Australian Broker Call

Morgans rates ANZ as Add (1) -

ANZ Bank is due to report it's FY20 result on Thursday October 29.

After reviewing the banking sector, Morgans updates individual banking stocks.

Despite recent share price strength, the broker retains a positive view on the major banks with the exception of Commonwealth Bank of Australia ((CBA)).

While Morgans acknowledges the sector is not offering attractive revenue growth prospects, the broker believes the extent of bad debt damage being priced for the ANZ Bank is generally overdone and this factor is creating attractive value opportunities for investors.

On a 12-month view, the analyst believes the value on offer is attractive enough to compensate for near-term dividend uncertainty stemming from dividends being tied to statutory earnings under APRA’s current dividend restrictions.

The Add rating is maintained. The target price is unchanged at $21.

Target price is $21.00 Current Price is $19.78 Difference: $1.22
If ANZ meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $21.49, suggesting upside of 9.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.9

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

Ord Minnett rates ASB as Lighten (4) -

Austal has acquired BSE Marine Solutions, which has operations in Brisbane and Cairns. This will increase the company's existing service footprint.

Ord Minnett envisages potential upside to earnings in the short term as the company moves to end the littoral combat ship program, although there are operational risks in the transition to steel shipbuilding in the US.

There is also risk to earnings programs from FY23 as the business takes on new and as yet unawarded shipbuilding programs. The broker maintains its Lighten recommendation with a $3 target price.

Target price is $3.00 Current Price is $3.17 Difference: minus $0.17 (current price is over target).
If ASB meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.97, suggesting upside of 33.6% (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

Morgans rates BIN as Hold (3) -

Morgans provides an update on Bingo Industries after the broker's Queensland conference. Management stated pricing was below pre-covid levels, with the company pursuing volume/market share at the expense of price and earnings (EBITDA) margin.

The company reported Post-Collections volumes had strong momentum, while Collections volumes were -10-15% below pre-covid levels. This sounds to Morgans like a better-than-expected start to the financial year, but the company continues to be cautious of a softening in parts of its addressable market (driven by residential construction and infrastructure projects).

The broker's forecasts now assume a -12% decline in FY21 earnings (EBITDA), with revised estimates implying growth of 31% in FY22, and of 10% in FY23.

The Hold rating is maintained. The target price is increased to $2.47 from $2.34.

Target price is $2.47 Current Price is $2.68 Difference: minus $0.21 (current price is over target).
If BIN meets the Morgans target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.63, suggesting downside of -0.2% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates BPT as Buy (1) -

Citi highlights drilling of the Ironbark-1 well, where Beach Energy holds a 21% interest, is just days away. 

Beach Energy's first-quarter production of 6.77mmboe was in line with Citi's estimate although sales missed the broker's forecast by -3%. The realised average sales price for the quarter at $51.8/boe was ahead by 2% due to stronger-than-expected gas prices.

Citi sees a material asymmetric opportunity afforded by the current share price and retains its Buy rating. The target rises slightly to $1.98 from $1.91.

Target price is $1.98 Current Price is $1.34 Difference: $0.64
If BPT meets the Citi target it will return approximately 48% (excluding dividends, fees and charges).

Current consensus price target is $1.89, suggesting upside of 42.1% (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

Credit Suisse rates BPT as Outperform (1) -

First quarter production results were in line with expectations. Production is tracking at the mid point of guidance while the upcoming catalysts include the Enterprise 1 well by December and Ironbark & Artisan by the March quarter.

Credit Suisse acknowledges it is tough to generate enthusiasm for the oil sector but the growth potential of Beach Energy, net cash balance sheet and exposure to east coast gas pricing means it stands out relative to peers.

Outperform retained. Target is reduced to $1.95 from $1.96.

Target price is $1.95 Current Price is $1.34 Difference: $0.61
If BPT meets the Credit Suisse target it will return approximately 46% (excluding dividends, fees and charges).

Current consensus price target is $1.89, suggesting upside of 42.1% (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

Macquarie rates BPT as Outperform (1) -

First quarter results were slightly better than Macquarie expected, because of solid east coast gas production and higher gas prices.

Macquarie believes the company has managed the disruptions well and high-impact exploration catalysts are likely over the next three months that could inspire investors.

The broker considers the shares represent excellent value at current levels and maintains an Outperform rating with a $1.65 target.

Target price is $1.65 Current Price is $1.34 Difference: $0.31
If BPT meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $1.89, suggesting upside of 42.1% (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 BPT as Buy (1) -

September quarter results revealed production is currently on track to achieve full year guidance.

Ord Minnett notes success with several wells over the next few months means Beach Energy is closer to the upper end of its revised five-year production target.

The broker retains a Buy rating and $2.20 target.

