Australian Broker Call

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

Credit Suisse revises estimates in light of the current conditions. The broker assumes around 25% of tenants have sought rental relief.

Within the storage portfolio, there appears to be no material impact of mandatory closures or social distancing but income assumptions are conservatively lowered.

Credit Suisse does not believe Abacus Property needs to raise equity for defensive purposes as gearing is well below the covenants.

The broker assesses the downside risks are more than priced in and upgrades to Outperform from Neutral. Target is reduced to $2.86 from $3.93.

Target price is $2.86 Current Price is $2.49 Difference: $0.37
If ABP meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $2.74, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

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

Credit Suisse expects a cautious, albeit confident update, from the company when it reports its results on May 27. Drilling activity in April was up 25%, primarily because of an uplift in gold exploration.

The broker also assesses life sciences testing is more defensive than the commercial and industrial segments, although management previously noted a slowing in sample flow because of the pandemic.

Rating is upgraded to Outperform from Neutral and the target is lowered to $8.00 from $8.60.

Target price is $8.00 Current Price is $7.07 Difference: $0.93
If ALQ meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $7.42, suggesting upside of 5.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Ord Minnett rates AMI as Buy (1) -

Ord Minnett urges investors to re-visit the stock, believing there is misunderstanding and Aurelia Metals trades like a distressed business. The stock is down -18% over the past month and has materially underperformed listed peers.

The broker assesses operating improvements are on track for the June quarter. Buy rating and $0.45 target maintained.

Target price is $0.45 Current Price is $0.32 Difference: $0.13
If AMI meets the Ord Minnett target it will return approximately 41% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

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

AP Eagers has announced cost cutting measures and steps to preserve liquidity. Together with the refrigerated logistics sale, this makes Credit Suisse more confident that the company can manage the downturn from the balance sheet and cash flow perspective.

2020 earnings are expected to decline sharply but the extent of this is hard to forecast and the broker prefers to focus on 2021-22 when the company is likely to emerge in a stronger competitive position amid a strong rebound in earnings.

Following a near doubling of the share price from recent lows, Credit Suisse downgrades to Neutral from Outperform. Target is reduced to $6.45 from $9.90.

Target price is $6.45 Current Price is $5.47 Difference: $0.98
If APE meets the Credit Suisse target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $7.85, suggesting upside of 43.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

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

With the US unemployment rate rising sharply in April, Morgan Stanley notes many investors are questioning why there is no increase in gross credit losses in the March quarter for Afterpay.

The broker suggests a reason could be that Afterpay requires a 25% up-front payment and changes its credit criteria rapidly. Still, the broker forecasts gross credit losses to rise to 1.2% in the second half from 1.0% in the first half, and peak at 1.6% in the first half of FY21.

Equal-weight rating. Target is $36. Industry view is In-Line.

Target price is $36.00 Current Price is $42.85 Difference: minus $6.85 (current price is over target).
If APT meets the Morgan Stanley target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.87, suggesting downside of -30.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

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

At current levels, Credit Suisse suggests an upgrade is required to support the share price appreciation and this may be challenging in the current environment.

The broker remains concerned about high margins and rising competition. Still, the demand outlook is robust and the prospective market is growing.

Rating is downgraded to Neutral from Outperform, primarily because of the surge in the share price. Target rises to $30 from $22.

Target price is $30.00 Current Price is $29.94 Difference: $0.06
If APX meets the Credit Suisse target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $31.48, suggesting upside of 5.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

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

Baby Bunting's outperformance relative to the broader retail sector is expected to slow as the lockdowns are eased and consumers stop stockpiling.

The broker also suspects the pandemic may have temporarily reduced demand for second-hand products and that would have been a positive for the company.

The broker considers the current FY21 price/earnings ratio of 17x is a fair reflection of the rewards and risks. Rating is downgraded to Neutral from Buy and the target raised to $3.35 from $2.65.

Target price is $3.35 Current Price is $3.12 Difference: $0.23
If BBN meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.45, suggesting upside of 10.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Macquarie rates BBN as Outperform (1) -

An update from Baby Bunting highlighted an 8.1% year on year increase in sales in the second half compared to 1% in the first half.

Importantly, the broker notes sales have increased 6.2% since the last update in March, which was in the middle of panic buying of consumables, thus sales have been across the board despite an easing in the panic.

Given the company's remaining level of undrawn debt, cash generation has been solid, allowing the company to recommence its capex program.

The broker sees Baby Bunting as a "category killer", and one of few small cap retailers able to grow earnings through the crisis. The broker has increased forecasts, net of the additional cost of operating stores at this time. Target rises to $3.40 from $2.50, Outperform retained.

