Australian Broker Call

UBS rates ABC as Neutral (3) -

UBS reviews the impact of housing construction trends and property valuations upon the Australian Building Materials sector.

The broker holds a baseline scenario of a 165,000 minimum dwelling consents in 2023, citing policy support, and expects some stimulus; a recovery in immigration; and cash-rate cuts in the 2023 December half (about -50 basis points) to also prove supportive.

This compares with 175,000 in 2022, and the broker forecasts a recovery to 205,000 in 2024.

At its nadir, UBS forecasts a -13% to -15% fall in property prices (a real fall post CPI of -20%) from their peak and a -25% drop in housing sales.

EPS forecasts rise 2% in FY23 for Adbri; and fall -3.7% in FY24.

Neutral rating retained. Target price eases to $2.00 from $2.43, UBS doubting the company can outpace earnings headwinds.

Target price is $2.00 Current Price is $1.84 Difference: $0.16
If ABC meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.29, suggesting upside of 58.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Ord Minnett rates AIS as Buy (1) -

Following a three-day site visit to Aeris Resources's Cracow, Tritton and Mt Colin mines, Ord Minnett spies medium-term upside, but says execution will be critical.

The broker expects FY23 will prove a transition year for the company and expects improved grades in FY24 and FY25 with new ore optionality from Constellation, Supergene and Budgerygar, which should feed the new Jamieson mill cell. Add to that strong greenfield exploration opportunities, and the broker is satisfied.

Mt Colin impressed Ord Minnett with its neat, low-overhead operations and strong cash flow, which will be used to fund Tritton, and says the model is easily replicable at other strategic deposits.

Cracow was also running smoothly and boasts exploration options but the broker says it's a race against time to drill out the Golden Plateau.

The broker notes the company is trading well shy of its intrinsic value and expects copper market setbacks are only temporary and expects in time it should trade in line with the copper price.

Buy rating and 70c target price retained.

Target price is $0.70 Current Price is $0.42 Difference: $0.28
If AIS meets the Ord Minnett target it will return approximately 67% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

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

After assessing Bank of Queensland's ((BOQ)) result, Macquarie upgrades the major banks' FY23 earnings by 5%-10% as a rising cash rate improves deposit pricing, just six weeks after a 3%-5% upgrade.

The broker retains its belief that margin growth will be limited in the long term as competition for deposits returns. 

All up, Macquarie expects short-term windfalls will be reinvested and that banks will also seek to tighten their front-to-back book gaps through retention pricing.

National Australia Bank is the broker's top pick.

ANZ Bank is downgraded to Neutral from Outperform. Target price rises to $25.50 from $24.

Target price is $25.50 Current Price is $25.36 Difference: $0.14
If ANZ meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $27.01, suggesting upside of 6.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Morgans rates BBN as Add (1) -

Baby Bunting shares have fallen nearly -30% since a 1Q trading update which disappointed on gross margins and Morgans now sees a buying opportunity. It's felt some elements of the -230bpt margin decline will lessen as FY23 plays out.

Those elements that could potentially improve include international freight rates, loyalty program redemptions and the domestic levy surcharge, explains the analyst. Less positively, renewed currency hedging may impact margins and competitive pressures are rising.

The broker maintains an Add rating, and still sees compelling opportunities to grow market share via store rollout, entry into New Zealand and the launch of an online marketplace. The target falls to $3.60 from $5.00.

Target price is $3.60 Current Price is $2.68 Difference: $0.92
If BBN meets the Morgans target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $4.24, suggesting upside of 56.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

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

UBS reviews the impact of housing construction trends and property valuations upon the Australian Building Materials sector.

The broker holds a baseline scenario of a 165,000 minimum dwelling consents in 2023, citing policy support, and expects some stimulus; a recovery in immigration; and cash-rate cuts in the 2023 December half (about 50 basis points) to also prove supportive. This compares with 175,000 in 2022, and the broker forecasts a recovery to 205,000 in 2024.

