Australian Broker Call
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December 24, 2018
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COMPANIES DISCUSSED IN THIS ISSUE
Click on symbol for fast access.
The number next to the symbol represents the number of brokers covering it for this report -(if more than 1).
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
| ALX - | ATLAS ARTERIA | Upgrade to Add from Hold | Morgans |
Overnight Price: $6.04
Morgans rates ALX as Upgrade to Add from Hold (1) -
Stockbroker Morgans sees an opportunity post share price weakness and has subsequently upgraded to Add from Hold. Because of weaker revenue fundamentals for France-based APRR, the price target has pulled back to $6.76 (was $6.80).
In the view of the analysts, potential key stock risks include traffic and toll growth, FX exposure, interest rates, capital management, tax, and M&A. APRR represents circa 25% of the broker's valuation for the company.
Target price is $6.76 Current Price is $6.04 Difference: $0.72
If ALX meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $7.14, suggesting upside of 18.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 24.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 25.1, implying annual growth of -67.8%. Current consensus DPS estimate is 24.0, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 24.1. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 30.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 44.2, implying annual growth of 76.1%. Current consensus DPS estimate is 30.0, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 13.7. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
CAR CARSALES.COM LIMITED
Automobiles & Components
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Overnight Price: $10.79
Morgans rates CAR as Add (1) -
Things are progressing far from planned with Stratton Finance and Morgans thinks it's going to require a few years to remediate this troubled division. On the other hand, the core operations continue to exhibit their traditional resilience, point out the analysts.
Price target drops to $14.68 from $16.81. Add rating retained on continued belief that market conditions should remain favourable for the next 3-5 years.
Target price is $14.68 Current Price is $10.79 Difference: $3.89
If CAR meets the Morgans target it will return approximately 36% (excluding dividends, fees and charges).
Current consensus price target is $14.78, suggesting upside of 37.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 44.00 cents and EPS of 58.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 57.9, implying annual growth of 7.2%. Current consensus DPS estimate is 47.3, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 18.6. |
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 45.00 cents and EPS of 63.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 63.3, implying annual growth of 9.3%. Current consensus DPS estimate is 50.9, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 17.0. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.27
Morgans rates GNX as Add (1) -
The company has announced a non-binding strategic partnership for (at least) 25 years of hydro power, with pricing arrangements not disclosed. The broker welcomes the news, but also acknowledges risks remain.
Price target has increased to $0.41 from $0.36. Add rating retained.
Target price is $0.41 Current Price is $0.27 Difference: $0.14
If GNX meets the Morgans target it will return approximately 52% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 0.00 cents and EPS of 2.00 cents. |
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 0.00 cents and EPS of 2.00 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $6.87
Morgans rates IAG as Hold (3) -
On the insurer's own calculations, recent Sydney storms will likely cost it $169m, which equals the maximum possible loss under its reinsurance program, point out the analysts. They add risks are now tilted to the downside for FY19.
Forecasts have been cut. Price target tumbles by -4% to $7.10. Hold rating retained, as the broker suggests the shares are still far from cheaply priced.
Target price is $7.10 Current Price is $6.87 Difference: $0.23
If IAG meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $7.61, suggesting upside of 10.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 30.60 cents and EPS of 39.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 44.2, implying annual growth of 10.3%. Current consensus DPS estimate is 35.9, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 15.5. |
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 36.50 cents and EPS of 48.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 44.5, implying annual growth of 0.7%. Current consensus DPS estimate is 35.6, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 15.4. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
MFG MAGELLAN FINANCIAL GROUP LIMITED
Wealth Management & Investments
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Overnight Price: $23.17
Morgans rates MFG as Hold (3) -
Marking to market, Morgans observes the past months have been nothing but brutal for global equity markets. When it comes to performance fees, the analysts point out the final two weeks performance can still move the potential fee materially.
Hold rating retained, alongside $28.54 price target.
Target price is $28.54 Current Price is $23.17 Difference: $5.37
If MFG meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $28.67, suggesting upside of 23.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 145.10 cents and EPS of 163.44 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 173.0, implying annual growth of 41.8%. Current consensus DPS estimate is 155.6, implying a prospective dividend yield of 6.7%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 153.40 cents and EPS of 173.54 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 181.5, implying annual growth of 4.9%. Current consensus DPS estimate is 163.0, implying a prospective dividend yield of 7.0%. Current consensus EPS estimate suggests the PER is 12.8. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
PDL PENDAL GROUP LIMITED
Wealth Management & Investments
More Research Tools In Stock Analysis - click HERE
Overnight Price: $7.41
Morgans rates PDL as Hold (3) -
Marking to market, Morgans observes the past months have been nothing but brutal for global equity markets. Morgans expects a low performance fee contribution from JOHCM, with meaningful underperformance to be caught up across several funds before the outlook in general turns more positive.
