Australian Broker Call

Ord Minnett rates AMI as Buy (1) -

First quarter results appear to have been shrugged off as the market remains concerned about the short-term outlook. Nevertheless, Ord Minnett was impressed in terms of the quality of the low-cost options in the pipeline, particularly Great Cobar.

The broker reiterates a Buy rating, assessing the stock is cheap and has potential as a mid-tier gold/base metal miner. Target is raised to $0.85 from $0.75.

Target price is $0.85 Current Price is $0.52 Difference: $0.33
If AMI meets the Ord Minnett target it will return approximately 63% (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

Morgan Stanley rates APT as Overweight (1) -

Afterpay will offer savings accounts and cash flow tools in Australia via white labelling Westpac Bank's ((WBC)) technology. Morgan Stanley highlights this partnership will give Afterpay access to customer data and offer opportunities for innovation in payment and banking in Australia. Since Westpac will hold the deposits, Afterpay will remain capital-light, points out the broker.    

For the September quarter, Morgan Stanley expects 11.3m active users and $4bn in gross merchandise value (GMV). Looking at the strong app downloads in the US, the broker has increased its FY21 user forecast by 8%.

On account of the upcoming key shopping periods, Morgan Stanley expects a surge in sales and customer activity in the December quarter. The structural shift to debit cards also continues which bodes well for Afterpay since 90% of its customers are debit card users.

Morgan Stanley retains its Overweight rating. Target rises to $115 from $106. Industry view: In-line.

Target price is $115.00 Current Price is $101.94 Difference: $13.06
If APT meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $87.10, suggesting downside of -14.5% (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

UBS rates APT as Sell (5) -

Afterpay has announced it will offer savings accounts in Australia and has entered into an agreement with Westpac Bank ((WBC)). The accounts will be linked to existing users' Afterpay accounts and will be facilitated by Westpac's cloud-based bank-as-a-service platform. The product will be offered under Westpac's ADI license and deposits will be held on Westpac's balance sheet.

In the view of UBS, this is a natural evolution of Afterpay's product offering. The broker sees the main benefits as increasing customer retention and driving transaction frequency higher. Additionally, it's considered this will leverage additional customer data to cross-sell new products and will result in improved credit decisioning through better visibility of customers' transactions.

However, the broker states the incremental economics of this product on its own are likely to be marginal. The Sell rating and target price of $28.25 are unchanged.

Target price is $28.25 Current Price is $101.94 Difference: minus $73.69 (current price is over target).
If APT meets the UBS target it will return approximately minus 72% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $87.10, suggesting downside of -14.5% (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

Credit Suisse rates BHP as Outperform (1) -

First quarter numbers were mostly in line with Credit Suisse estimates. An investment decision is still expected mid 2021 for Jansen while South Flank is on track for first production in that timeframe.

A five-year production record was set at Olympic Dam in the quarter but there was no change to guidance because of refinery crane work to be undertaken in the March quarter. The BFX studies have now concluded that debottlenecking is the best way forward.

Credit Suisse retains an Outperform rating and $39 target.

Target price is $39.00 Current Price is $35.90 Difference: $3.1
If BHP meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $40.81, suggesting upside of 13.1% (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: 0.9

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

Macquarie rates BHP as Outperform (1) -

First quarter results were mixed with better-than-expected iron ore volumes, petroleum and copper offset by weaker coal.

FY21 guidance has been maintained although Cerrejon volumes are now under review following disruptions caused by the pandemic.

Macquarie adjusts forecasts to reflect the results which causes a -2% reduction in the target to $44 from $45. Outperform retained.

Target price is $44.00 Current Price is $35.90 Difference: $8.1
If BHP meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $40.81, suggesting upside of 13.1% (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: 0.9

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

Morgan Stanley rates BHP as Overweight (1) -

BHP Group's FY21 started on a positive note with iron ore, copper and petroleum performing well in the first quarter and beating Morgan Stanley's forecasts. The strong output was somewhat offset by a subdued met coal which lagged the broker's estimate.

There is no material change to the broker's FY21 operating income forecast with production and cost guidance intact.

The broker notes the Jansen Stage 1 project is on track for a final investment decision in mid-2021 albeit at a higher capex budget. South flank also remains on track for its first production in mid-2021.

Overweight rating is retained with a target price of $41. Industry view: Attractive.

Target price is $41.00 Current Price is $35.90 Difference: $5.1
If BHP meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $40.81, suggesting upside of 13.1% (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: 0.9

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

Morgans rates BHP as Add (1) -

BHP Group’s first quarter result outpaced expectations in both iron ore and copper, reports Morgans. Pilbara iron ore, Escondida and Olympic Dam beat the broker’s estimates.

