Australian Broker Call
September 21, 2016
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)
Last Updated: 11:29 AM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
| ABC - | ADELAIDE BRIGHTON | Upgrade to Outperform from Neutral | Macquarie |
| BHP - | BHP BILLITON | Upgrade to Outperform from Neutral | Macquarie |
| BLD - | BORAL | Upgrade to Outperform from Neutral | Macquarie |
| NHC - | NEW HOPE CORP | Upgrade to Outperform from Underperform | Macquarie |
| NST - | NORTHERN STAR | Upgrade to Outperform from Neutral | Macquarie |
| S32 - | SOUTH32 | Upgrade to Outperform from Underperform | Macquarie |
| SBM - | ST BARBARA | Upgrade to Outperform from Neutral | Macquarie |
| SYD - | SYDNEY AIRPORT | Upgrade to Outperform from Neutral | Macquarie |
| TPM - | TPG TELECOM | Downgrade to Reduce from Hold | Morgans |
Macquarie rates ABC as Upgrade to Outperform from Neutral (1) -
Macquarie observes the transition to infrastructure from residential building is now smoother and there is also less downside risk in the near term from residential activity.
The better outlook combined with more attractive valuations post August reporting has led to the broker upgrading to Outperform from Neutral. Target rises to $6.00 from $5.50.
Target price is $6.00 Current Price is $5.23 Difference: $0.77
If ABC meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $5.15, suggesting downside of -3.6% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY16:
Macquarie forecasts a full year FY16 dividend of 30.50 cents and EPS of 30.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.6, implying annual growth of -7.5%. Current consensus DPS estimate is 26.1, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 18.0. |
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 22.00 cents and EPS of 30.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.1, implying annual growth of 5.1%. Current consensus DPS estimate is 26.7, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 17.2. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates ALL as Buy (1) -
Citi reiterates its High Conviction Buy rating for Aristocrat. A survey at the recent Australasian Gaming Expo suggests most gaming managers remain of the intent to reserve the largest part of their allocation for Aristocrat, the analysts report.
Citi analysts continue to anticipate increased market share for the company in North-America in the years ahead. They've slightly raised estimates. Citi forecasts remain above market consensus. Price target lifts to $18.55 from $18.40.
Target price is $18.55 Current Price is $15.55 Difference: $3
If ALL meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $15.96, suggesting upside of 1.7% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY16:
Citi forecasts a full year FY16 dividend of 23.00 cents and EPS of 60.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 56.5, implying annual growth of 87.7%. Current consensus DPS estimate is 22.3, implying a prospective dividend yield of 1.4%. Current consensus EPS estimate suggests the PER is 27.8. |
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 29.00 cents and EPS of 72.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 68.9, implying annual growth of 21.9%. Current consensus DPS estimate is 30.9, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 22.8. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates BHP as Upgrade to Outperform from Neutral (1) -
With stronger demand and the impact of supply-side reforms in China, Macquarie makes upward adjustments to its forecasts for bulk commodities, with substantial upgrades to coking coal, thermal coal and manganese.
BHP's rating is upgraded to Outperform from Neutral on the back of the improved outlook, with the broker calculating it now offers a superior free cash flow to Rio Tinto ((RIO)). Target is raised to $24 from $20.
Target price is $24.00 Current Price is $20.61 Difference: $3.39
If BHP meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $23.00, suggesting upside of 10.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 42.18 cents and EPS of 79.06 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 75.2, implying annual growth of N/A. Current consensus DPS estimate is 51.0, implying a prospective dividend yield of 2.4%. Current consensus EPS estimate suggests the PER is 27.7. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 45.16 cents and EPS of 91.13 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 94.7, implying annual growth of 25.9%. Current consensus DPS estimate is 61.7, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 22.0. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates BLD as Upgrade to Outperform from Neutral (1) -
Macquarie observes the transition to infrastructure from residential building is now smoother and there is also less downside risk in the near term from residential activity.
The better outlook combined with more attractive valuations post August reporting has led to the broker upgrading to Outperform from Neutral. Target rises to $7.10 from $6.60.
Target price is $7.10 Current Price is $6.35 Difference: $0.75
If BLD meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $6.80, suggesting upside of 3.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 23.00 cents and EPS of 37.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 38.5, implying annual growth of 12.6%. Current consensus DPS estimate is 24.4, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 17.1. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 23.00 cents and EPS of 37.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 42.8, implying annual growth of 11.2%. Current consensus DPS estimate is 26.9, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 15.4. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates CSL as Neutral (3) -
The protocol for the AEGIS-I trial has been published. As a result, Credit Suisse reviews its valuation for CSL and notes potential upside, assuming the 2b trial dosing protocol is incorporated into a phase 3 trial.
