Australian Broker Call
September 26, 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: 10:49 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
| RSG - | RESOLUTE MINING | Downgrade to Equal-weight from Overweight | Morgan Stanley |
| VOC - | VOCUS COMMUNICATIONS | Upgrade to Buy from Neutral | UBS |
Citi rates AGL as Neutral (3) -
AGL's share price has declined recently and yet Citi analysts continue to see risk as to the downside. Factors mentioned are both operational (Portland smelter closure, Alinta IPO, etc) as financial markets related (safe yield plays out of favour, AGL shares possibly used as a funding source, etc).
The stockbroker's long-term thesis of value driven by higher electricity prices remains unchanged. Neutral rating retained. Citi analysts are not so convinced about the potential for capital returns. Price target drops to $18.75 from $19.51.
Target price is $18.75 Current Price is $17.50 Difference: $1.25
If AGL meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $19.70, suggesting upside of 11.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 72.00 cents and EPS of 110.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 113.7, implying annual growth of N/A. Current consensus DPS estimate is 74.0, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 15.5. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 76.00 cents and EPS of 120.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 125.7, implying annual growth of 10.6%. Current consensus DPS estimate is 78.8, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 14.1. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates AGL as Underweight (5) -
Morgan Stanley examines the base load scenario in Victoria given the speculation regarding the closure of the oldest operating power plant, Hazelwood, which suggest the owners will decide in October whether to close the plant as early as next April.
The broker believes the closure of Hazelwood would be a near-term positive for AGL and the company could realise an uplift to EBIT in FY18 to the tune of $125m from a forward pool price rise of $10/MWh and a volume uplift of around 2TWh.
Nevertheless, a price hike of that magnitude is likely to accelerate demand destruction, the broker believes, most notably at the Portland aluminium smelter which recently terminated its offtake from AGL. Underweight retained. Target price is $18.13. Industry view: Cautious.
Target price is $18.13 Current Price is $17.50 Difference: $0.63
If AGL meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $19.70, suggesting upside of 11.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 77.00 cents and EPS of 117.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 113.7, implying annual growth of N/A. Current consensus DPS estimate is 74.0, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 15.5. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 78.00 cents and EPS of 126.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 125.7, implying annual growth of 10.6%. Current consensus DPS estimate is 78.8, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 14.1. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates AMC as Buy (1) -
Citi analysts explain the reason as to why they remain attracted to Amcor shares is because of the multiple growth drivers available to company management.
In particular in the Americas, with Amcor actively looking for acquisition targets, the analysts continue to see value-accretive opportunity. Buy rating retained.
Target price is $17.95 Current Price is $15.10 Difference: $2.85
If AMC meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $16.38, suggesting upside of 8.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 57.32 cents and EPS of 84.21 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 77.2, implying annual growth of N/A. Current consensus DPS estimate is 58.1, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 19.6. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 58.69 cents and EPS of 93.08 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 87.7, implying annual growth of 13.6%. Current consensus DPS estimate is 65.6, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 17.2. |
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
Ord Minnett rates BOQ as Hold (3) -
Ord Minnett is expecting FY16 cash earnings of $371m and a flat final dividend of 38c at the results on October 6.
While operating conditions are challenging, the under performance of the stock by around 10% in the year to date has improved the risk/reward balance in the broker's observation.
Hold rating and $11.50 target maintained.
Target price is $11.50 Current Price is $11.14 Difference: $0.36
If BOQ meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $12.00, suggesting upside of 7.6% (ex-dividends)
The company's fiscal year ends in August.
Forecast for FY16:
Ord Minnett forecasts a full year FY16 dividend of 79.00 cents and EPS of 95.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 93.6, implying annual growth of -3.8%. Current consensus DPS estimate is 76.7, implying a prospective dividend yield of 6.9%. Current consensus EPS estimate suggests the PER is 11.9. |
Forecast for FY17:
Ord Minnett forecasts a full year FY17 EPS of 98.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 97.4, implying annual growth of 4.1%. Current consensus DPS estimate is 77.2, implying a prospective dividend yield of 6.9%. Current consensus EPS estimate suggests the PER is 11.4. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates CTX as Hold (3) -
The realised refiner margin of US$8.08/bbl for August was lower than July's US$10.30/bbl but in line with Deutsche Bank's forecasts.
The broker continues to forecasts a realised margin of US$8.44/bbl for the remainder of the year.
A Hold rating and $33.90 target are retained.
