01
If HRL meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Citi rates MML as Neutral (3) -

Medusa Mining expects improved production and exploration upside in FY19 after commissioning the E15 server shaft at Co-O gold mine. Nevertheless, until there are some benefits to be observed from the development Citi maintains a Neutral/High Risk rating.

The new shaft will be used to move workers and materials and the older one will be dedicated to ore haulage. This should improve efficiency.

Citi includes an increase in gold output related to the new shaft in its base case but takes a more conservative view of utilisation rates. Target is reduced to $0.38 from $0.56. The relatively short reserve life remains a risk.

Target price is $0.38 Current Price is $0.31 Difference: $0.07
If MML meets the Citi target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $0.38, suggesting upside of 22.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.0

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

UBS rates MPL as Sell (5) -

UBS assesses Medibank Private appears to have turned the corner in terms of the reduction in policy holders. Regulatory changes aimed at capping premium increases could help, the broker suggests.

Still, this is not significant or certain enough to undermine a negative view. The company is expected to be a relative winner as the gold-silver-bronze-basic framework is rolled out.

Regulatory changes aimed at pricing and product design are initially negative for net margins and industry churn, UBS points out. Sell rating maintained. Target is reduced to $2.30 from $2.60.

Target price is $2.30 Current Price is $2.42 Difference: minus $0.12 (current price is over target).
If MPL meets the UBS target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.62, suggesting upside of 8.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Credit Suisse rates MYX as Outperform (1) -

Gross profit is up 75% in the year to date and revenue up 21%, driven by strength in specialty brands. This comes despite the decline in sales of the company's largest generic drug, dofetilide, which is down -65%.

Credit Suisse believes a strong improvement in gross margins highlights the ongoing transformation of the business as it expands in the niche dermatology market. The broker reiterates an Outperform rating and $1.30 target.

Target price is $1.30 Current Price is $0.98 Difference: $0.32
If MYX meets the Credit Suisse target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $1.16, suggesting upside of 18.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Macquarie rates MYX as Underperform (5) -

Other than a compositional variation, Mayne's trading update was largely in line with forecasts. Operating cash flow was nonetheless weaker than expected, the broker notes.

The broker expects ongoing momentum for the specialty brands division and contributions from key pipeline products in the medium to longer term, but also sees increasing competition in key generic products as a near term risk. The stock trades at a 23% PE premium to generic peers, the broker calculates.

Underperform retained. Target falls to $1.03 from $1.05.

Target price is $1.03 Current Price is $0.98 Difference: $0.05
If MYX meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $1.16, suggesting upside of 18.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

UBS rates MYX as Buy (1) -

The company has announced a trading update, indicating revenue is up 21% and gross profit up 75% for the first four months of FY19. UBS notes specialty brands are up strongly.

The company has 25 products in the pipeline, 15 of which are pending approval with the US FDA. Further updates on the generic NuvaRing launch are expected to be key catalysts.

Buy rating maintained. Target is reduced to $1.15 from $1.26.

Target price is $1.15 Current Price is $0.98 Difference: $0.17
If MYX meets the UBS target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $1.16, suggesting upside of 18.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Citi rates NEC as Upgrade to Neutral from Sell (3) -

Following the acquisition of Fairfax, Citi updates forecasts and now expects pro forma operating earnings (EBITDA) of $487m in FY19. Domain ((DHG)) as well as merger synergies are expected to drive growth in the longer term.

In the short term the broker envisages downside risk to earnings as advertising revenue is already slowing down. The broker upgrades to Neutral from Sell and reduces the target to $1.85 from $2.10.

Target price is $1.85 Current Price is $1.75 Difference: $0.1
If NEC meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $2.09, suggesting upside of 19.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Citi rates ORA as Neutral (3) -

Orora has acquired Pollock Packaging, expecting the deal to meet its hurdle rates which Citi estimates to be around 4% accretive to earnings per share by 2021-22.

