Australian Broker Call
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November 18, 2019
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1).
Last Updated: 05:00 PM
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
| BSL - | BLUESCOPE STEEL | Downgrade to Equal-weight from Overweight | Morgan Stanley |
| Downgrade to Sell from Neutral | UBS | ||
| CCL - | COCA-COLA AMATIL | Upgrade to Neutral from Underperform | Macquarie |
| QAN - | QANTAS AIRWAYS | Upgrade to Outperform from Neutral | Macquarie |
| VAH - | VIRGIN AUSTRALIA | Upgrade to Neutral from Sell | UBS |
AIZ AIR NEW ZEALAND LIMITED
Transportation & Logistics
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Overnight Price: $2.60
Macquarie rates AIZ as Underperform (5) -
Macquarie reviews the outlook for the airline and seat capacity. Capacity has experienced a modest increase, at around 4% for FY20, underpinned by Asia, while market capacity continues to decline across domestic and international markets.
Macquarie also notes the demand environment remains patchy. The broker requires more clarity on the path to improved returns, particularly in light of a tough macro backdrop. Underperform rating and NZ$2.40 target maintained.
Current Price is $2.60. Target price not assessed.
Current consensus price target is N/A
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 21.78 cents and EPS of 25.66 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.7, implying annual growth of N/A. Current consensus DPS estimate is 22.0, implying a prospective dividend yield of 8.5%. Current consensus EPS estimate suggests the PER is 10.5. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 22.73 cents and EPS of 30.96 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.5, implying annual growth of 19.4%. Current consensus DPS estimate is 24.1, implying a prospective dividend yield of 9.3%. Current consensus EPS estimate suggests the PER is 8.8. |
This company reports in NZD. 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
Overnight Price: $31.98
Citi rates ALL as Buy (1) -
Ahead of Aristocrat Leisure's earnings result on Wednesday, the broker has increased its price target to $37.90 from $35.00, retaining Buy. The broker expects FY19 to deliver another year of double-digit earnings growth and believes the same can be achieved for the next three years.
Driving growth will be the monetisation of RAID in FY21, ongoing land-based growth and capital management. The stock offers superior growth while trading at a discount to the market ex resources/financials.
Target price is $37.90 Current Price is $31.98 Difference: $5.92
If ALL meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $34.44, suggesting upside of 7.7% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 50.00 cents and EPS of 138.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 133.2, implying annual growth of 16.7%. Current consensus DPS estimate is 52.5, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 24.0. |
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 52.00 cents and EPS of 159.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 153.9, implying annual growth of 15.5%. Current consensus DPS estimate is 60.0, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 20.8. |
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $8.15
Morgans rates ALQ as Hold (3) -
Morgans lifts the earnings multiple applied to the commodities division, which drives a slight improvement in valuation. Target is raised to $7.81 from $7.63.
The broker rates the stock highly and envisages scope for modest improvement in both commodities and life sciences into the second half. However, this is considered more than captured in the FY20 valuation metrics and a Hold rating is maintained.
Target price is $7.81 Current Price is $8.15 Difference: minus $0.34 (current price is over target).
If ALQ meets the Morgans target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $8.03, suggesting downside of -1.4% (ex-dividends)
The company's fiscal year ends in March.
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 23.00 cents and EPS of 39.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 38.5, implying annual growth of 21.8%. Current consensus DPS estimate is 23.0, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 21.2. |
Forecast for FY21:
Morgans forecasts a full year FY21 dividend of 25.00 cents and EPS of 43.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 43.0, implying annual growth of 11.7%. Current consensus DPS estimate is 25.4, implying a prospective dividend yield of 3.1%. Current consensus EPS estimate suggests the PER is 19.0. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $14.09
Morgan Stanley rates BSL as Downgrade to Equal-weight from Overweight (3) -
Morgan Stanley believes the recent strength in the share price more than accounts for the positive momentum in steel prices. The broker believes investors should capitalise on the strength in the share price and downgrades to Equal-weight from Overweight.
Earnings (EBIT) forecasts are reduced by -9% for FY20 and -16% for FY21. While an improving steel price is positive, further price and spread increases are required to support forecasts. Morgan Stanley reduces the target to $13.50 from $14.00. Industry view: Cautious.
Target price is $13.50 Current Price is $14.09 Difference: minus $0.59 (current price is over target).