The broker now estimates valuation upside of $4.60 in a low dose base case and $15.20 in a high dose base case.
Target of $110 and Neutral rating retained.
Target price is $110.00 Current Price is $102.45 Difference: $7.55
If CSL meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $108.66, suggesting upside of 5.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 178.26 cents and EPS of 375.56 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 364.2, implying annual growth of N/A. Current consensus DPS estimate is 172.6, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 28.2. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 220.44 cents and EPS of 462.65 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 441.7, implying annual growth of 21.3%. Current consensus DPS estimate is 202.4, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 23.3. |
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
Morgan Stanley rates CSL as Underweight (5) -
Morgan Stanley observes growth in plasma collection centre numbers has led to competition for sites and donors. With low US unemployment the broker envisages a risk of rising raw material costs for CSL and gross margin pressure.
Underweight rating and In-Line industry view retained and the broker still envisages a risk of earnings per share downgrades. Target is $98.29.
Target price is $98.29 Current Price is $102.45 Difference: minus $4.16 (current price is over target).
If CSL meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $108.66, suggesting upside of 5.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 192.54 cents and EPS of 374.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 364.2, implying annual growth of N/A. Current consensus DPS estimate is 172.6, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 28.2. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 240.66 cents and EPS of 474.48 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 441.7, implying annual growth of 21.3%. Current consensus DPS estimate is 202.4, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 23.3. |
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
Morgans rates CSL as Add (1) -
The broker believes the market is complacent about CSL but is ignoring a new "good cholesterol" drug for short-term heart attack treatment that offers the greatest upside potential in latter years. Phase 2b results will be presented to the US Heart Association in November.
The broker's risk-adjusted, discounted PE analysis ascribes $4.37ps for the drug with 3x upside once moving into Phase 3. In the meantime, Add and $120.20 target retained.
Target price is $120.20 Current Price is $102.45 Difference: $17.75
If CSL meets the Morgans target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $108.66, suggesting upside of 5.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 178.26 cents and EPS of 382.37 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 364.2, implying annual growth of N/A. Current consensus DPS estimate is 172.6, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 28.2. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 202.75 cents and EPS of 436.79 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 441.7, implying annual growth of 21.3%. Current consensus DPS estimate is 202.4, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 23.3. |
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
Morgan Stanley - Cessation of coverage
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 0.95 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is N/A, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY18:
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
Morgans rates IPD as Add (1) -
Impedimed's study results show early intervention with L-Dex technology has a meaningful positive impact for breast cancer related lymphoedema. The broker believes the company is on track to reach key milestones over the coming 12 months.
No changes to forecasts, with Add and a $2.13 target retained, and a caveat that this is a stock for risk tolerant investors.
Target price is $2.13 Current Price is $1.60 Difference: $0.53
If IPD meets the Morgans target it will return approximately 33% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 0.60 cents. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 0.00 cents and EPS of 0.30 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates JBH as Underperform (5) -
Credit Suisse assumes completion of The Good Guys acquisition on January 1 and consolidates estimates into the second half of FY17.
The broker includes EBIT of $80m in FY18 and assumes synergies of $25m by FY20. The broker's Underperform rating is maintained. Target rises to $26.16 from $25.21.
Target price is $26.16 Current Price is $29.06 Difference: minus $2.9 (current price is over target).
If JBH meets the Credit Suisse target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $29.64, suggesting upside of 0.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 116.00 cents and EPS of 184.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 171.4, implying annual growth of 11.5%. Current consensus DPS estimate is 111.4, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 17.1. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 130.00 cents and EPS of 200.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 194.7, implying annual growth of 13.6%. Current consensus DPS estimate is 127.6, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 15.1. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates MQG as Hold (3) -
Macquarie has reconfirmed FY17 guidance of earnings being flat on FY16. Trading conditions and improving commodity prices are positives, the broker notes, but there appears little organic growth ahead in leasing.
The broker remains a fan of Macquarie longer term but after a solid run the share price currently reflects full value, the broker suggests. Target ticks up to $74.85 from $74.62. Hold retained.
Target price is $74.85 Current Price is $81.13 Difference: minus $6.28 (current price is over target).
