Australian Broker Call

Macquarie rates AST as Neutral (3) -

AusNet Services' FY21 net profit was $302m as opposed to Macquarie's expected $325m while operating income was -4% below the broker's forecast. The dividend outlook for FY22 is $0.095, lower than the broker's expected $0.0975.

The company is a stable cash generator, suggests the broker, and benefits from a government policy that supports renewables. On the flip side, these benefits are not likely to start flowing before FY23 and more materially FY25. 

Neutral rating with the target dropping to $1.95 from $2.

Target price is $1.95 Current Price is $1.74 Difference: $0.21
If AST meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $1.87, suggesting upside of 4.9% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.1

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

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

FY21 earnings before interest, taxes, depreciation and amortisation after leases (EBITDAaL) was -3% below Morgan Stanley's estimate, owing to a non-recurring -$31m impairment of geospatial software.

Regulated assets generated earnings (EBITDA) -2% below the broker's estimate, including around $18-20m of volume outperformance.

Unregulated business (Growth & Future Networks) delivered EBITDAaL (includes lease income) -7% below the analyst's forecast on non-recurring items. Morgan Stanley retains an Equal-weight rating and a $1.88 target. Industry view: Cautious.

Target price is $1.88 Current Price is $1.74 Difference: $0.14
If AST meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $1.87, suggesting upside of 4.9% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.1

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

Morgans rates AST as Hold (3) -

Second half earnings (EBITDA) [ex customer contributions and material items] declined -6% on the pcp as a result of a -6% revenue decline and flat margins. The earnings decline was mainly due to tower relocation projects completed in the pcp, explains Morgans.

The broker notes flat FY22 DPS guidance and indications that DPS growth is facing revenue and capex headwinds. The outlook for asset base growth is considered appealing though the funding required for the necessary growth capex dilutes equity value creation. 

The company franked the FY21 dividend to 40%. The amount of franking of the FY22 dividend is uncertain, due to tax matters being contested with the ATO, explains the analyst. The Hold rating is unchanged and the target price is increased to $1.83 from $1.82.

Target price is $1.83 Current Price is $1.74 Difference: $0.09
If AST meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $1.87, suggesting upside of 4.9% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.1

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

Ord Minnett rates AST as Lighten (4) -

FY21 attributable operating earnings (EBITDA) were well below Ord Minnett’s forecast, while reported net profit increased on FY20 due to a lower interest expense. The Lighten rating and $1.75 target are retained. Management guided for flat distributions in FY22.

While predictable to the broker, the contribution from regulated assets declined though earnings were affected by a number of one-offs. This included a -$31m impairment of geospatial assets in the Electricity Distribution division.

The analyst highlights the shares are offering an attractive partially franked dividend yield. They are also trading on an enterprise value (EV) to regulated and contracted asset base (RCAB) ratio of 1.26 times, versus the historical average of 1.25 times.

Target price is $1.75 Current Price is $1.74 Difference: $0.01
If AST meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $1.87, suggesting upside of 4.9% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.1

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

Ord Minnett rates AVN as Hold (3) -

Aventus Group has entered into a conditional agreement to sell MacGregor Home in Queensland for $42.15m. The sale represents a
56% premium to the asset's last reported book value, explains Ord Minnett.

Also, as a result of transactional evidence, the board has commissioned to have the entire portfolio independently valued as at June 2021. The broker reduces the cap rate assumption in the valuation to 6% from 6.1% in-line with transactional evidence.

As a result, the target rises to $2.83 from $2.76, with the assumption the MacGregor Home sale goes ahead. The Hold rating is maintained.

Target price is $2.83 Current Price is $2.92 Difference: minus $0.09 (current price is over target).
If AVN meets the Ord Minnett target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.94, suggesting upside of 3.0% (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

Macquarie rates CAR as Neutral (3) -

Carsales announced the acquisition of a 49% stake in Trader Interactive, a US-based digital marketplace business, for $797m. The acquisition will partly be funded by a circa $600m equity raising.

Macquarie suggests the company's latest trading update demonstrates the strength of its Australian business. The US acquisition makes strategic sense to Macquarie, giving Carsales an opportunity to leverage its expertise in a different geography.

Neutral rating. The price target drops to $20.80 from $23.