If BSL 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 $13.42, suggesting downside of -4.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 14.00 cents and EPS of 77.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 81.5, implying annual growth of -57.1%. Current consensus DPS estimate is 14.0, implying a prospective dividend yield of 1.0%. Current consensus EPS estimate suggests the PER is 17.3. |
Forecast for FY21:
Morgan Stanley forecasts a full year FY21 dividend of 14.00 cents and EPS of 92.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 107.4, implying annual growth of 31.8%. Current consensus DPS estimate is 15.0, implying a prospective dividend yield of 1.1%. Current consensus EPS estimate suggests the PER is 13.1. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates BSL as Downgrade to Sell from Neutral (5) -
UBS is cautious about the recent momentum in steel prices and spreads. US steel prices and spreads have lifted by 8-10% since the trough in late October but the spread remains below the company's first half guidance.
During this time the stock has rallied 16%. Rating is downgraded to Sell from Neutral and UBS cuts FY20 estimates for earnings (EBIT) by -17%. Target is reduced to $11.94 from $12.20.
Target price is $11.94 Current Price is $14.09 Difference: minus $2.15 (current price is over target).
If BSL meets the UBS target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $13.42, suggesting downside of -4.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 7.00 cents and EPS of 75.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 81.5, implying annual growth of -57.1%. Current consensus DPS estimate is 14.0, implying a prospective dividend yield of 1.0%. Current consensus EPS estimate suggests the PER is 17.3. |
Forecast for FY21:
UBS forecasts a full year FY21 dividend of 10.00 cents and EPS of 99.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 107.4, implying annual growth of 31.8%. Current consensus DPS estimate is 15.0, implying a prospective dividend yield of 1.1%. Current consensus EPS estimate suggests the PER is 13.1. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
CCL COCA-COLA AMATIL LIMITED
Food, Beverages & Tobacco
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Overnight Price: $11.40
Citi rates CCL as Sell (5) -
Coca Cola Amatil sees earnings growth returning in FY20 as input costs fall in Australian and Indonesia. The broker agrees, forecasting 7%, but also agrees with management that ever further cost savings are not possible. This puts the focus on revenue.
Management is upbeat, suggesting genuine improvement in execution and product mix, but the broker is concerned revenue growth will remain sluggish. Sell and $9.70 target retained.
Target price is $9.70 Current Price is $11.40 Difference: minus $1.7 (current price is over target).
If CCL meets the Citi target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $10.14, suggesting downside of -11.0% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 51.00 cents and EPS of 52.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 52.1, implying annual growth of 35.3%. Current consensus DPS estimate is 48.9, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 21.9. |
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 51.00 cents and EPS of 56.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 55.2, implying annual growth of 6.0%. Current consensus DPS estimate is 48.0, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 20.7. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates CCL as Upgrade to Neutral from Underperform (3) -
Management has reiterated expectations for mid single-digit earnings growth in 2020. Macquarie welcomes the company's confidence in the outlook and upgrades to Neutral from Underperform.
Second half profit growth is expected to be higher than the first half. Coca-Cola Amatil has confirmed 2019 will be the end of its transition period and it can now focus on the top line. Target is raised to $11.20 from $8.77.
Target price is $11.20 Current Price is $11.40 Difference: minus $0.2 (current price is over target).
If CCL 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 $10.14, suggesting downside of -11.0% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 44.50 cents and EPS of 50.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 52.1, implying annual growth of 35.3%. Current consensus DPS estimate is 48.9, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 21.9. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 46.90 cents and EPS of 54.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 55.2, implying annual growth of 6.0%. Current consensus DPS estimate is 48.0, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 20.7. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates CCL as Accumulate (2) -
Management has reiterated expectations for earnings growth in 2020. Ord Minnett notes low single-digit earnings (EBIT) growth in the Australian beverages division has proved elusive in recent years but this should now start to happen.
In Indonesia, the beverages industry is performing well and Coca-Cola Amatil is well-positioned. The broker considers the valuation attractive compared with large Australian consumer peers and maintains an Accumulate rating. Target is raised to $11.50 from $11.00.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $11.50 Current Price is $11.40 Difference: $0.1
If CCL meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $10.14, suggesting downside of -11.0% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Ord Minnett forecasts a full year FY19 EPS of 51.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 52.1, implying annual growth of 35.3%. Current consensus DPS estimate is 48.9, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 21.9. |
Forecast for FY20:
Ord Minnett forecasts a full year FY20 EPS of 53.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 55.2, implying annual growth of 6.0%. Current consensus DPS estimate is 48.0, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 20.7. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates CCL as Sell (5) -
UBS found the 2019 strategy briefing incrementally positive with the company maintaining mid single-digit growth targets from 2020. The broker is becoming less negative but retains a Sell rating on valuation grounds.