As a result, the analyst upgrades estimates for iron ore and Escondida volumes.

Management has shelved plans to expand Olympic Dam after drilling results failed to confirm earlier hopes.

Despite a drag from Olympic Dam, Morgans explains the group still boasts a robust free cash flow yield of 9.2%, with value upside.

The Add rating is unchanged and the target price is decreased to $39.40 from $39.70.

Target price is $39.40 Current Price is $35.90 Difference: $3.5
If BHP meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $40.81, suggesting upside of 13.1% (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: 0.9

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

Ord Minnett rates BHP as Buy (1) -

Iron ore production and shipments in the September quarter were ahead of Ord Minnett's forecasts, albeit down -2% and -5% quarter on quarter, respectively, after a record fourth quarter.

The broker notes Olympic Dam expansion plans have been shelved but the nearby Oak Dam exploration will progress to technical studies. Capital expenditure for Jansen has increased and a final investment decision is still expected in mid 2021.

Buy rating retained. Target is reduced to $43 from $44.

Target price is $43.00 Current Price is $35.90 Difference: $7.1
If BHP meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $40.81, suggesting upside of 13.1% (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: 0.9

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

UBS rates BHP as Buy (1) -

BHP Group's second quarter production was sequentially softer across the commodities mix due to seasonality and unplanned maintenance, reports UBS. However, the broker says the result was generally ahead of market expectations.

Oil and copper were both ahead of the analyst's expectations, with the beat in copper driven by Escondida. Total coal production was below the UBS forecast due to planned shutdowns at Queensland wash plants and strike action at Cerrejon.

After additional underground drilling the Olympic Dam BFX (brownfield expansion) will not proceed, which disappoints the broker.

UBS adjusts the Olympic Dam copper production down by around -20%, but also increased ongoing sustaining capital spend. This results in a fall to the target price.

The Buy rating is unchanged and the target price is decreased to $39.25 from $41.

Target price is $39.25 Current Price is $35.90 Difference: $3.35
If BHP meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $40.81, suggesting upside of 13.1% (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: 0.9

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

Ord Minnett rates CCL as Upgrade to Accumulate from Hold (2) -

Ord Minnett assesses Coca-Cola Amatil is positioned for leverage from a recovery in activity in Australasia. Cost savings should support earnings and mitigate the negative impact of volume reductions.

The broker increases forecasts by 2.6% for 2020 and 6.4% for 2021 amid greater confidence in a recovery. Rating is upgraded to Accumulate from Hold and the target raised to $11 from $9.

Target price is $11.00 Current Price is $10.18 Difference: $0.82
If CCL meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $10.11, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Ord Minnett rates CLV as Buy (1) -

Stockpiling through the initial wave of the pandemic is likely to blame for diminished sales volumes in the first half of FY21, Ord Minnett assesses. Revenue is guided to be down -15-25%. However, the broker considers this a short-term obstacle.

As the stockpiles are consumed, manufacturers are expected to witness a resumption in sales, and subsequently demand for high-quality DHA should resume. Ord Minnett retains a Buy rating and reduces the target to $2.47 from $3.00.

Target price is $2.47 Current Price is $2.04 Difference: $0.43
If CLV meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

The company's fiscal year ends in July.

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

Macquarie rates CMM as Underperform (5) -

The development of Karlawinda is on schedule for first gold in the fourth quarter of FY21. Budget is on track for $165-170m.

The company has also announced conditions for the drawing down of the $80m debt facility have been met. Hence, Macquarie anticipates no further funding will be required.

Despite the good progress, the broker notes the stock continues to trade at a multiple in line with more established producers and retains an Underperform rating. Target is $1.70.

Target price is $1.70 Current Price is $1.81 Difference: minus $0.11 (current price is over target).
If CMM meets the Macquarie target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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

Credit Suisse rates COH as Neutral (3) -

First quarter implant sales reveal a faster recovery is now underway. Credit Suisse now assumes unit sales declined -10% in the first half.

The broker also assumes services and acoustics revenue remains on a positive trajectory and return to pre-pandemic levels by the first half of FY22. Moreover, Cochlear appears to be gaining share in the market.

Target is raised to $225 from $215. Despite the long-term opportunity for growth, particularly in the adult market, Credit Suisse assesses the valuation is full and a Neutral rating is appropriate.

