Australian Broker Call

Macquarie rates A2M as Underperform (5) -

A2 Milk Company enjoyed a strong recovery in daigou sales in the first quarter from its associate Bubs ((BUB)), propelling the  a2 Milk share price 13.6% higher, reports Macquarie.

The company will host an investor briefing on October 27 which could provide details of a renewed strategy in China, product development and marketing.

As a result, the broker expects a trading update that echoes this daigou recovery will be welcomed. Underperform rating and $5.40 target maintained.

Target price is $5.40 Current Price is $6.58 Difference: minus $1.18 (current price is over target).
If A2M meets the Macquarie target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.09, suggesting downside of -11.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.2

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

Morgans rates AND as Add (1) -

While small in size, Morgans considers Ansarda Group's acquisition of SaaS company TriLine GRC is strategic. GRC stands for governance, risk and compliance - a roughly $50bn market.

After spending -$5.2m on the transaction, the analyst feels there are ample resources available for investing in growth and/or further acquisitions. 

After forecast upgrades and taking into account peer multiples, the broker raises its target price to $1.93 from $1.84. Add rating retained.

Target price is $1.93 Current Price is $1.53 Difference: $0.4
If AND meets the Morgans target it will return approximately 26% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

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

Bank of Queensland's FY21 results met Citi's estimates and the outlook for FY22 is better than expected.

Yet the broker suspects the negative stock reaction stems from a fixation on costs that deceivingly appear to be accelerating.

After adjusting for an accounting reclassification and slightly higher volume growth, the broker suggests management is on track to deliver broadly flat expenses. Rating is upgraded to Buy from Neutral and the target lifted to $10.50 from $9.90.

Target price is $10.50 Current Price is $9.30 Difference: $1.2
If BOQ meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $10.45, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Credit Suisse rates BOQ as Outperform (1) -

In the wake of Bank of Queensland's FY21 results, Credit Suisse upgrades cash earnings forecasts for FY22 by 19% due to higher loan growth.

On the flipside, FY23 estimates were lowered by -6% due to a higher capital investment spend. The target price slips to $11 from $11.50.

The analyst feels the result may add to the number of skeptics until a tangible cost plan is outlined. The Outperform rating is maintained and it's noted the bank outperforms its peers on the metric of group underlying profit.

Target price is $11.00 Current Price is $9.30 Difference: $1.7
If BOQ meets the Credit Suisse target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $10.45, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Macquarie rates BOQ as Outperform (1) -

Bank of Queensland's FY21 results were broadly in line with Macquarie's expectations. The broker continues to envisage upside, given the funding outlook and an undemanding valuation.

The broker acknowledges the second half was always going to be messy because of the inclusion of the ME acquisition, but on a stand-alone basis margins were stable and there was sector-leading pre-provision profit growth of 9%.

ME was not as good, with Macquarie noting estimated pre-provision profit was reduced by -6%. Outperform retained. Target is $10.

Target price is $10.00 Current Price is $9.30 Difference: $0.7
If BOQ meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $10.45, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Morgan Stanley rates BOQ as Overweight (1) -

Following Bank of Queensland's FY21 results, Morgan Stanley assesses second-half revenue and pre-provision profit were slightly better than forecast. Cash profit was circa 11% more than estimated, largely from an impairment benefit of $44m.

Management commentary was broadly consistent with the analyst's expectation, with above-system loan growth from the bank and "around system" from ME Bank. 

Overweight rating is unchanged. Target price falls to $10.40 from $10.50. Industry view: In-line.

Target price is $10.40 Current Price is $9.30 Difference: $1.1
If BOQ meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $10.45, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Morgans rates BOQ as Add (1) -

As Bank of Queensland's net credit loss provision for the second half was less than Morgans expected, FY21 cash earnings were a -4.5% miss. However, the broker expects an improvement in cash return on tangible equity (ROTE) and lifts its target to $11 from $10.80.

Unlike some investors, the analyst was not spooked by guidance for a lower net interest margin (NIM), given management expects to outpace its system home-loan growth forecast of 7.5% in FY22. Add rating is maintained. The bank's final fully franked dividend is 22cps.