Further investment is likely to be required and, to become more positive, UBS would need to witness more signs of investment pay-back and stable margins. Target is raised to $9.10 from $8.40.
Target price is $9.10 Current Price is $11.40 Difference: minus $2.3 (current price is over target).
If CCL meets the UBS target it will return approximately minus 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $10.14, suggesting downside of -11.0% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 51.00 cents and EPS of 53.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 52.1, implying annual growth of 35.3%. Current consensus DPS estimate is 48.9, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 21.9. |
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 47.00 cents and EPS of 55.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 55.2, implying annual growth of 6.0%. Current consensus DPS estimate is 48.0, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 20.7. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $12.73
Citi rates CWN as Neutral (Re-initiation of coverage) (3) -
Citi is cautious on the outlook for the Australian casino industry, given $4bn is set to be invested in projects delivering returns below the cost of capital which will likely cannibalise existing assets. It is possible that recent stimulus and a recovering housing market could support the domestic consumer, the broker suggests, who provides 50-60% of earnings, but the VIP market remains tough.
The broker "initiates" coverage of Crown Resorts (last report April 2018) with a Neutral rating and $12.80 target, preferring the stock on a relative basis.
Target price is $12.80 Current Price is $12.73 Difference: $0.07
If CWN meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $12.10, suggesting downside of -4.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 60.00 cents and EPS of 55.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 52.6, implying annual growth of -11.0%. Current consensus DPS estimate is 60.0, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 24.2. |
Forecast for FY21:
Citi forecasts a full year FY21 dividend of 60.00 cents and EPS of 58.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 53.6, implying annual growth of 1.9%. Current consensus DPS estimate is 60.0, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 23.8. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $8.44
UBS rates GNC as Buy (1) -
The ACCC will not oppose the sale of the bulk liquid terminals business but has imposed certain conditions such as GrainCorp retaining its terminal at Port Kembla and ANZ Terminals divesting its terminal at Osborne to a purchaser to be approved by the ACCC.
ANZ Terminals is also required to seek ACCC clearance of any future land acquisitions it proposes at Coode Island.
UBS considered GrainCorp over geared, but post the divestments believes all of the remaining core debt could go into the malt company with the new GrainCorp left with just a seasonal grain trading facility. Buy rating and $9.40 target maintained.
Target price is $9.40 Current Price is $8.44 Difference: $0.96
If GNC meets the UBS target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $8.70, suggesting upside of 3.1% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 0.00 cents and EPS of 23.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 20.9, implying annual growth of N/A. Current consensus DPS estimate is 5.5, implying a prospective dividend yield of 0.7%. Current consensus EPS estimate suggests the PER is 40.4. |
Forecast for FY21:
UBS forecasts a full year FY21 dividend of 16.00 cents and EPS of 46.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 42.7, implying annual growth of 104.3%. Current consensus DPS estimate is 20.2, implying a prospective dividend yield of 2.4%. Current consensus EPS estimate suggests the PER is 19.8. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $36.68
Citi rates JBH as Neutral (3) -
The prices of TVs have fallen -16-28% in the six months to November, the broker notes, presenting JB Hi-Fi with deflation risk. Smartphones also appear to be peaking.
The company has a strong track record in delivering above market growth through superior execution, and the broker is forecasting above-industry sales growth in FY20. Neutral retained, target rises to $35.20 from $29.50.
Target price is $35.20 Current Price is $36.68 Difference: minus $1.48 (current price is over target).
If JBH meets the Citi target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $32.05, suggesting downside of -12.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 151.00 cents and EPS of 231.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 220.4, implying annual growth of 1.4%. Current consensus DPS estimate is 144.3, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 16.6. |
Forecast for FY21:
Citi forecasts a full year FY21 dividend of 152.00 cents and EPS of 232.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 221.7, implying annual growth of 0.6%. Current consensus DPS estimate is 145.0, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 16.5. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
LNK LINK ADMINISTRATION HOLDINGS LIMITED
Wealth Management & Investments
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Overnight Price: $5.88
Morgan Stanley rates LNK as Overweight (1) -
The company has reaffirmed FY20 guidance. This is a positive outcome, in Morgan Stanley's view, given significant investor concerns in recent months.
Member growth remains strong and corporate market revenue is in line with expectations. Overweight rating, $7.50 target and In-Line industry view maintained.