Target price is $225.00 Current Price is $222.82 Difference: $2.18
If COH meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $206.05, suggesting downside of -7.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Macquarie rates COH as Outperform (1) -

Revenue was ahead of expectations in the first quarter. Going forward, Macquarie envisages scope for above-industry unit sales growth, and market share gains should complement a recovery in activity.

Developed markets have recovered more strongly than emerging markets providing a positive mix for Cochlear. Macquarie retains an Outperform rating and raises the target to $241 from $236.

Target price is $241.00 Current Price is $222.82 Difference: $18.18
If COH meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $206.05, suggesting downside of -7.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Morgan Stanley rates COH as Overweight (1) -

Recovery in the first quarter has been broadly better than expected, observes Morgan Stanley. This is driven by new surgeries, market share gains and clinical assessments in many markets coming back to pre-covid-19 levels.

The broker expects first-half FY21 cochlear implant revenue of $431m.   

Services revenue is 86% of last year, better than Morgan Stanley's estimate. If this run rate is applied to the first half of FY21, it would imply revenue of $194m which is higher than the broker's expected $184m.

Acoustic revenue is 89% of last year and also at a run rate better than expected by the broker which, if applied to the first half of FY21, would imply $73m in revenue versus the broker's estimated $64m.

Overweight retained with a target price of $229. Industry view: In-line.

Target price is $229.00 Current Price is $222.82 Difference: $6.18
If COH meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $206.05, suggesting downside of -7.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Ord Minnett rates COH as Lighten (4) -

First quarter revenue was ahead of Ord Minnett's forecasts with the company benefiting from a rapid recovery in developed markets. The broker notes market share increases have been consistent although the stages of recovery vary.

Earnings forecasts are lifted, to reflect a rapid recovery in revenue. However, with the stock trading close to historical highs the broker retains a Lighten rating. Target is raised to $193 from $175.

Target price is $193.00 Current Price is $222.82 Difference: minus $29.82 (current price is over target).
If COH meets the Ord Minnett target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $206.05, suggesting downside of -7.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

UBS rates COH as Sell (5) -

Cochlear provided a first quarter trading update in-line with UBS expectations. Key takeaways for the broker included a -6% fall in cochlear implant (CI) revenues,  a -14% fall in service revenues and a -11% fall in acoustics revenues.

UBS makes no changes to forecast earnings.

While the analyst forecasts a recovery in CI unit and service sales in the second half back to historic levels, the current incidence of covid-19 infection suggests this may be overly optimistic.

The Sell rating and target price of $175 are unchanged.

Target price is $175.00 Current Price is $222.82 Difference: minus $47.82 (current price is over target).
If COH meets the UBS target it will return approximately minus 21% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $206.05, suggesting downside of -7.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Credit Suisse rates CSL as Outperform (1) -

Credit Suisse observes CSL is confident about the strength of demand in its core products. Despite continued competition in the haemophilia segment, patient numbers continue to grow for the company.

The majority of key R&D opportunities are not expected to launch until after 2023. Credit Suisse retains an Outperform rating and $333 target.

Target price is $333.00 Current Price is $301.04 Difference: $31.96
If CSL meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $311.11, suggesting upside of 4.7% (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: 0.4

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

Macquarie rates CSL as Neutral (3) -

The company has held its annual research & development briefing. A number of trials are underway, although launch of key products appears long dated, for 2023-25.

For the short term, Macquarie notes several catalysts for competitor products over the balance of 2020. Combined with the plasma collection risks, this causes the broker to retain a Neutral rating for CSL. Target is $295.

Target price is $295.00 Current Price is $301.04 Difference: minus $6.04 (current price is over target).
If CSL 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 $311.11, suggesting upside of 4.7% (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: 0.4

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

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

As seen in CSL's 2020 annual research & development day, trials involving some of its key products have been pushed to 2021-22 due to covid-19. 

Morgan Stanley believes the covid-19 vaccine is likely to be the only catalyst for any meaningful earnings variation over the next two years.

Equal-weight rating with a target price of $282. Industry view: In-line.

Target price is $282.00 Current Price is $301.04 Difference: minus $19.04 (current price is over target).
If CSL 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 $311.11, suggesting upside of 4.7% (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: 0.4

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

Ord Minnett rates CSL as Hold (3) -

The company has outlined its programs and provided commercial updates in an R&D briefing. Given solid progress even with the pandemic, Ord Minnett remains comfortable the product outlook is more than sufficient to offset the competitive challenges.

Plasma supply for the short term remains a key constraint, as rising infection rates in the US raise the risk that a recovery in collections could falter. Hold rating and $290 target retained.

