Australian Broker Call

Macquarie rates AGL as Neutral (3) -

Macquarie anticipates lower base load pricing across NSW and Victoria when the Default Market Offer (DMO) and Victorian Default Offer (VDO) draft decisions by the Australian Energy Regulator (AER) are handed down in coming days.

At a minimum, this outcome will hurt the retail base load that AGL Energy sells to itself, suggests the analyst, though better load profiling will lift the average price and provide an offset.

Upside risk to Macquarie's expectation relates to how much hedging beyond the company's own retail base is already in place at materially higher prices.

The Neutral rating and $9.60 target are unchanged.

Target price is $9.60 Current Price is $8.68 Difference: $0.92
If AGL meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $10.71, suggesting upside of 24.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Macquarie rates AMI as Outperform (1) -

The analyst at Macquarie has just visited the Federation development project, the Peak South underground mine and the Peak mill. It's felt Aurelia Metals is turning a corner with Federation development fully funded and operational improvements at Peak.

The visit also highlighted to the broker strong exploration upside potential, including Nymagee and Great Cobar.

The analysts also notes the company has total pro-forma liquidity of $163m.

The Outperform rating and 22c target are retained.

Target price is $0.22 Current Price is $0.14 Difference: $0.08
If AMI meets the Macquarie target it will return approximately 57% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Morgan Stanley rates ANZ as Overweight (1) -

Having sold a 16.5% stake in Malaysia's AmBank for net proceeds of around $672m, ANZ Bank is left with a 5.2% holding.

While the impact on 1H profit will be immaterial, Morgan Stanley notes the transaction will add around 16bps to the bank's CET1 ratio.

The broker considers the deal an incremental positive for ANZ, given AmBank is a non-core holding. It's also felt the odds of an $1-1.5bn buyback being announced at 1H results in May have now increased.

The Overweight rating and target price of $27.70 are retained. Industry view: In-Line.

Target price is $27.70 Current Price is $29.02 Difference: minus $1.32 (current price is over target).
If ANZ 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 $26.55, suggesting downside of -9.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

UBS rates ANZ as Neutral (3) -

While ANZ Bank will receive $665m from the selldown of its stake in AmBank Holding Berhad Malaysia to 5.2% from 21.7%, UBS does not expect a material impact on ANZ's profit. 

The broker considers the deal a good one, and in line with the bank's broader strategy to simplify the group's non-Australia, non-Institutional banking investments/presence.

Neutral and $25 target retained.

Target price is $25.00 Current Price is $29.02 Difference: minus $4.02 (current price is over target).
If ANZ meets the UBS target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $26.55, suggesting downside of -9.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

UBS rates AX1 as Upgrade to Neutral from Sell (3) -

Following a review of the outlook for Accent Group, UBS has become more upbeat around both revenue growth and earnings (EBIT) margins.

The broker's rating is upgraded to Neutral from Sell and the target increased to $2.05 from $1.95.

Stronger revenue growth should arise from more stores, higher like-for-like sales growth, while earnings margins should lift due to a lower ratio for cost-of-doing-business (CODB)/sales, explains the analyst.

Target price is $2.05 Current Price is $1.92 Difference: $0.135
If AX1 meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $2.26, suggesting upside of 14.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

UBS rates BGA as Neutral (3) -

Following a review of 1H results for Bega Cheese (back on February 22), UBS was most impressed by the earnings margin improvement for the Branded segment to 6.5% from 3.1% in the previous corresponding period.

The broker explains the majority of the margin uptick resulted from lagged price increases, as well as cost recuctions from the removal of duplication. UBS forecasts a 6.9% margin for the 2H.

Challenges persist in the Bulk segment, notes the analyst, due to the substantial disconnect between end-market dairy commodity prices and domestic milk input prices.

The Neutral rating is maintained and the target increased to $4.10 from $3.50.