Target price is $10.80 Current Price is $9.30 Difference: $1.5
If BOQ meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $10.45, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Ord Minnett rates BOQ as Accumulate (2) -

Bank of Queensland's FY21 cash net profit was ahead of expectations.

Guidance is for flat expenses in FY22, which is also slightly ahead of previous forecasts. Ord Minnett notes the disappointment about elevated cost growth but believes the share price reaction reflects on market optimism heading into the result.

Regardless, the broker's growth forecast for the banks pre-provision profit is on par with most of the major banks and valuation is considered attractive. Accumulate rating and $10 target maintained.

Target price is $10.00 Current Price is $9.30 Difference: $0.7
If BOQ meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $10.45, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

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

Bubs Australia's trading update suggests improved momentum in the daigou channel, and that continued focus on innovation should allow further expansion into new markets and categories. Gross sales were up 97%.

Citi believes the improvement in daigou, despite international borders being closed, is a reflection on how corporate daigou has evolved.

The broker upgrades to Buy/High Risk from Neutral/High Risk and raises its target to $0.63 from $0.41.

Target price is $0.63 Current Price is $0.50 Difference: $0.13
If BUB meets the Citi target it will return approximately 26% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Morgans rates CBL as Add (1) -

Morgans makes no changes to Control Bionics' forecasts after management, at the AGM, were optimistic about upcoming revenue growth in Australia and specifically Nth America, due to the easing of pandemic restrictions.

Two new products were announced, which expands what Morgans considers to be a compelling product offering. The broker maintains its Speculative Buy rating and $1.42 target price.

Target price is $1.42 Current Price is $0.61 Difference: $0.81
If CBL meets the Morgans target it will return approximately 133% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Citi rates CGF as Neutral (3) -

Challenger's first-quarter sales were broadly in line with expectations. Guidance has been reiterated, although the company believes the midpoint of its FY22 normalised net profit guidance, at $455m, is a best estimate.

Citi finds this interesting in terms of the increase in equity, infrastructure and alternative assets, which signals a significant lift in normalised capital growth, albeit also forecasting a further step down in product margins as a result.

The broker retains a Neutral rating and raises its target to $6.20 from $6.10.

Target price is $6.20 Current Price is $6.34 Difference: minus $0.14 (current price is over target).
If CGF meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.16, suggesting downside of -5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

Credit Suisse rates CGF as Neutral (3) -

In a first-quarter update, Challenger exceeded Credit Suisse's expectations for annuity sales and annuity book growth. It's thought, unfortunately, the driver was lumpy lower-margin institutional sales.

Even if regulation supports the annuity market, (and the draft legislation was less supportive than the analyst expected), it's felt the company may not have sufficient capital to fund growth. The Neutral rating is maintained.

Nonetheless, the broker upgrades FY22-24 EPS forecasts, due to slightly higher book growth and a greater cost of equity (COE) margin. Target price rises to $6.25 from $6.05.

Target price is $6.25 Current Price is $6.34 Difference: minus $0.09 (current price is over target).
If CGF meets the Credit Suisse target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.16, suggesting downside of -5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

Macquarie rates CGF as Neutral (3) -

Further to the first-quarter update, Macquarie makes small reductions to Challenger's EPS estimates to FY23 then upgrades substantially for the outer years to reflect the recently acquired bank.

Macquarie retains a Neutral rating and raises the target to $6.20 from $5.70.

The risk to the recommendation includes credit spreads movements, re-pricing momentum and competition.

Target price is $6.20 Current Price is $6.34 Difference: minus $0.14 (current price is over target).
If CGF 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 $6.16, suggesting downside of -5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

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

Morgan Stanley sees little change is necessary to its Equal-weight rating and $5.60 target price after Challenger's September-quarter update. FY22 guidance was broadly in-line at $455m. Industry view: In-line.

While there was strong life book growth in the quarter, there was also lower margin products and the pace of Fidante inflows slowed, explains the analyst. It's thought an increased exposure to alternative asset management is required to lift return on equity (ROE).