Target price is $2.20 Current Price is $1.34 Difference: $0.86
If BPT meets the Ord Minnett target it will return approximately 64% (excluding dividends, fees and charges).

Current consensus price target is $1.89, suggesting upside of 42.1% (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

Citi rates BSL as Neutral (3) -

BlueScope Steel expects operating income of circa $340m in its first-half FY21. This implies an increase of around 30% over the second half of FY20. Looking at the strong domestic demand in Australia and New Zealand, the company expects an improved outlook for the building products segment in ASEAN and India.

Citi assumes Australian domestic despatches to be flat in FY21. The broker considers the government housing stimulus to be working better than expected and expects a strong performance in the alterations and additions division.

Neutral retained. Target rises to $16 from $14.

Target price is $16.00 Current Price is $15.92 Difference: $0.08
If BSL meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $16.40, suggesting upside of 2.3% (ex-dividends)

The company's fiscal year ends in June.

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

Credit Suisse rates BSL as Outperform (1) -

BlueScope Steel has guided to first half earnings (EBIT) of $340m, ahead of consensus expectations. Credit Suisse assesses this outcome appears to be driven by volume rather than steel spreads.

Hence, the result is another demonstration of the quality of the business and contrary to concerns that demand was being disrupted. Moreover, it is indicative of strength in product and geographic diversification, the broker adds.

Outperform retained. Target rises to $16.95 from $15.55.

Target price is $16.95 Current Price is $15.92 Difference: $1.03
If BSL meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $16.40, suggesting upside of 2.3% (ex-dividends)

The company's fiscal year ends in June.

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

Macquarie rates BSL as Outperform (1) -

First half earnings guidance of $340m is significantly better than Macquarie's expectations. Demand has been driven by fiscal stimulus in Australia, a recovery in the US automotive industry and strong activity in Asia.

Macquarie upgrades estimates for FY21 by 76% and FY22 by 12%. Outperform retained. Target is raised to $19.05 from $16.20.

Target price is $19.05 Current Price is $15.92 Difference: $3.13
If BSL meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $16.40, suggesting upside of 2.3% (ex-dividends)

The company's fiscal year ends in June.

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 BSL as Equal-weight (3) -

The trading update revealed a much improved first half. Morgan Stanley expects the company will use the strong cash flow to facilitate capital management.

The stronger-than-expected performance in Australian Steel Products was supported by resilient volumes. Building products in Asia and North America also rebounded strongly. Morgan Stanley increases earnings estimates by 72% for FY21 and by 35% for FY22.

Equal-weight. Target is raised to $16.00 from $11.50. Industry view: Cautious.

Target price is $11.50 Current Price is $15.92 Difference: minus $4.42 (current price is over target).
If BSL meets the Morgan Stanley target it will return approximately minus 28% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.40, suggesting upside of 2.3% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates BSL as Accumulate (2) -

BlueScope Steel has guided to first half earnings of $340m, up 30% and materially higher than Ord Minnett had forecast.

The broker increases FY21 estimates by 60% and finds the improved earnings profile has generated an impressive free cash flow yield.

Ord Minnett retains an Accumulate rating and raises the target to $19.20 from $16.70.

Target price is $19.20 Current Price is $15.92 Difference: $3.28
If BSL meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $16.40, suggesting upside of 2.3% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates BSL as Neutral (3) -

BlueScope Steel has guided to a first-half operating income of $340m. UBS notes strong steel spreads and higher than expected volumes will help boost earnings.  

BlueScope's dwelling sales per approval is trending higher, notes the broker and believes these tailwinds are likely to continue, providing upside risk.

Covid-19 is leading to more demand for detached housing but UBS is not sure how much of this is a catch-up, a pull forward or an actual positive sustainable change.

Neutral rating with the target price raised to $15.70 from $13.10.

Target price is $15.70 Current Price is $15.92 Difference: minus $0.22 (current price is over target).
If BSL meets the UBS target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.40, suggesting upside of 2.3% (ex-dividends)

The company's fiscal year ends in June.

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

Morgans rates CBA as Hold (3) -

Commonwealth Bank releases a first quarter trading update on the 11th of November.

After reviewing the banking sector, Morgans updates individual banking stocks.

Despite recent share price strength, the broker retains a positive view on the major banks with the exception of Commonwealth Bank of Australia.

While Morgans acknowledges the sector is not offering attractive revenue growth prospects, the broker believes the extent of bad debt damage being priced in is generally overdone and this factor is creating attractive value opportunities for investors.

On a 12-month view, the analyst believes the value on offer is attractive enough to compensate for near-term dividend uncertainty stemming from dividends being tied to statutory earnings under APRA’s current dividend restrictions.

