Australian Broker Call

Morgans rates ADI as Add (1) -

APN Industria REIT recently reiterated guidance at its AGM.  FY21 funds from operations (FFO) and DPS are expected to be broadly in-line with FY20.

Management also noted cash collection so far in FY21 equated to around 99% of contracted rent (vs 98% in FY20).

Morgans sets the price target (an increase to $3 from $2.93) in-line with an adjusted valuation. This adjustment resulted from the impact on near-term earnings and distribution of an improved outlook/stabilisation regarding the Code of Conduct (good faith leasing principles).

The Add rating is unchanged.

Target price is $3.00 Current Price is $2.87 Difference: $0.13
If ADI meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Credit Suisse rates AFP as Outperform (1) -

AFT Pharmaceuticals' first-half operating income was NZ$2.4m, down -39% versus last year led by covid-19 impacted licensing income.

The company has maintained its FY21 operating income guidance ranging between NZ$14-$18m and has reiterated its intent to start paying dividends in FY22 subject to better performance in the second half.

Credit Suisse has downgraded its FY21-23 earnings forecasts by -3-9% to account for the slower launch profile of Maxigesic along with less licensing income expected in FY21.

Outperform rating is retained with a target price of NZ$6.50.

Current Price is $4.90. Target price not assessed.

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

UBS rates ALU as Neutral (3) -

Altium has reaffirmed FY21 guidance, in line with the broker's forecast. The first half remains heavily virus-impacted but there are some positive signs, and management confidence is increasing for the second half. Cloud adoption is up 40% since July.

The company's 365 cloud platform is the major driver of future value, the broker asserts, albeit hard to value. While the near term outlook remains challenging, the long term growth story remains intact as far as the broker is concerned. Neutral and $36 target retained.

Target price is $36.00 Current Price is $35.81 Difference: $0.19
If ALU meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $35.35, suggesting downside of -2.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.2

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

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

Morgans downgrades the rating for Atlas Arteria to Hold from Add on recent share price strength and foreign exchange rates. In addition, weaker traffic and CPI indications in France are considered negative factors for valuation.

The CPI affects forecasts as it feeds into calculations for any potential APRR (French motorway network) annual toll increase in February 2021.

The target price is decreased to $6.74 from $7.01.

Target price is $6.74 Current Price is $6.90 Difference: minus $0.16 (current price is over target).
If ALX meets the Morgans target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.96, suggesting upside of 3.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Morgan Stanley rates ANZ as Overweight (1) -

Morgan Stanley moves to a neutral stance from a negative stance on the major banks in mid-March as medium-term valuation support had emerged for the first time since 2012.

The broker believes balance sheets are in good shape and economic tail risks have been reduced by the fiscal and monetary policy response. However, some of that valuation support has now been realised as investors factor in recovery.

While dividends should rise in 2021, the analyst believes the earnings and return on equity (ROE) recovery will not emerge until 2022.

ANZ Bank is number two in the broker's major bank order of preference. The bank has a lower return business mix than peers and its revenue is likely to decline again in FY21.

However, the broker highlights an improved retail franchise performance, revenue diversification benefits and credible cost reduction. In addition, there is considered more comfort on the credit risk profile due to business mix and industry exposures.

The Overweight rating and target price of $21.90 are unchanged. Industry view is In-Line.

Target price is $21.90 Current Price is $22.45 Difference: minus $0.55 (current price is over target).
If ANZ 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 $22.24, suggesting downside of -0.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Morgan Stanley rates APE as Overweight (1) -

Morgan Stanley has issued a detailed report on Eagers Automotive, suggesting the company is looking to disrupt Australia's used car market. As a result the target price is increased to $16 from $10.

"Power to the consumer" and digitisation of used car retailing have allowed US peers to scale into two-sided vertical networks earning premium multiples, explains the broker.

Under the analysts bull-case scenario earnings could nearly triple. The risk-reward is considered compelling and the broker backs a management team that emerged from covid-19 with a better business on which to execute.

Overweight maintained. Industry view: In-Line.

Target price is $16.00 Current Price is $12.92 Difference: $3.08
If APE meets the Morgan Stanley target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $12.80, suggesting downside of -3.8% (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

Citi rates APT as Neutral (3) -

Citi takes a fresh look at Afterpay and questions whether the company should open up its network.

In the broker's view, the company could benefit from launching a 'Shop Anywhere' program as part of its loyalty program (‘Pulse’). From a regional perspective, it's considered the largest potential is in the US and UK.

A ‘Shop Anywhere’ offering that is limited to a curated list of merchants and is exclusively available to Afterpay's loyalty program members would boost the company’s GMV (underlying sales), explains the broker. 

The analyst considers this may be done while maintaining merchant relationships and more importantly, it would reduce leakage to competitors. At the same time, it's considered it may increase user engagement levels.

Citi upgrades earnings (EBITDA) forecasts for FY21-23 by 14% to 68%. This reflects 6% to 8% upgrades to GMV forecasts to reflect
higher purchase frequency levels in FY21, given recent merchant additions and first quarter performance.

The Neutral rating is maintained. The target price is increased to $97.75 from $92.5.

Target price is $97.75 Current Price is $97.89 Difference: minus $0.14 (current price is over target).
If APT meets the Citi target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $94.09, suggesting downside of -4.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Macquarie rates AVN as Outperform (1) -

Aventus Group provided FY21 funds from operations guidance of at least 18.5c, broadly in line with Macquarie's estimate. Given the uncertain environment, the fact the group provided guidance at all is a positive in itself, comments the broker.

Macquarie remains attracted to Aventus's tenant exposure to consumer durables and the fact that 100% of the group’s portfolio, including Victoria, remains open and trading.

Outperform retained. Target rises to $2.93 from $2.86.

Target price is $2.93 Current Price is $2.64 Difference: $0.29
If AVN meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $2.84, suggesting upside of 5.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates AVN as Add (1) -

The Aventus Group portfolio is now 100% open. Morgans highlights foot traffic is strong, rent collection is 90% and occupancy stable at 98.2%.