Target price is $33.90 Current Price is $33.80 Difference: $0.1
If CTX meets the Deutsche Bank target it will return approximately 0% (excluding dividends, fees and charges).
Current consensus price target is $35.34, suggesting upside of 4.4% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY16:
Deutsche Bank forecasts a full year FY16 dividend of 99.00 cents and EPS of 199.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 203.4, implying annual growth of -12.7%. Current consensus DPS estimate is 106.0, implying a prospective dividend yield of 3.1%. Current consensus EPS estimate suggests the PER is 16.6. |
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 115.00 cents and EPS of 229.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 222.7, implying annual growth of 9.5%. Current consensus DPS estimate is 116.1, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 15.2. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates CYB as Sell (5) -
Citi analysts stoically retain their Sell rating on the expectation downward margin pressure will offset any benefits from cost reductions. Sell.
Current Price is $4.41. Target price not assessed.
Current consensus price target is $4.34, suggesting upside of 0.0% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY16:
Citi forecasts a full year FY16 dividend of 0.00 cents and EPS of 29.23 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 23.2, implying annual growth of N/A. Current consensus DPS estimate is 2.3, implying a prospective dividend yield of 0.5%. Current consensus EPS estimate suggests the PER is 18.7. |
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 7.80 cents and EPS of 37.03 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 34.0, implying annual growth of 46.6%. Current consensus DPS estimate is 21.8, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 12.8. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates FMG as Outperform (1) -
Macquarie is disappointed regarding the departure of CFO Stephen Pearce as he was a driver of the cost and debt reductions. He will remain until a new CFO is appointed.
Greg Lilleyman is appointed a director of operations from January 1, 2017, which the broker welcomes as a sign that the company has transformed its operations in the Pilbara into a world class, low-cost business.
Outperform and $5.70 target retained.
Target price is $5.70 Current Price is $4.96 Difference: $0.74
If FMG meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $4.68, suggesting downside of -5.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 15.00 cents and EPS of 46.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 39.7, implying annual growth of N/A. Current consensus DPS estimate is 16.2, implying a prospective dividend yield of 3.3%. Current consensus EPS estimate suggests the PER is 12.5. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 16.00 cents and EPS of 25.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.6, implying annual growth of -38.0%. Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 20.2. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates FMG as Accumulate (2) -
Ord Minnett views the resignation of CFO Stephen Pearce as a loss to the company while the appointment of Greg Lilleyman as director of operations is a major positive, considering his experience.
The broker observes, with one week left in September, iron ore has averaged a healthy US$58.50/t in the quarter to date. Ord Minnett continues to believe the stock is undervalued and retains an Accumulate rating and $5.70 target.
Target price is $5.70 Current Price is $4.96 Difference: $0.74
If FMG meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $4.68, suggesting downside of -5.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 23.11 cents and EPS of 66.61 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 39.7, implying annual growth of N/A. Current consensus DPS estimate is 16.2, implying a prospective dividend yield of 3.3%. Current consensus EPS estimate suggests the PER is 12.5. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 21.79 cents and EPS of 57.21 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.6, implying annual growth of -38.0%. Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 20.2. |
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 GPT as Underweight (5) -
Improvements to redevelopment risk management, with the successful delivery of Sunshine Plaza, have improved the re-rating potential of the stock over the next 26 months, Morgan Stanley believes.
Nevertheless, rising defensive capex and moderating returns could temper the upside. The broker retains an Underweight rating and Attractive sector view. Target is $5.00.
Target price is $5.00 Current Price is $5.00 Difference: $0
If GPT meets the Morgan Stanley target it will return approximately 0% (excluding dividends, fees and charges).
Current consensus price target is $5.07, suggesting upside of 2.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY16:
Morgan Stanley forecasts a full year FY16 dividend of 23.50 cents and EPS of 25.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.8, implying annual growth of -38.9%. Current consensus DPS estimate is 23.5, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 17.2. |
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 23.80 cents and EPS of 26.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.4, implying annual growth of 2.1%. Current consensus DPS estimate is 24.4, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 16.9. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates IAG as Neutral (3) -
The company's main business, Insurance Manufacturers Australia, which accounted for around 26.8% of group gross written premium (GWP) in FY16, has grown GWP by 2.7%, led by the motor vehicle lines. IAG's group GWP declined 0.6% in FY16.
IMA comprises mostly home and personal motor insurance in Victoria and NSW and is 70% owned by IAG and 30% by RACV.