Target price is $5.60 Current Price is $6.34 Difference: minus $0.74 (current price is over target).
If CGF meets the Morgan Stanley target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.16, suggesting downside of -5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

Ord Minnett rates CGF as Hold (3) -

Challenger's first-quarter volumes revealed strong growth in life and increased risk asset allocation, Ord Minnett observes.

In the broker's view Challenger has shown it can maintain strong book growth in an environment where it is trying to avoid compression of returns.

The broker also believes there some positives should arise from the agreement by Athene and Apollo to hold an 18% strategic stake.

Otherwise, Ord Minnett awaits the new CEO believing some investors may hesitate to invest in the company without a clear idea of where growth will occur. Hold maintained. Target rises to $6.10 from $6.00.

Target price is $6.10 Current Price is $6.34 Difference: minus $0.24 (current price is over target).
If CGF meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.16, suggesting downside of -5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

UBS rates CGF as Neutral (3) -

UBS observes Challenger's fund and life flows were reasonably resilient in the first quarter. Total life flows of $600m delivered book growth of 3.4%. Sales were also ahead of the broker's "conservative" expectations.

UBS suspects there is some modest margin pressure, given the composition of flows, but this is likely offset by a re-allocation of assets away from cash and fixed income. The broker retains a Neutral rating and raises the target to $6.25 from $6.10.

Target price is $6.25 Current Price is $6.34 Difference: minus $0.09 (current price is over target).
If CGF 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 $6.16, suggesting downside of -5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

Credit Suisse rates CIP as Neutral (3) -

Credit Suisse detects no negative news emanating from Centuria Industrial REIT's first-quarter trading update.

The broker suspects there has been investor rotation away from the REIT in the past month, due to a preference for re-opening plays in the sector.

The analyst retains the Neutral rating and thinks the REIT is interesting at current share price levels.

FY22 guidance forecasts funds from operations (FFO) should be no less than 18.1cps, and a dividend of 17.3cps.

Target price slips to $3.83 from $3.90.

Target price is $3.83 Current Price is $3.60 Difference: $0.23
If CIP meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $3.96, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Citi rates DMP as Downgrade to Neutral from Buy (3) -

Given the potential for a weak performance in the first half in Australasia and France, and because of the share price appreciation in the year to date of about 64%, Citi downgrades Domino's Pizza Enterprises to Neutral from Buy.

Net profit estimates for FY22 are trimmed, as slower sales growth is expected in the first half in Australasia and Europe.

The broker remains positive about the longer term, noting opportunities in existing territories and the potential for acquisitions. Target is reduced to $148.70 from $159.05.

Target price is $148.70 Current Price is $139.28 Difference: $9.42
If DMP meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $128.00, suggesting downside of -8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.4

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

Macquarie rates ECX as Outperform (1) -

Macquarie extrapolates analysis of Custom Fleet (ANZ) for the purposes of evaluating Eclipx Group. Custom Fleet's recent second-quarter update reflects the impact of the pandemic, with higher yields boosted by end-of-lease income.

Hence, the broker deduces operating conditions support upside risk to forecasts for Eclipx in FY22.

The company will release its FY21 result on November 3. Outperform rating maintained. Target rises to $2.69 from $2.50.

Target price is $2.69 Current Price is $2.41 Difference: $0.28
If ECX meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $2.66, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in September.

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

Morgans rates GDG as Add (1) -

After Generation Development Group's first-quarter funds under management (FUM) grew 9% on the previous quarter, Morgans lifts FY22-24 EPS forecasts by about 6%-7%, on increased sales assumptions.

Target price rises to $1.68 from $1.40 and Add rating is maintained.

The analyst believes the Lonsec business and the expected roll-out of the new lifetime annuity product will potentially bring forward and then accelerate growth. Morgans likes the potential compound earnings growth story over time.

Target price is $1.68 Current Price is $1.40 Difference: $0.28
If GDG meets the Morgans target it will return approximately 20% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Citi rates NCM as Neutral (3) -

Citi finds Newcrest Mining's prefeasibility studies for Lihir, Havieron and Red Chris have failed to live up to expectations. Still the production profile remains steady from FY22-30 with improving margins stemming from copper byproducts.