Strategically and financially, the broker believes the acquisition is positive and a logical bolt-on to the existing North American packaging distribution business.

Neutral rating and $3.70 target maintained.

Target price is $3.70 Current Price is $3.28 Difference: $0.42
If ORA meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.63, suggesting upside of 10.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Deutsche Bank rates ORA as Hold (3) -

Deutsche Bank considers the acquisition of Pollock Packaging for US$80.5m as a minor positive. The business appears to be a good fit strategically, although Orora will have to achieve the targeted synergies of US$6m to ensure it is accretive to value.

Deutsche Bank increases earnings forecast by 1-3% to reflect the acquisition and raises the target to $3.30 from $3.20. Hold rating maintained.

Target price is $3.30 Current Price is $3.28 Difference: $0.02
If ORA meets the Deutsche Bank target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.63, suggesting upside of 10.5% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Macquarie rates ORA as Outperform (1) -

Orora's acquisition of Texan packaging company Pollock is consistent with the company's M&A focus for Orora Procurement Solutions, the broker suggests. OPS has a solid track record over a long period of time, the broker notes.

The broker has ticked up earnings forecasts to reflect the acquisition and forex adjustments, noting Orora still has plenty of balance sheet capacity left. Target rises to $3.81 from $3.78. Outperform retained.

Target price is $3.81 Current Price is $3.28 Difference: $0.53
If ORA meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $3.63, suggesting upside of 10.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

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

The company has announced the acquisition of Pollock Packaging, broadening is US presence. Morgan Stanley calculates Pollock generates an EBIT margin of 3%, just shy of the company's 5.4% in FY18.

The broker believes the acquisition is strategically consistent with the company's commentary and, while the transaction is value accretive, the average valuation declines modestly to reflect the recent de-rating in global peers.

Equal-weight rating. Price target is reduced to $3.50 from $3.60. Sector view is Cautious.

Target price is $3.50 Current Price is $3.28 Difference: $0.22
If ORA meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.63, suggesting upside of 10.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Morgans rates ORA as Add (1) -

The company has acquired Pollock Packaging in the US for $113m. While the margins are lower than the existing packaging solutions division, management believes this provides an opportunity to add value to the business.

The acquisition is expected to meet the company's targeted 20% return on investment by the third full year of ownership.

Morgans believes the deal is consistent with strategy and, while integration remains the key risk, management has had a strong track record in this regard.

The broker maintains an Add rating and raises the target to $3.74 from $3.70.

Target price is $3.74 Current Price is $3.28 Difference: $0.46
If ORA meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $3.63, suggesting upside of 10.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

UBS rates ORA as Upgrade to Buy from Neutral (1) -

UBS believes the value driver in the near term is execution on the North American growth strategy. The broker envisages little scope for strategic M&A in the core Australasian segment, given its low growth outlook.

In contrast, the highly fragmented North American packaging distribution industry provides an opportunity. UBS upgrades to Buy from Neutral. Target is raised to $3.90 from $3.74.

Orora has announced the acquisition of Pollock Packaging, which has distribution centres in Texas, California, New Jersey and Georgia. The broker notes this is Orora's largest M&A transaction and follows the recent US$24m acquisition of Bronco Packaging.

Target price is $3.90 Current Price is $3.28 Difference: $0.62
If ORA meets the UBS target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $3.63, suggesting upside of 10.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Deutsche Bank rates ORE as Buy (1) -

The board has approved the final investment decision for the 25,000tpa stage 2 development at Olaroz. While the decision was expected, Deutsche Bank notes it firms up the development timeline and strategy.

An EPC contract for the Japanese conversion facility is expected to be signed before the end of the year and first production is targeted in the second half of 2020. The broker maintains a Buy rating and $6.20 target.

Target price is $6.20 Current Price is $4.32 Difference: $1.88
If ORE meets the Deutsche Bank target it will return approximately 44% (excluding dividends, fees and charges).