Target price is $290.00 Current Price is $301.04 Difference: minus $11.04 (current price is over target).
If CSL meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $311.11, suggesting upside of 4.7% (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: 0.4

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

UBS rates CSL as Buy (1) -

A CSL research and development briefing demonstrated to UBS the ongoing strategy of allocating investment across three key areas. These are life-cycle management, market development (new geographies/indications) and new product development. The broker notes over the past three years, product development has accounted for all of the 11% compound annual growth rate (CAGR).

The analyst highlights key pipeline updates included antibody development, gene therapy opportunities and covid-19 vaccines.

UBS calculates the company is trading on 42x times 12-month forward consensus EPS, which is a 37% premium to the ASX100 industrials. This is versus five year averages of 31x times and 60%.

The Buy rating and $346 price target are unchanged.

Target price is $346.00 Current Price is $301.04 Difference: $44.96
If CSL meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $311.11, suggesting upside of 4.7% (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: 0.4

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

Credit Suisse rates CWN as Outperform (1) -

Credit Suisse observes casinos around the world are not experiencing a restoration of high-cost, non-gaming amenities as quickly as gambling operations. This shift bodes well for future margins.

Still revenue and profit are likely to be soft relative to pre-pandemic levels out to FY23. The broker asserts this, combined with regulatory pressures, could create an environment for a merger between Crown Resorts and The Star Entertainment ((SGR)).

The broker lowers the target to $10.20 from $11.10 because of lower VIP expectations and regulatory costs. Outperform retained as, once the regulatory cloud disappears, Credit Suisse believes the stock will trade towards fair value.

Target price is $10.20 Current Price is $8.35 Difference: $1.85
If CWN meets the Credit Suisse target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $10.14, suggesting upside of 21.3% (ex-dividends)

The company's fiscal year ends in June.

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 DMP as Sell (5) -

Citi analysts sense the market is already pricing in the next territorial expansion yet to be announced by Domino's Pizza. The broker's favoutites are Poland and South Korea.

While the near term operational outlook remains positive, Citi also thinks this is well and truly reflected in the share price.

Sell rating retained while the price target lifts to $67.40 on slightly increased forecasts.

Target price is $67.40 Current Price is $92.32 Difference: minus $24.92 (current price is over target).
If DMP meets the Citi target it will return approximately minus 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $72.12, suggesting downside of -21.7% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.4

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

Morgan Stanley rates IEL as Overweight (1) -

Morgan Stanley believes IDP Education is tracking to plan.

The company continues to be profitable and FY21 appears on track versus the broker's forecast.

IELTS volumes are supply-constrained and if the first half run rate does not improve, the broker estimates volumes in the second half will need to be circa 74% of the first-half peak volumes to achieve the broker's forecast.

Student applications, a proxy for placement volumes are down -22% versus last year. The broker expects FY21 volume to decline by -17%. The course mix (UG/PG) could be a headwind, but the broker sees scope for higher commission rates, which have not been fully factored in.

Morgan Stanley maintains its Overweight rating with a target price of $24. Industry view: In-line.

Target price is $24.00 Current Price is $18.57 Difference: $5.43
If IEL meets the Morgan Stanley target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $21.53, suggesting upside of 11.0% (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

Morgans rates IEL as Hold (3) -

IDP Education provided a trading update.The key highlights for Morgans were IELTS testing capacity is now back at around 70% capacity of pre-covid levels and English teaching reopened in Vietnam/Cambodia.

Additional highlights included first quarter applied student levels (student placement segment) were down -22% on the previous corresponding period and UK/Canada first half intakes were down in-line with the broker’s expectations.

While the analyst expects the company to be materially better placed when normalised conditions prevail, it is still considered pleasing to see continued improvement in operating conditions.

The broker makes only around 1-3% EPS forecast increases. Morgans retains a Hold rating, because of less than 10% upside to the broker’s revised upside target of $19.42 (from $19.31).

Target price is $19.42 Current Price is $18.57 Difference: $0.85
If IEL meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $21.53, suggesting upside of 11.0% (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 LOV as Equal-weight (3) -

Lovisa Holdings’ trading update, with better same-store sales growth trends and opening of new stores, was ahead of Morgan Stanley's estimate. However, the broker feels this has already been priced in with the shares up 20% since August.

Store roll-out continues with fourteen new stores added since FY20. The broker notes most stores are now open (except for Melbourne) and Australia and New Zealand continues to be the best performing region. 

Morgan Stanley maintains its Equal-weight rating with a target price of $7.15. Industry view: In-line.