Target price is $20.80 Current Price is $19.51 Difference: $1.29
If CAR meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $21.76, suggesting upside of 11.5% (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 CAR as Overweight (1) -

The Federal Budget affirms Morgan Stanley's view of the cyclical and structural tailwinds assisting the technology, media and telecom sector (TMT). In particular, this is considered to apply to the online classified ad verticals such as online jobs, real estate and cars.

Regarding Carsales.com, an extension to asset write-off relief for business could potentially add "churn" to the new and used car markets, especially work-related vehicles, explains the broker. Overweight rating. Target price is $23. Industry view: Attractive.

Target price is $23.00 Current Price is $19.51 Difference: $3.49
If CAR meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $21.76, suggesting upside of 11.5% (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

UBS rates CAR as Buy (1) -

Carsales.com has announced the purchase of a 49% stake in US online marketplace Trader Interactive to be funded by a $600m rights offer. The latter is a 1 for 6.99 accelerated rights offer at $17, a -12.9% discount to the company's last close of $19.51.

Trader Interactive is a platform of branded marketplaces in the US, providing digital marketing solutions and services across the commercial truck, recreational vehicle, power sports and equipment industries.

Management has no immediate plans to pivot Trader Interactive into the car vertical. UBS sees the key opportunity is to leverage expertise with demand-based revenue models (i.e. leads). Trader Interactive has a supply-based subscription revenue model. 

At this stage the Buy rating and $24.50 target are retained while the analyst conducts further financial analysis.

Target price is $24.50 Current Price is $19.51 Difference: $4.99
If CAR meets the UBS target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $21.76, suggesting upside of 11.5% (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

Credit Suisse rates CBA as Neutral (3) -

Commonwealth Bank's third-quarter unaudited cash earnings were approx $2.4bn, up 85% over last year and income increased by 2%. Credit Suisse notes the result was driven by a higher net interest margin, volume growth and higher retail banking fees.

With CET1 pro-forming above 13%, the broker thinks all eyes will be on the bank's FY21 result in August to see whether the bank pulls the capital management trigger. Credit Suisse predicts a $4bn buyback via an off-market structure and $8bn of buybacks over FY22-23.

Neutral rating with the target rising to $95 from $85.

Target price is $95.00 Current Price is $95.57 Difference: minus $0.57 (current price is over target).
If CBA meets the Credit Suisse target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $86.82, suggesting downside of -9.4% (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 CBA as Neutral (3) -

Macquarie observes Commonwealth Bank's third-quarter earnings trends were broadly consistent with peers. Even then, better revenue growth and improving margins set the bank apart, in the broker's view.

The bank's capital position remained sector leading and a CET1 of circa 13.4% alongside a healthy franking credit balance suggests a higher likelihood of a structured buyback in the first half of 2022.

Neutral rating with the target rising to $86 from $81.5.

Target price is $86.00 Current Price is $95.57 Difference: minus $9.57 (current price is over target).
If CBA meets the Macquarie target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $86.82, suggesting downside of -9.4% (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 CBA as Underweight (5) -

Third quarter cash profit ex notable items was around 9% above the estimate of Morgan Stanley. Operating trends were considered pleasing though a strong result was widely expected.

Revenue rose circa 2% versus the broker's -0.5%, with net interest income up around 1% compared to the expected -1.5%.
Non-interest income came in up circa 3% versus the analyst's forecast of over 5%.

Management stated the timing and extent of capital management is "dependent on a continued trend of domestic economic improvement", credit quality and regulatory guidance. The Underweight rating and $83 target are retained. Industry view: In-Line.

Target price is $83.00 Current Price is $95.57 Difference: minus $12.57 (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 $86.82, suggesting downside of -9.4% (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 CBA as Reduce (5) -

While cash profit (NPAT) before provisions (excluding remediation costs) was around 5% better than Morgans expectation, remediation costs largely offset any forecast upgrades. The bank is considered high quality though overvalued.

The broker highlights the net interest margin (NIM) and bad debt charge outcomes both appear to be better than consensus expectations.

Morgans increases cash EPS forecasts by 1.8% and 1.7% for FY22 and FY23, largely due to higher non-interest income forecasts. The Sell rating is unchanged and the target price increases to $73 from $72.