Morgans identifies the bad debt damage being priced in for the Commonwealth Bank is significantly lower than that for the other major banks. It's considered there is too much relative optimism in the bank's current share price, and this is one of the key reasons why it is the broker's least preferred bank.

The Hold rating and target price of $66 are unchanged.

Target price is $66.00 Current Price is $69.90 Difference: minus $3.9 (current price is over target).
If CBA meets the Morgans target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $67.23, suggesting downside of -3.7% (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

Credit Suisse rates CSR as Upgrade to Outperform from Neutral (1) -

Credit Suisse observes the projected volume decline has disappeared and multi-residential units are now the only segment showing material weakness.

The broker is encouraged by both industry assessment and approvals data that show strength in non-residential construction, particularly government-exposed sectors.

The broker increases estimates for net profit in FY21 by 13%. Rating is upgraded to Outperform from Neutral and the target raised to $5.30 from $4.10.

Target price is $5.30 Current Price is $4.59 Difference: $0.71
If CSR meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $4.45, suggesting downside of -6.4% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Morgans rates CTD as Add (1) -

Morgans has resumed coverage of Corporate Travel Management. To avoid confusion for our readers, prior to a blackout period of coverage the broker rated the company as a Hold with a $14.20 price target. Given the hiatus in coverage, FNArena will consider this update as a pseudo initiation of coverage, with an Add rating and target price of $20.50.  

On October 30, Corporate Travel Management will acquire Travel & Transport (T&T), a leading corporate travel company in the US at a cost of US$200.4m. Strategically, this acquisition is both highly accretive and compelling, enthuses Morgans. It’s considered this will provide the company with its targeted level of scale and will make the company the fifth largest corporate travel company in the world.

When travel demand recovers post covid-19 (Morgans assume FY23), the company should achieve its $10bn total transaction value (TTV) target with the addition of T&T, calculates the broker.

In addition, the analyst highlights the acquisition will give the company access to a world class hotel program which will further bolster its value proposition with clients, while also being a lucrative revenue stream.

The rating is upgraded to Add from Hold (after a period of non coverage) and the target price is increased to $20.50 from $14.20.

Target price is $20.50 Current Price is $17.41 Difference: $3.09
If CTD meets the Morgans target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $17.27, suggesting downside of -3.7% (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

Credit Suisse rates DRR as Initiation of coverage with Neutral (3) -

Deterra Royalties, spun off from Iluka Resources ((ILU)) as the BHP Group ((BHP)) operated Mining Area C, has been listed as an independently run corporate entity.

While it should be heavily leveraged to the iron ore price, Credit Suisse expects a broad range of interest from investors, given the committed dividend policy, a tier-1 asset and strong counterparty.

Credit Suisse assumes Deterra Royalties will have a FY21 and FY22 dividend yield of 4.2% and 5.7%, respectively. The broker assesses this is a unique ASX listing in terms of scale and substance and initiates coverage with a Neutral rating and $4.40 target.

Target price is $4.40 Current Price is $4.60 Difference: minus $0.2 (current price is over target).
If DRR meets the Credit Suisse target it will return approximately minus 4% (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: 0.0

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

Citi rates EVT as Neutral (3) -

Citi observes Event Hospitality's cinemas and hotels businesses underperformed in the first quarter relative to the broker's expectations while Thredbo and the property segment outperformed.

The broker envisages increased downside risks around Event's recovery mostly due to further delays in major blockbusters. Also, uncertainty around the sale of the German cinemas has increased, putting more pressure on the balance sheet.

Citi maintains its Neutral rating with the target trimmed slightly to $9.20 from $9.35.

Target price is $9.20 Current Price is $8.76 Difference: $0.44
If EVT meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

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

Macquarie rates GOR as Outperform (1) -

The quarterly result was better than Macquarie expected, in particular costs and gold sales. A rebound is anticipated in the December quarter following the completion of fresh rock processing and mill repairs.

A step up in operating cash flow in 2021 should ensure a dividend of 4c, in the broker's calculation. Outperform rating and $1.80 target retained.

Target price is $1.80 Current Price is $1.39 Difference: $0.41
If GOR meets the Macquarie target it will return approximately 29% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Ord Minnett rates GOR as Buy (1) -

September quarter production numbers revealed the ball mill bearing failure compound an already weak quarter. An improvement in the December quarter is expected. 2020 guidance is maintained.

Aside from an Australian dollar gold price variation, the main driver of value for the company is the conversion of more than 7m ounces to reserves and higher annual production rates in 2021, Ord Minnett notes. Buy rating and $2.20 target retained.

Target price is $2.20 Current Price is $1.39 Difference: $0.81
If GOR meets the Ord Minnett target it will return approximately 58% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Morgans rates HLS as Hold (3) -

Healius provided a trading update when releasing first quarter financial results. Revenue and underlying earnings improved considerably, observes Morgans.