In Lihir phase 14A, the cutback is located close to a culturally sensitive site which leaves little room for error.

Citi was also expecting something larger at Havieron stage 1 and, likewise, the Red Chris block cave PFS was not to the scale expected.

The broker retains a Neutral rating and reduces its target to $26 from $27.

Target price is $26.00 Current Price is $24.14 Difference: $1.86
If NCM meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $29.13, suggesting upside of 17.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.8

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

Macquarie rates NCM as Outperform (1) -

Newcrest Mining has provided pre-feasibility studies for Lihir, Havieron and Red Chris. Macquarie finds further clarity on production and capital costs and the new FY22-30 base case is broadly in line with estimates.

The main variance to prior estimates includes further upside to the outlook through depth extensions at Havieron and the east-ridge zone of Red Chris. Management expects first production from Red Chris block cave in FY27. Outperform rating and $30 target retained.

Target price is $30.00 Current Price is $24.14 Difference: $5.86
If NCM meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $29.13, suggesting upside of 17.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.8

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

Ord Minnett rates NCM as Buy (1) -

Ord Minnett reports higher capital expenditure at Newcrest Mining's Red Chris has been offset by longer mine life and a higher processing rate as a result of the pre-feasibility study.

The phase 14A study at Lihir is considered value neutral while a 2mtpa starting point for Havieron was constrained by drilling and a larger operation is probable.

Ord Minnett retains a Buy rating and reduces its target to $30 from $33.

Target price is $30.00 Current Price is $24.14 Difference: $5.86
If NCM meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $29.13, suggesting upside of 17.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.8

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

UBS rates NTO as Initiation of coverage with Buy (1) -

UBS initiates coverage on Nitro Software, a document productivity company, with a Buy rating and $4.70 target. The broker expects 37% growth in subscription recurring revenue to US$105m by FY24.

The broker assesses Nitro Software is in a unique position to compete with Adobe at less than half the cost. The launch of NitroSign could also provide a step change in growth as the company targets the US$17bn e-signing market.

Target price is $4.70 Current Price is $3.38 Difference: $1.32
If NTO meets the UBS target it will return approximately 39% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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: 1.0

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

Macquarie rates PDL as Resume coverage with Outperform (1) -

Macquarie now incorporates the impact of Pendal Group's Thompson, Siegel and Walmsley acquisition. This fills a product gap that existed in international/US value which the broker expects will reduce volatility in the company's performance.

Meanwhile, JO Hambro has started to deliver a more encouraging flow performance. As a result, the net-flow outlook is more encouraging than listed peers, in the broker's view, providing scope for Pendal Group to trade at a premium.

Macquarie resumes coverage with an Outperform rating and $8.55 target. FY21 results will be released on November 5.

Target price is $8.55 Current Price is $7.71 Difference: $0.84
If PDL meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $8.61, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in September.

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 PGH as Outperform (1) -

After a trading update from Pact Group Holdings, Credit Suisse reports the group is managing cost pressures from freight via aggressive price increases. It's thought this makes sense, as the whole industry is being affected by freight costs.

Management revealed the Contract Manufacturing business has been taken off the market, which was expected by the broker due to a protracted sale process.

Target price is lowered to $4.30 from $4.95 after a prior oversight by the analyst (after the FY21 results) when earnings forecasts were overstated. Outperform rating retained

Target price is $4.30 Current Price is $3.10 Difference: $1.2
If PGH meets the Credit Suisse target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $4.03, suggesting upside of 30.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Macquarie rates PGH as Upgrade to Outperform from Neutral (1) -

Pact Group Holdings has ceased the sale process for its contract manufacturing. Continued market uncertainty and disruptions in the supply chain have created problems in realising the value target.

Hence, the company now believes retention of the business will deliver the greatest value. Pact Group was not a forced seller and the balance sheet is in good shape so the announcement is not that surprising for Macquarie.

Rating is upgraded to Outperform from Neutral. Target price is steady at $4.20.