At its nadir, UBS forecasts a -13% to -15% fall in property prices (a real fall post CPI of -20%) from their peak and a -25% drop in housing sales.

UBS raises its property valuation for Brickworks and EPS forecasts rise 30.8% in FY23 and 117.5% in FY24. Rating rises to Buy from Neutral. Target price rises to $25.30 from $23.

Target price is $25.30 Current Price is $21.71 Difference: $3.59
If BKW meets the UBS target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $26.00, suggesting upside of 16.8% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

UBS rates BLD as Neutral (3) -

UBS reviews the impact of housing construction trends and property valuations upon the Australian Building Materials sector.

The broker holds a baseline scenario of a 165,000 minimum dwelling consents in 2023, citing policy support, and expects some stimulus; a recovery in immigration; and cash-rate cuts in the 2023 December half (about 50 basis points) to also prove supportive. This compares with 175,000 in 2022, and the broker forecasts a recovery to 205,000 in 2024.

At its nadir, UBS forecasts a -13% to -15% fall in property prices (a real fall post CPI of -20%) from their peak and a -25% drop in housing sales.

UBS doubts Boral will benefit from these trends, noting earnings challenges are too strong. EPS forecasts fall -3.5% in FY23 and -3.7% in FY24.

Boral's Neutral rating is retained. Target price falls to $2.95 from $3.25.

Target price is $2.95 Current Price is $2.72 Difference: $0.23
If BLD meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $2.83, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.5

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

Macquarie rates CBA as Neutral (3) -

After assessing the Bank of Queensland ((BOQ)) result, Macquarie upgrades bank FY23 earnings by 5%-10% across the board as a rising cash rate improves deposit pricing, just six weeks after a 3% to 5% upgrade.

The broker retains its belief that margin growth will be limited in the long term as competition for deposits returns. 

All up, Macquarie expects short-term windfalls will be reinvested and that banks will also seek to tighten their front-to-back book gaps through retention pricing.

The broker prefers National Australia Bank given its recent outperformance over ANZ, but CommBank takes second spot.

Neutral target price retained for CommBank. Target price rises to $95 from $90.50

Target price is $95.00 Current Price is $98.90 Difference: minus $3.9 (current price is over target).
If CBA meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $91.11, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.4

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

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

UBS reviews the impact of housing construction trends and property valuations upon the Australian Building Materials sector.

The broker holds a baseline scenario of a 165,000 minimum dwelling consents in 2023, citing policy support, and expects some stimulus; a recovery in immigration; and cash-rate cuts in the 2023 December half (about 50 basis points) to also prove supportive. This compares with 175,000 in 2022, and the broker forecasts a recovery to 205,000 in 2024.

At its nadir, UBS forecasts a -13% to -15% fall in property prices (a real fall post CPI of -20%) from their peak and a -25% drop in housing sales.

CSR is the broker's favoured sector pick, given it is most exposed to the detached housing market, and also raises its property valuation for the company. EPS forecasts fall -1.7% in FY23 and -7% in FY24 but rising property valuations win the day.

CSR's rating is upgraded Buy from Neutral. Target price rises to $6.50 from $6.40.

Target price is $6.50 Current Price is $4.60 Difference: $1.9
If CSR meets the UBS target it will return approximately 41% (excluding dividends, fees and charges).

Current consensus price target is $5.74, suggesting upside of 33.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

UBS rates DMP as Buy (1) -

Domino's Pizza Enterprises' September-quarter trading reveals that same-store sales trends improved globally.

Retail prices followed food inflation upward but the company believes it remains the best-in-class value proposition, says UBS. Meanwhile, the carry-out market is carrying on up, while deliveries fell as labour shortages hit, and UBS says the business remains vulnerable to price rises.

Buy rating and $85 share price retained.