Target price is $7.15 Current Price is $8.67 Difference: minus $1.52 (current price is over target).
If LOV meets the Morgan Stanley target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.27, suggesting downside of -22.4% (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

Morgan Stanley rates MMS as Overweight (1) -

McMillan Shakespeare's AGM update showed salary packaging activity for group remuneration services (GRS) was back to pre-covid-19 levels.

Activity levels in both asset management (AM) and retail financial services (RFS) segments showed a rebound from covid-19 troughs but are still below pre-covid levels. 

Morgan Stanley believes the company is on track to achieve the broker's FY21 forecast with growing novated volumes and the plan partners segment continuing to scale.

Morgan Stanley maintains its Overweight rating with a target price of $12. Industry view: In-line.

Target price is $12.00 Current Price is $9.46 Difference: $2.54
If MMS meets the Morgan Stanley target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $10.23, suggesting upside of 8.9% (ex-dividends)

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

Credit Suisse rates OSH as Neutral (3) -

PNG LNG production was higher in the September quarter, at 8.9mtpa, while operating expenditure guidance is lower.

Credit Suisse assesses the weaker LNG pricing is a one-off, as the 2-3 month lag from the slump in the oil price in the second quarter has kicked in.

The broker retains a Neutral rating and reduces the target to $3.06 from $3.23. This is based on a long-term assumption that LNG contract prices will soften.

Target price is $3.06 Current Price is $2.85 Difference: $0.21
If OSH meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.44, suggesting upside of 16.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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 OSH as Outperform (1) -

Production in the September quarter was in line with expectations while revenue was weaker. Oil Search continues to evaluate the discoveries in Alaska and further appraisal is required to confirm the size and extent.

The update on Alaska at the strategy briefing in November is likely to be material, Macquarie assesses, as many in the market remain sceptical about the ability of the company to sell down the asset and move successfully to production.

Outperform retained and the target is reduced to $3.30 from $3.40.

Target price is $3.30 Current Price is $2.85 Difference: $0.45
If OSH meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $3.44, suggesting upside of 16.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

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

Oil Search's third-quarter revenue was down -29% versus the second quarter due to lower realised LNG prices. 2020 capex has been lowered to US$390-US$460m on account of less exploration and rephasing of FEED activities in Alaska.

The broker has increased its net profit estimates for FY20 due to lower than expected exploration expenses and other operating costs. 

Morgan Stanley notes Oil Search is very leveraged to higher oil and LNG prices. Also, growth on the Alaska project remains many years away with first production not expected until 2025, which is one of the key challenges faced by the company.

Morgan Stanley remains Equal-weight with a target price of $3.30. Industry view: Cautious.

Target price is $3.30 Current Price is $2.85 Difference: $0.45
If OSH meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $3.44, suggesting upside of 16.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Morgans rates OSH as Add (1) -

Oil Search outlined that at its investor day (19 November) it would release updated Pikka Unit (Alaska) variables, including a “materially lower” development cost.

Morgans expects market forecasts to refactor in this positive catalyst quickly.

The company posted third quarter group production of 7.4mmboe versus Morgans estimate of 7.2mmboe. LNG production came in ahead of estimates with PNG LNG having averaged a fresh record of 8.8mtpa.

The received LNG price was down -42% on the previous quarter, to US$4.23/mmbtu, which was close to the broker's estimates.

The company cut its 2020 capex budget back further to US$390-$460m from US$440-$530m, highlights the analyst.

The Add rating and target price of $3.65 are unchanged.

Target price is $3.65 Current Price is $2.85 Difference: $0.8
If OSH meets the Morgans target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $3.44, suggesting upside of 16.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Ord Minnett rates OSH as Accumulate (2) -

Output in the September quarter was generally stronger than Ord Minnett expected. A significant decline in realised LNG prices was consistent with the earlier fall in Brent prices.

The company has lowered operating and capital cost guidance. Lower capital expenditure appears to be related to the deferral of spending on Alaska and more detail is expected at the strategy briefing. Accumulate rating and $3.35 target retained.

Target price is $3.35 Current Price is $2.85 Difference: $0.5
If OSH meets the Ord Minnett target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $3.44, suggesting upside of 16.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

UBS rates OSH as Buy (1) -

UBS explains lower realised pricing overshadowed record production at PNG LNG, when Oil Search provided a 2020 cost guidance update. Cost guidance improved with lower exploration capital expenditure and deferred spend in Alaska, explains the broker.

Third quarter production for PNG LNG beat the UBS forecast by 6%.

The broker lifts forecasts for the fourth quarter LNG spot price, but EPS forecasts remain largely unchanged.

The Buy rating is unchanged and the target price is decreased to $3.60 from $3.70.