Target price is $73.00 Current Price is $95.57 Difference: minus $22.57 (current price is over target).
If CBA meets the Morgans target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $86.82, suggesting downside of -9.4% (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 CBA as Hold (3) -

The third-quarter FY21 cash net profit of $2.41bn was ahead of the run-rate required to meet Ord Minnett’s second-half forecast of $4.125bn, once remediation charges are excluded. The target is lifted to $91 from $80.20 and the Hold rating is retained.

A revenue rise of 2% on the quarterly average for the first half reflected a lift in net interest margin (NIM) and good loan growth across the housing and business segments, explains the analyst. The profit forecast is lifted by 8%, due mainly to lower impairment charges.

The broker considers the bank has market share momentum and is gaining in the small business (SME) segment. Additionally, it is leveraging a scale and technology advantage and is considered to have good leverage to rising interest rates. 

Target price is $91.00 Current Price is $95.57 Difference: minus $4.57 (current price is over target).
If CBA meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $86.82, suggesting downside of -9.4% (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 - Cessation of coverage

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 CIP as Hold (3) -

A third quarter update revealed to Morgans leasing remains robust with 5.3% of the portfolio leased during the period, which increased occupancy to 98.8% from 97.7%. Rent collection averaged 98% during the quarter.

Management reiterated FY21 guidance, with funds from operations (FFO) of no less than 17.6c and a distribution of 17c.

The REIT also recently announced revaluations on the portfolio of $196m, up over 8.3% on a like-for-like basis. Morgans increases the target price to $3.55 from $3.27. The Hold rating is maintained.

Target price is $3.55 Current Price is $3.52 Difference: $0.03
If CIP meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.64, suggesting upside of 5.4% (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

Citi rates CSR as Buy (1) -

CSR’s FY21 result showed strong cost control in an improving macro backdrop. While sales appear to be improving gradually, Citi has detected the early stages of an earnings upgrade cycle for CSR.

Looking at CSR's strong execution track record, the broker is comfortable with the company's ability to deliver results.

Buy rated with the target rising to $7.40 from $6.60.

Target price is $7.40 Current Price is $6.16 Difference: $1.24
If CSR meets the Citi target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $6.26, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in March.

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

Macquarie rates CSR as Outperform (1) -

CSR's FY21 results were solid, observes Macquarie, with net profit at $160.4m higher than the broker's expected $154.5m. The group declared more special dividends with total dividends for the year at 36.5c versus the broker's expected 25.5c.

The outlook for activity is strong, notes the broker, evident in the turning revenue momentum. The aluminum outlook looks stronger than expected to the broker in FY22 due to a better hedging position.

Macquarie notes valuation is broadly on par with historical averages while the macro context remains favourable. As a result, the broker thinks there remains some attraction in the stock and retains its Outperform rating with the target rising to $6.50 from $6.

Target price is $6.50 Current Price is $6.16 Difference: $0.34
If CSR meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $6.26, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in March.

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

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

 CSR reported FY21 earnings (EBIT) over 3% higher than Morgan Stanley's forecast. The beat was driven by Building Products
 on stronger margins, which was partly offset by a higher than expected corporate expense, explains the broker.

 Aluminium and Property were in-line with the estimates of the analyst, while higher interest and tax expense saw profit (NPAT) in-line. 

The key surprise for Morgan Stanley was a final 14.5c final dividend and 9c special dividend, both fully franked and both exceeding expectations of 10c and 4c, respectively.

The Equal-weight rating is retained due to a currently full valuation and the broker raises the target to $6.30 from $5. The industry view is cautious.

Target price is $6.30 Current Price is $6.16 Difference: $0.14
If CSR meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $6.26, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in March.

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

Ord Minnett rates CSR as Hold (3) -

Underlying FY21 net profit was in-line with Ord Minnett’s forecast and group earnings (EBIT) came in 1.3% above the estimate. A fully franked final dividend of 14.5c and a special dividend of 9.5c compared to the broker's expectation of 12c and 4c, respectively.

The analyst feels the stock may struggle to materially outperform as the valuation is stretched and housing data may be as good as it gets. Additionally, the outcome of management’s business unit realignment and cost management efforts are awaited.

The broker increases EPS estimates by an average of 7% over the forecast period, driven mainly by the Aluminium division.
Slightly higher building products earnings were offset by increased corporate costs. The target lifts to $6 from $5.70. Hold retained.