The analysts anticipate consensus forecasts to be lowered. Hold rating retained, alongside a price target of $9.35.
Target price is $9.35 Current Price is $7.41 Difference: $1.94
If PDL meets the Morgans target it will return approximately 26% (excluding dividends, fees and charges).
Current consensus price target is $9.26, suggesting upside of 24.9% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 48.00 cents and EPS of 55.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 61.4, implying annual growth of -10.1%. Current consensus DPS estimate is 51.8, implying a prospective dividend yield of 7.0%. Current consensus EPS estimate suggests the PER is 12.1. |
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 53.00 cents and EPS of 62.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 67.8, implying annual growth of 10.4%. Current consensus DPS estimate is 56.2, implying a prospective dividend yield of 7.6%. Current consensus EPS estimate suggests the PER is 10.9. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
PNI PINNACLE INVESTMENT MANAGEMENT GROUP LIMITED
Wealth Management & Investments
More Research Tools In Stock Analysis - click HERE
Overnight Price: $4.12
Morgans rates PNI as Add (1) -
Marking to market, Morgans observes the past months have been nothing but brutal for global equity markets. In line with this observation, retail funds inflows are expected to be lower than previously projected.
Add rating retained an a medium-term view. Price target $6.15.
Target price is $6.15 Current Price is $4.12 Difference: $2.03
If PNI meets the Morgans target it will return approximately 49% (excluding dividends, fees and charges).
Current consensus price target is $6.52, suggesting upside of 58.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 13.00 cents and EPS of 16.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 16.3, implying annual growth of 14.0%. Current consensus DPS estimate is 14.5, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 25.3. |
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 18.00 cents and EPS of 22.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 23.2, implying annual growth of 42.3%. Current consensus DPS estimate is 20.1, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 17.8. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $12.34
Morgans rates SUN as Add (1) -
The insurer has received 7800 claims post the hailstorm that savaged Sydney last Thursday. Morgans is expecting the event will go close to being a maximum event loss for Suncorp under it’s reinsurance program ($250m).
Estimates have been lowered, but only for the present year. Price target declines to $15.18 (was $16.49). Add rating retained.
Target price is $15.18 Current Price is $12.34 Difference: $2.84
If SUN meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $15.10, suggesting upside of 22.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 72.80 cents and EPS of 92.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 84.2, implying annual growth of 2.5%. Current consensus DPS estimate is 76.8, implying a prospective dividend yield of 6.2%. Current consensus EPS estimate suggests the PER is 14.7. |
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 84.80 cents and EPS of 110.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 100.4, implying annual growth of 19.2%. Current consensus DPS estimate is 78.6, implying a prospective dividend yield of 6.4%. Current consensus EPS estimate suggests the PER is 12.3. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Today's Price Target Changes
| Company | Broker | New Target | Prev Target | Change | |
| ALX | ATLAS ARTERIA | Morgans | 6.76 | 6.95 | -2.73% |
| CAR | CARSALES.COM | Morgans | 14.68 | 16.81 | -12.67% |
| GNX | GENEX POWER | Morgans | 0.41 | 0.36 | 13.89% |
| IAG | INSURANCE AUSTRALIA | Morgans | 7.10 | 7.41 | -4.18% |
| MFG | MAGELLAN FINANCIAL GROUP | Morgans | 28.54 | 28.64 | -0.35% |
| PDL | PENDAL GROUP | Morgans | 9.35 | 10.05 | -6.97% |
| PNI | PINNACLE INVESTMENT | Morgans | 6.15 | 7.70 | -20.13% |
| SUN | SUNCORP | Morgans | 15.18 | 16.49 | -7.94% |
Summaries
| ALX | ATLAS ARTERIA | Upgrade to Add from Hold - Morgans | Overnight Price $6.04 |
| CAR | CARSALES.COM | Add - Morgans | Overnight Price $10.79 |
| GNX | GENEX POWER | Add - Morgans | Overnight Price $0.27 |
| IAG | INSURANCE AUSTRALIA | Hold - Morgans | Overnight Price $6.87 |
| MFG | MAGELLAN FINANCIAL GROUP | Hold - Morgans | Overnight Price $23.17 |
| PDL | PENDAL GROUP | Hold - Morgans | Overnight Price $7.41 |
| PNI | PINNACLE INVESTMENT | Add - Morgans | Overnight Price $4.12 |
| SUN | SUNCORP | Add - Morgans | Overnight Price $12.34 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 5 |
| 3. Hold | 3 |
Friday 04 January 2019
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