Target price is $3.60 Current Price is $2.85 Difference: $0.75
If OSH meets the UBS target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $3.44, suggesting upside of 16.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Citi rates PPT as Neutral (3) -

Citi still thinks the acquisition of Barrow Hanley will prove "transformational" for Perpetual, but in the same vein, the analysts would like more details and data, and none has been forthcoming to date.

Maybe the investor day on December 9th is a key date to look forward to?

For now, the analysts have reduced estimates, which pulls back the price target to $32.30 (from $34.10). Neutral rating retained.

Target price is $32.30 Current Price is $29.90 Difference: $2.4
If PPT meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $34.05, suggesting upside of 13.8% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Credit Suisse rates PPT as Neutral (3) -

The first quarter business update was slightly weaker than Credit Suisse expected. The company will report Barrow Hanley and Trillium in a separate division called Perpetual International Asset Management.

The former acquisition is expected to close a month earlier than Credit Suisse expected, which leads to 4% upgrades to estimates for the current year, although minimal changes to outer years.

Meanwhile, funds under management in the September quarter at $29bn were up 2%. Neutral rating retained. Target is $31.

Target price is $31.00 Current Price is $29.90 Difference: $1.1
If PPT meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $34.05, suggesting upside of 13.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Morgan Stanley rates PPT as Overweight (1) -

Perpetual's September quarter update noted positive flows of $0.2bn into investments beating Morgan Stanley's estimated $0.1bn. The broker notes the inflow was driven by $1.0bn institutional inflows into cash & FI.

Higher fee saw outflows of -$0.8bn from wholesale and institutional channels. Private wealth inflows were driven largely by new advisors.

The broker points out the Barlow Hanley acquisition remains on track and is expected to close by 30 Nov 2020. 

Morgan Stanley retains its Overweight rating with a target price of $46.50. Industry view: In-line.

Target price is $46.50 Current Price is $29.90 Difference: $16.6
If PPT meets the Morgan Stanley target it will return approximately 56% (excluding dividends, fees and charges).

Current consensus price target is $34.05, suggesting upside of 13.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Ord Minnett rates PPT as Hold (3) -

First quarter funds under management revealed positive flows overall but Ord Minnett observes this masked outflows in higher-margin equities and retail/intermediate channels.

The broker expects the market to remain cautious regarding the value accretion from recent acquisitions until there are signs of a turnaround in flows. Hold rating retained. Target is reduced to $32.50 from $35.00.

Target price is $32.50 Current Price is $29.90 Difference: $2.6
If PPT meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $34.05, suggesting upside of 13.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Credit Suisse rates PRU as Outperform (1) -

Production in the September quarter of 68,800 ounces was 52% of the first half budget. Credit Suisse notes, compositionally, Sissingue was the star performer while Edikan performed to expectations.

The December quarter is expected to reveal increased expenditure outflow at Yaoure with -US$191m paid to date of the total -US$265m in project expenditure.

All up, Credit Suisse believes this was a solid result, despite the wet season conditions constraining mining. Outperform rating and $1.60 target retained.

Target price is $1.60 Current Price is $1.31 Difference: $0.29
If PRU meets the Credit Suisse target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $1.63, suggesting upside of 25.6% (ex-dividends)

The company's fiscal year ends in June.

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

Macquarie rates PRU as Outperform (1) -

Macquarie notes a solid start to FY21. Gold production was 68,800 ounces in the quarter and 5% ahead of estimates. Stronger process volumes at Edikan and Sissingue more than offset recoveries.

Guidance is unchanged and Yaoure is on track for first production in late December. Outperform retained. Target is $1.70.

Target price is $1.70 Current Price is $1.31 Difference: $0.39
If PRU meets the Macquarie target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $1.63, suggesting upside of 25.6% (ex-dividends)

The company's fiscal year ends in June.

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

Credit Suisse rates SGP as Neutral (3) -

Commercial rent collection in the September quarter was higher relative to the prior quarter, with 81% of first quarter rent collected as of October 18. Credit Suisse notes, while retail was slow, the office and industrial segments were relatively resilient.

Guidance remains absent but the broker assesses Stockland is tracking below its unchanged FY21 earnings expectations. However, there is scope for rent relief coming in higher than estimated. Neutral rating retained. Target rises to $4.05 from $3.96.

Target price is $4.05 Current Price is $4.08 Difference: minus $0.03 (current price is over target).
If SGP meets the Credit Suisse target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.96, suggesting downside of -0.6% (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 SGP as Downgrade to Neutral from Outperform (3) -

The company provided the first quarter update, with residential sales slightly below Macquarie's estimates. Momentum is slowing as the stimulus impact rolls off.