Macquarie continues to prefer Suncorp ((SUN)) on a relative valuation comparison and mix of business basis. Neutral and $5.80 target retained.
Target price is $5.80 Current Price is $5.52 Difference: $0.28
If IAG meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $5.56, suggesting upside of 1.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 30.00 cents and EPS of 34.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 34.3, implying annual growth of 33.0%. Current consensus DPS estimate is 26.5, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 15.9. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 29.00 cents and EPS of 33.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 35.3, implying annual growth of 2.9%. Current consensus DPS estimate is 27.5, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 15.5. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates NCM as Underperform (5) -
Newcrest has taken a 10% placement worth $10.7m in copper-gold explorer SolGold primarily to advance exploration at Cascabel, Ecuador. This was the first of the company's early exploration joint ventures that appeared to have compelling strategic potential, Credit Suisse notes.
Credit Suisse believes Newcrest must assess the doubling in the cost of its "risk money" investment this time into a high potential, albeit still early stage, opportunity. Credit Suisse retains an Underperform rating and $19.20 target.
Target price is $19.20 Current Price is $22.41 Difference: minus $3.21 (current price is over target).
If NCM 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 $20.54, suggesting downside of -8.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 13.69 cents and EPS of 135.44 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.4, implying annual growth of 65.3%. Current consensus DPS estimate is 20.1, implying a prospective dividend yield of 0.9%. Current consensus EPS estimate suggests the PER is 23.3. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 54.75 cents and EPS of 170.83 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 101.2, implying annual growth of 5.0%. Current consensus DPS estimate is 30.4, implying a prospective dividend yield of 1.4%. Current consensus EPS estimate suggests the PER is 22.2. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates PMV as Neutral (3) -
The second half was weaker than expected, but included a warm start to winter and unfavourable Easter timing, as well as the federal election.
The outlook for the first half of FY17 is relatively good at a macro level, UBS observes, with Smiggle's international roll out on track. UBS retains a Neutral rating and reduces the target to $16.60 from $16.85.
Target price is $16.60 Current Price is $16.39 Difference: $0.21
If PMV meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $15.32, suggesting downside of -3.6% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 56.00 cents and EPS of 71.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 74.1, implying annual growth of N/A. Current consensus DPS estimate is 54.0, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 21.5. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 66.00 cents and EPS of 81.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 83.9, implying annual growth of 13.2%. Current consensus DPS estimate is 60.7, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 19.0. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates QAN as Outperform (1) -
Macquarie observes some investor concern regarding two of the company's main international markets, the US and Japan.
The broker considers Qantas to be underweight on aggressive growth routes. Also, the stockbroker thinks the capacity growth in both these routes is set to decline into the second half and this is a positive for group revenue from available seat kilometres.
Macquarie believes the stock has a clear value proposition, given earnings sustainability and yield support. The broker retains an Outperform rating and $4.40 target.
Target price is $4.40 Current Price is $3.23 Difference: $1.17
If QAN meets the Macquarie target it will return approximately 36% (excluding dividends, fees and charges).
Current consensus price target is $4.48, suggesting upside of 38.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 53.60 cents and EPS of 67.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 62.8, implying annual growth of 27.1%. Current consensus DPS estimate is 28.3, implying a prospective dividend yield of 8.7%. Current consensus EPS estimate suggests the PER is 5.2. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 31.20 cents and EPS of 62.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 60.3, implying annual growth of -4.0%. Current consensus DPS estimate is 26.6, implying a prospective dividend yield of 8.2%. Current consensus EPS estimate suggests the PER is 5.4. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates QUB as Equal-weight (3) -
Diesel fuel data suggest to Morgan Stanley there are volume challenges which are both widespread and growing. The broker likes the company's strategic assets but would prefer volume and the price cycle to stabilise before becoming more constructive.
Diesel fuel demand, the broker's proxy for transport volumes, keeps falling and the demand weakness is likely to be spreading to the core operating business.
Morgan Stanley retains an Equal-weight rating, $2.40 target and Attractive sector view.
