Australian Broker Call

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

Ord Minnett believes management is making significant improvements but not fast enough to counter the negative impact of the high levels of competition in the US. FY18 sales for Main Event are considered reasonable but a significant deceleration is observed in the later stages of the second half.

Ord Minnett believes there is a lot factored into the price and downgrades to Lighten from Hold. Target is reduced to $1.54 from $1.95.

Target price is $1.54 Current Price is $1.79 Difference: minus $0.25 (current price is over target).
If AAD meets the Ord Minnett target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.95, suggesting upside of 8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Morgans rates ALQ as Hold (3) -

Guidance from the AGM was better than expected. Importantly, Morgans suggests there is solid growth in geochemistry samples and operating improvements in life sciences.

The broker continues to be attracted to the growth trajectory. Hold rating maintained. Target is raised to $8.11 from $7.23.

Target price is $8.11 Current Price is $8.68 Difference: minus $0.57 (current price is over target).
If ALQ meets the Morgans target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.10, suggesting downside of -6.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Ord Minnett rates ALQ as Upgrade to Hold from Lighten (3) -

The AGM guidance for first half net profit of $85-90m implies a 21-28% growth rate, Ord Minnett observes. The broker had feared an earnings downgrade, particularly from the erosion of life sciences margins.

However, the chance of this has now diminished and the rating is upgraded to Hold from Lighten. Target is raised to $8.17 from $6.63. The main issues are now the degree to which pricing will recover in geochemistry and delivery on the margin recovery in life sciences.

Target price is $8.17 Current Price is $8.68 Difference: minus $0.51 (current price is over target).
If ALQ meets the Ord Minnett target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.10, suggesting downside of -6.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

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

While a formal bid is yet to be made by CKI, Citi upgrades to Buy from Neutral and raises the target to $11.00 from $9.90, in line with the indicative bid price.

The broker acknowledges regulatory approvals are still inherently risky and CKI was unable to acquire Ausgrid but this is considered more likely because it was jointly bidding with the Chinese state company.

Target price is $11.00 Current Price is $9.75 Difference: $1.25
If APA meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $10.22, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Ord Minnett rates CGF as Lighten (4) -

Ord Minnett maintains a Lighten rating ahead of the FY18 results on August 14, noting a higher volatility element in cash flows versus peers as well as headwinds to pre-tax profit growth.

The broker raises the target to $9.55 from $9.50.

Target price is $9.55 Current Price is $12.27 Difference: minus $2.72 (current price is over target).
If CGF meets the Ord Minnett target it will return approximately minus 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.23, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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

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

Citi expects the cost cutting program will be countered by cost inflation over the next 18 months. Feed costs are the company's largest input and, while there are some mechanisms to pass these on, the dramatic rise in feed costs is expected to produce weaker earnings growth over FY19 and FY20.

Citi lowers EPS forecasts by -7% for both years and reduces the target to $3.70 from $3.90. Rating is downgraded to Neutral from Buy. A share buyback announcement is still considered probable at the FY18 results.

Target price is $3.70 Current Price is $3.59 Difference: $0.11
If ING meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $3.83, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.2

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

Macquarie rates IVC as Neutral (3) -

Invocare has acquired Grafton & District Funerals. Acquisitions are expected to offset some of the temporary impact from the protect & grow investment plan. Macquarie suggests this plan will cause short-term disruption as additional sites are refreshed and enhanced.

The broker also expects the company will need to show it is delivering on targets in order to drive a re-rating. The first half result is expected on August 16 and the broker expects revised guidance following the acquisitions and an update on protect & grow. Target is raised to $13.90 from $12.71. Neutral maintained.

Target price is $13.90 Current Price is $14.64 Difference: minus $0.74 (current price is over target).
If IVC meets the Macquarie target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.67, suggesting downside of -13.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.3

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

Deutsche Bank rates MIN as Hold (3) -

June quarter production and shipping numbers were soft. Iron ore production was down -22% and DSO volumes at Wodgina fell -27% after the company made a decision to keep resources on the ground.

Mount Marion lifted spodumene concentrate shipments but missed Deutsche Bank's forecast by -29%. The broker reduces operating earnings estimates by -7% and net profit by -9% for FY18. Hold rating maintained on valuation. Target is $17.

Target price is $17.00 Current Price is $16.47 Difference: $0.53
If MIN meets the Deutsche Bank target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $18.83, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Credit Suisse rates NST as Underperform (5) -

Credit Suisse suggests the growth in resources to 15.9m ounces is solid. Measured and indicated resources imply a potential 14-year mine life, five years more than the broker models.