If MQG 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 $75.98, suggesting downside of -7.5% (ex-dividends)
The company's fiscal year ends in March.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 400.00 cents and EPS of 613.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 611.8, implying annual growth of -6.6%. Current consensus DPS estimate is 403.3, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 420.00 cents and EPS of 656.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 634.5, implying annual growth of 3.7%. Current consensus DPS estimate is 427.5, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 12.9. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates NCM as Lighten (4) -
Overall, Ord Minnett recommends investors be underweight on precious metals, but for those seeking gold exposure the stockbroker suggests a basket of mid-cap stocks.
The broker maintains a Lighten rating for Newcrest as the stock is considered expensive on both a relative and absolute basis. Target is $19.
Target price is $19.00 Current Price is $21.29 Difference: minus $2.29 (current price is over target).
If NCM meets the Ord Minnett target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $19.62, suggesting downside of -8.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 32.00 cents and EPS of 91.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 95.9, implying annual growth of 64.5%. Current consensus DPS estimate is 20.2, implying a prospective dividend yield of 0.9%. Current consensus EPS estimate suggests the PER is 22.4. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 34.00 cents and EPS of 74.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 101.4, implying annual growth of 5.7%. Current consensus DPS estimate is 31.9, implying a prospective dividend yield of 1.5%. Current consensus EPS estimate suggests the PER is 21.2. |
Market Sentiment: -0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates NHC as Upgrade to Outperform from Underperform (1) -
The FY16 loss was worse than Macquarie expected. Impairments continue and Queensland oil and coal were unprofitable.
Nevertheless, with thermal coal prices expected to average 25% higher in the first half of FY17, the broker expects Acland can return to profitability and Bengalla will obtain even greater benefit.
With stronger demand and the impact of supply-side reforms in China, Macquarie upgrades to Outperform from Underperform. Target slips to $1.70 from $1.80.
Target price is $1.70 Current Price is $1.50 Difference: $0.2
If NHC meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $1.65, suggesting upside of 4.8% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 8.50 cents and EPS of 13.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 10.0, implying annual growth of N/A. Current consensus DPS estimate is 5.7, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 15.7. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 13.60 cents and EPS of 13.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 10.6, implying annual growth of 6.0%. Current consensus DPS estimate is 9.3, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 14.9. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates NHC as Hold (3) -
New Hope's result came in well below the broker, thanks to the broker's overly optimistic assumptions on pricing and Qld coal costs. The broker nevertheless believes FY16 will mark the bottom of this company's earnings cycle as Bengalla kicks in.
Uncertainty around the Acland Stage 3 approval has meant New Hope's share price has lagged both the thermal coal price bounce and peer Whitehaven Coal ((WHC)). The broker is assuming Acland will indeed extend. Hold rating and $1.60 target retained.
Target price is $1.60 Current Price is $1.50 Difference: $0.1
If NHC meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $1.65, suggesting upside of 4.8% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 4.00 cents and EPS of 6.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 10.0, implying annual growth of N/A. Current consensus DPS estimate is 5.7, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 15.7. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 5.00 cents and EPS of 8.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 10.6, implying annual growth of 6.0%. Current consensus DPS estimate is 9.3, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 14.9. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates NST as Upgrade to Outperform from Neutral (1) -
Macquarie continues to favour nickel and gold in metals and upgrades Northern Star to Outperform from Neutral on the back of recent share price weakness.
The $5.00 target is retained.
Target price is $5.00 Current Price is $4.22 Difference: $0.78
If NST meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $4.58, suggesting upside of 6.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 12.00 cents and EPS of 34.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 43.2, implying annual growth of 71.4%. Current consensus DPS estimate is 13.1, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 10.0. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 13.00 cents and EPS of 50.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 52.3, implying annual growth of 21.1%. Current consensus DPS estimate is 13.4, implying a prospective dividend yield of 3.1%. Current consensus EPS estimate suggests the PER is 8.2. |
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates RWC as Outperform (1) -
A visit to the US operations provides insight into recent events. Macquarie maintains an Outperform rating and considers the growth story reflects the move to broaden the company's presence in the retail channel.
The new construction product EvoPEX has an enviable value proposition, in the broker's view. Target is steady at $3.40.
Target price is $3.40 Current Price is $3.14 Difference: $0.26
If RWC meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $3.14, suggesting upside of 1.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 6.00 cents and EPS of 11.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 12.0, implying annual growth of N/A. Current consensus DPS estimate is 6.0, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 25.9. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 7.00 cents and EPS of 13.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 13.7, implying annual growth of 14.2%. Current consensus DPS estimate is 6.8, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 22.7. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates S32 as Upgrade to Outperform from Underperform (1) -
With stronger demand and the impact of supply-side reforms in China, the outlook for most bulk commodities has improved, Macquarie observes. The broker substantially upgrades forecasts for coking coal, thermal coal and manganese.