Target price is $4.20 Current Price is $3.10 Difference: $1.1
If PGH meets the Macquarie target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $4.03, suggesting upside of 30.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Morgan Stanley rates PGH as Underweight (5) -

While trading comments were vague at Pact Group Holding's first-quarter update, Morgan Stanley discerns trading is broadly in-line with the broker's expectations. There's considered resilient demand in Packaging & Sustainability, and Materials Handling and Pooling.

The analyst is disappointed the sale of the Contract Manufacturing business has been abandoned, not only because performance continues to lag, but also a sale would likely have been a positive catalyst.

The Underweight rating and $3.30 target price are retained. Industry view: In-Line.

Target price is $3.30 Current Price is $3.10 Difference: $0.2
If PGH meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $4.03, suggesting upside of 30.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Morgan Stanley rates PSQ as Overweight (1) -

Following the release of Pacific Smiles Group's first-quarter patient fees, Morgan Stanley likes the relative stability of recent weeks, given expectations derived from management commentary at FY21 results.

The analyst expects to see the first signs of reopening tailwinds when management gives a further update in October. Overweight rating and $3.20 price target are maintained. Industry view: In-Line.

Target price is $3.20 Current Price is $2.70 Difference: $0.5
If PSQ meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Ord Minnett rates PSQ as Buy (1) -

Pacific Smiles Group's patient fees in the first quarter totaled $44.8m, 15% ahead of Ord Minnett's estimates and largely because of Queensland centres.

Relative to the prior corresponding first-quarter fees declined -22%, given the portfolio weighting towards NSW and Victoria.

Four opened during the quarter and an additional six new centres are expected by the end of the half year.

As vaccination targets are met, the re-opening trade should mean fees bounce and Ord Minnett reiterates a Buy rating. Target edges up to $3.10 from $3.09.

Target price is $3.10 Current Price is $2.70 Difference: $0.4
If PSQ meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

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

Morgan Stanley believes it's time to review Rio Tinto's capital allocation strategy. In an upcoming management update on October 20, a repositioning of the portfolio towards future-facing commodities is one of several topics expected to be addressed.

This, along with addressing some operating challenges and updating the capital allocation policy, has the potential to re-rate the share price, believes the analyst. Equal-weight rating and $110 target are retained. Industry view is In-Line. 

Target price is $110.00 Current Price is $99.37 Difference: $10.63
If RIO meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $124.43, suggesting upside of 23.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

Morgan Stanley rates S32 as Overweight (1) -

Morgan Stanley notes media reports are suggesting South32 is in talks to buy a 45% stake in Chilean copper mine, Sierra Gorda, for US$2bn. The company has not commented and the broker notes the reported purchase price aligns with its estimates.

The analyst points out Sierra Gorda had ramp-up issues in 2016, related to ore quality control and recoveries. The Overweight rating and target price of $4.20 are retained. Industry view: In-Line.

Target price is $4.20 Current Price is $3.65 Difference: $0.55
If S32 meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $4.05, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.9

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

Citi rates SHV as Buy (1) -

Logistical problems have affected Select Harvests' export shipments while new crop commitments are also down in the year to September. As a result almond prices have declined although, as Citi notes, this is a seasonally softer period.

Hence, reports over the next few weeks will indicate how operators are positioning for the Californian winter. The broker continues to envisage upside to almond from current market pricing and the potential for the California drought to persist through winter.

Buy rating and $9.85 target maintained.

Target price is $9.85 Current Price is $7.90 Difference: $1.95
If SHV meets the Citi target it will return approximately 25% (excluding dividends, fees and charges).

The company's fiscal year ends in September.

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 TCL as No Rating (-1) -

The re-opening of NSW is occurring faster than expected and Macquarie is also surprised by the potential for early re-opening in Victoria. Hence, confidence in a second-half recovery for Transurban Group has increased with the ultimate goal being a fillip to the FY23 dividend.

US developments are also progressing with the 1495Next project moving ahead on an agreement with VDOT, including an additional US$2.2m in transit payments. Financial close is expected in December.

Macquarie is restricted on providing a rating and target at present.

Current Price is $13.67. Target price not assessed.

Current consensus price target is $14.91, suggesting upside of 8.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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