Australian Broker Call

Citi rates 29M as Neutral High Risk (3) -

Following 29Metals' FY23 result on February 23, Citi has concerns about the balance sheet and now allows for an $80m equity raise in the 1H of FY24.

The cash balance was $162m at the end of 2023, and the broker believes the new CEO will potentially seek additional funds, especially as both the Capricorn Copper and Golden Grove operations will consume free cash flow in 2024.

Citi has cut its target to 45c from 50c and retains a Neutral (High Risk) rating.

Target price is $0.45 Current Price is $0.38 Difference: $0.07
If 29M meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $0.41, suggesting upside of 8.8% (ex-dividends)

The company's fiscal year ends in December.

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

Macquarie rates ALQ as Outperform (1) -

With ALS Ltd set to report on its full year in May, Macquarie is already anticipating a top end of guidance range net profit result from the company. The broker expects ALS Ltd can deliver $324m in net profits, reflecting a 51% second half skew.

It is also expected the company will make a decision on Nuvisan in early 2024, with the company retaining a call option to acquire the remaining 51% interest, which Macquarie expects ALS Ltd could secure at a lower price than its original 49% stake.

The Outperform rating is retained and the target price increases to $14.25 from $13.60.

Target price is $14.25 Current Price is $12.90 Difference: $1.35
If ALQ meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $12.30, suggesting downside of -5.3% (ex-dividends)

The company's fiscal year ends in March.

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

Ord Minnett rates AMI as Speculative Buy (1) -

Ord Minnett's positive view on Aurelia Metals was reinforced by a recent site trip to Cobar showing the Federation development remains on track, while mining/processing at Peak is tracking according to expectations, despite adverse weather.

The broker expects Peak/Federation will be generating circa $11m of free cash flow in FY25 and around $140mpa over FY27-32.

The Speculative Buy rating is unchanged and the target rises to 22c from 21c.

Target price is $0.22 Current Price is $0.14 Difference: $0.075
If AMI meets the Ord Minnett target it will return approximately 52% (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

Citi rates ANZ as Neutral (3) -

Citi moderately lowers earnings forecasts for ANZ Bank after the annouced sale of its16.5% stake in Malaysian bank AMMB. ANZ has a remaining holding of 5.2%.

As the Australian Competition Tribunal has approved the ANZ/Suncorp Group ((SUN)) bank acquisition, Citi believes ANZ will begin buybacks starting in the 2H of FY24.

Target $26. Neutral.

Target price is $26.00 Current Price is $29.24 Difference: minus $3.24 (current price is over target).
If ANZ meets the Citi target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $27.38, suggesting downside of -6.5% (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) -

In the wake of the February reporting season for Australian banks, UBS highlights its order of preference within the sector.

ANZ Bank and Macquarie Group are ((MQG)) both rated Neutral by the broker, and the remainder of banks under coverage have Sell ratings. Overall, there is around -14% potential downside from current bank shares prices to UBS target prices.

For ANZ Bank, the analyst also incorporates into forecasts the Suncorp Group ((SUN)) bank acquisition.

The target for ANZ rises to $30 from $25. Neutral.

Target price is $30.00 Current Price is $29.24 Difference: $0.76
If ANZ meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $27.38, suggesting downside of -6.5% (ex-dividends)

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

Citi rates NAB as Sell (5) -

In the wake of the February reporting season for Australian banks, UBS highlights its order of preference within the sector.

ANZ Bank and Macquarie Group are both rated Neutral by the broker, and the remainder of banks under coverage have Sell ratings. Overall, there is around -14% potential downside from current bank shares prices to UBS target prices.

The National Australia Bank target rises to $28 from $26. Sell.

Target price is $28.00 Current Price is $34.03 Difference: minus $6.03 (current price is over target).
If NAB meets the Citi target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.37, suggesting downside of -13.1% (ex-dividends)

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 PGC as Buy (1) -

Paragon Care appears set to acquire the entirety of healthcare logistics provider CH2 Holdings, subject to shareholder approval which will be sought at the AGM in May, for a total value of $202m. 