Macquarie believes the earnings outlook for South32 has been transformed, given it has exposure to all three of these commodities. The broker upgrades to Outperform from Underperform and raises the target to $2.70 from $1.50.
Target price is $2.70 Current Price is $2.33 Difference: $0.37
If S32 meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $2.23, suggesting downside of -5.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 12.25 cents and EPS of 4.63 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.7, implying annual growth of N/A. Current consensus DPS estimate is 5.0, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 27.0. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 1.63 cents and EPS of 4.08 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 9.6, implying annual growth of 10.3%. Current consensus DPS estimate is 4.4, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 24.5. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates SBM as Upgrade to Outperform from Neutral (1) -
Macquarie continues to favour nickel and gold in metals and upgrades St Barbara to Outperform from Neutral on the back of recent share price weakness.
Target is raised to $3.70 from $3.50.
Target price is $3.70 Current Price is $2.93 Difference: $0.77
If SBM meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).
Current consensus price target is $3.18, suggesting upside of 5.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 0.00 cents and EPS of 29.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 36.2, implying annual growth of 5.8%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 8.4. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of 38.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 43.1, implying annual growth of 19.1%. Current consensus DPS estimate is 7.5, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 7.0. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates SUN as Underweight (5) -
Morgan Stanley believes its Underweight view is reinforced by the over reliance on reserve releases and the slow process of fixing the issues in personal and commercial lines.
The broker also notes the seemingly unintended growth in CTP share in NSW. Morgan Stanley prefers Insurance Australia Group ((IAG)) over Suncorp and retains a $12.00 target. Industry view is In-Line.
Target price is $12.00 Current Price is $12.30 Difference: minus $0.3 (current price is over target).
If SUN meets the Morgan Stanley target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $13.34, suggesting upside of 7.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 81.00 cents and EPS of 96.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 94.8, implying annual growth of 16.4%. Current consensus DPS estimate is 75.8, implying a prospective dividend yield of 6.1%. Current consensus EPS estimate suggests the PER is 13.1. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 84.00 cents and EPS of 99.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 97.5, implying annual growth of 2.8%. Current consensus DPS estimate is 78.3, implying a prospective dividend yield of 6.3%. Current consensus EPS estimate suggests the PER is 12.7. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates SYD as Upgrade to Outperform from Neutral (1) -
August traffic revealed total passenger growth of 4.5% and international up 7.6%. Macquarie believes the stock now provides value to investors, with the recent fall in the share price.
Moreover, Sydney's growth outlook is strengthening with opportunities to develop and creating a growth path which should last 10-15 years.
Macquarie upgrades to Outperform from Neutral. Target rises to $7.45 from $7.41.
Target price is $7.45 Current Price is $6.61 Difference: $0.84
If SYD meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $7.37, suggesting upside of 9.5% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY16:
Macquarie forecasts a full year FY16 dividend of 31.00 cents and EPS of 14.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.2, implying annual growth of 19.3%. Current consensus DPS estimate is 30.7, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 44.3. |
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 33.00 cents and EPS of 16.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.3, implying annual growth of 13.8%. Current consensus DPS estimate is 33.4, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 38.9. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates TPM as Buy (1) -
Citi analysts remain resolute in their view post what appeared a disappointing guidance for the year ahead: TPG management is simply being conservative, as always. The analysts are expecting an upgrade to guidance at the interim report release.
Citi reiterates its Buy rating. Price target falls to $13.35 from $14.50. EBITDA forecast for FY17 remains 3% above management's guidance.
Target price is $13.35 Current Price is $9.28 Difference: $4.07
If TPM meets the Citi target it will return approximately 44% (excluding dividends, fees and charges).
Current consensus price target is $10.32, suggesting upside of 14.7% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 15.00 cents and EPS of 45.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 45.2, implying annual growth of N/A. Current consensus DPS estimate is 15.6, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 19.9. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 16.50 cents and EPS of 51.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 49.1, implying annual growth of 8.6%. Current consensus DPS estimate is 16.9, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 18.3. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates TPM as Underperform (5) -
FY16 results were in line with expectations but FY17 guidance disappointed Credit Suisse. The broker notes subscriber growth was again weak in the second half and the company's market share declined.