Target price is $6.00 Current Price is $6.16 Difference: minus $0.16 (current price is over target).
If CSR meets the Ord Minnett target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.26, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in March.

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

Morgan Stanley rates DHG as Overweight (1) -

The Federal Budget affirms Morgan Stanley's view of the cyclical and structural tailwinds assisting the technology, media and telecom sector (TMT). In particular, this is considered to apply to the online classified ad verticals such as online jobs, real estate and cars.

There was small additional funding for first-home buyers and superannuation advantages for people to encourage "down-sizing". While this could add further "churn" to residential housing transaction volumes, the broker sees it having a minor effect for Domain Holdings.

Overweight retained. Target is $5.50. Industry view is Attractive. 

Target price is $5.50 Current Price is $4.59 Difference: $0.91
If DHG meets the Morgan Stanley target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $4.99, suggesting upside of 12.1% (ex-dividends)

The company's fiscal year ends in May.

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 DXS as Outperform (1) -

Dexus's proposal to merge with APN Property Group ((APD)) was like a bolt out of the blue for Credit Suisse. The broker notes the offer price represents a 50% premium to APN Property's last close on 10 May and points to a potential outlay of circa -$320m for Dexus.

While the transaction will grow external funds under management by circa $2.9bn, Credit Suisse notes this is a mixed bag that includes circa $1.6bn of direct real estate across industrial, business parks/Non-CBD office as well as $1.3bn of property securities funds.

The broker has not included this transaction in its estimates but notes this could initially add $8m of incremental earnings pre any synergies.

Outperform rating. Target rises to $10.82 from $9.92.

Target price is $10.82 Current Price is $10.14 Difference: $0.68
If DXS meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $10.36, suggesting upside of 3.6% (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 EHE as Outperform (1) -

Post the additional funding announced by the Australian government in response to the report by the Royal Commission into Aged Care Quality and Safety, Macquarie has updated its forecasts.The broker sees the additional funding as positive for the aged care sector.

For Estia Health, the broker notes operating income changes are in line with the broker's analysis. Macquarie sees Estia Health as presenting a favourable balance sheet position and valuation appeal relative to listed peers.

Outperform retained, target rises to $3.15 from $2.25.

Target price is $3.15 Current Price is $2.65 Difference: $0.5
If EHE meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $2.26, suggesting downside of -13.0% (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

Citi rates EOS as Neutral (3) -

Citi considers Electro-Optic Systems Holdings’ receipt of $30m for parts, training and facilities to mean customer paperwork issues now stand resolved and the customer is satisfied with the contract.

The broker expects more announcements around cash collection to improve investor sentiment and additional cash may be collected in mid-2021 subject to when the company invoices for the first 30 RWS units.

Neutral rating with a target of $5.28.

Target price is $5.28 Current Price is $4.40 Difference: $0.88
If EOS meets the Citi target it will return approximately 20% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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 IEL as Add (1) -

Morgans assesses recent covid-19 outbreaks in India provide a headwind to the recovery. It’s estimated that India accounts for around 40% of the company’s IELTS testing revenue.

Additionally, recent border shutdowns to Indian outbound immigrants (e.g. Canada/Australia) does have the potential to impact student placement volumes, explains the broker.

The analyst believes earnings risk lies to the upside as pent-up demand levels are quantified, with M&A providing a potential further catalyst. Add rating and the target is reduced to $28.48 from $30.29.

Target price is $28.48 Current Price is $20.66 Difference: $7.82
If IEL meets the Morgans target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $30.08, suggesting upside of 44.2% (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

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

After an investor day update, Morgan Stanley notes long-term targets imply higher capex of around -$30m, low to mid-teens EPS
growth and greater than 12% return on invested capital (ROIC). This is considered quite modest relative to consensus expectations.

Some key positives included accelerated digitisation and a step-up in management discipline, accountability and metrics, notes the broker.

The Equal-weight rating and target of $11 are retained. Industry view: In-Line.

Target price is $11.00 Current Price is $10.49 Difference: $0.51
If IVC meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $11.10, suggesting upside of 7.1% (ex-dividends)

The company's fiscal year ends in December.

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

Macquarie rates JHC as No Rating (-1) -

Post the additional funding announced by the Australian government in response to the report by the Royal Commission into Aged Care Quality and Safety, Macquarie has updated its forecasts.