Target price is $3.40 Current Price is $3.12 Difference: $0.28
If BBN meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.45, suggesting upside of 10.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Morgan Stanley rates BBN as Overweight (1) -

The business has outperformed expectations in the second half to date. Morgan Stanley notes consumables outperformed on panic buying while hard goods are experiencing some tailwinds from easing restrictions. Online sales accelerated to 22.4%.

The broker envisages scope for opportunistic network expansion, given favourable lease opportunities post the pandemic.

Overweight. Target is raised to $3.70 from $3.50. Industry view is In-line.

Target price is $3.70 Current Price is $3.12 Difference: $0.58
If BBN meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $3.45, suggesting upside of 10.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Morgans rates BBN as Add (1) -

Online sales for Baby Bunting Group are up 120% in the last two months although store sales remain key with 87% of the business conducted through them, highlights Morgans.

The group enjoys a strong balance sheet, displays defensive characteristics and has store growth potential, reminds the broker.

Morgans believes achieving scales would lead to an uptick in gross margins and operating leverage.

The broker maintains its Add rating with target increased to $3.33 from $2.39.

Target price is $3.33 Current Price is $3.12 Difference: $0.21
If BBN meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.45, suggesting upside of 10.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

UBS rates CGC as Buy (1) -

Costa Group will hold an AGM on May 29 when an update on current trading is expected. On balance, UBS expects this to be positive.

The broker remains comfortable with estimates for operating earnings in 2020 of $147m.

UBS suspects, if a lower Australian dollar is sustained and there is stronger rainfall in the Riverland, upside risk to prices exists.

Still, it is early in the year and the risks around border closures in Europe and demand in China continue. Buy rating and $3.25 target maintained.

Target price is $3.25 Current Price is $3.19 Difference: $0.06
If CGC meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.16, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Citi rates COH as Neutral (3) -

The US Court of Appeals has denied the company's petition for re-hearing the appeal in the AMF & AB US patent infringement case. Cochlear is expected to pay around -US$280m in combined infringement damages and interest.

A decision is still pending on an application for pre-judgement interest of -US$123m and attorney fees of -US$15m. The company has committed bank loan facilities to fund the judgement.

The patent has expired and, hence, the judgement will have no impact on the business operations. Citi had already assumed Cochlear would have to pay the costs in its estimates. Neutral rating and $203 target maintained.

Target price is $203.00 Current Price is $186.35 Difference: $16.65
If COH meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $180.33, suggesting downside of -3.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Morgan Stanley rates CPU as Underweight (5) -

Computershare has maintained FY20 guidance in its latest update. The additional detail is mostly positive, in Morgan Stanley's view, and highlights the defensive qualities of the business.

The company has made progress on integration, with UK loan migration completed and Equatex on track. Underweight maintained. Target is $11. Industry view is In-Line.

Target price is $11.00 Current Price is $12.76 Difference: minus $1.76 (current price is over target).
If CPU meets the Morgan Stanley target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.62, suggesting downside of -8.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.0

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

Ord Minnett rates CPU as Lighten (4) -

Computershare is guiding to a drop in earnings per share of -20% in FY20 and guiding for margin income of US$180m. Cost savings from the UK mortgage servicing migration are expected to be delivered by September.

Ord Minnett notes no material change in employee share plans and retains a Lighten rating and $10.50 target.

Target price is $10.50 Current Price is $12.76 Difference: minus $2.26 (current price is over target).
If CPU meets the Ord Minnett target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.62, suggesting downside of -8.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.0

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

UBS rates CPU as Buy (1) -

Computershare has reaffirmed guidance and noted improved transaction activity across employee plans and corporate actions in April. The main area of concern for UBS is the US mortgage services book.

While expecting weaker transaction revenues extending into FY21, a more normal backdrop going forward and cost initiatives should mean the business is well-placed. UBS retains a Buy rating and $12.30 target.

Target price is $12.30 Current Price is $12.76 Difference: minus $0.46 (current price is over target).
If CPU meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.62, suggesting downside of -8.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.0

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

Morgan Stanley rates EVN as Downgrade to Equal-weight from Overweight (3) -

Morgan Stanley expects gold to be supported in 2020 on the basis of economic and market headwinds. Selective opportunities still exist in gold stocks, with the broker calculating that, if those under its coverage return to respective peak multiples, there is 30% upside for all except Evolution Mining.

Hence, the broker downgrades to Equal-weight from an Overweight rating. Target is raised to $4.70 from $4.30. Industry view: In-Line.