The broker attributes this to increased competitive intensity, particularly from Telstra ((TLS)). The broker updates its NBN transition analysis and calculates that TPG faces a $200m EBITDA headwind in the consumer business.
Underperform rating retained. Target slips to $8.00 from $9.00.
Target price is $8.00 Current Price is $9.28 Difference: minus $1.28 (current price is over target).
If TPM meets the Credit Suisse target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $10.32, suggesting upside of 14.7% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 16.62 cents and EPS of 44.92 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 45.2, implying annual growth of N/A. Current consensus DPS estimate is 15.6, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 19.9. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 17.36 cents and EPS of 45.69 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 49.1, implying annual growth of 8.6%. Current consensus DPS estimate is 16.9, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 18.3. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates TPM as Initiation of coverage with Buy (1) -
Deutsche Bank initiates coverage with a Buy rating and $11.01 target. The broker has a positive outlook on the company, based on a forecast of 13% compound earnings per share growth over the next five years, led by NBN market share gains.
Whilst the broker acknowledges margin headwinds as the NBN is rolled out, the company's extensive fibre network should allow it to connect to large apartment blocks and offer fibre-to-the-basement (FTTB) services.
Target price is $11.01 Current Price is $9.28 Difference: $1.73
If TPM meets the Deutsche Bank target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $10.32, suggesting upside of 14.7% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 16.00 cents and EPS of 47.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 45.2, implying annual growth of N/A. Current consensus DPS estimate is 15.6, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 19.9. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 18.00 cents and EPS of 52.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 49.1, implying annual growth of 8.6%. Current consensus DPS estimate is 16.9, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 18.3. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates TPM as Neutral (3) -
FY16 results were in line with expectations and the company continues to drive organic growth from both its consumer and corporate segments.
The company envisages a significant long-term opportunity in Singapore, with strong regulatory support for a fourth player. The catalyst in the broker's view will be the update on the licence auction process in the December quarter.
Macquarie is disappointed with FY17 guidance and suspects trading multiples will remain under pressure until there is further clarity over the medium-term outlook.
Neutral rating retained. Target is reduced to $10.00 from $11.55.
Target price is $10.00 Current Price is $9.28 Difference: $0.72
If TPM meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $10.32, suggesting upside of 14.7% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 15.80 cents and EPS of 46.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 45.2, implying annual growth of N/A. Current consensus DPS estimate is 15.6, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 19.9. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 17.50 cents and EPS of 51.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 49.1, implying annual growth of 8.6%. Current consensus DPS estimate is 16.9, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 18.3. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates TPM as Overweight (1) -
FY16 results were in line with expectations. Growth is lower than expected in FY17 guidance yet Morgan Stanley recognises the company has a track record of issuing conservative guidance and either meeting or exceeding it.
Still, the commentary on rising competition in the retail broadband space increases the risk profile around the future growth of all industry participants, the broker contends.
Overweight rating and In-Line sector view retained. Target is $11.40.
Target price is $11.40 Current Price is $9.28 Difference: $2.12
If TPM meets the Morgan Stanley target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $10.32, suggesting upside of 14.7% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 16.60 cents and EPS of 47.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 45.2, implying annual growth of N/A. Current consensus DPS estimate is 15.6, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 19.9. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 EPS of 52.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 49.1, implying annual growth of 8.6%. Current consensus DPS estimate is 16.9, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 18.3. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates TPM as Downgrade to Reduce from Hold (5) -
Morgans was impressed by TPG's FY16 result despite it hitting only the lower end of guidance, but FY17 guidance came in lower 7% than forecast, reflecting the reality of the NBN becoming a material part of earnings and margin pressure now being applied.
The headwinds can no longer be ignored and hence Morgans has cut its FY17 earnings forecast by 11% to the midpoint of guidance, and downgraded its rating to Reduce. Target falls to $7.49 from $11.79 as the broker cuts its enterprise multiple to 10x from 12x, noting five years ago telcos traded on 6x.
Hence there is further downside risk if interest rates rise, the broker warns.
Target price is $7.49 Current Price is $9.28 Difference: minus $1.79 (current price is over target).
If TPM meets the Morgans target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $10.32, suggesting upside of 14.7% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 15.00 cents and EPS of 45.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 45.2, implying annual growth of N/A. Current consensus DPS estimate is 15.6, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 19.9. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 15.00 cents and EPS of 42.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 49.1, implying annual growth of 8.6%. Current consensus DPS estimate is 16.9, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 18.3. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates VRL as Buy (1) -
Citi analysts note the 1H17 Australian weekend box office continues to perform above expectations, up 18% on pcp. Were this momentum to continue for longer, the analysts see upside risk for Village Roadshow in FY17.