Target price is $85.00 Current Price is $57.05 Difference: $27.95
If DMP meets the UBS target it will return approximately 49% (excluding dividends, fees and charges).

Current consensus price target is $84.32, suggesting upside of 48.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Macquarie rates EHL as Outperform (1) -

Emeco Holdings has advised that $32m of outstanding receivables with Pit N Portal are at risk of not being fully recovered, separate to a another recently advised customer with which the company is in discussions.

Macquarie estimates that, should the receivables be written off, the Pit N Portal bad debt represents about -$5m risk to earnings (EBITDA).

The broker notes that continued wet weather is also likely to drag on the company's operating utilisation in the east.

EPS forecasts fall -7% in FY2 and -2% in FY24 accordingly.

Overall, while short-term risks are presenting themselves, Macquarie notes demand is solid, weather stress should eventually ease, the valuation is undemanding, and the buyback continues to support shares.

Outperform rating retained. Target price is is $1.20, compared with the last August entry in the FNArena database of $1.30.

Target price is $1.20 Current Price is $0.79 Difference: $0.41
If EHL meets the Macquarie target it will return approximately 52% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Macquarie rates FPH as Neutral (3) -

Macquarie reports US data suggests flu is taking over from where covid left off, and while hospitalisations are rising, absolute levels remain modest.

In Australia, the broker notes cases and hospitalisations during the 2022 winter were 4x above the five year average (which would have been suppressed during covid when rates fell). 

As a result, the broker anticipates the widely mooted customer destocking could be delayed from the first half of 2023 to the first half of 2024. Meanwhile, input inflation is likely to drag on margin reflation in FY24.

Fisher & Paykel Healthcare's earnings forecasts fall -1% in FY23 and FY24 and -3% in FY25. 

Neutral rating retained. Target price falls -6% to NZ$20.15.

Current Price is $16.70. Target price not assessed.

Current consensus price target is $19.50, suggesting upside of 14.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.3

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

Credit Suisse rates IAG as Outperform (1) -

The High Court has dismissed an application from both insurers and insured to appeal against the Business Interruption (BI) Test Case which found in favour of insurers.

Credit Suisse this means that most claims under policies referring to the Quarantine Act will not be valid and expects this will allow Insurance Australia Group to sharply reduce its BI provisioning by 70% to 90%, increasing the company's capital return by 4% to 5%.

The only small negative for insurers, says the broker, is they will not be able to deduct JobKeeper from valid claims, and they will be liable for interest charges.

Outperform rating retained. Target price is steady at $5.37 (the broker awaiting news from the company's trading halt) but the broker points to upside risk relating to the capital return.

Target price is $5.37 Current Price is $4.81 Difference: $0.56
If IAG meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $4.97, suggesting upside of 1.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Morgan Stanley rates IAG as Underweight (5) -

In a boost for capital across the sector, according to Morgan Stanley, insurers have won the second test case appeal on business interruption, regarding prevention of access.

Of insurer's under the broker's coverage, Insurance Australia Group should receive the largest boost to capital, which may lead to a capital benefit of around $800m or 32cps.

The Underweight rating and $3.90 target are retained. Industry View: In-Line.

Target price is $3.90 Current Price is $4.81 Difference: minus $0.91 (current price is over target).
If IAG meets the Morgan Stanley target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.97, suggesting upside of 1.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Ord Minnett rates MME as Hold (3) -

MoneyMe's September-quarter update reveals a reduction in the loan book to $1.28bn from $1.34bn in the June quarter.

Origination growth slowed sharply to $130m from $334m, Ord Minnett describing this as "conservative", the company logically focusing on caution and profit generation over balance sheet growth as rates rise.

The broker lowers its impairment provision and cuts marketing expense estimates accordingly for FY23, and notes September-quarter revenue guidance is on track.

The main challenge now, says the broker, is the renegotiation of the company's $75m corporate debt facility, due in FY23. Ord Minnett believes the company is now able to self-fund a greater share of originations, which would reduce debt payments as rates rise.