The broker sees the additional funding as positive for the aged care sector, one that supports an improved earnings outlook relative to previous expectations. 

Japara Healthcare's operating income forecasts have been revised upwards by 21-36% over FY22-24.

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

Current Price is $1.05. Target price not assessed.

Current consensus price target is $0.94, suggesting downside of -10.2% (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 - Cessation of coverage

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

Morgan Stanley rates NEC as Overweight (1) -

The Federal Budget affirms Morgan Stanley's view of the cyclical and structural tailwinds assisting the technology, media and telecom sector (TMT). In particular, this is considered to apply to the online classified ad verticals such as online jobs, real estate and cars.

There was small additional funding for first-home buyers and superannuation advantages for people to encourage "down-sizing". While this could add further "churn" to residential housing transaction volumes, the broker sees it as having a small effect for Nine Entertainment.

Additionally, there was a small relative benefit to commercial free-to-air (FTA) broadcasters from reduced funding for public broadcasters ABC and SBS, explains the analyst. Overweight rating retained. Industry view: Attractive. Target is US$31.

Finally, the broker notes extra funding for industry regulator ACMA signals the government is confident that the much discussed Google and Facebook digital licencing payments will come to fruition and require monitoring by the regulator.

Target price is $3.50 Current Price is $2.90 Difference: $0.6
If NEC meets the Morgan Stanley target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $3.40, suggesting upside of 21.0% (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 NWS as Overweight (1) -

The Federal Budget affirms Morgan Stanley's view of the cyclical and structural tailwinds assisting the technology, media and telecom sector (TMT). In particular, this is considered to apply to the online classified ad verticals such as online jobs, real estate and cars.

There was small additional funding for first-home buyers and superannuation advantages for people to encourage "down-sizing", explains the broker. While this could add "churn" to residential housing transaction volumes, the effect is considered small for News Corp.

Additionally, there was a small relative benefit to commercial free-to-air (FTA) broadcasters from reduced funding for public broadcasters ABC and SBS, explains the analyst. Overweight rating retained. Industry view: Attractive. Target is US$31.

Finally, extra funding for industry regulator ACMA signals the government is confident that the much discussed Google and Facebook digital licencing payments will come to fruition and require monitoring by the regulator, notes Morgan Stanley. 

Current Price is $32.60. Target price not assessed.

Current consensus price target is $38.33, suggesting upside of 22.5% (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: 1.0

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

Citi rates OZL as Neutral (3) -

Citi expects copper prices to be skewed towards its bull case of US$12,000/t/+US$5.40/lb over the next 3-6 months. Looking at this, Citi expects OZ Minerals to trade higher with the copper price and prefers exposure to the stock.

Over the longer term, Citi remains cautious of chasing higher valuations noting execution of OZ Minerals growth pipeline remains key. While the company has reassured about funding the two key expansion projects from its cash flow, the broker is not convinced on its base deck. 

Citi retains its Neutral rating with the target rising to $27 from $22.

Target price is $27.00 Current Price is $26.35 Difference: $0.65
If OZL meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $21.88, suggesting downside of -13.8% (ex-dividends)

The company's fiscal year ends in December.

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

Macquarie rates PPH as Neutral (3) -

Pushpay Holdings' total customers in FY21 at 11,099 were 2% ahead of Macquarie's estimate. The donor management system (DMS) customers rose 9% to 8,927 while the Church management system (ChMS) customers grew 11% to 4,625.

While better than expected, Macquarie notes cross sell is a captive market and customer metrics remain below a level required to make the broker more positive.

While the company's result provided some comfort around customer churn, Macquarie thinks there was no meaningful acceleration in customer growth.

Neutral rating with a target price of NZ$1.76.

Current Price is $1.54. Target price not assessed.

Current consensus price target is $1.84, suggesting upside of 22.7% (ex-dividends)

The company's fiscal year ends in March.

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: 0.3

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

Ord Minnett rates PPH as Hold (3) -

Ord Minnett believes the FY21 result, with sales -5% versus expectations, overall reflected the benefits to the company of covid-19 stay-at-home orders. However, it's considered FY22 will not be a repeat of this remarkable performance, with a much slower rate of growth.