Despite a consistent gold price, average underground RSV grade has fallen materially across all underground operations with the exception of East Kundana. The broker hopes that the lower cut-off grades that are implied can be offset by unit cost reductions.

Underperform rating and $5.20 target maintained.

Target price is $5.20 Current Price is $7.31 Difference: minus $2.11 (current price is over target).
If NST meets the Credit Suisse target it will return approximately minus 29% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.24, suggesting downside of -14.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.4

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

Ord Minnett rates NST as Lighten (4) -

The company's reserve and resource report reveals increased overall reserves, now 4m ounces, and an increase of 1.1m when factoring in mine depletion. Ord Minnett considers the report a net positive but comfortably factored into consensus expectations. FY19 production guidance has been reiterated.

The company expects significant exploration expenditure planned for FY19 will drive further growth in reserves as well as increases in production beyond the guidance. Ord Minnett maintains a Lighten rating and $6.30 target.

Target price is $6.30 Current Price is $7.31 Difference: minus $1.01 (current price is over target).
If NST meets the Ord Minnett target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.24, suggesting downside of -14.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.4

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

Ord Minnett rates PGH as Hold (3) -

Ord Minnett expects a net profit of $106m, up 6%, when the company reports on August 15. The broker will be looking for any guidance on potential benefits from the re-designing of the rigid packaging network.

Hold rating maintained. Target rises to $5.70 from $5.25.

Target price is $5.70 Current Price is $5.52 Difference: $0.18
If PGH meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $5.78, suggesting upside of 4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Ord Minnett rates QBE as Accumulate (2) -

Ord Minnett notes QBE has a weak record of hitting guidance, with frequent downgrades occurring at both the underlying and reported levels. The broker assesses current guidance as appropriate and hitting the expected number would signal a major positive.

QBE is scheduled to release first half results on August 16. Ord Minnett maintains an Accumulate rating and raises the target to $11.50 from $10.70.

Target price is $11.50 Current Price is $10.40 Difference: $1.1
If QBE meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $11.21, suggesting upside of 7.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.6

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

Morgans rates RAP as Add (1) -

The company has completed the enrolment of 1470 patients across three hospitals in the US trial and 681 patients in the Australian study.

Morgans believes the studies should act as a strong lead indicator to the pivotal US results which in turn would be a catalyst for de novo submission to the FDA.

Add rating and 28c target maintained.

Target price is $0.28 Current Price is $0.17 Difference: $0.11
If RAP meets the Morgans target it will return approximately 65% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Deutsche Bank rates RMD as Buy (1) -

At first glance the company's fourth quarter has slightly missed Deutsche Bank's forecasts at the revenue line. The gross profit margin was also slightly lower than expected. However revenue growth in the Americas was better than expected. Buy rating maintained.

Current Price is $14.27. Target price not assessed.

Current consensus price target is $13.59, suggesting downside of -4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.3

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

Morgan Stanley rates RMD as Overweight (1) -

Total revenue in the fourth quarter was slightly lower than Morgan Stanley expected, while US revenue was in line. Gross margins appear stable. The broker expects the market to focus more on re-supply and ongoing operating leverage than on ROW devices.

Overweight rating. Target is US$112. Industry view: In Line.

Current Price is $14.27. Target price not assessed.

Current consensus price target is $13.59, suggesting downside of -4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.3

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

UBS rates RRL as Sell (5) -

UBS observes the market has rewarded production growth and earnings and for some time the stock has looked expensive.

The broker notes cost guidance in the June quarterly appeared 10-15% higher than the market was estimating and may focus attention on the Duketon satellite orebodies that have somewhat poorer economics versus existing mines.

The broker acknowledges the stock is now a little less expensive and the next catalyst may be the feasibility study on McPhillamys, due in the December quarter.

Current Price is $4.39. Target price not assessed.

Current consensus price target is $4.28, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.6

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

Ord Minnett rates SUL as Downgrade to Hold from Buy (3) -

Following a review of the investment thesis Ord Minnett downgrades to Hold from Buy. This is based on the recent share price performance, a lack of valuation support and potential upside from the company's three-year growth targets.

Target price is steady at $9. The broker forecasts FY18 underlying net profit of $137.7m, up 2.4%, when the company reports on August 21.

Target price is $9.00 Current Price is $8.95 Difference: $0.05
If SUL meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $8.52, suggesting downside of -4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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