Target price is $7.50 Current Price is $5.88 Difference: $1.62
If LNK meets the Morgan Stanley target it will return approximately 28% (excluding dividends, fees and charges).
Current consensus price target is $6.68, suggesting upside of 13.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 19.10 cents and EPS of 27.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.4, implying annual growth of -47.6%. Current consensus DPS estimate is 18.6, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 18.7. |
Forecast for FY21:
Morgan Stanley forecasts a full year FY21 dividend of 21.30 cents and EPS of 35.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 36.8, implying annual growth of 17.2%. Current consensus DPS estimate is 20.1, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 16.0. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates LNK as Accumulate (2) -
The company has reaffirmed FY20 guidance. Ord Minnett remains cautious, however, given current pressures in the funds administration sector.
Accumulate rating and $7 target maintained. The broker makes no earnings changes, although expects an earnings contribution from PEXA from FY21.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $7.00 Current Price is $5.88 Difference: $1.12
If LNK meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $6.68, suggesting upside of 13.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Ord Minnett forecasts a full year FY20 dividend of 19.00 cents and EPS of 31.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.4, implying annual growth of -47.6%. Current consensus DPS estimate is 18.6, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 18.7. |
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 19.00 cents and EPS of 38.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 36.8, implying annual growth of 17.2%. Current consensus DPS estimate is 20.1, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 16.0. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
MYX MAYNE PHARMA GROUP LIMITED
Pharmaceuticals & Biotech/Lifesciences
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Overnight Price: $0.57
Credit Suisse rates MYX as Neutral (3) -
The launch of new generic drugs fentora and efudex has been strong, with 40% and 30% market share respectively. Yet Credit Suisse suspects this has not been enough to offset competition and earnings decline in the first half.
While the company has three core drugs driving earnings growth beyond FY21, the market needs evidence of successfully executed product launches before becoming comfortable and incorporating these in valuations, in the broker's view.
Neutral rating maintained. Target is reduced to 65c from 73c.
Target price is $0.65 Current Price is $0.57 Difference: $0.08
If MYX meets the Credit Suisse target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $0.62, suggesting upside of 8.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 0.00 cents and EPS of 1.12 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 2.0, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 28.5. |
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 0.00 cents and EPS of 3.28 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 3.4, implying annual growth of 70.0%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 16.8. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $8.21
Macquarie rates ORG as Outperform (1) -
Amid speculation that ConocoPhilips is selling its interest in APLNG, Macquarie values Origin Energy's equivalent stake at around $13.7bn. Control of APLNG may provide an opportunity to move to an asset-light business, the broker suggests.
The stake is too large for Origin Energy to take over by itself but Macquarie believes the company could obtain control through layering ownership. Outperform and $9.12 target retained.
Target price is $9.12 Current Price is $8.21 Difference: $0.91
If ORG meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $8.46, suggesting upside of 3.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 30.00 cents and EPS of 55.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 56.5, implying annual growth of -17.9%. Current consensus DPS estimate is 31.7, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 14.5. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 34.00 cents and EPS of 53.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 59.1, implying annual growth of 4.6%. Current consensus DPS estimate is 34.8, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 13.9. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
QAN QANTAS AIRWAYS LIMITED
Transportation & Logistics
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Overnight Price: $6.98
Macquarie rates QAN as Upgrade to Outperform from Neutral (1) -
Macquarie considers the stock cheap vs its global peers, expecting both the domestic airline and the loyalty scheme will generate improved profitability in the medium term. The broker expects the stock to continue re-rating and upgrades to Outperform from Neutral.
Target is raised to $7.90 from $6.15. Forecasts are updated to reflect the first quarter trading update and a review of the Australian domestic market.
An improvement in domestic airline profits is expected as Virgin Australia ((VAH)) revises its pricing, fleet, routes and frequency. This will ultimately lead to capacity reductions.
Target price is $7.90 Current Price is $6.98 Difference: $0.92
If QAN meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $7.06, suggesting upside of 1.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 27.50 cents and EPS of 59.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 60.1, implying annual growth of 9.3%. Current consensus DPS estimate is 26.7, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 11.6. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 28.00 cents and EPS of 69.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 68.8, implying annual growth of 14.5%. Current consensus DPS estimate is 27.9, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 10.1. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates QAN as Buy (1) -
UBS suspects changes in focus at competitor Virgin Australia ((VAH)) should mean Qantas will maintain an advantage and Virgin will not be able to rely solely on cost initiatives to improve profitability.