Target price is $6.05 Current Price is $4.58 Difference: $1.47
If VRL meets the Citi target it will return approximately 32% (excluding dividends, fees and charges).
Current consensus price target is $5.49, suggesting upside of 18.1% (ex-dividends)
Forecast for FY17:
Current consensus EPS estimate is 35.5, implying annual growth of 262.2%. Current consensus DPS estimate is 27.7, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 13.1. |
Forecast for FY18:
Current consensus EPS estimate is 39.8, implying annual growth of 12.1%. Current consensus DPS estimate is 29.0, implying a prospective dividend yield of 6.2%. Current consensus EPS estimate suggests the PER is 11.7. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates WES as Outperform (1) -
Macquarie has increased its forecasts for coal prices over the medium term and continues to believe Wesfarmers is leveraged to any recovery in the coal price.
While the source of earnings revisions is volatile, the broker considers the net impact of resources is now a positive. Outperform retained. Target rises to $44.50 from $44.01.
Target price is $44.50 Current Price is $43.17 Difference: $1.33
If WES meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $41.94, suggesting downside of -4.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 210.00 cents and EPS of 243.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 237.2, implying annual growth of 555.2%. Current consensus DPS estimate is 200.9, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 18.4. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 240.00 cents and EPS of 277.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 257.3, implying annual growth of 8.5%. Current consensus DPS estimate is 215.1, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 17.0. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| ABC - | ADELAIDE BRIGHTON | Upgrade to Outperform from Neutral - Macquarie | Overnight Price $5.23 |
| ALL - | ARISTOCRAT LEISURE | Buy - Citi | Overnight Price $15.55 |
| BHP - | BHP BILLITON | Upgrade to Outperform from Neutral - Macquarie | Overnight Price $20.61 |
| BLD - | BORAL | Upgrade to Outperform from Neutral - Macquarie | Overnight Price $6.35 |
| CSL - | CSL | Neutral - Credit Suisse | Overnight Price $102.45 |
| Underweight - Morgan Stanley | Overnight Price $102.45 | ||
| Add - Morgans | Overnight Price $102.45 | ||
| HZN - | HORIZON OIL | Cessation of coverage - Morgan Stanley | Overnight Price $0.04 |
| IPD - | IMPEDIMED | Add - Morgans | Overnight Price $1.60 |
| JBH - | JB HI-FI | Underperform - Credit Suisse | Overnight Price $29.06 |
| MQG - | MACQUARIE GROUP | Hold - Morgans | Overnight Price $81.13 |
| NCM - | NEWCREST MINING | Lighten - Ord Minnett | Overnight Price $21.29 |
| NHC - | NEW HOPE CORP | Upgrade to Outperform from Underperform - Macquarie | Overnight Price $1.50 |
| Hold - Morgans | Overnight Price $1.50 | ||
| NST - | NORTHERN STAR | Upgrade to Outperform from Neutral - Macquarie | Overnight Price $4.22 |
| RWC - | RELIANCE WORLDWIDE | Outperform - Macquarie | Overnight Price $3.14 |
| S32 - | SOUTH32 | Upgrade to Outperform from Underperform - Macquarie | Overnight Price $2.33 |
| SBM - | ST BARBARA | Upgrade to Outperform from Neutral - Macquarie | Overnight Price $2.93 |
| SUN - | SUNCORP | Underweight - Morgan Stanley | Overnight Price $12.30 |
| SYD - | SYDNEY AIRPORT | Upgrade to Outperform from Neutral - Macquarie | Overnight Price $6.61 |
| TPM - | TPG TELECOM | Buy - Citi | Overnight Price $9.28 |
| Underperform - Credit Suisse | Overnight Price $9.28 | ||
| Initiation of coverage with Buy - Deutsche Bank | Overnight Price $9.28 | ||
| Neutral - Macquarie | Overnight Price $9.28 | ||
| Overweight - Morgan Stanley | Overnight Price $9.28 | ||
| Downgrade to Reduce from Hold - Morgans | Overnight Price $9.28 | ||
| VRL - | VILLAGE ROADSHOW | Buy - Citi | Overnight Price $4.58 |
| WES - | WESFARMERS | Outperform - Macquarie | Overnight Price $43.17 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 17 |
| 3. Hold | 4 |
| 4. Reduce | 1 |
| 5. Sell | 5 |
Wednesday 21 September 2016
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the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe
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This document is provided for informational purposes only. It does not
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