The broker notes the residential business has benefited from federal/state stimulus and, while there is potential for additional stimulus to be announced, the implications for Stockland are now more limited.

The broker expects pressure will return to retail assets as conditions normalise and downgrades to Neutral. Target is reduced -2.5% to $4.18.

Target price is $4.18 Current Price is $4.08 Difference: $0.1
If SGP meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.96, suggesting downside of -0.6% (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

Morgan Stanley rates SGP as Overweight (1) -

Stockland's first-quarter update notes a stronger residential segment with 1,799 items in pre-sales. Morgan Stanley highlights this was the biggest quarter of pre-sales since FY17.

Morgan Stanley expects 5.7k residential settlements in FY21. With 1,083 in the first quarter and another 3,800 in the bag, the broker notes Stockland is well on track to achieve the broker's forecast.

Retail seems to be going in the right direction with billings collected for the quarter higher than the June quarter (76% versus 51%).

The broker is concerned the second quarter may see Stockland relying more on Victoria to keep the momentum going.

Overweight rating. Target is $4.45. Industry view: In-line.

Target price is $4.45 Current Price is $4.08 Difference: $0.37
If SGP meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.96, suggesting downside of -0.6% (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

Ord Minnett rates SGP as Lighten (4) -

The first quarter trading update provided no guidance. Ord Minnett observes residential sales while strong were slowing and retail sales were positive, excluding Victoria and Wetherill Park.

Rent collection improved across the diversified investment portfolio. Ord Minnett assesses Stockland is fully valued compared to A-REIT peers and retains a Lighten rating with a $3.60 target.

Target price is $3.60 Current Price is $4.08 Difference: minus $0.48 (current price is over target).
If SGP meets the Ord Minnett target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.96, suggesting downside of -0.6% (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

UBS rates SGP as Neutral (3) -

Stockland reported the strongest quarterly sales result in three years, according to UBS. However, the monthly run-rate has moderated from the extreme strength seen in June/July, which the broker attributes to subdued trading in Victoria.

Additionally, it's considered the impact of capacity constraints for customers to access the HomeBuilder grant have had an effect.

UBS notes the company referenced a preference for commercial tenants to provide employees with "a balance between home and office", potentially flagging risks that the office developments might not achieve the required pre-leasing.

The Neutral rating and target price of $3.80 are unchanged.

Target price is $3.80 Current Price is $4.08 Difference: minus $0.28 (current price is over target).
If SGP meets the UBS target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.96, suggesting downside of -0.6% (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

Credit Suisse rates SGR as Outperform (1) -

Credit Suisse observes casinos around the world are not experiencing a restoration of high-cost, non-gaming amenities as quickly as gambling operations. This shift bodes well for future margins.

Still revenue and profit are likely to be soft relative to pre-pandemic levels out to FY23. The broker asserts this, combined with regulatory pressures, could create an environment for a merger between The Star Entertainment and Crown Resorts ((CWN)).

Outperform retained. Target is raised to $3.85 from $3.60.

Target price is $3.85 Current Price is $3.60 Difference: $0.25
If SGR meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.63, suggesting upside of 0.6% (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

Ord Minnett rates SYD as Downgrade to Lighten from Hold (4) -

Passenger numbers fell -96% in September. However, Ord Minnett notes a slight improvement month on month which should accelerate as domestic borders reopen and international travel bubbles are established. The timing is heavily reliant on coronavirus cases remaining low.

The broker downgrades to Lighten from Hold, given the recent bounce in the share price and the reliance on a recovery in international travel. Target is raised to $5.40 from $5.00 because of changes to forecasts for net operating receipts.

Target price is $5.40 Current Price is $6.01 Difference: minus $0.61 (current price is over target).
If SYD meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.93, suggesting downside of -0.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Credit Suisse rates TAH as Outperform (1) -

Credit Suisse upgrades estimates for FY22-23 by 5-6% after the trading update. Tabcorp reported lottery/Keno revenue was down -6.9% in the September quarter. This is in line with expectations and Credit Suisse models 1.2% growth for FY21.

Wagering & media revenue was up 2.9% in the quarter and the broker now models 5.4% revenue growth. Outperform rating retained. Target rises to $4.40 from $4.30.

Target price is $4.40 Current Price is $3.44 Difference: $0.96
If TAH meets the Credit Suisse target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $3.87, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

UBS rates TAH as Buy (1) -

Tabcorp reported a first quarter revenue decline of -6%, which was broadly in-line with the UBS forecast. The main driver of the revenue decline were lotteries, which was down -7%, notes the broker.