The Catholic opportunity has been flagged as the next leg of growth. However, the broker sees success as far from guaranteed, a long way off and requiring material investment in the near-term. The Hold rating is maintained and the target reduced to $1.84 from $1.95.

Target price is $1.84 Current Price is $1.54 Difference: $0.3
If PPH meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $1.84, suggesting upside of 22.7% (ex-dividends)

The company's fiscal year ends in March.

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: 0.3

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

UBS rates PPH as Neutral (3) -

Pushpay Holdings' FY21 result and FY22 guidance were largely in-line with the expectations of UBS. Management is targeting
25% of the Catholic market within five years, which is more ambitious than the broker's 10-15% within 3-5 years target.

The Neutral rating is maintained. The analyst lowers the target to NZ$1.80 from NZ$1.90 due partly to an increase in forecast Catholic investment.

Current Price is $1.54. Target price not assessed.

Current consensus price target is $1.84, suggesting upside of 22.7% (ex-dividends)

The company's fiscal year ends in March.

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: 0.3

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

Ord Minnett rates QAN as Buy (1) -

Qantas has pushed out the planned international restart by two months to the end of December from the end of October. This is due to the delay in vaccine rollout and delay in the international border reopening.

The analyst remains positive, given the airline's high leverage to the domestic and loyalty businesses, which represent 70–75% of earnings. The Buy rating is retained and the target falls to $5.50 from $6.

Target price is $5.70 Current Price is $4.50 Difference: $1.2
If QAN meets the Ord Minnett target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $5.75, suggesting upside of 31.3% (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

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

Ord Minnett upgrades Qube Holdings to Accumulate from Hold after upgrading FY21 profit (NPATA) forecasts by 6%. This reflects better-than-expected port volumes and transport conditions in the logistics and ports/bulk segments. 

Additionally, the Federal budget has extended the asset purchase write-off for purchasers of eligible equipment until FY23. The broker expects this to lower the cash tax payable for the company.

The analyst sees potential for a material deleveraging of the balance sheet and/or capacity to re-invest in accretive customer led
projects or acquisitions. The target price rises to $3.31 from $3.23.

Target price is $3.31 Current Price is $2.98 Difference: $0.33
If QUB meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $3.09, suggesting upside of 4.4% (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

Morgan Stanley rates REA as Overweight (1) -

The Federal Budget affirms Morgan Stanley's view of the cyclical and structural tailwinds assisting the technology, media and telecom sector (TMT). In particular, this is considered to apply to the online classified ad verticals such as online jobs, real estate and cars.

There was small additional funding for first-home buyers and superannuation advantages for people to encourage "down-sizing". While this could add further "churn" to residential housing transaction volumes, the broker sees it as having a small effect on REA Group.

The Overweight rating and $175 target are retained. Industry view: Attractive.

Target price is $175.00 Current Price is $151.72 Difference: $23.28
If REA meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $157.75, suggesting upside of 6.9% (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

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

Post the additional funding announced by the Australian government in response to the report by the Royal Commission into Aged Care Quality and Safety, Macquarie has updated its forecasts.

The broker sees the additional funding as positive for the residential aged care sector. For Regis Resources, the broker notes operating income changes are in line with the broker's previous analysis.

Also, Macquarie thinks additional funding will lead to better cash flows.

Led by an improved funding outlook, Macquarie moves to Outperform from Neutral with the target rising to $2.95 from $2.1.  

Target price is $2.95 Current Price is $2.20 Difference: $0.75
If REG meets the Macquarie target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $2.24, suggesting upside of 6.8% (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 RRL as Add (1) -

Morgans feels the $903m purchase price for a 30% interest in the Tropicana gold mine appears fully priced. However, quite apart from an immediate production and cash flow lift, the broker believes the purchase is transformational for the long-term outlook.

As an operating mine, managed by majority owner Anglogold, it provides immediate cash flow and minimum integration challenges. The Add rating is maintained and the target is decreased to $4.08 from $4.44. 

Target price is $4.08 Current Price is $2.60 Difference: $1.48
If RRL meets the Morgans target it will return approximately 57% (excluding dividends, fees and charges).

Current consensus price target is $3.75, suggesting upside of 42.7% (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

Morgan Stanley rates SEK as Overweight (1) -

The Federal Budget affirms Morgan Stanley's view of the cyclical and structural tailwinds assisting the technology, media and telecom sector (TMT). In particular, this is considered to apply to the online classified ad verticals such as online jobs, real estate and cars.