Current consensus price target is $5.36, suggesting upside of 24.2% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.9

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

Deutsche Bank rates QAN as Upgrade to Buy from Hold (1) -

Deutsche Bank rolls forward fuel costs and its hedging model to incorporate an increased level of hedging and a lower average Brent oil price for FY19 and FY20.

In addition, the broker notes Qantas continues to benefit from strong demand as well as higher domestic ticket prices.

The broker upgrades earnings estimates and raises the target to $6.90 from $6.15. Rating is upgraded to Buy from Hold.

Target price is $6.90 Current Price is $5.98 Difference: $0.92
If QAN meets the Deutsche Bank target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $6.61, suggesting upside of 10.5% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

UBS rates QAN as Neutral (3) -

Since the October trading update the jet fuel price has fallen by $16/bbl which UBS calculates, all else being equal, should drive a $500m per annum increase in profits.

The broker raises forecasts by 15% for FY19 and 22% for FY20 to incorporate the lower spot price, net of hedging and some revenue offset.

Having said that, UBS believes consensus is not properly capturing higher capital expenditure and cash tax payments. Neutral rating maintained. The broker upgrades the target to $6.30 from $5.60.

Target price is $6.30 Current Price is $5.98 Difference: $0.32
If QAN meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $6.61, suggesting upside of 10.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Deutsche Bank rates RIO as Hold (3) -

Deutsche Bank believes the approval of the Koodaideri mine is indicative of inflation returning to Western Australia's Pilbara region. The broker suggests this inflation is likely to affect all producers in the region.

Hold rating and $84 target maintained.

Target price is $84.00 Current Price is $73.45 Difference: $10.55
If RIO meets the Deutsche Bank target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $88.90, suggesting upside of 21.0% (ex-dividends)

Forecast for FY18:

Forecast for FY19:

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 RIO as Accumulate (2) -

Rio Tinto has approved development of its major Pilbara replacement mine, Koodaideri, for US$2.6bn. Ord Minnett calculates this is around US$400m higher than the original budget.

Despite the blowout in the budget, returns on the project are likely to be strong, with the company flagging a 20% internal rate of return.

Ord Minnett calculates total spending from the iron ore majors on the three key replacement mines amounts to US$7.3bn, with all projects expected to start in 2020 or 2021.

Accumulate rating and $95 target maintained.

Target price is $95.00 Current Price is $73.45 Difference: $21.55
If RIO meets the Ord Minnett target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $88.90, suggesting upside of 21.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

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

Credit Suisse rates SYD as Upgrade to Neutral from Underperform (3) -

Credit Suisse has changed its view somewhat regarding the potential for change after the Productivity Commission review. While there is a higher probability of changes to airport regulation versus past reviews the probability of significant change is considered low.

This time around there are no specific behaviours, such as poor customer relations at Sydney Airport, in question and therefore the broker deduces the risk of changes is lower than in the 2012 inquiry.

Rating is upgraded to Neutral from Underperform. Target is steady at $6.80. The broker also believes lower oil prices are favourable for international capacity additions to and from Sydney Airport particularly in 2019-20.

Target price is $6.80 Current Price is $6.80 Difference: $0
If SYD meets the Credit Suisse target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $7.48, suggesting upside of 10.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Morgan Stanley rates WES as Underweight (5) -

Post Coles ((COL)) Wesfarmers has become a cyclical non-food retailer and Morgan Stanley believes, given a softer housing cycle and the online threat, that the PE on FY19 estimates of 17.5x is too rich. Moreover, margins at Bunnings are very high versus global peers.

The broker suspects competition will gradually chip away at the company's businesses. Underweight rating. Target is reduced to $30 from $45. Cautious industry view maintained.

Target price is $30.00 Current Price is $31.35 Difference: minus $1.35 (current price is over target).
If WES meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $33.69, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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