Target price is $4.70 Current Price is $6.09 Difference: minus $1.39 (current price is over target).
If EVN meets the Morgan Stanley target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.88, suggesting downside of -19.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Macquarie rates FBU as Neutral (3) -

Back in late March, after Fletcher Building had withdrawn guidance and first half dividend and suspended its buyback and the Rocla sale process, the broker had retained its NZ$4.88 target and Neutral rating given no immediate impact apparent from the virus.

That was then. The broker has now downgraded forecast earnings by -39% and -42% in FY20-21 on expected virus impact, suggesting risk remains to the downside.

The balance sheet and liquidity position are nonetheless robust, and the broker retains a Neutral rating. Target falls to NZ$4.03.

Current Price is $3.08. Target price not assessed.

Current consensus price target is $4.40, suggesting upside of 42.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.2

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

Credit Suisse rates GUD as Neutral (3) -

Despite the decline in end-market demand being less than previously feared, Credit Suisse reduces estimates by -16-20% across FY20-21.

The broker suspects the risk of material automotive de-stocking will play out across the fourth quarter. There are pockets of strength in other areas outside of automotive brands but Ryco and BWI remain the single largest earnings drivers.

Neutral rating maintained. Target is reduced to $9.15 from $11.80.

Target price is $9.15 Current Price is $9.32 Difference: minus $0.17 (current price is over target).
If GUD meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.53, suggesting upside of 2.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Citi rates JHX as Buy (1) -

FY20 underlying net profit was up 17% and in line with guidance. No final dividend was paid. North American operating costs growth accelerated to double digits in the fourth quarter, Citi notes.

The broker notes volumes are experiencing weakness in the first quarter and further disruption is likely. The working capital to sales ratio jumped to 24% in FY20 from 19% in FY19. Buy rating and $25.15 target maintained.

Target price is $25.15 Current Price is $23.81 Difference: $1.34
If JHX meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $29.54, suggesting upside of 24.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 1.0

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

Credit Suisse rates JHX as Outperform (1) -

Fourth quarter group earnings were in line with expectations. Credit Suisse concludes that exterior volumes were up in May although the company's cautious assessment signals that the recovery will have a long tail.

Sales have benefited from the carry-over of new housing momentum and DIY in interiors. The broker retains an Outperform rating and raises the target to $27.00 from $26.90.

Target price is $27.00 Current Price is $23.81 Difference: $3.19
If JHX meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $29.54, suggesting upside of 24.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 1.0

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

Macquarie rates JHX as Outperform (1) -

James Hardie reported fourth quarter results in line with pre-released guidance. The group has seen a solid recovery in demand from an early April trough, the broker notes, and trading momentum across all regions is better than expected thus far in FY21. Europe was nevertheless a key miss of forecasts.

James Hardie is well positioned, the broker believes, and a focus on efficiency, market share growth and innovation at this time is impressive. Outperform retained, target rises to $34.10 from $32.75.

Target price is $34.10 Current Price is $23.81 Difference: $10.29
If JHX meets the Macquarie target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $29.54, suggesting upside of 24.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 1.0

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

Morgan Stanley rates JHX as Overweight (1) -

The trading update and first quarter guidance reflects remarkable resilience, Morgan Stanley suggests, for both volumes and margins. FY20 net profit of US$353m was in line with guidance. Corporate costs were also lower than anticipated.

Morgan Stanley now forecasts a shallower trough in North America and Asia-Pacific, partially offset by weaker European margins. Overweight reiterated. Target is $32. Cautious industry view.

Target price is $32.00 Current Price is $23.81 Difference: $8.19
If JHX meets the Morgan Stanley target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $29.54, suggesting upside of 24.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 1.0

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

Ord Minnett rates JHX as Buy (1) -

Net profit in FY20 was in line with Ord Minnett's forecasts. The broker expects market share gains in all regions while the company retains strong margins even given the current environment.

The balance sheet is in a solid position and there is ample credit to manage the business through uncertain demand. Ord Minnett retains a Buy rating and raises the target to $28 and $25.

Target price is $28.00 Current Price is $23.81 Difference: $4.19
If JHX meets the Ord Minnett target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $29.54, suggesting upside of 24.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 1.0

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

UBS rates JHX as Buy (1) -

James Hardie reported US activity and margins held up in the first six weeks of FY21. UBS welcomed the result but, with social distancing restrictions now easing, suspects the strength in do-it-yourself work will not be repeated.