The broker suspects Qantas will prefer profit growth over market share growth, which enables disciplined capacity and unit revenue growth over the next few years. Buy rating maintained. Target is raised to $7.50 from $6.40.
Target price is $7.50 Current Price is $6.98 Difference: $0.52
If QAN meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $7.06, suggesting upside of 1.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 25.00 cents and EPS of 60.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 60.1, implying annual growth of 9.3%. Current consensus DPS estimate is 26.7, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 11.6. |
Forecast for FY21:
UBS forecasts a full year FY21 dividend of 24.00 cents and EPS of 76.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 68.8, implying annual growth of 14.5%. Current consensus DPS estimate is 27.9, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 10.1. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $2.54
Macquarie rates SBM as Outperform (1) -
The Gwalia extension project is nearing completion and the company expects a material improvement in mining rates. This is a key component of the production profile.
Macquarie believes the extension should pave the way for the necessary mining volumes that will offset reduced grades at depth.
Outperform rating maintained. Target is $3.30. Macquarie lowers estimates for earnings per share by -6% in FY21 and -2% in FY22.
Target price is $3.30 Current Price is $2.54 Difference: $0.76
If SBM meets the Macquarie target it will return approximately 30% (excluding dividends, fees and charges).
Current consensus price target is $3.15, suggesting upside of 24.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 5.00 cents and EPS of 18.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.0, implying annual growth of 7.4%. Current consensus DPS estimate is 9.2, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 8.8. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 10.00 cents and EPS of 31.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 37.0, implying annual growth of 27.6%. Current consensus DPS estimate is 9.8, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 6.9. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $4.73
Citi rates SGR as Sell (re-initiation of coverage) (5) -
Citi is cautious on the outlook for the Australian casino industry, given $4bn is set to be invested in projects delivering returns below the cost of capital which will likely cannibalise existing assets.
It is possible that recent stimulus and a recovering housing market could support the domestic consumer, the broker suggests, who provides 50-60% of earnings, but the VIP market remains tough.
The broker "initiates" coverage of Star Entertainment (last report April 2018) with a Sell rating and $4.3 target, preferring Crown Resorts on a relative basis.
Target price is $4.30 Current Price is $4.73 Difference: minus $0.43 (current price is over target).
If SGR meets the Citi target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $4.74, suggesting upside of 0.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 20.00 cents and EPS of 26.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 26.3, implying annual growth of 21.8%. Current consensus DPS estimate is 21.0, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 18.0. |
Forecast for FY21:
Citi forecasts a full year FY21 dividend of 19.00 cents and EPS of 25.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 27.8, implying annual growth of 5.7%. Current consensus DPS estimate is 22.2, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 17.0. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
TLS TELSTRA CORPORATION LIMITED
Telecommunication
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Overnight Price: $3.53
Macquarie rates TLS as Neutral (3) -
Macquarie envisages weaker top-line mobile trends will be offset by cost reduction initiatives and a reduced handset subsidy.
This sets the platform up for a return to revenue and earnings growth from FY21. The broker maintains a Neutral rating and $3.75 target.
Target price is $3.75 Current Price is $3.53 Difference: $0.22
If TLS meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $3.89, suggesting upside of 10.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 16.00 cents and EPS of 14.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 20.6, implying annual growth of 13.8%. Current consensus DPS estimate is 16.0, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 17.1. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 16.00 cents and EPS of 14.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 19.3, implying annual growth of -6.3%. Current consensus DPS estimate is 15.8, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 18.3. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
VAH VIRGIN AUSTRALIA HOLDINGS LIMITED
Transportation & Logistics
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Overnight Price: $0.15
UBS rates VAH as Upgrade to Neutral from Sell (3) -
The company has articulated a strategy putting profit growth ahead of market share. The shares have underperformed by -40% over the past two years and UBS believes the earnings risk is shifting.
An earnings decline is expected in FY24 followed by improvements in future years. Rational domestic behaviour is critical to the broker's thesis and this is expected to occur along with near-term capacity reductions.
Rating is upgraded to Neutral from Sell and the target raised to $0.16 from $0.15.