Strength continued in pathology and day hospitals, while imaging was a bit mixed given the Victorian lockdown and outbreak clusters in other states, according to the broker.

The analyst highlights strong margins of 16.5% that surprised to the upside (levels not seen in more than five years). As expected by Morgans, management indicated a resumption of regular dividends, but failed to discuss its intentions with around $470m in proceeds from the sale of its medical centres.

While the broker appreciates ongoing momentum following a strong Jul/Aug period, the sustainability of margins and earnings growth remains an open question, with waning covid-19 testing, government programs and the lack of guidance adding to uncertainty.

The Hold rating is unchanged and the target price is increased to $3.53 from $3.22.

Target price is $3.53 Current Price is $3.67 Difference: minus $0.14 (current price is over target).
If HLS 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 $3.86, suggesting upside of 9.6% (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

Ord Minnett rates HLS as No Rating (-1) -

Healius provided a trading update and Ord Minnett makes only minor revisions to FY21 forecasts. However, a reduction in coronavirus testing revenue and changes to "business as usual" assumptions result in a -4% cut to FY22 estimates.

The broker is currently research restricted and cannot provide a recommendation or target price.

Current Price is $3.67. Target price not assessed.

Current consensus price target is $3.86, suggesting upside of 9.6% (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

Macquarie rates IAG as Outperform (1) -

Insurance Australia achieved low single-digit gross written premium growth in the first quarter. At current levels Macquarie believes the stock price is over estimating the risk from potential business interruption losses.

The broker notes the insurance margin in the first quarter is consistent with the prior half but requires adjustment for the change in long-term reserve release expectations, which reduces it to 14.1% from 15.1%.

Perils allowance remains on track although the broker highlights that the peak period occurs between December and February. Outperform. Target is $5.50.

Target price is $5.50 Current Price is $4.84 Difference: $0.66
If IAG meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $5.85, suggesting upside of 19.0% (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

Morgan Stanley rates IAG as Overweight (1) -

Growth in gross written premium in the first quarter was slightly ahead of Morgan Stanley's forecasts while underlying profitability was similar to the second half of FY20.

The broker forecasts a 15.4% first half underlying margin. The company has indicated that the impact of the pandemic is broadly neutral in aggregate, with lower motor claims offset by higher costs and provisioning.

Overweight. Target is $6.50. Industry view: In-line.

Target price is $6.50 Current Price is $4.84 Difference: $1.66
If IAG meets the Morgan Stanley target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $5.85, suggesting upside of 19.0% (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

Ord Minnett rates IAG as Hold (3) -

Insurance Australia Group has achieved low growth in gross written premium in the first quarter, which is attributed partly to exchange rates. Seasonally lower incidence of natural perils has supported insurance profits.

Gross written premium is slightly better than previously forecast and Ord Minnett retains a Hold rating and $5.08 target.

Target price is $5.08 Current Price is $4.84 Difference: $0.24
If IAG meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $5.85, suggesting upside of 19.0% (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 ILU as Upgrade to Buy from Neutral (1) -

Deterra Royalties ((DRR)) has listed with a market capitalisation of $2.4bn. Citi notes this to imply Iluka Resources' 20% stake in the company is worth $486m. This also implies the value of Iluka's mineral sands business is $1.67bn, adds the broker.

Citi expects Iluka to record a pre-tax non-cash gain on the demerger of circa $483m with demerger costs of -$11.9m. 

The broker upgrades its rating to Buy from Neutral with the target price falling to $6.20 from $10.50.

Target price is $6.20 Current Price is $5.12 Difference: $1.08
If ILU meets the Citi target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $7.19, suggesting upside of 35.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Credit Suisse rates ILU as Downgrade to Neutral from Outperform (3) -

Now Deterra Royalties ((DRR)) has been listed, Iluka Resources will trade as a pure mineral sands business along with the 20% holding it has retained in Deterra.

While this is now a smaller company, Credit Suisse finds it appealing because of a clean balance sheet and exposure to the mineral sands markets, having the largest global production of zircon.

Credit Suisse downgrades to Neutral from Outperform, given the new valuation, to reflect the possibility of a material turnover in the register. Target is now $5.35, reduced from $10.15.

Target price is $5.35 Current Price is $5.12 Difference: $0.23
If ILU meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $7.19, suggesting upside of 35.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

UBS rates ILU as Neutral (3) -

Deterra Royalties ((DRR)) listed on the ASX on 23 October 2020 after Iluka Resources received shareholder support for demerging its royalty streams. Iluka has retained a 20% shareholding in Deterra.