Hold rating retained (the stock was Buy rated in September). Target price falls to 77c from 83c.

Target price is $0.77 Current Price is $0.45 Difference: $0.32
If MME meets the Ord Minnett target it will return approximately 71% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Credit Suisse rates MP1 as Initiation of coverage with Neutral (3) -

Credit Suisse has initiated coverage of Megaport with a Neutral rating and target price of $8.10. Megaport is the global leading pure-play Software-Defined Networking (SDN) operator and the broker believes the company will retain its leading market position.

On the back of Megaport's best-in-class global network ecosystem, Credit Suisse is forecasting 39% CAGR 2021 to 2026 as the cloud becomes ever more prevalent in business IT infrastructures.

Recent price increases are expected to assist the company with turning EBITDA positive in FY23. Megaport won't generate any free cash flow until FY25 on the broker's projections, but the company should have enough cash to execute its plans and expansion.

Target price is $8.10 Current Price is $7.70 Difference: $0.4
If MP1 meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $10.92, suggesting upside of 38.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Citi rates MQG as Neutral (3) -

Citi expects gains on sales and commodities to be key earnings drivers for Macquarie Group, with benefits of a falling Australian dollar mitigated by lower assets under management. 

The broker expects commodities could be supported by energy market dislocation, but deal-linked revenue is at risk by material tightening amid ongoing volatility. 

The Neutral rating and target price of $172.00 are retained. 

Target price is $172.00 Current Price is $160.91 Difference: $11.09
If MQG meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $192.50, suggesting upside of 24.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

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

After assessing Bank of Queensland's result, Macquarie upgrades the major banks' FY23 earnings by 5%-10% as a rising cash rate improves deposit pricing, just six weeks after a 3%-5% upgrade.

The broker retains its belief that margin growth will be limited in the long term as competition for deposits returns. 

All up, Macquarie expects short-term windfalls will be reinvested and that banks will also seek to tighten their front-to-back book gaps through retention pricing.

National Australia Bank is the broker's top pick and is upgraded to Outperform from Neutral. Target price rises to $32.25  from $30.25.

Target price is $32.25 Current Price is $31.08 Difference: $1.17
If NAB meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $32.19, suggesting upside of 4.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Macquarie rates NGI as Outperform (1) -

Navigator Global Investments posted positive growth in assets under management in the September quarter, thanks to organic growth and a decent investment performance.

Outperform rating and $2.19 target price retained by Macquarie.

Target price is $2.19 Current Price is $1.13 Difference: $1.06
If NGI meets the Macquarie target it will return approximately 94% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 1.0

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

Morgan Stanley rates QAN as Overweight (1) -

Following last week's 1H trading update for Qantas Airways, Morgan Stanley lifts its target price to $9.00 from $7.50. The ramp-up to profitability is occurring much faster than the market had expected.

Guidance for 1H FY23 profit before tax of $1.2-1.3bn was well ahead of the analyst's $200m forecast. A reduction in net debt is expected to create capital management opportunities beyond the current $400m buyback.

The Overweight rating is maintained. The broker sees structural improvements for the industry, with the exit of Tiger and reduction in capacity for Virgin domestically. Also, some international capacity has been removed permanently.

Target price is $9.00 Current Price is $5.80 Difference: $3.2
If QAN meets the Morgan Stanley target it will return approximately 55% (excluding dividends, fees and charges).

Current consensus price target is $7.19, suggesting upside of 23.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Credit Suisse rates QBE as Outperform (1) -

The High Court has dismissed an application from both insurers and insured to appeal against the Business Interruption (BI) Test Case which found in favour of insurers.

Credit Suisse this means that most claims under policies referring to the Quarantine Act will not be valid and expects this will allow QBE Insurance to sharply reduce its BI provisioning but given the insurer has not disclosed its Australian BI provision, the broker cannot hazard an estimate on the amount.