Target price is $0.16 Current Price is $0.15 Difference: $0.01
If VAH meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 0.90 cents. |
Forecast for FY21:
UBS forecasts a full year FY21 dividend of 0.00 cents and EPS of 0.10 cents. |
Market Sentiment: -0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Today's Price Target Changes
| Company | Last Price | Broker | New Target | Prev Target | Change | |
| ALL | ARISTOCRAT LEISURE | $31.98 | Citi | 37.90 | 35.00 | 8.29% |
| ALQ | ALS LIMITED | $8.15 | Morgans | 7.81 | 7.63 | 2.36% |
| BSL | BLUESCOPE STEEL | $14.09 | Morgan Stanley | 13.50 | 14.00 | -3.57% |
| UBS | 11.94 | 12.20 | -2.13% | |||
| CCL | COCA-COLA AMATIL | $11.40 | Macquarie | 11.20 | 8.77 | 27.71% |
| Ord Minnett | 11.50 | 11.00 | 4.55% | |||
| UBS | 9.10 | 8.40 | 8.33% | |||
| CWN | CROWN RESORTS | $12.73 | Citi | 12.80 | 14.50 | -11.72% |
| JBH | JB HI-FI | $36.68 | Citi | 35.20 | 29.50 | 19.32% |
| LNK | LINK ADMINISTRATION | $5.88 | Morgan Stanley | 7.50 | 7.70 | -2.60% |
| MYX | MAYNE PHARMA GROUP | $0.57 | Credit Suisse | 0.65 | 0.73 | -10.96% |
| QAN | QANTAS AIRWAYS | $6.98 | Macquarie | 7.90 | 6.15 | 28.46% |
| UBS | 7.50 | 6.40 | 17.19% | |||
| SGR | STAR ENTERTAINMENT | $4.73 | Citi | 4.30 | 6.60 | -34.85% |
| VAH | VIRGIN AUSTRALIA | $0.15 | UBS | 0.16 | 0.15 | 6.67% |
Summaries
| AIZ | AIR NEW ZEALAND | Underperform - Macquarie | Overnight Price $2.60 |
| ALL | ARISTOCRAT LEISURE | Buy - Citi | Overnight Price $31.98 |
| ALQ | ALS LIMITED | Hold - Morgans | Overnight Price $8.15 |
| BSL | BLUESCOPE STEEL | Downgrade to Equal-weight from Overweight - Morgan Stanley | Overnight Price $14.09 |
| Downgrade to Sell from Neutral - UBS | Overnight Price $14.09 | ||
| CCL | COCA-COLA AMATIL | Sell - Citi | Overnight Price $11.40 |
| Upgrade to Neutral from Underperform - Macquarie | Overnight Price $11.40 | ||
| Accumulate - Ord Minnett | Overnight Price $11.40 | ||
| Sell - UBS | Overnight Price $11.40 | ||
| CWN | CROWN RESORTS | Neutral (Re-initiation of coverage) - Citi | Overnight Price $12.73 |
| GNC | GRAINCORP | Buy - UBS | Overnight Price $8.44 |
| JBH | JB HI-FI | Neutral - Citi | Overnight Price $36.68 |
| LNK | LINK ADMINISTRATION | Overweight - Morgan Stanley | Overnight Price $5.88 |
| Accumulate - Ord Minnett | Overnight Price $5.88 | ||
| MYX | MAYNE PHARMA GROUP | Neutral - Credit Suisse | Overnight Price $0.57 |
| ORG | ORIGIN ENERGY | Outperform - Macquarie | Overnight Price $8.21 |
| QAN | QANTAS AIRWAYS | Upgrade to Outperform from Neutral - Macquarie | Overnight Price $6.98 |
| Buy - UBS | Overnight Price $6.98 | ||
| SBM | ST BARBARA | Outperform - Macquarie | Overnight Price $2.54 |
| SGR | STAR ENTERTAINMENT | Sell (re-initiation of coverage) - Citi | Overnight Price $4.73 |
| TLS | TELSTRA CORP | Neutral - Macquarie | Overnight Price $3.53 |
| VAH | VIRGIN AUSTRALIA | Upgrade to Neutral from Sell - UBS | Overnight Price $0.15 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 7 |
| 2. Accumulate | 2 |
| 3. Hold | 8 |
| 5. Sell | 5 |
Monday 18 November 2019
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Disclaimer:
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FNArena, or of its journalists. In fact we don't have any opinion about
the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe
and comment on. By doing so we believe we provide intelligent investors
with a valuable tool that helps them in making up their own minds, reading
market trends and getting a feel for what is happening beneath the surface.
This document is provided for informational purposes only. It does not
constitute an offer to sell or a solicitation to buy any security or other
financial instrument. FNArena employs very experienced journalists who
base their work on information believed to be reliable and accurate, though
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should contact their personal adviser before making any investment decision.
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