FY21 funds from operations (FFO) guidance is for at least 18.5 cents versus the broker’s expectation for 18.2 cents.

The analyst regards positively the announcement of a move back to a 90% payout ratio.

The Add rating is unchanged and the target lifted to $2.75 from $2.62.

Target price is $2.75 Current Price is $2.64 Difference: $0.11
If AVN meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $2.84, suggesting upside of 5.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

UBS rates AVN as Buy (1) -

Aventus Group has provided FY21 dividend guidance of 18.5c or more on a payout ratio of 90%, which is 8% above the broker's forecast. The broker had conservatively expected a 70% payout to provide for de-gearing.

Aventus will instead underwrite the first quarter dividend. Rent collection and foot traffic in July-October boith increased on March-June, the broker notes.

UBS retains Buy on the back of resilient assets, strong foot traffic, low rents and benefits from changes to household spending patterns (stay-at-home) and an improving housing market. Target rises to $2.84 from $2.50.

Target price is $2.84 Current Price is $2.64 Difference: $0.2
If AVN meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $2.84, suggesting upside of 5.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Citi rates BSL as Neutral (3) -

BlueScope Steel has raised first half earnings (EBIT) guidance for the third time since initial guidance on October 23, notes Citi.

The broker describes Australian steel products (ASP) as very strong, with the result expected to be substantially better than the first half FY20. Domestic construction and distribution segment demand is also considered strong, particularly for coated and painted products.

Contribution from export coke remains elevated, in the analyst's view, and is expected to be greater than the second half of FY20.

The broker raises earnings estimates for FY21 and FY22 by 36% and 28%, respectively.

The Neutral retained is unchanged and the target is increased to $18.50 from $16.

Target price is $18.50 Current Price is $17.72 Difference: $0.78
If BSL meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $18.93, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Credit Suisse rates BSL as Outperform (1) -

Credit Suisse is surprised at BlueScope Steel's 25% upgrade to its first-half operating income guidance to $475m. The upgrade was driven by strong performance across the business, a richer product mix and steel spread expansion.

The broker considers BlueScope Steel to be a high-quality cyclical with strong competitive positions in key markets, a diversified product and geographic base and increasing leverage to the key US market.

Outperform retained. Target rises to $19.50 from $16.95.

Target price is $19.50 Current Price is $17.72 Difference: $1.78
If BSL meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $18.93, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Macquarie rates BSL as Outperform (1) -

BlueScope Steel has upgraded its operating income guidance to around $475m from circa $380m, materially ahead of Macquarie's estimated $379.6m. The lift is driven by housing demand, both in renovation and new construction activity, explains the broker.

The broker continues to foresee strong earnings momentum. US HRC spreads continue to drive higher and are now well above the lows seen in June-July. 

Target rises to $20.25 from $19.10, Outperform retained.

Target price is $20.25 Current Price is $17.72 Difference: $2.53
If BSL meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $18.93, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

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

BlueScope Steel provided a trading update for the first half and raised guidance 25% above prior guidance. This is due to substantially higher earnings (EBIT) for Australian Steel Products (ASP), explains Morgan Stanley.

In the US, management noted more stable raw material costs and the broker highlights the performance appears to have improved in Asia.  Additionally, New Zealand is considered to be improving considerably.

The analyst states volumes and pricing are working in the company’s favour in virtually all markets, and warns caution in extrapolating this into the long term.

Equal-weight. Target is raised to $16.00 from $11.50. Industry view: Cautious.

Target price is $16.00 Current Price is $17.72 Difference: minus $1.72 (current price is over target).
If BSL meets the Morgan Stanley target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.93, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Ord Minnett rates BSL as Accumulate (2) -

BlueScope Steel's third update to its first-half earnings guidance shows operating earnings are now expected to be $475m.

Ord Minnett notes the guidance is $95m higher than the last update on October 23 led mainly by better Australian steel products (ASP) domestic volumes, a lift in North Star spreads and improved ASEAN building products earnings.

The broker believes BlueScope is set to deliver top-of-the-cycle earnings for FY21 with its free cash flow yield an impressive 9%.

Ord Minnett retains its Accumulate rating with the target rising to $21.20 from $19.20.

Target price is $21.20 Current Price is $17.72 Difference: $3.48
If BSL meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $18.93, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

UBS rates BSL as Neutral (3) -

For the second time in a month, BlueScope Steel has upgraded guidance, citing better than expected volumes across the board. Half of the forecast earnings increase comes from Australian Steel Products, mostly from a surprising increase in housing. Colorbond gone mad.

The broker sees several reasons why Colorbond demand can continue to increase post-covid, but notes the outlook for US steel remains weak. Target rises to $18.10 from $15.70, Neutral retained.

Target price is $18.10 Current Price is $17.72 Difference: $0.38
If BSL meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $18.93, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Morgan Stanley rates CBA as Underweight (5) -

Morgan Stanley moves to a neutral stance from a negative stance on the major banks in mid-March as medium-term valuation support had emerged for the first time since 2012.

The broker believes balance sheets are in good shape and economic tail risks have been reduced by the fiscal and monetary policy response. However, some of that valuation support has now been realised as investors factor in recovery.

While dividends should rise in 2021, the analyst believes the earnings and return on equity (ROE) recovery will not emerge until 2022.

The Commonwealth Bank is Morgan Stanley's least-preferred major bank given high investor expectations and rising pressure on retail bank profitability growth from lower rates and mortgage competition. 

Additionally, there is considered little prospect of near-term cost reduction. There is also considered potential credit quality deterioration and additional provisioning requirements. This is despite the bank's lower-than-peer risk profile, notes the analyst.

The Underweight rating and target price of $68.50 are unchanged.  Industry view: In-line.

Target price is $68.50 Current Price is $78.87 Difference: minus $10.37 (current price is over target).
If CBA meets the Morgan Stanley target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $68.59, suggesting downside of -14.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.4

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

Ord Minnett rates CHC as Accumulate (2) -

According to news reports, Charter Hall Group is the preferred party to acquire the Telstra Exchange on Pitt Street (Sydney) for $280m on a sale and leaseback for 10 years.