However, the company disclosed that like-for-like revenue was actually up 15-30% on pre-covid levels, once the strong jackpot sequence was adjusted in the previous corresponding period.

The company reported online wagering growth of 47% year-on-year, which remains elevated but below peers, explains UBS.

The broker continues to see the announcement of a new CEO as a material catalyst for the stock.

The Buy rating and $4.70 price target are unchanged.

Target price is $4.70 Current Price is $3.44 Difference: $1.26
If TAH meets the UBS target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $3.87, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Morgan Stanley rates URW as Underweight (5) -

Unibail Rodamco Westfield will be publishing its third-quarter result on November 1. There are four things Morgan Stanley is keenly awaiting updates on. These are portfolio valuation declines, rent declines (and renegotiations), disposal progress and more detail on the credit lines.

The broker expects capital values will fall by around -35% on average peak-to-trough. and suggests valuers be market observers rather than market participants.

Underweight rating is maintained with a target price of EUR35. Industry view: In-line.

Current Price is $3.48. Target price not assessed.

Current consensus price target is $3.88, suggesting upside of 12.1% (ex-dividends)

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: -0.3

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

Morgans rates VMY as Add (1) -

The August 2020 update of the definitive feasibility study (DFS) for Vimy Resources' wholly-owned Mulga Rock uranium project in Western Australia enhanced value further, according to Morgans. This is despite the broker using a lower long term contract uranium price of US$55/lb U308, previously US$60/lb.

The -US$393m development is scheduled to produce 3.5mlbs per year U308 at an all-in sustaining cost of US$31.22/lb over the 15-year life from existing reserves, reports the broker. All primary approvals, including the Condition Environmental Management Plans are received.

Morgans believes another short-term catalyst could be the discovery of another high-grade deposit such as Angulari. The longer term valuation driver is considered to be the contract uranium price, with prices over US$50-60/lb expected to justify development of Mulga Rock.

The Add rating is unchanged and the target price is decreased to $0.17 from $0.38, due to increased issued capital.

Target price is $0.17 Current Price is $0.03 Difference: $0.14
If VMY meets the Morgans target it will return approximately 467% (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

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

Investors expect a weak second half result on 2 November. Cash profit (ex-notable items) is expected to fall by circa -30% with the dividend constrained by APRA's payout ratio cap.

Morgan Stanley thinks Westpac's second half CET1 ratio, final dividend and outlook commentary will influence its share price performance for the rest of the year.

The broker expects the CET1 ratio to be circa 10.9% with a final dividend of 25c. While cautious on the outlook for revenue and expense, the broker expects positive commentary on the level of provisioning, capital outlook and the prospect of asset sales. 

Equal-weight rating retained with a target price of $17.50. Industry view: In-line.

Target price is $17.50 Current Price is $18.51 Difference: minus $1.01 (current price is over target).
If WBC meets the Morgan Stanley target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.20, suggesting upside of 8.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.7

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

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

Citi upgrades to Buy from Neutral, raising estimates for earnings per share by 5% for FY21 and 3.5% for FY22. This reflects a rational grocery market and earnings momentum as well as appealing relative valuations.

The broker assesses the sales gap over Coles ((COL)) is driven by the online channel and forecasts like-for-like sales growth of 11.6% in the first quarter for Woolworths. Target is raised to $44.50 from $41.20.

Target price is $44.50 Current Price is $39.14 Difference: $5.36
If WOW meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $42.17, suggesting upside of 9.2% (ex-dividends)

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

UBS rates Z1P as Sell (5) -

Zip Co announced the launch of ‘Tap & Zip’, enabling Zip Pay users to shop anywhere that accepts Visa. The company has been granted a Principal Issuer licence with Visa and will leverage Marqeta's open-API card-issuing platform to create Zip-branded virtual cards.

This will also allow Zip Pay users to be added to Google and Apple wallets. Zip will monetise payments via interchange revenue on transaction volume processed on its cards.

UBS opines the announcement is significant though difficult to quantity. While increasing the total addressable market materially, it's considered there is a risk of cannibalisation from higher margin transactions processed via the Zip platform. 

The broker also sees a risk to future merchant growth, given Zip's customers can now access such merchants without paying a higher fee (though under certain conditions this may not apply and merchants will continue to integrate directly with Zip).

The Sell rating and $5.50 target price are unchanged.

Target price is $5.50 Current Price is $7.07 Difference: minus $1.57 (current price is over target).
If Z1P meets the UBS target it will return approximately minus 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.69, suggesting downside of -5.5% (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