UBS notes Deterra will be Australia's leading listed royalty investment company with its mainstay asset being a royalty over BHP's Mining Area C (MAC) iron ore operation in Western Australia.

The broker notes the dividend policy for Deterra is 100% of its net profit which could evolve as the business matures.

UBS retains its Neutral rating with a target price of $10.

Target price is $10.00 Current Price is $5.12 Difference: $4.88
If ILU meets the UBS target it will return approximately 95% (excluding dividends, fees and charges).

Current consensus price target is $7.19, suggesting upside of 35.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

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

Link Administration believes the transaction proposal from PEP/Carlyle materially undervalues the business, with no detail on the value of the business ex-PEXA.

The board continues to engage with the consortium and will provide an update in November including structural alternatives for PEXA. The company believes the separation of its PEXA stake could be done in a relatively short period, as it operates independently.

Equal -weighted retained. Target is $5.20. Industry view: In-Line.

Target price is $5.20 Current Price is $4.90 Difference: $0.3
If LNK meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $5.13, suggesting upside of 3.3% (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

Ord Minnett rates LNK as Hold (3) -

Link Administration has rejected the indicative offer of $5.20 a share from PEP/Carlyle, which it said does not value the control premium or PEXA.

The board has also indicated it will look at alternative ways to crystallise value in PEXA while still engaging with the consortium. Ord Minnett suggests there may be some downward pressure on the share price in the short term and retains a Hold rating and $5 target.

Target price is $5.00 Current Price is $4.90 Difference: $0.1
If LNK meets the Ord Minnett target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $5.13, suggesting upside of 3.3% (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

Morgans rates LVH as Add (1) -

Livehire's quarterly update shows Morgans a continuation of trends in the Australian SaaS business and the initial revenue contribution from the Nth American contingent labour opportunity.

Churn remains an issue in the SaaS business, highlights the broker. However, it's considered a reduction in clients on the legacy product and increased penetration of multi-year deals show the potential of this business. Additionally, higher annual recurring revenue (ARR) per client on new signups is a positive.

The foundation for success in Nth America are being set, believes the analyst, with the signing of three initial distribution partners and advancing towards the company target of 7-10 quality partnerships.

The Add rating and $0.50 price target are unchanged.

Target price is $0.50 Current Price is $0.29 Difference: $0.21
If LVH meets the Morgans target it will return approximately 72% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates MIN as Outperform (1) -

Mineral Resources' first-quarter result was mixed, observes Macquarie, with higher iron-ore production offset by lower iron-ore shipments. Spodumene shipments were in line.

The broker thinks Wonmunna's acquisition would deliver additional iron-ore volumes to Mineral Resources in the second half. The miner is expected to provide more information on the outlook for its Pilbara iron-ore business in the next few months, a key near-term catalyst.

Macquarie maintains its Outperform rating with the target price rising to $32 from $31.60. 

Target price is $32.00 Current Price is $24.91 Difference: $7.09
If MIN meets the Macquarie target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $25.90, suggesting upside of 1.2% (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

Morgan Stanley rates MIN as Underweight (5) -

Morgan Stanley updates estimates to incorporate the September quarter production result. The quarter was weak for iron ore, with production and shipments below expectations.

Morgan Stanley expects 65% of FY21 operating earnings (EBITDA) will be driven by the iron ore division. The Wonmunna acquisition will add a further 1-2mtpa to exports in the second half and also add -$126m in capital expenditure.

Underweight retained. Target rises to $23.50 from $23.40. Industry view: Attractive.

Target price is $23.50 Current Price is $24.91 Difference: minus $1.41 (current price is over target).
If MIN 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 $25.90, suggesting upside of 1.2% (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

Morgans rates MX1 as Add (1) -

Micro-X has posted first quarter cashflow results.

The net cash outflow was -$2.5m. Cash receipts from Nano sales were $1.9m and grant receipts totalled $1m. Morgans highlights management's emphasis on growing sales activity as covid-19 cases escalate. 

Morgans downgrades EPS estimates for FY21/22/23 by -1.4%, -43.6% and -24%, respectively, as a result of adjusting down Nano sales assumptions to reflect the difficulty in estimating order flow.

The Speculative Buy rating is unchanged and the target price is decreased to $0.32 from $0.34.

Target price is $0.32 Current Price is $0.21 Difference: $0.11
If MX1 meets the Morgans target it will return approximately 52% (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

Credit Suisse rates NAB as Outperform (1) -

National Australia Bank has announced the second half cash earnings will be affected to the tune of -$264m by an increase in remediation and payroll provisions as well as an impairment of property-related assets.

The earnings changes result in a -3% reduction in Credit Suisse estimates for FY20 cash earnings and a -4% reduction to net profit.

Outperform retained along with a $21.30 target.