While Ord Minnett is of the view the deal highlights Charter Hall’s ability to raise and deploy capital,  the broker considers the site "awkward" which, in its view would be best redeveloped if Charter Hall were to consolidate the adjoining land.

The broker highlights a new building with a value of $600–$800m could be developed on the site, which would rise to $1-$1.5bn if the adjoining site is included.

Ord Minnett reaffirms its Accumulate recommendation with a target price of $16. 

Target price is $16.00 Current Price is $13.36 Difference: $2.64
If CHC meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $14.21, suggesting upside of 8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Ord Minnett rates CMW as Lighten (4) -

Cromwell Property Group’s board comprises two ARA-nominated directors and three other directors. Ord Minnett suggests directors nominated by ARA Asset Management will not need to stand for re-election at the forthcoming meeting.

The broker estimates a participation rate of at least 95% is needed for the remaining directors to be re-elected, which is not considered out of the question given the significance of the vote.

Ord Minnett retains its Lighten rating with a target of $0.77.

Target price is $0.77 Current Price is $1.00 Difference: minus $0.23 (current price is over target).
If CMW meets the Ord Minnett target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.93, suggesting downside of -3.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.3

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

Morgan Stanley rates CQR as Underweight (5) -

The recent positive news flow around the covid-19 vaccine, along with Melbourne re-opening, means Morgan Stanley is now more
bullish about the trajectory of rental receipts in a post-covid world.

The broker now believes rents may decline over time, rather than immediately. As such, Morgan Stanley upgrades earnings estimates for the 2021 calendar-year and FY22, across retail pure-plays.

The target price for Charter Hall Retail REIT is increased to $3.60 from $3.15.This reflects the anticipation that rental income will snap back to 95% of pre-covid levels by FY22.

Underweight maintained. Industry view is In-Line.

Target price is $3.60 Current Price is $3.88 Difference: minus $0.28 (current price is over target).
If CQR meets the Morgan Stanley target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.47, suggesting downside of -12.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

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

Morgan Stanley's new lower assumptions for plasma sees underlying EPS forecasts fall by -4% in FY21, -10% in FY22 and moving up 2% in FY23.

CSL's collections were down around -25% in both the June and September quarters. The broker's diligence reveals collections are still down around -15%, and an imminent return to pre-covid levels may be unlikely.

Once the US has "reopened", the analyst expects collections will then be easy to grow, and Ig availability will rise markedly from low levels – running the risk of oversupply.

The Equal-weight rating is unchanged and the target increased to $294 from $282. Industry view: In-line.

Target price is $294.00 Current Price is $310.27 Difference: minus $16.27 (current price is over target).
If CSL meets the Morgan Stanley target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $316.67, suggesting upside of 0.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

Ord Minnett rates EHE as Upgrade to Accumulate from Hold (2) -

Ord Minnett notes Washington H Soul Pattinson's ((SOL)) bid to acquire Regis Healthcare ((REG)) highlights the rising investor interest in the aged care sector. The broker believes investors should consider building a position in the sector now despite the continuing uncertainty.

Ord Minnett upgrades its rating on Estia Health to Accumulate from Hold. The target rises to $1.85 from $1.40.

Target price is $1.85 Current Price is $1.61 Difference: $0.24
If EHE meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $1.68, suggesting downside of -14.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

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

Shareholders have approved FlexiGroup's name change to Humm.

FlexiGroup's first-quarter update shows a material upgrade to its FY21 numbers led by improvements in the credit quality.

Macquarie has increased its first-half cash net profit estimate to $36.1m from $28.8m primarily led by reduced impairment expenses. The broker also expects receivables growth to return as repayment activity normalises.

Rating is upgraded to Outperform from Neutral. Target is raised to $1.40 from $1.33.

Target price is $1.40 Current Price is $1.13 Difference: $0.27
If FXL meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $1.42, suggesting upside of 13.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

UBS rates FXL as Buy (1) -

FlexiGroup threw a lot out there at its AGM, so the broker will spend more time reviewing what was a positive update before reassessing forecasts. Buy and $1.45 target retained.

First half profit guidance implies 58% upside to the broker's numbers. BNPL is performing well, with Kogan ((KGN)) a new sign-up.

Commercial is offsetting losses in Cards (travel exposure), while 30-day-plus arrears are reducing thanks to government stimulus measures.

Target price is $1.45 Current Price is $1.13 Difference: $0.32
If FXL meets the UBS target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $1.42, suggesting upside of 13.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

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

Credit Suisse notes via the Automotive Components and Accessories division (ACAD) deal, GUD Holdings has diversified into a growing component of the car park while managing to purchase this exposure at a lower multiple from a distressed vendor.

Furthermore, the company can add material value to the acquired business in terms of distribution and manufacturing know-how. Incorporating the acquisition drives about 4-5% earnings accretion across FY22-23, adds the broker.

Rating is upgraded to Outperform from Neutral with the target unchanged at $13.

Target price is $13.00 Current Price is $11.83 Difference: $1.17
If GUD meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $12.95, suggesting upside of 9.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Macquarie rates GUD as No Rating (-1) -

GUD Holdings will be funding its acquisition of Automotive Components and Accessories division (ACAD) from AMA Group via a capital raising. The company expects the acquisition to be mid-single-digit earnings accretive in FY21 before synergies kick in.

Macquarie believes the ACAD acquisition will diversify GUD’s customers and channels to include original equipment manufacturers, car dealerships, fleets and specialist 4WD resellers. 

Also, the acquisition allows GUD Holdings entry into the rapidly-growing 4WD accessories category, adds the broker.

Macquarie is research restricted on GUD Holdings and cannot provide a rating or target.

Current Price is $11.83. Target price not assessed.

Current consensus price target is $12.95, suggesting upside of 9.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Ord Minnett rates GUD as Hold (3) -

GUD Holdings announced the acquisition of AMA Group’s Automotive Components and Accessories division (ACAD) for $70m. ACAD is a manufacturer and distributor of light and heavy vehicle and 4WD accessories in Australia and New Zealand.