Target price is $2.40 Current Price is $2.37 Difference: $0.03
If QUB meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $2.65, suggesting upside of 13.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 7.00 cents and EPS of 10.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 10.2, implying annual growth of 24.5%. Current consensus DPS estimate is 6.1, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 22.9. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 8.90 cents and EPS of 12.36 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.3, implying annual growth of 10.8%. Current consensus DPS estimate is 6.8, implying a prospective dividend yield of 2.9%. Current consensus EPS estimate suggests the PER is 20.7. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates RSG as Downgrade to Equal-weight from Overweight (3) -
Confirmation of the company's mine plan in Queensland has brought value to the base case for Morgan Stanley, but the equity has had a strong run up and the metrics are looking fair, so the broker downgrades to Equal-weight from Overweight.
The stock has been a stand-out in the sector and execution is now key for the broker. Target rises to $2.40 from $2.00. Attractive industry view retained.
Target price is $2.40 Current Price is $2.19 Difference: $0.21
If RSG meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 2.00 cents and EPS of 28.00 cents. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 2.00 cents and EPS of 21.00 cents. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates S32 as Outperform (1) -
Macquarie has reviewed the upside risk for South32, having upgraded forecasts recently. Three projects, GEMCO, Cannington and Illawarra are expected to dominate earnings and cash flow.
The stock appears cheap on earnings multiples and the broker retains an Outperform rating and $2.70 target.
Target price is $2.70 Current Price is $2.40 Difference: $0.3
If S32 meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $2.24, suggesting downside of -6.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 3.67 cents and EPS of 17.54 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 10.7, implying annual growth of N/A. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 22.5. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 5.98 cents and EPS of 15.23 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.1, implying annual growth of 3.7%. Current consensus DPS estimate is 5.0, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 21.7. |
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 VOC as Upgrade to Buy from Neutral (1) -
The ACCC has approved the NextGen transaction and Vocus has also announced it has exceeded its first quarter corporate/wholesale new sales target. NBN subscribers have grown 21.7% since June 30.
UBS notes investors have little visibility regarding the shape of FY17/18 growth which could limit a re-rating of the stock. A lack of transparency, lacklustre organic growth in FY16 and general conservatism leads the broker to reduce FY17-18 earnings per share estimates by 10-14%.
In line with the revisions the broker's price target falls to $6.80 from $8.60. The stock looks inexpensive so UBS upgrades to Buy from Neutral.
Target price is $6.80 Current Price is $6.45 Difference: $0.35
If VOC meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $9.04, suggesting upside of 40.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 19.00 cents and EPS of 35.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 39.7, implying annual growth of 110.5%. Current consensus DPS estimate is 20.5, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 16.2. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 20.00 cents and EPS of 41.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 44.4, implying annual growth of 11.8%. Current consensus DPS estimate is 21.1, implying a prospective dividend yield of 3.3%. Current consensus EPS estimate suggests the PER is 14.5. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| AGL - | AGL ENERGY | Neutral - Citi | Overnight Price $17.50 |
| Underweight - Morgan Stanley | Overnight Price $17.50 | ||
| AMC - | AMCOR | Buy - Citi | Overnight Price $15.10 |
| BOQ - | BANK OF QUEENSLAND | Hold - Ord Minnett | Overnight Price $11.14 |
| CTX - | CALTEX AUSTRALIA | Hold - Deutsche Bank | Overnight Price $33.80 |
| CYB - | CYBG | Sell - Citi | Overnight Price $4.41 |
| FMG - | FORTESCUE | Outperform - Macquarie | Overnight Price $4.96 |
| Accumulate - Ord Minnett | Overnight Price $4.96 | ||
| GPT - | GPT | Underweight - Morgan Stanley | Overnight Price $5.00 |
| IAG - | INSURANCE AUSTRALIA | Neutral - Macquarie | Overnight Price $5.52 |
| NCM - | NEWCREST MINING | Underperform - Credit Suisse | Overnight Price $22.41 |
| PMV - | PREMIER INVESTMENTS | Neutral - UBS | Overnight Price $16.39 |
| QAN - | QANTAS AIRWAYS | Outperform - Macquarie | Overnight Price $3.23 |
| QUB - | QUBE HOLDINGS | Equal-weight - Morgan Stanley | Overnight Price $2.37 |
| RSG - | RESOLUTE MINING | Downgrade to Equal-weight from Overweight - Morgan Stanley | Overnight Price $2.19 |
| S32 - | SOUTH32 | Outperform - Macquarie | Overnight Price $2.40 |
| VOC - | VOCUS COMMUNICATIONS | Upgrade to Buy from Neutral - UBS | Overnight Price $6.45 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 5 |
| 2. Accumulate | 1 |
| 3. Hold | 7 |
| 5. Sell | 4 |
Monday 26 September 2016
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