CH2 is anticipated to deliver revenue of $2.97bn and earnings of $53.7m over the full year, and Bell Potter seems a number of synergies to be gained, including the fast-tracking of the company's products and capabilities into New Zealand and Asia.

The Buy rating is retained and the target price increases to 31 cents from 26 cents.

Target price is $0.31 Current Price is $0.26 Difference: $0.05
If PGC meets the Bell Potter target it will return approximately 19% (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

Morgans rates PIQ as Downgrade to Hold from Speculative Buy (3) -

Following a 50% share price rally so far in 2024 for Proteomics International Laboratories, Morgans downgrades its rating to Hold from Speculative Buy, despite remaing positive on the outlook.

The broker recently lowered its valuation to account for delays in forecast timelines to commercial launch of PromarkerD. Conservatively, the valuation only assumes commercial success in the US.

The $1.38 target is unchanged.

Target price is $1.38 Current Price is $1.33 Difference: $0.055
If PIQ meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Morgan Stanley rates SGF as Overweight (1) -

Given a lack of new vehicle supply over the past few years, Morgan Stanley believes an ongoing overhang for the SG Fleet share price has been earnings uncertainty when residual values (RV) normalise.

Thus, the biggest takeaway for the analysts from 1H results was the company's largest half of earnings on record, despite a -26% decine in net RV income. Even as used car prices become a headwind, the broker now believes SG Fleet can at least maintain earnings.

Such a conviction by Morgan Stanley earns SG Fleet a position among the broker's key small/mid cap ideas.

The $3.10 target and Overweight rating are maintained. Industry View: In-line.

Target price is $3.10 Current Price is $2.76 Difference: $0.34
If SGF meets the Morgan Stanley target it will return approximately 12% (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 SVR as Hold (3) -

Solvar's New Zealand subsidiary, Go Car Finance, has been served with legal proceedings by the New Zealand Commerce Comission in relation to 48 loans for which the company failed to meet its responsible lending obligations to borrowers. 

Bell Potter points out the Commission will seek to have outstanding amounts waived for these loans where vehicles have been repossessed, as well as pecuniary penalties.

At this point the broker finds the potential impact difficult to quantify, but does note even a good outcome doesn't offer much upside for shareholders. 

The Hold rating is retained and the target price decreases to 91 cents from $1.07.

Target price is $0.91 Current Price is $0.93 Difference: minus $0.02 (current price is over target).
If SVR meets the Bell Potter target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Macquarie rates TCL as Downgrade to Neutral from Outperform (3) -

A newly proposed toll model could leave Transurban Group in conflict with the government, says Macquarie, and could drive a potential need for legal remedies.

This new model was outlined in the Toll Review Interim Report, and, according to Macquarie, fails to ensure Transurban Group and other road investors are "kept whole in the long term."

While the broker points out history is on the side on the road investors, the review increases uncertainty over Transurban Group's value.

The rating is downgraded to Neutral from Outperform and the target price of $13.69 is retained.

Target price is $13.69 Current Price is $13.45 Difference: $0.24
If TCL meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $13.77, suggesting upside of 4.5% (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

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

Morgan Stanley believes proposed transition measures by the Interim NSW Independent Toll Review, released by the NSW government,  appropriately protects existing investments by Transurban Group.

The Review is proposing network-wide declining distance-based tolls, plus infrastructure charges, and peak/off-peak charges (especially for freight).

A new body, "State Tollco" would set tolls, run collections and customer service, and potentially, manage concessions and private roads, explains the broker.

Target $13.68. Equal Weight. Industry View: Cautious.

Target price is $13.68 Current Price is $13.45 Difference: $0.23
If TCL meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $13.77, suggesting upside of 4.5% (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

UBS rates WBC as Sell (5) -

In the wake of the February reporting season for Australian banks, UBS highlights its order of preference within the sector.

ANZ Bank and Macquarie Group are both rated Neutral by the broker, and the remainder of banks under coverage have Sell ratings. Overall, there is around -14% potential downside from current bank shares prices to UBS target prices.

The target for Westpac rises to $23 from $20. Sell.

Target price is $23.00 Current Price is $26.82 Difference: minus $3.82 (current price is over target).
If WBC 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 $23.92, suggesting downside of -11.2% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.1

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