Management's rationale for the transaction includes broadening the business’s distribution channels and customer base, as well as diversifying the business away from internal combustion engines-related products.

The transaction is expected to be mid-single-digit earnings-accretive. In Ord Minnett’s view, the acquisition price is reasonable but the broker remains cautious on the near-term returns from the business.

Hold recommendation is maintained with a $12.00 target price.

Target price is $12.00 Current Price is $11.83 Difference: $0.17
If GUD meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $12.95, suggesting upside of 9.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Morgans rates IAG as Hold (3) -

The NSW court of appeal has found in favour of policyholders and against General Insurers, in relation to the test case examining business interruption (BI) policy exclusions that reference the Quarantine Act.

The Insurance Council of Australia (ICA) is currently considering whether there are grounds for an appeal against the ruling.

Insurance Australia Group is currently in a trading halt as the company is considering the impact of the judgement and a potential capital raising. While Morgans awaits further detail, a capital raising is considered hard to reconcile in the context of the company’s strong FY20 capital position (among some other factors).

Morgans leaves the earnings forecast and price target of $5.39 unchanged, pending further detail.

The Hold rating is maintained.

Target price is $5.39 Current Price is $5.46 Difference: minus $0.07 (current price is over target).
If IAG meets the Morgans target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.85, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Citi rates ING as Buy (1) -

Inghams Group recently noted poultry volume growth of 6% for the September 2020 quarter. Recent industry data show industry-wide growth of 1%, notes Citi.

The company's share gains may reflect some one-off problems in the prior period, explains the broker. However, the industry supply-demand balance is considered encouraging.

The analyst projects company earnings should benefit in calendar 2021 from more stable demand, lower feed costs and cost saving initiatives.

Citi is also increasingly positive on the pricing environment, with a rational market for both producers and supermarkets increasing the chance that a greater portion of feed cost savings are retained.

The Buy rating and target price of $3.70 are unchanged.

Target price is $3.70 Current Price is $3.22 Difference: $0.48
If ING meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $3.62, suggesting upside of 13.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

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

InvoCare announced Olivier Chretien will take on the position of CEO and MD in January.

Morgan Stanley thinks this may surprise the market given the promotion of Damien MacRae to Deputy CEO in June 2020, but investors may welcome a fresh perspective to the company's performance.

Equal-weight rating. Target is $10.30. In-Line industry view.

Target price is $10.30 Current Price is $11.41 Difference: minus $1.11 (current price is over target).
If IVC meets the Morgan Stanley target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.08, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in December.

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 JHC as Upgrade to Buy from Hold (1) -

Ord Minnett notes Washington H Soul Pattinson's ((SOL)) bid to acquire Regis Healthcare ((REG)) highlights the rising investor interest in the aged care sector. The broker believes investors should consider building a position in the sector now despite continuing uncertainty.

Ord Minnett upgrades its rating for Japara Healthcare to Buy from Hold. The target rises to $0.75 from $0.55.

Target price is $0.75 Current Price is $0.62 Difference: $0.13
If JHC meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $0.58, suggesting downside of -24.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgans rates KAR as Add (1) -

Morgans undertakes a review of Karoon Energy after the transformational Bauna acquisition.

In the broker’s view, the company has a solid prospect of a healthy share price performance even in the absence of a recovering oil price.

This is considered plausible as the company is de-risked in terms of deal completion and management plans. Additionally, there is no debt on the balance sheet and over ten years of 2P reserves, explains the analyst.

Another appeal of the company to Morgans is the earnings and valuation sensitivity to oil prices. The company is considered a high-margin conventional pure oil producer. 

The Add rating is unchanged and the target is decreased to $1.51 from $1.61.

Target price is $1.51 Current Price is $0.89 Difference: $0.62
If KAR meets the Morgans target it will return approximately 70% (excluding dividends, fees and charges).

Current consensus price target is $1.35, suggesting upside of 48.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates MIN as Outperform (1) -

Mineral Resources provided an overview of how the company plans to grow its iron-ore production capacity to over 90mtpa from the current 21mtpa.

Macquarie has adjusted its Kumina production scenario to incorporate Bungaroo South which is expected to lift Mineral Resources' peak iron-ore production up to 50mtpa by FY25.

Buoyant iron-ore prices continue to drive the upgrade momentum.

Macquarie maintains its Outperform rating with the target price rising to $35 from $32. 

Target price is $35.00 Current Price is $28.40 Difference: $6.6
If MIN meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $27.57, suggesting downside of -7.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Morgan Stanley rates NAB as Underweight (5) -

Morgan Stanley moves to a neutral stance from a negative stance on the major banks in mid-March as medium-term valuation support had emerged for the first time since 2012.

The broker believes balance sheets are in good shape and economic tail risks have been reduced by the fiscal and monetary policy response. However, some of that valuation support has now been realised as investors factor in recovery.

While dividends should rise in 2021, the analyst believes the earnings and return on equity (ROE) recovery will not emerge until 2022.

National Australia Bank is Morgan Stanley's number three in major bank order of preference. The strategy is considered clear, operating performance has been sound and the capital position is strong.

However, the broker believes the revenue recovery will lag expectations, given downside risk to margins and loan growth forecasts. Additionally, cost reduction potential is considered to have been delayed and loan losses will be higher than peers, given the bank's business mix and industry exposures.

The Underweight rating and target of $20.10 are unchanged. Industry view: In-line.

Target price is $20.10 Current Price is $22.70 Difference: minus $2.6 (current price is over target).
If NAB meets the Morgan Stanley target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.77, suggesting downside of -8.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Ord Minnett rates NCM as Accumulate (2) -

Ord Minnett has updated its development scenario for Newcrest Mining to include a 5mtpa cave which increases its Telfer production assumption by 12% while reducing costs by -7%.

Havieron and Red Chris remain two of the major gold development projects globally, comments the broker. While currently accounting for only 15% of the broker's valuation, both projects form a key part of the miner's future.

For now, the broker maintains its Accumulate recommendation with the target price rising to $34.90 from $34.70.