Target price is $21.30 Current Price is $19.53 Difference: $1.77
If NAB meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $20.24, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in September.

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

Macquarie rates NAB as Underperform (5) -

National Australia Bank disclosed several notable items of circa -$450m putting a dent in its second-half earnings. Macquarie highlights the bank made a provision related to payroll remediation and also recognised an impairment to property-related assets of -$134m. The broker estimates this will lower the bank's cost base in FY21 by about -$300m.

Macquarie sees limited scope for outperformance over the next twelve months despite the bank's attractive valuation metrics. Exposure to SMEs and riskier segments add to the broker's concern.

Underperform retained. Target is $17.50.

Target price is $17.50 Current Price is $19.53 Difference: minus $2.03 (current price is over target).
If NAB meets the Macquarie target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.24, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in September.

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

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

National Australia Bank will include additional provision and charges of -$450m in its second half. A review of expected credit losses and associated impact on provisions has not yet concluded.

Morgan Stanley assumes the covid-19 overlay in the second half is topped up by -$200m but acknowledges potential for a larger amount, given the Victorian lockdown.

Equal-weight rating. Target is $17.50. Industry view: In-line.

Target price is $17.50 Current Price is $19.53 Difference: minus $2.03 (current price is over target).
If NAB meets the Morgan Stanley target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.24, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in September.

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

Morgans rates NAB as Add (1) -

After reviewing the banking sector, Morgans updates individual banking stocks.

Despite recent share price strength, the broker retains a positive view on the major banks with the exception of Commonwealth Bank of Australia ((CBA)).

While Morgans acknowledges the sector is not offering attractive revenue growth prospects, the broker believes the extent of bad debt damage being priced in is generally overdone and this factor is creating attractive value opportunities for investors.

On a 12-month view, the analyst believes the value on offer is attractive enough to compensate for near-term dividend uncertainty stemming from dividends being tied to statutory earnings under APRA’s current dividend restrictions.

It should be noted National Australia Bank releases its FY20 result on Thursday, the 5th of November.

The National Australia Bank announced in late August that it has agreed to sell 100% of MLC Wealth (MLC) to IOOF Holdings Ltd ((IFL)) for a price of $1,440m. Subject to timing of regulatory approvals, completion is expected to occur before the middle of calendar year 2021.

Morgans has received clarification from NAB that the expected post-tax loss of around -$400m associated with the sale will be recognised in the bank's accounts in FY20 as opposed to the broker's assumption that it will be recognised in FY21. 

Along with some other changes, the net result is the analyst reduces the final dividend forecast for FY20 to 58cps fully franked (previously 68cps), and increases the dividend forecast for FY21 to 94cps fully franked (previously 88cps). Earnings forecasts are left unchanged.

The Add rating is maintained and the target price remains at $20.50.

Target price is $20.50 Current Price is $19.53 Difference: $0.97
If NAB meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $20.24, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in September.

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 NAB as Accumulate (2) -

National Australia Bank has added charges and provisions for second half earnings which will reduce cash earnings by -$260m. Ord Minnett lowers second half forecasts for net profit by -3%. The CET1 ratio estimate is reduced by -10 basis points, to 11.7%.

In noting the bank's leverage to a recovery in the Australian economy, Ord Minnett maintains its Accumulate recommendation with a target price of $20.90. 

Target price is $20.90 Current Price is $19.53 Difference: $1.37
If NAB meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $20.24, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in September.

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

UBS rates NAB as Buy (1) -

National Australia Bank expects its second half result will be impacted by post-tax additional provisions of -$266m for wealth and banking remediation, -$90m after-tax in payroll remediation and -$94m post-tax property assets impairment mainly due to the consolidation of Melbourne office space. UBS expects these items to reduce the bank's CET1 by -15bps.

UBS notes the bank has an experienced management team and a strong balance sheet and is well prepared for the recession. Buy rating is retained with a target price of $20.50.

Target price is $20.50 Current Price is $19.53 Difference: $0.97
If NAB meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $20.24, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in September.

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

Morgan Stanley rates QAN as Overweight (1) -

Domestic capacity is operating at less than 30% of pre-pandemic levels, below the airline's prior expectations of 60% by now, because border closures continue.

Domestic capacity is expected to reach 50% of pre-pandemic levels by Christmas, assuming the Queensland border opens to NSW in coming weeks.

Freight demand in recent months is in line with seasonal levels. Morgan Stanley believes the share price will continue to trade on the pandemic-related news flow but retains an Overweight rating, comfortable with the liquidity and "normalised" valuation upside. Target is $4.90. Industry view: In-line.