Elsewhere, Australian volumes are flat and Europe is down -16%. The company is guiding to first quarter US earnings margins of 22-27%. UBS retains a Buy rating and raises the target to $31 from $29.

Target price is $31.00 Current Price is $23.81 Difference: $7.19
If JHX meets the UBS target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $29.54, suggesting upside of 24.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 1.0

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

UBS rates KGN as Neutral (3) -

While the acquisition of Matt Blatt and the acceleration in online penetration is supportive, UBS remains cautious. As stores re-open and competitive offerings emerge, the broker expects the benefits for online business from the pandemic will partially reverse.

The broker suggests the market is already pricing in a structurally better outlook. While raising estimates for the long-term by 8-10%, UBS retains a Neutral rating. Target is raised to $8.50 from $6.30.

Target price is $8.50 Current Price is $8.86 Difference: minus $0.36 (current price is over target).
If KGN meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Ord Minnett rates LLC as Buy (1) -

Lendlease has re-capitalised by raising around $1bn, which has reduced gearing to 10-15%. Ord Minnett assesses the company faces a challenging 12 months but there is attractive upside for the share price for those willing to go the distance.

The broker assesses several issues need to be addressed in order to bring greater visibility to the outlook, including de-risking the exposure at Melbourne Metro, completing the sale of the engineering business and concluding the 50% sale of the development rights to One Sydney Harbour.

Buy rating maintained. Target is reduced to $14 from $21.

Target price is $14.00 Current Price is $11.44 Difference: $2.56
If LLC meets the Ord Minnett target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $14.49, suggesting upside of 26.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Morgans rates NAN as Downgrade to Hold from Add (3) -

Share price of Nanosonics has been relatively stable during this period of pandemic-generated volatility, observes Morgans.

The broker believes revenue will be uncertain till the first quarter of FY21 and has left forecast unchanged, having lowered it before by -2%.

The company’s technology platform will continue to be prized and the current offering - Trophon2 - to be expanded soon.

With the share price close to the broker’s target, Morgans downgrades its rating to Hold from Add with a target price of $6.92.

Target price is $6.92 Current Price is $6.92 Difference: $0
If NAN meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $6.24, suggesting downside of -9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Macquarie rates NIC as Outperform (1) -

Nickel Mines has exercised its option to increase its ownership of the Hengjaya and Ranger pig iron plants to 80% from 60%, six months earlier than expected, for US$120m, which will increase production to 36ktpa contained nickel, the broker notes.

Funding will be provided by a $230m rights issue at 50c. Dilution from the raising drops forecasts by -14% and the broker's target by -11%, to 80c from 90c. Outperform retained.

Target price is $0.80 Current Price is $0.56 Difference: $0.24
If NIC meets the Macquarie target it will return approximately 43% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Credit Suisse rates PGH as Outperform (1) -

Pact Group has identified sustainability as a strategic growth area, intending to exit contract manufacturing. The company has recently committed to an investment of $10m in a food-grade PET reprocessing facility.

Meanwhile, Infrastructure Victoria has projected that by 2030 some 540,000t of plastic will need to be reprocessed. Credit Suisse notes similar requirements may exist in other states but assessments have not been published.

This is a potential long-term growth opportunity for the company albeit, the broker suggests, not an easy one.

The company has provided no pandemic trading update and therefore Credit Suisse concludes that the current trading has not put it out of range of earnings guidance. Outperform rating and $2.50 target maintained.

Target price is $2.50 Current Price is $2.13 Difference: $0.37
If PGH meets the Credit Suisse target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $2.57, suggesting upside of 20.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Macquarie rates PPC as Outperform (1) -

Having reviewed its thesis for Peet & Co, the broke retains Outperform. While the near term is impeded by lower property sales and increased defaults and delays, the medium term outlook for residential is much stronger, the broker believes. Peet is a pure play on a residential recovery.

The broker expects the stock to revalue from its current PE and -40% discount to net tangible assets well ahead of an earnings recovery not expected until FY22. Forecasts are cut on the near term impact and target falls to $1.04 from $1.41.

Target price is $1.04 Current Price is $0.73 Difference: $0.31
If PPC meets the Macquarie target it will return approximately 42% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Citi rates RHC as Neutral (3) -

Ramsay Health Care has finalised a comprehensive agreement with a number of Australian states to make facilities available during the pandemic. Citi continues to assume agreements remain in place until the end of June.

The broker also anticipates that all elective surgery will resume in Australia by the end of June. The agreements across the states appear to be essentially earnings neutral.

Citi retains a Neutral rating and raises the target to $72 from $69. The main driver for the stock will be how quickly elective surgery volumes recover.