Target price is $34.90 Current Price is $28.31 Difference: $6.59
If NCM meets the Ord Minnett target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $34.34, suggesting upside of 21.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.5

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

Credit Suisse rates NEC as Outperform (1) -

Nine Entertainment's longer-term forecasts on its total TV growth and margins, presented at its investor day, were broadly consistent with Credit Suisse's estimates.

The broker expects revenues to grow from FY21 onwards and also expects a slight dip in margins in FY22 on account of the investment in Stan and lower FTA revenues followed by margin expansion thereafter.

The broker expects radio and metro media will remain well below management’s targets due to the exposure of these divisions to the ad market.

Credit Suisse retains a target of $2.75 with an Outperform rating.

Target price is $2.75 Current Price is $2.37 Difference: $0.38
If NEC meets the Credit Suisse target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $2.56, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates NEC as Outperform (1) -

Nine Entertainment's annual investor day provided more clarity on the company's strategy of becoming a digital business.

The group reaffirmed its medium-term targets of getting 60% of its operating income from its digital segment. Key drivers of revenue going into FY24 include more than 100% growth in 9Now revenues along with cost-outs in FTA and the metro media business.

The broker remains attracted to the high-quality business model with low financial leverage, high return on equity and cash conversion.

The Outperform rating is maintained with a target price of $2.90.

Target price is $2.90 Current Price is $2.37 Difference: $0.53
If NEC meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $2.56, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Citi rates NIC as Initiation of coverage with Buy (1) -

Citi initiates coverage of Nickel Mines with a Buy (high-risk) rating and $1.30 target price. The company is considered a unique pure-play on nickel with further growth optionality and value.

It is the largest listed pure-play nickel company globally, producing nickel pig iron (NPI) from its 80% stake in two RKEF processing plants in Indonesia.

The company operates in partnership with 18.6% shareholder, Chinese stainless steel producer, Tsingshan.

The proximity to high-grade nickel ore and integrated facilities at Morowali (to produce NPI) underpins operating costs of circa US$7500-7700/t, notes the broker. 

On a payable basis for FY21, the analyst estimates a healthy 40% margin. This is considered a long-life business with low capex intensity.

Target price is $1.30 Current Price is $0.93 Difference: $0.37
If NIC meets the Citi target it will return approximately 40% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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 NUF as Outperform (1) -

Nufarm's latest trading update on its performance during August and September shows better seasonal conditions and reduced costs. These factors lifted Nufarm's crop protection profitability in all regions, observes Credit Suisse.

Seed technologies were marginally weaker led by increased costs associated with commercialisation of Omega-3 and Carinata. Working capital continued to improve in October with substantial cash and undrawn funds available.

The company has changed its financial year from July 31 to September 30.

Outperform rating retained with the target falling to $4.88 from $5.07.

Target price is $4.88 Current Price is $4.12 Difference: $0.76
If NUF meets the Credit Suisse target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $4.91, suggesting upside of 15.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Ord Minnett rates NUF as Hold (3) -

Nufarm has changed its financial year-end from 31 July to 30 September. For August-September, Nufarm reported a decline in operating earnings of -$43.4m although still noting an improvement of 17.9% over last year. Dividends remain suspended.

At the divisional level, operating income for Australia and New Zealand, Asia, Europe and North America improved year-on-year while the seed technologies division came in lower.

Ord Minnett notes August and September are seasonally weak months for Nufarm and maintains its Hold recommendation with the target price lowered to $4.50 from $4.70.

Target price is $4.50 Current Price is $4.12 Difference: $0.38
If NUF meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $4.91, suggesting upside of 15.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

UBS rates NUF as Buy (1) -

Nufarm would normally have reported FY earnings yesterday but has shifted its FY end-date out to September, so yesterday only a trading update was provided. It was a positive update nonetheless.

Recent earnings momentum has continued, the broker notes, with revenue increasing 23% year on year. A&NZ and Europe were the standouts. The numbers increase the broker's confidence Europe has now passed an earnings trough.

The broker retains Buy, believing a -30% valuation discount to global agri peers is too steep. Target rises to $5.30 from $5.25.

Target price is $5.30 Current Price is $4.12 Difference: $1.18
If NUF meets the UBS target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $4.91, suggesting upside of 15.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Ord Minnett rates ORI as Hold (3) -

Upon initial glance, it appears Orica's FY21 didn't quite cut the mustard as far as Ord Minnett's assessment is concerned.

First the positive: Orica's reported FY20 underlying EBIT of $605m proved in line with the broker's $604m estimate and guidance of "slightly above $600m"

Profit (NPAT) of $299m was -6% short of Ord Minnett's forecast of $319m, with higher-than-expected interest expense to blame.

The final dividend of 16.5cps was equally short with market consensus and the broker expecting 21cps. Operating cash flow too turned out weaker than forecast.

Not helping matters, the company has indicated the near-term outlook is weak with 1H21 EBIT expected to be down year on year, reports the broker.

Target price is $17.00 Current Price is $16.97 Difference: $0.03
If ORI meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $18.21, suggesting upside of 11.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

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

With the recent share price rally, Citi now considers the Oil Search share price fair and downgrades the rating to Neutral from Buy.

The broker doesn't see any material catalysts in the near term and downgrades EPS forecasts largely on oil price revisions.

Guidance on capex of US$2.2-2.5bn pre-first oil is in-line with the analyst's US$2.3bn. The 80kbpd production guidance was a touch lower than the analyst's 90kbpd. 50% debt cover of capex is in-line.

Overall, Citi considers execution, funding and capital structure are key going forward.

The target price is increased to $4 from $3.80 on revisions to Alaska late-life production capacity.

Target price is $4.00 Current Price is $3.73 Difference: $0.27
If OSH meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.61, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in December.

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

Credit Suisse rates OSH as Downgrade to Underperform from Neutral (5) -

Credit Suisse downgrades its rating to Underperform from Neutral with the target rising to $3.10 from $3.06.

The downgrade is driven by the higher valuation of Alaska offset by the higher capex at the PNG LNG project.