Target price is $4.90 Current Price is $4.55 Difference: $0.35
If QAN meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $4.33, suggesting downside of -5.6% (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

Morgans rates RED as Add (1) -

While Morgans states Red 5’s first quarter production update was at the lower end of expectations, management is confident the King of the Hills (KOTH) project will meet FY21 guidance.

The broker believes the company is cheap on bottom up modeling, and cheap when compared to other gold producers and developers in the market. It’s considered only a matter of time before an opportunistic takeover bid arrives at the current share price.

The analyst notes the debt funding process is underway, and the company has flagged it expects to select a preferred lender by the end of the month. Site early works are also underway ahead of full production.

The Add rating and target price of $0.52 are unchanged.

Target price is $0.52 Current Price is $0.30 Difference: $0.22
If RED meets the Morgans target it will return approximately 73% (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

UBS rates RHC as Neutral (3) -

UBS notes larger private hospitals (and not standalone day hospitals) dominate when it comes to day stay services. The broker highlights data from 2019 which show that of the circa $10bn paid by private health insurers to private hospitals, about 21% went to fund day stays, out of which the share of day admissions within private hospitals was about 16%.

The broker also notes incentives for sector consolidation are not clear and insurer rates for the same procedure may be lower than those achieved by larger groups like Ramsay Health Care. 

Without a material change to incentives for operating in the standalone market, the broker does not think it wise for Ramsay to increase its exposure in this subsector. Capital may be better spent improving the day service offering within its existing large hospitals, suggests UBS.

UBS retains its Neutral rating with a target price of $71.20.

Target price is $71.20 Current Price is $64.67 Difference: $6.53
If RHC meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $68.52, suggesting upside of 6.5% (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

Ord Minnett rates RHP as Accumulate (2) -

First half results revealed margins stabilised while top-line growth was slightly lower than Ord Minnett expected. Cost control was "solid" and this has resulted in expanding operating profit margins.

The business is well capitalised and Ord Minnett believes it is positioned to take advantage of a post-pandemic recovery in small business. Accumulate retained. Target is reduced to $2.30 from $2.45.

Target price is $2.30 Current Price is $2.07 Difference: $0.23
If RHP meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

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

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

ResMed will publish its first quarter earnings on October 29 (US time). Morgan Stanley suspects the uplift from ventilators sales will have peaked in the fourth quarter and the positive revisions to earnings have played out for the short term.

The business is expected to emerge from the pandemic in good condition although the valuation keeps the broker's rating at Equal-weight. Target is raised to $25.90 from $25.40. Industry view: In-Line.

Target price is $25.90 Current Price is $25.74 Difference: $0.16
If RMD meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $25.21, suggesting downside of -1.2% (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: -0.1

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

Ord Minnett rates RMD as Lighten (4) -

ResMed will report the September quarter result on October 30. Ord Minnett expects solid ventilator sales and a speedy recovery in sleep laboratories sales, particularly in the US.

Ord Minnett retains its Lighten recommendation and raises the target to $21 from $20.

Target price is $21.00 Current Price is $25.74 Difference: minus $4.74 (current price is over target).
If RMD meets the Ord Minnett target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $25.21, suggesting downside of -1.2% (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: -0.1

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

Macquarie rates RRL as Underperform (5) -

First-quarter production result of Regis Resources was -6% below Macquarie's expectation led by a pit wall slip at Erlistoun. Costs were higher than anticipated.

The result has led the broker to incorporate material cuts to its near-term earnings forecasts. The broker believes a soft start to the year implies the second quarter will also be weak.

Underperform rating reaffirmed with the target price falling to $4.50 from $5.20.

Target price is $4.50 Current Price is $4.65 Difference: minus $0.15 (current price is over target).
If RRL meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.56, suggesting upside of 23.5% (ex-dividends)

The company's fiscal year ends in June.

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 RRL as Overweight (1) -

September quarter gold production was lower than Morgan Stanley expected, because of lower head grades. Better grades are expected at Rosemont underground later in the year. FY21 guidance has been maintained, with a weighting to the second half.

The Garden Well maiden resource and reserve is now delayed until the December quarter and Regis Resources hopes for a decision on McPhillamys in the first half of 2021.

Overweight rating. The target price is $6.30. Industry view: Attractive.

Target price is $6.30 Current Price is $4.65 Difference: $1.65
If RRL meets the Morgan Stanley target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $5.56, suggesting upside of 23.5% (ex-dividends)

The company's fiscal year ends in June.

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

Morgans rates RRL as Upgrade to Add from Hold (1) -

Production was down and costs were up in the first quarter as a result of scheduled mill maintenance at Moolart Well and Garden Well, informs Morgans.

The broker believes the market may have misinterpreted the severity of a wall slip for Garden Well and marked the share price down on the day of the quarterly update. It's considered by management that it is not an ore sterilising event like some of the major wall failures seen at other operations in the past, and simply re-shuffles the mining schedule.