Target price is $4.10 Current Price is $3.94 Difference: $0.16
If BGA meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.29, suggesting upside of 9.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Bell Potter rates CU6 as Speculative Buy (1) -

Clarity Pharmaceuticals has released more detail on the COBRA study, which is seeking to determine if the drug 64Cu-SAR-bisPSMA is more sensitive to early stage Biochemical Recurrence (BCR) relative to the standard of care imaging.

BCR in prostate cancer occurs when prostate cancer lesions grow following initial definitive therapy to surgically remove the prostate gland.

Bell Potter explains initial data show the product is safe and effective in detecting lesions in patients with BCR who were negative or equivocal in system on a chip (SOC) imaging.

The broker suggests 64Cu-SAR-bisPSMA appears to have a clinical advantage over currently marketed PSMA targeted imaging agents. The ability to detect earlier stage disease is highly significant, in the analyst's view.

The target rises to $3.90 from $3.00. The Speculative Buy rating is unchanged.

Final data from COBRA will be released mid-2024.

Target price is $3.90 Current Price is $2.85 Difference: $1.05
If CU6 meets the Bell Potter target it will return approximately 37% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Bell Potter rates SMI as Speculative Buy (1) -

Bell Potter updates its valuation for the Bendigo-Ophir Project on the South Island in New Zealand, owned by Santana Minerals, following the release of an Initial Mining Assessment (IMA) report.

The report indicates a combined open pit and underground mining inventory (of 18.6mt at 2.7g/t gold) containing 1,630koz of gold , which compares to Bell Potter's prior forecast for 1,260koz.

The report also forecasts a total cash operating surplus of $3.0bn (pre-tax, pre-capital costs), from average operating cash costs of $1096/oz (real).

Based on this operating forecast, Santana Minerals announced it would commence a pre-feasibility study (PFS) for the project.

The Speculative Buy rating is retained and the target rises to $1.90 from $1.70.

Target price is $1.90 Current Price is $1.30 Difference: $0.6
If SMI meets the Bell Potter target it will return approximately 46% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Macquarie rates VEA as Outperform (1) -

Macquarie analysts have updated their assumptions and modeling following a visit to OTR's Pretson site as well as Viva Energy's Coles Express site at Edmonson Park.

Given FIRB review, deal completion has been pushed out by an additional month. Plus the broker now also assumes store conversions will happen more slowly.

The EPS estimate for FY24 has lost -5%, but FY25 gains 4% on higher fules margin projection. Target lifts by 4% to $4.70. Outperform.

Target price is $4.70 Current Price is $3.56 Difference: $1.14
If VEA meets the Macquarie target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $3.79, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Macquarie rates VNT as Outperform (1) -

Following December half results, Macquarie observes margins are broadly increasing across its research coverage of Contractors, and expects further accretion in the 2H of the financial year. It's felt labour availability is starting to improve.

The broker raises its target for Outperform-rated Ventia Services to $4.00 from $3.75 after applying a lesser discount to the valuation of global peers. The company has a strong telco outlook in particular, notes the analyst.

Macquarie also has Outperform ratings for Worley ((WOR)), Monadelphous Group ((MND)), Service Stream ((SSM)) and Macmahon ((MAH)).

Target price is $4.00 Current Price is $3.83 Difference: $0.17
If VNT meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.10, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

UBS rates ZIP as Upgrade to Buy from Neutral (1) -

UBS upgrades its rating for Zip Co to Buy from Neutral and raises its target materially to $1.43 from 36c. First half results last week revealed stronger-than-expected cash earnings (EBTDA), driven by improving gross profit margins, explains the analyst.

The results also illustrated to the broker the benefits from recent cost-out and strong momentum in the US. It's noted US BNPL penetration is less than 2% of total payments, compared to 13-15% in Australia, suggesting significant room for growth.

In a surprise for UBS, the company added 100,000 net new active customers in the US (in H1), reversing declining customer trends in the previous two years.

Target price is $1.43 Current Price is $1.17 Difference: $0.26
If ZIP meets the UBS target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $1.10, suggesting downside of -13.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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