The broker fears risks may be skewed to the downside for Oil Search versus peers. This is driven by the disappointing progress on the Alaska sell-down along with political winds in Papua New Guinea which have the potential to go either way. 

On a more positive note, the broker is pleased with the increased transparency and disclosures by management.

Target price is $3.10 Current Price is $3.73 Difference: minus $0.63 (current price is over target).
If OSH meets the Credit Suisse target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.61, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in December.

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

Macquarie rates OSH as Neutral (3) -

Macquarie notes the Alaska oil project's breakeven has been reduced to less than US$40/bbl from US$45/bbl. Papua New Guinea's LNG breakeven has also been reduced to circa US$6/mmbtu. 

The broker believes the difficulty in further lowering the level at which the Alaskan operation turns breakeven will likely make Oil Search a less attractive takeover target.

Macquarie maintains its Neutral rating with the target price rising to $3.50 from $3.30.

Target price is $3.50 Current Price is $3.73 Difference: minus $0.23 (current price is over target).
If OSH meets the Macquarie target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.61, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in December.

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 OSH as Equal-weight (3) -

At an investor day, Oil Search set long-term free cash flow (FCF) targets of US$1.5bn-2bn per annum (2028-2030) and production of over 50Mmboe. (Morgan Stanley forecasts had assumed 52mmboe in 2026, given higher Alaska production).

The company reconfirmed plans to farm down 15% prior to the final investment decision (FID) in late 2021.

Optimisation studies targeting lower initial development capital in Alaska appear to the broker to have been successful. 

Morgan Stanley remains Equal-weight with a target price of $3.30. Industry view: Cautious.

Target price is $3.30 Current Price is $3.73 Difference: minus $0.43 (current price is over target).
If OSH meets the Morgan Stanley target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.61, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in December.

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 OSH as Downgrade to Hold from Accumulate (3) -

Ord Minnett notes the most significant change announced in Oil Search's investor day pertains to Alaska with a 33% increase in the 2C (contingent) resource and a rephasing of development, which will include a -16% sell-down in Alaska for US$450m. 

While management had previously flagged synergies between the P’nyang and Papua development projects, the broker believes the JV partners will proceed with the 5mtpa Papua LNG project alone.

Noting the share price has already increased by 49% in this month, Ord Minnett downgrades its recommendation to Hold from Accumulate, while the target rises to $4.00 from $3.35. 

Target price is $4.00 Current Price is $3.73 Difference: $0.27
If OSH meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.61, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in December.

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 OSH as Downgrade to Neutral from Buy (3) -

Oil Search's investor day presentation has led UBS to upgrade its target to $3.70 from $3.60 due to higher forecast production in Alaska. But a more than 30% increase in share price since the first vaccine annoucement has the broker pulling back to Neutral from Buy.

Valuation now implies oil at US$58/bbl -- the highest across the broker's coverage -- and implies an excessive valuation for long-dated growth projects, UBS suggests. Oil Search is now the broker's least preferred O&G name.

Target price is $3.70 Current Price is $3.73 Difference: minus $0.03 (current price is over target).
If OSH meets the UBS target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.61, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in December.

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

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

Morgans reviews Panoramic Resources after the share price has rallied around 40% since September.

The company’s development activities to support a restart of production at Savannah North are on or ahead of schedule (and on budget), highlights the broker.

Management also said they are seeing improving terms and payability in the nickel offtake market.

Morgans raises the target price to $0.15 from $0.14 after some changes to foreign exchange assumptions.

The rating is decreased to Hold from Speculative Buy

Target price is $0.15 Current Price is $0.14 Difference: $0.01
If PAN meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.5

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

Morgans rates QBE as Add (1) -

The NSW court of appeal has found in favour of policyholders and against General Insurers, in relation to the test case examining business interruption (BI) policy exclusions that reference the Quarantine Act.

The Insurance Council of Australia (ICA) is currently considering whether there are grounds for an appeal against the ruling.

QBE Insurance Group has disclosed the net cost of any BI claims in Australia is likely to be limited to -$5m per occurrence, under the group’s catastrophe reinsurance cover.

Morgans leaves the earnings forecast and price target unchanged. This reflects the broker’s view that the impact of the test case is largely factored into current numbers.

The Add rating and $12.07 target price are unchanged.

Target price is $12.07 Current Price is $10.00 Difference: $2.07
If QBE meets the Morgans target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $11.40, suggesting upside of 14.6% (ex-dividends)

The company's fiscal year ends in December.

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: 0.6

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

Macquarie rates REG as Upgrade to Neutral from Underperform (3) -

Washington H. Soul Pattinson ((SOL)) and its consortium partner, Ashburn have submitted a non-binding proposal to acquire Regis Healthcare for $1.85 per share via a scheme of arrangement. Ashburn controls 27.2% of Regis Healthcare's shares on issue.

Macquarie notes the offer price is at a 25% premium to the closing price of Regis Healthcare's shares on November 19, equating to an enterprise value of $773m. The broker considers the offer price attractive.

Rating is upgraded to Neutral from Underperform with the target price rising to $1.85 from $1.1.

Target price is $1.85 Current Price is $1.48 Difference: $0.37
If REG meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $1.57, suggesting downside of -14.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Morgans rates REG as Hold (3) -

Regis Healthcare has received a non-binding bid at $1.85 from Washington H Soul Pattinson & Company ((SOL)) and the current co-founder.

The proposal represents a 25% premium to the closing price and Morgans believes the bid is reasonable.

There are two alternative forms of consideration to Regis Healthcare shareholders, being full cash consideration or a scrip alternative in a newly incorporated company. This latter alternative allows shareholders to retain an exposure via a privately operated business.

Morgans makes no changes to forecasts. The broker highlights average occupancy across the 65 residential aged care homes was 87.9% for the first quarter.

The Hold rating is maintained. The target price is moved to the proposed bid price of $1.85 from $1.43.

Target price is $1.85 Current Price is $1.48 Difference: $0.37
If REG meets the Morgans target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $1.57, suggesting downside of -14.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

UBS rates REG as Neutral (3) -

UBS reports the news Regis Healthcare has received a $1.85 offer from a conosrtium including WH Soul Pattinson ((SOL)), representing a 25% premium to the last trading price. The offer could be taken up either as scrip or cash.