Target price is $72.00 Current Price is $67.91 Difference: $4.09
If RHC meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $64.63, suggesting downside of -4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Credit Suisse rates RHC as Outperform (1) -

Private health insurance statistics from APRA indicate industry benefits growth of 4.0% in the first quarter. Despite the shutdowns stemming from the pandemic commencing in late March, Credit Suisse assesses this has not materially affected private hospital volumes in the quarter.

However, the deferral of elective surgery in private hospitals did not begin until April 1. The broker assesses there could have even been a small pulling forward of demand as the economy headed towards a shutdown.

Meanwhile, memberships fell -20 basis points to 43.8% in March 2020 with the majority of exits in the younger age group. Outperform rating and $68.80 maintained.

Target price is $68.80 Current Price is $67.91 Difference: $0.89
If RHC meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $64.63, suggesting downside of -4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Macquarie rates SKO as Outperform (1) -

The broker has revisited its Serko forecasts to account for virus impact. Forecast earnings fall -180% and -244% in FY20-21, and target falls -23% to NZ$4.55.

Liquidity concerns have nonetheless eased and the company is well placed to recommence its northern hemisphere growth path, the broker suggests, as domestic travel resumes.

This will likely take longer than in A&NZ, but the broker believes the market is pricing in a -30% reduction in corporate travel compared to its oen -15% forecast. Outperform retained.

Current Price is $2.70. Target price not assessed.

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 1.0

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

Macquarie rates TNE as Neutral (3) -

TechnologyOne's first half earnings fell -10% short of the broker. SaaS recurring revenues grew 33% but that's down from a 45% pace in FY19. Given FY20 guidance implies a 70% second half skew, those revenues need to accelerate, the broker notes.

M&A would help growth in the UK, the broker suggests, and potentially in other markets, but the company's medium term targets imply significant upside risk to the broker's own forecasts.

A much stronger second half and FY21 is needed for the broker to lift from Neutral. Target falls to $9.50 from $9.75.

Target price is $9.50 Current Price is $9.83 Difference: minus $0.33 (current price is over target).
If TNE meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.30, suggesting downside of -15.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Morgans rates TNE as Hold (3) -

TechnologyOne’s first half was slightly weaker than Morgans expected, but still strong when seen against the backdrop of the current upheaval and performance of peers.

The company increased R&D investment by 10% and continues to improve the attractiveness of its software as a service (SAAS) product, reports the broker, noting growth of 22% in its SaaS customer base to 389 while SaaS recurring revenue grew 33% to $110m.

Morgans has lowered revenue forecasts, thereby reducing earnings estimates for FY20 and FY21 by -3.5% and -8%.

Hold rating maintained with target price increased to $9.16 from $8.26.

Target price is $9.16 Current Price is $9.83 Difference: minus $0.67 (current price is over target).
If TNE 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 $8.30, suggesting downside of -15.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Ord Minnett rates TNE as Lighten (4) -

The first half result revealed a generally resilient business, Ord Minnett suggests, albeit not immune to the impact of the pandemic.

Lower software-as-a-service recurring revenue is targeted for FY20, making the step up to $500m by FY24 looking increasingly aspirational.

The main bright spot for the broker in the first half was better cash flow. Ord Minnett retains a Lighten rating and $7.30 target.

Target price is $7.30 Current Price is $9.83 Difference: minus $2.53 (current price is over target).
If TNE meets the Ord Minnett target it will return approximately minus 26% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.30, suggesting downside of -15.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Credit Suisse rates TPM as Neutral (3) -

As part of the merger scheme booklet, TPG Telecom has reiterated guidance for FY20 operating earnings (EBITDA) in the range of $775-785m.

The broker estimates a special dividend of around $0.60 will be paid to shareholders prior to the merger taking place.

The expected synergies from the transaction and capital expenditure intentions were not quantified. Neutral rating and $7.80 target maintained.

Target price is $7.80 Current Price is $7.54 Difference: $0.26
If TPM meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $7.93, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

UBS rates TPM as Neutral (3) -

The Vodafone Australia merger scheme booklet has been released. TPG Telecom's stand-alone guidance is maintained. A special dividend is not quantified.

UBS assesses the apparent conditional re-financing of debt should be viewed in a positive way by the market and the new dividend policy appears to prioritise a measure somewhat closer to free cash flow, as it excludes spectrum amortisation.

Neutral and $8.40 target retained.

Target price is $8.40 Current Price is $7.54 Difference: $0.86
If TPM meets the UBS target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $7.93, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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