Morgans fundamental valuation and long-term outlook for the company remain largely unchanged. The rating is upgraded to Add from Hold. The target price is decreased to $5.74 from $5.82.

Target price is $5.74 Current Price is $4.65 Difference: $1.09
If RRL meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $5.56, suggesting upside of 23.5% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates RRL as Hold (3) -

September quarter production was -13% below Ord Minnett's expectations while costs were 8% higher. Guidance is maintained and the company expects an improved second half.

Ord Minnett eases back on underground grade expectations and increases capital expenditure estimates for McPhillamys by 10%. Hold maintained. Target is reduced to $4.50 from $4.80.

Target price is $4.50 Current Price is $4.65 Difference: minus $0.15 (current price is over target).
If RRL meets the Ord Minnett target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.56, suggesting upside of 23.5% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates RRL as Buy (1) -

Regis Resources has not had a very good start to FY21, notes UBS. Production in the September quarter was -7% below UBS's forecast with costs higher than expected.

The company has maintained its FY21 guidance but management has flagged production to be skewed to the second half.

Overall, the broker considers the company's valuation attractive and retains its Buy rating with the target price reducing to $5.70 from $5.90.

Target price is $5.70 Current Price is $4.65 Difference: $1.05
If RRL meets the UBS target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $5.56, suggesting upside of 23.5% (ex-dividends)

The company's fiscal year ends in June.

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

Morgans rates WBC as Add (1) -

After reviewing the banking sector, Morgans updates individual banking stocks.

Despite recent share price strength, the broker retains a positive view on the major banks with the exception of Commonwealth Bank of Australia ((CBA)).

While Morgans acknowledges the sector is not offering attractive revenue growth prospects, the broker believes the extent of bad debt damage being priced in is generally overdone and this factor is creating attractive value opportunities for investors.

On a 12-month view, the analyst believes the value on offer is attractive enough to compensate for near-term dividend uncertainty stemming from dividends being tied to statutory earnings under APRA’s current dividend restrictions.

It should be noted Westpac is due to release FY20 results on Monday, 2nd of November.

Westpac remains the broker's preferred major bank, with one reason being it is the only major bank where the analyst believes the asset quality damage priced in is worse than the GFC experience.

However, as a result of potential write-downs/impairments of intangible assets and potential devaluation of the life insurance business in the fourth quarter, there is much uncertainty about the bank's final dividend for FY20.

Morgans were previously treating an AUSTRAC provision top-up as a non-cash item. The broker is now treating it as a cash item due to certainty around the top-up.

Consequently, forecast cash earnings are reduced by -10%. Additionally, the broker has a reduced final dividend estimate of 40cps fully franked. This is based on an assumed payout ratio of 49.95% of FY20 statutory earnings.

The Add rating and $22.50 target price are unchanged.

Target price is $22.50 Current Price is $18.78 Difference: $3.72
If WBC meets the Morgans target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $20.20, suggesting upside of 7.6% (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

Ord Minnett rates WEB as Buy (1) -

Ord Minnett observes Webjet is one of the most shorted stocks on the ASX and assesses the reversal in B2B working capital is now complete and at the same time cash burn is moving lower.

Cash burn is likely to decline as domestic borders open, while B2C will benefit from pent-up demand and market share gains versus off-line agents. Ord Minnett retains a Buy rating and raises the target to $4.58 from $4.36.

Target price is $4.58 Current Price is $4.08 Difference: $0.5
If WEB meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $3.90, suggesting downside of -4.5% (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

Macquarie rates WOR as Outperform (1) -

Worley's first-quarter headcount fell -5% versus June-end and utilisation remains at about 87% of the target.

Macquarie considers the conditions remain challenging in the short term due to covid-19 related project deferrals. However, Worley's cost-outs are expected to continue to support margins.

Outperform retained, target cut to $12.93 from $13.46.

Target price is $12.93 Current Price is $10.58 Difference: $2.35
If WOR meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $11.65, suggesting upside of 10.6% (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

UBS rates WOR as Buy (1) -

Worley noted its near term investment has been impacted by lower oil & gas prices but expects chemicals growth to return in 2021 as global economies recover. Covid-19 restrictions continue to impact sites, leading to project deferrals, as expected by UBS.

On the bright side, the broker is pleased to see the company managing its cost base with headcount down a further -5% since June. A stronger Australian dollar presents a headwind, indicates UBS and conservatively forecasts a revenue decline of circa -15% through FY20-22.

The broker considers the valuation attractive and retains its Buy rating with a target price of $12.32.

Target price is $12.32 Current Price is $10.58 Difference: $1.74
If WOR meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $11.65, suggesting upside of 10.6% (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