The broker has not yet adjusted its $1.36 target and retains Neutral.

Target price is $1.36 Current Price is $1.48 Difference: minus $0.12 (current price is over target).
If REG meets the UBS target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.57, suggesting downside of -14.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Morgan Stanley rates SCG as Overweight (1) -

The recent positive news flow around the covid vaccine, along with Melbourne re-opening, means Morgan Stanley is now more
bullish about the trajectory of rental receipts in a post-covid world.

The broker now believes rents will decline over time, rather than immediately. As such, Morgan Stanley upgrades earnings estimates across retail pure-plays for FY22 and the 2021 calendar-year.

The revised forecast for Scentre Group assumes the group can deliver a circa 5.7% 2021 DPS yield, assuming a 70%-75% payout
ratio.

Overweight rating. Target is increased to $3.15 from $2.65. Industry view: In-line.

Target price is $3.15 Current Price is $2.78 Difference: $0.37
If SCG meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $2.49, suggesting downside of -10.4% (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

Credit Suisse rates SCP as Neutral (3) -

Credit Suisse is of the view Shopping Centres Australasia may continue to appeal to REIT-relative investors.

Despite the recent positive news about a covid vaccine, the broker thinks there are earnings challenges ahead for many REITs except for Shopping Centres Australasia.

The broker believes Shopping Centres Australasia's exposure to non-discretionary anchor tenants provides a higher degree of earnings predictability and offers an attractive forecast dividend yield of circa 5%.

Neutral with the target rising to $2.57 from $2.31.

Target price is $2.57 Current Price is $2.50 Difference: $0.07
If SCP meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $2.43, suggesting downside of -4.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Macquarie rates SCP as Outperform (1) -

Shopping Centres Australasia acquired Auburn Central Shopping Centre from Elanor Retail Property Fund ((ERF)) for $129.5m, implying a 4.9% premium to the fund's book value of $123.5m.

Macquarie estimates the acquisition to be circa 3.2% accretive to the funds from operations on an annualised basis. Noting there is more capital to deploy, the broker expects more upgrades. 

Macquarie reaffirms its Outperform rating with the target price rising to $2.63 from $2.55.

Target price is $2.63 Current Price is $2.50 Difference: $0.13
If SCP meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $2.43, suggesting downside of -4.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgan Stanley rates SCP as Overweight (1) -

The recent positive news flow around the covid vaccine, along with Melbourne re-opening, means Morgan Stanley is now more
bullish about the trajectory of rental receipts in a post-covid world.

The broker now believes rents will decline over time, rather than immediately. As such, Morgan Stanley upgrades earnings estimates across retail pure-plays for FY22 and the 2021 calendar-year.

Shopping Centres Australasia Property Group is Morgan Stanley's preferred exposure amongst smaller malls.

The price target has been lifted to $2.69 from $2.60, reflecting the anticipation that rental income will snap back to 95% of
pre-covid by FY22.

This stock is also offering an attractive 6.7% yield on the broker's FY22 forecasts, which is considered quite secure given the more steady nature of the assets.

The broker maintains an Overweight rating. In-Line industry view.

Target price is $2.69 Current Price is $2.50 Difference: $0.19
If SCP meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $2.43, suggesting downside of -4.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Credit Suisse rates SEK as Outperform (1) -

Seek’s latest update guides to a higher than FY20 revenue of circa $1.6bn with an operating income of circa $400m.

The broker believes the guidance reflects better macro conditions, especially in Australia, New Zealand and China and has revised its forecasts upwards, slightly ahead of the guidance.

Credit Suisse retains its Outperform rating with the target price rising to $28.50 from $23.10.

Target price is $28.50 Current Price is $25.43 Difference: $3.07
If SEK meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $23.67, suggesting downside of -7.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgans rates SEK as Hold (3) -

Seek has upgraded the ‘indicative scenario guidance’ previously provided at the FY20 results release.

Given the listings data Morgans tracks, the revenue upgrade was not unexpected. The incremental margin leverage has surprised on the upside versus the broker’s forecasts.

The analyst highlights Seek will use any additional revenue above prior expectations to further invest for the long term.

Morgans materially upgrades the valuation and price target.

The Hold rating is is unchanged and the target price is increased to $23.09 from $17.90.

Target price is $23.09 Current Price is $25.43 Difference: minus $2.34 (current price is over target).
If SEK meets the Morgans target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $23.67, suggesting downside of -7.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Ord Minnett rates SEK as Hold (3) -

Seek's October year-to-date revenue was well above expectations with the Australia and New Zealand (ANZ) region, online education services (OES) and Zhaopin businesses doing better than assumed.

The company updated its FY21 guidance at its AGM. Ord Minnett notes the updated guidance points to revenue of $1.60bn versus $1.47bn earlier while operating earnings are now expected to be $402m versus $325m previously.

Ord Minnett maintains its Hold recommendation with the target rising to $23.50 from $20.15.

Target price is $23.50 Current Price is $25.43 Difference: minus $1.93 (current price is over target).
If SEK meets the Ord Minnett target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $23.67, suggesting downside of -7.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

UBS rates SEK as Downgrade to Neutral from Buy (3) -

Seek has upgraded FY21 revenue guidance given all businesses are performing better than was predicted back at the August result. UBS believes guidance may be conservative given current listings momentum.

That said, the broker is wary of such momentum reflecting a pull-forward of a return to pre-covid volumes, suggesting it may not be sustainable. Upgraded forecast earnings lead to a target increase to $26 from $22 but UBS pulls back to Neutral from Buy.

Target price is $26.00 Current Price is $25.43 Difference: $0.57
If SEK meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $23.67, suggesting downside of -7.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Macquarie rates SKI as Outperform (1) -

Settlement of Spark Infrastructure Group's tax dispute is a positive, comments Macquarie. The win provides circa $57m of additional cash flow.

NSW's electricity roadmap is a mixed bag for the group with Boman solar farm's revenue outlook compromised.