The only small negative for insurers, says the broker, is they will not be able to deduct JobKeeper from valid claims, and they will be liable for interest charges.

Outperform rating and $17.84 target price retained.

Target price is $17.84 Current Price is $12.23 Difference: $5.61
If QBE meets the Credit Suisse target it will return approximately 46% (excluding dividends, fees and charges).

Current consensus price target is $15.72, suggesting upside of 33.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 1.0

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

Morgan Stanley rates QBE as Overweight (1) -

In a boost for capital across the sector, according to Morgan Stanley, insurers have won the second test case appeal on business interruption (BI), regarding prevention of access.

Of insurer's under the broker's coverage, Insurance Australia Group should receive the largest boost to capital, and QBE Insurance the least.

While the analyst thinks a modestly-sized BI reserve may be released, the group may choose to shore up general reserves in the current inflationary environment.

The Overweight rating and $16.00 target are retained. Industry view: In-Line.

Target price is $16.00 Current Price is $12.23 Difference: $3.77
If QBE meets the Morgan Stanley target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $15.72, suggesting upside of 33.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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 SUN as Outperform (1) -

The High Court has dismissed an application from both insurers and insured to appeal against the Business Interruption (BI) Test Case which found in favour of insurers.

Credit Suisse this means that most claims under policies referring to the Quarantine Act will not be valid and expects this will allow Suncorp to release between 50% and 90% of its BI provisions, which would have a minimal increase in its share price.

The only small negative for insurers, says the broker, is they will not be able to deduct JobKeeper from valid claims, and they will be liable for interest charges.

Outperform rating and $13.70 target price retained.

Target price is $13.70 Current Price is $10.77 Difference: $2.93
If SUN meets the Credit Suisse target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $13.11, suggesting upside of 25.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Morgan Stanley rates SUN as Underweight (5) -

In a boost for capital across the sector, according to Morgan Stanley, insurers have won the second test case appeal on business interruption (BI), regarding prevention of access.

Of insurer's under the broker's coverage, Insurance Australia Group should receive the largest boost to capital, followed by Suncorp Group.

Suncorp Group has $185m in BI provisions, which the analyst feels could provide a meaningful uplift to the group's common equity Tier 1 (CET1) capital.

The Underweight rating and $10.20 target are retained. Industry View: In-Line.

Target price is $10.20 Current Price is $10.77 Difference: minus $0.57 (current price is over target).
If SUN 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 $13.11, suggesting upside of 25.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Macquarie rates WBC as Neutral (3) -

After assessing Bank of Queensland's result, Macquarie upgrades the major banks' FY23 earnings by 5%-10% as a rising cash rate improves deposit pricing, just six weeks after a 3%-5% upgrade.

The broker retains its belief that margin growth will be limited in the long term as competition for deposits returns. 

All up, Macquarie expects short-term windfalls will be reinvested and that banks will also seek to tighten their front-to-back book gaps through retention pricing.

National Australia Bank is the broker's top pick. Westpac is the broker's least preferred pick.

Neutral rating retained. Target price rises to $23.50 from $22.25.

Target price is $23.50 Current Price is $23.50 Difference: $0
If WBC meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $25.06, suggesting upside of 7.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

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

Macquarie reviews Xero, and spies light at the end of the tunnel in second half.

The broker doubts that the November introduction of Making Tax Digital will greatly benefit Xero, expecting smaller operators are likely to adopt one of the 24 free compliant MTD solutions on the market.

So, while Macquarie expects weaker subs growth will continue in the June half, it also expects current price rises and a weaker $NZ should offset this somewhat. 

EPS forecasts rise 25% in FY23, 9% in FY24 and 6% in FY24.

Rating is upgraded to Neutral from Underperform. Target price rises to $74 from $70.

Target price is $74.00 Current Price is $72.00 Difference: $2
If XRO meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $97.68, suggesting upside of 35.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

This company reports in NZD. 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