The government has an ongoing focus on stimulus across a range of policy measures for the jobs market, explains the broker. All the extra "churn" in jobs volumes is expected to be helpful for Seek. Also, there is a new push for job seekers to do more on-line searching.

Overweight rating. Target is $21. Industry view: Attractive.

Target price is $21.00 Current Price is $29.46 Difference: minus $8.46 (current price is over target).
If SEK meets the Morgan Stanley target it will return approximately minus 29% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.87, suggesting upside of 4.5% (ex-dividends)

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 SWM as No Rating (-1) -

The Federal Budget affirms Morgan Stanley's view of the cyclical and structural tailwinds assisting the technology, media and telecom sector (TMT). In particular, this is considered to apply to the online classified ad verticals such as online jobs, real estate and cars.

For Seven West Media there was a small relative benefit to commercial free to air (FTA) broadcasters from reduced funding for public broadcasters ABC and SBS, notes the broker. Morgan Stanley is unable to provide a rating and target at present.

Also, the analyst notes extra funding for industry regulator ACMA signals the government is confident that the much discussed Google and Facebook digital licencing payments will come to fruition and require monitoring by the regulator. The broker's Industry view is Attractive.

Current Price is $0.37. Target price not assessed.

Current consensus price target is $0.67, suggesting upside of 80.4% (ex-dividends)

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 TLS as Overweight (1) -

The Federal Budget affirms Morgan Stanley's view of the cyclical and structural tailwinds assisting the technology, media and telecom sector (TMT). In particular, this is considered to apply to the online classified ad verticals such as online jobs, real estate and cars.

Of relevance to Telstra was a small boost to funding of mobile networks in regions, notes the broker. The Overweight rating and $4 target are retained. Industry view: In-Line.

Target price is $4.00 Current Price is $3.48 Difference: $0.52
If TLS meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $3.80, suggesting upside of 10.3% (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 TPG as Overweight (1) -

The Federal Budget affirms Morgan Stanley's view of the cyclical and structural tailwinds assisting the technology, media and telecom sector (TMT). In particular, this is considered to apply to the online classified ad verticals such as online jobs, real estate and cars.

Of relevance to TPG Telecom was a small boost to funding of mobile networks in regions, notes the broker. The Overweight rating and $9.75 target are retained. Industry view: In-line.

Target price is $9.75 Current Price is $5.21 Difference: $4.54
If TPG meets the Morgan Stanley target it will return approximately 87% (excluding dividends, fees and charges).

Current consensus price target is $7.86, suggesting upside of 53.0% (ex-dividends)

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 VVA as Initiation of coverage with Buy (1) -

Citi initiates coverage on Viva Leisure with a Buy rating and a target price of $3.25.

Viva Leisure forecasts operating income to grow more than fourfold to $69m between FY20-23 driven by greenfield rollout, acquisitions, and margin expansion.

Citi expects Viva Leisure’s health club network in Australia to increase three times by FY25. Citi thinks the company's network expansion could contribute incremental revenue and operating income of circa $224m and circa $91m by FY25. 

While covid adversely impacted Viva Leisure’s short-term margins, the broker's analysis suggests operating income margins could expand by almost 533bps between FY20-24 driven by fractionalisation of costs over a larger club base maturity of new health clubs.

Target price is $3.25 Current Price is $2.35 Difference: $0.9
If VVA meets the Citi target it will return approximately 38% (excluding dividends, fees and charges).

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

Morgan Stanley rates XRO as Overweight (1) -

The Federal Budget affirms Morgan Stanley's view of the cyclical and structural tailwinds assisting the technology, media and telecom sector (TMT). In particular, this is considered to apply to the online classified ad verticals such as online jobs, real estate and cars.

Relevant for Xero is the push for e-invoicing, notes the broker. Federal government suppliers that provide e-invoices will be guaranteed to be paid within five days. It's felt the company should be feeling pleased about the strategic fit of the recently acquired Tickstar.

Morgan Stanley retains the Overweight rating and target price of $140. Industry view: Attractive.

Target price is $140.00 Current Price is $134.88 Difference: $5.12
If XRO meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $114.75, suggesting downside of -2.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

This company reports in NZD. 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