Expecting higher dividends, Macquarie maintains its Outperform rating with the target price falling to $2.38 from $2.42.

Target price is $2.38 Current Price is $2.06 Difference: $0.32
If SKI meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $2.30, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in December.

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 SUN as Add (1) -

The NSW court of appeal has found in favour of policyholders and against General Insurers, in relation to the test case examining business interruption (BI) policy exclusions that reference the Quarantine Act.

The Insurance Council of Australia (ICA) is currently considering whether there are grounds for an appeal against the ruling.

The recently announced increase in Suncorp Group’s BI provision will cover this outcome, explains Morgans. Any earnings impact is considered to be relatively immaterial given the group’s reinsurance covers.

Morgans leaves the earnings forecast and price target unchanged. This reflects the broker’s view that the impact of the test case is largely factored into current numbers.

The Add rating and target price of $10.20 are unchanged.

Target price is $10.20 Current Price is $9.43 Difference: $0.77
If SUN meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $10.64, suggesting upside of 9.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Macquarie rates SVW as Outperform (1) -

Seven Group's update shows industrials seem to be doing well despite some headwinds.

WesTrac's October year to date revenue was up 11% versus last year. The strength in Western Australia was slightly offset by subdued coal activity in NSW.

Year to date revenue for Coates fell -7% versus last year and the broker notes the business is experiencing softness in construction although infrastructure seems to be holding up well.

Macquarie expects operating income for both WesTrac and Coates to show single-digit growth. The broker thinks Seven Group provides quality exposure to resources and infrastructure and expects strong tailwinds going into FY22.

Outperform retained, target rises to $25 from $21.10.

Target price is $25.00 Current Price is $22.33 Difference: $2.67
If SVW meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $23.10, suggesting upside of 2.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Morgan Stanley rates VCX as Underweight (5) -

The recent positive news flow around the covid vaccine, along with Melbourne re-opening, means Morgan Stanley is now more
bullish about the trajectory of rental receipts in a post-covid world.

Whilst rent may still decline, the broker believes this will happen over time, rather than immediately. As such, Morgan Stanley upgrades  earnings estimates for FY22/2021 calendar-year across retail pure-plays.

Morgan Stanley retains an Underweight rating for Vicinity Centres as there remains several issues for the company to  confront. These include CBDs may take longer to recover and additional capex requirements at some key centres.

Target is increased to $1.57 from $1.25. Industry view: In-line.

Target price is $1.57 Current Price is $1.68 Difference: minus $0.11 (current price is over target).
If VCX meets the Morgan Stanley target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.53, suggesting downside of -8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Credit Suisse rates VOC as Neutral (3) -

Vocus Group will be going for an IPO of Vocus New Zealand by the end of FY21,  intended to raise capital to invest into the core Vocus Network Services (VNS) business.

The broker recalls the last time Vocus tried to pursue a sale of its New Zealand division in 2018, the process did not lead to offers acceptable to the company.

Credit Suisse values Vocus New Zealand at $416m or $0.66 per share. The broker suspects Vocus will try to benchmark the business against fibre operators globally, leading the company to value the business at circa $660m or $1.05 per share, about 40c more than the broker's valuation for the business.

Neutral maintained with a target price of $3.40.

Target price is $3.40 Current Price is $4.37 Difference: minus $0.97 (current price is over target).
If VOC meets the Credit Suisse target it will return approximately minus 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.74, suggesting downside of -12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

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

Vocus Group's decision to progress with the sale of its New Zealand franchise and prioritise investment into Australian fibre and network solutions supports Ord Minnett's investment case.

At its AGM. the group re-affirmed its FY21 operating income guidance. Management reiterates that Vocus networks is in the growth mode, driven by contract wins and rising utilisation on the Australia-Singapore cable.

Looking at the recent share price strength, Ord Minnett reduces its rating to Hold from Buy. The target rises to $4.50 from $3.74.

Target price is $4.50 Current Price is $4.37 Difference: $0.13
If VOC meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $3.74, suggesting downside of -12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

UBS rates VOC as Downgrade to Neutral from Buy (3) -

The market had been discounting its valuation of Vocus Group, UBS suggests, based on pessimism over the company's ability to deliver on earnings forecasts and on under-valuation of its portfolio of assets. The August result and contract wins have countered the first point.

Yesterday Vocus announced its intention to IPO its NZ business to bolster the balance sheet and reinstate dividends. Tick box two. The broker has increased its target price to $4.40 from $3.60 but with the market already there, downgrades to Neutral from Buy.

Target price is $4.40 Current Price is $4.37 Difference: $0.03
If VOC meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.74, suggesting downside of -12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Morgan Stanley rates WBC as Overweight (1) -

Morgan Stanley moves to a neutral stance from a negative stance on the major banks in mid-March as medium-term valuation support had emerged for the first time since 2012.

The broker believes balance sheets are in good shape and economic tail risks have been reduced by the fiscal and monetary policy response. However, some of that valuation support has now been realised as investors factor in recovery.

While dividends should rise in 2021, the analyst believes the earnings and return on equity (ROE) recovery will not emerge until 2022.

Westpac Bank is Morgan Stanley's preferred major bank. The retail bank profitability is considered under threat, franchise performance has been weak and a turnaround is likely to take time.

However, the broker believes the mortgage market share loss will moderate and management's approach to costs is set to change. Additionally, non-core asset sales are likely, provisioning is sound and the dividend could triple next year.

The Overweight rating and target of $20.40 are unchanged. Industry view: In-line.

Target price is $20.40 Current Price is $19.90 Difference: $0.5
If WBC meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $20.37, suggesting upside of 2.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Citi rates Z1P as Sell (5) -

Citi expects Zip Co to deliver strong growth in the near term, driven by increasing investment in the US and UK. Additionally, there is considered to be increasing merchant and consumer adoption of BNPL.

The broker sees downside risks to medium-term growth forecasts and margins from increasing competition.

The Sell rating and target price of $6.55 are unchanged.

Target price is $6.55 Current Price is $6.07 Difference: $0.48
If Z1P meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $6.69, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.3

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