Australian Broker Call

Morgans rates AST as Hold (3) -

The company has adjusted its second half distribution guidance, indicating it expects to pay no franking instead of 50% previously but more cash, with 4.4c per share as previously paid plus a 1.0c per share special dividend.

Morgans suggests this reflects the tax payable is expected to be less in FY17 than previously anticipated. Hold rating and $1.55 target retained.

Target price is $1.55 Current Price is $1.69 Difference: minus $0.14 (current price is over target).
If AST meets the Morgans target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.61, suggesting downside of -5.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.1

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

Macquarie rates CLQ as Outperform (1) -

The company has raised $81m in a placement to fast track the Syerston development. Macquarie observes this removes any near-term funding risk and enables the prospect of accelerating the development time frame.

The broker observes cobalt prices continue to rise and present a material upside risk to base case forecasts. Outperform and $1.50 target retained.

Target price is $1.50 Current Price is $0.89 Difference: $0.61
If CLQ meets the Macquarie target it will return approximately 69% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Citi rates COH as Neutral (3) -

Citi analysts express their concern that Cochlear might be legally ordered to pay a considerable amount in its patent dispute with the Al Mann Foundation (AMF) while trading on a lofty PE multiple.

The analysts note the company has taken a provision of US$20m but this could prove insufficient with Citi estimating the final damages award can be as high as US$500m. Neutral. Target $127.50.

Target price is $127.50 Current Price is $135.26 Difference: minus $7.76 (current price is over target).
If COH meets the Citi target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $125.28, suggesting downside of -8.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.3

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

Credit Suisse rates CSL as Outperform (1) -

Credit Suisse research suggests recovered plasma, a byproduct of whole blood donation, has declined by around -5% in recent years. To this end, the research suggests that in 2017 recovered plasma will represent just 12% of total plasma supply and 16% of IG volume.

As IG growth is expected to remain robust the broker calculates that the fractionation industry needs to grow plasma centres like these 10% through to 2020. Outperform rating and $125 target maintained.

Target price is $125.00 Current Price is $123.00 Difference: $2
If CSL meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $128.14, suggesting upside of 2.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

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

Market Sentiment: 0.6

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

Credit Suisse rates FAR as Outperform (1) -

The company has secured 80% stakes in two blocks south of SNE field, offshore The Gambia. The company will pay US$5.18m up front and fund up to US $8m of the seller's share of exploration well costs.

Credit Suisse observes the addition to be a savvy and logical acquisition, providing more exposure on the trend to the existing SNE field to the south. Outperform rating retained with a 14c target.

Target price is $0.14 Current Price is $0.08 Difference: $0.06
If FAR meets the Credit Suisse target it will return approximately 75% (excluding dividends, fees and charges).

Current consensus price target is $0.16, suggesting upside of 97.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Morgan Stanley rates FAR as Overweight (1) -

The company has announced a farm-in deal with Erin Energy. This expands its acreage, with an additional 80% interest in two blocks immediately south of the SNE field.

Morgan Stanley is positive about the transaction as there is significant exploration potential around the existing discovery. Overweight retained. Target is $0.13. Industry view: In-Line.

Target price is $0.13 Current Price is $0.08 Difference: $0.05
If FAR meets the Morgan Stanley target it will return approximately 63% (excluding dividends, fees and charges).

Current consensus price target is $0.16, suggesting upside of 97.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Ord Minnett rates MYR as Hold (3) -

Ord Minnett analysts note market speculation about whether Myer might now be the target for, probably, a foreign suitor (though Solomon Lew's Premier Investments ((PMV)) is mentioned as well). South African department-store retailers Edgars or Steinhoff may also be interested, suggest the analysts.

The key elements of Myer’s corporate appeal, as Ord Minnett sees it, are its low rent on a per square metre basis, and its rent as proportion of sales. The broker cannot get past the challenges that lay ahead and retains Hold rating, and $1.30 price target.

Target price is $1.30 Current Price is $1.20 Difference: $0.105
If MYR meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $1.25, suggesting upside of 1.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.4

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

Citi rates ORL as Neutral (3) -

It's tough to halt discounting in a sector where price discounting has become the new norm. These are not the exact words expressed by Citi analysts, but they reflect overall sentiment post OrotonGroup's interim financial performance.

Citi analysts maintain the Neutral rating and lower their price target to $1.65 from $1.90. They remain hopeful FY18 will show a better performance. Gap is now expected to reach breakeven in FY19 instead of FY18.

Target price is $1.65 Current Price is $1.54 Difference: $0.11
If ORL meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $1.65, suggesting upside of 8.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Macquarie rates QAN as Outperform (1) -

The company has enjoyed a steady share price performance since the release of its first half results, Macquarie observes, supported by the share buy-back and rational international competitor behaviour.

The broker believes the stock is still a significant buying opportunity. Outperform maintained. Target rises to $4.90 from $4.50.

Target price is $4.90 Current Price is $3.98 Difference: $0.92
If QAN meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $4.44, suggesting upside of 11.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

UBS rates QIN as Buy (1) -

The company has released detailed information of its supply contracts with customers. The release also outlined a study into the Indian Sandalwood market by McKinsey & Co, which forecasts Quintis to have around 75% global share of the legal authentic market by 2025.

UBS believes the company is in a unique position to service market demand across the wood, fine fragrance and pharmaceutical markets for the next 20 years.

The broker notes one area of concern is the fact that Shanghai Richer Link has not placed an order so far in 2017. Although it is unclear as to why the company has been slow to order, UBS acknowledges there are advanced negotiations to supply alternative customers in China and FY17 guidance has been reaffirmed.

UBS maintains a Buy rating and $3.20 target.

Target price is $3.20 Current Price is $1.25 Difference: $1.95
If QIN meets the UBS target it will return approximately 156% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

UBS rates RHC as Neutral (3) -

The chief operating officer, Craig McNally, has been confirmed as CEO from July. UBS had formed the view that he would be a logical successor to the retiring CEO.

In the long term, the broker envisages a broad range of opportunities common to each of the company's markets with a favourable ageing demographic. Public hospitals are also increasingly expected to outsource to meet demand profiles.

Neutral retained. Target is $72.

Target price is $72.00 Current Price is $67.96 Difference: $4.04
If RHC meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $75.10, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.4

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

UBS rates S32 as Buy (1) -

Assuming the US$500m buy-back is evenly spread over the next 12 months, UBS increases FY17 estimates for earnings per share by 1% and FY18 estimates by 3.5%.

The broker estimates the company will still be net cash at the end of FY17 by around US$1.8bn and US$2.3bn at the end of FY18. This allows for significant additional returns to shareholders. The broker retains a Buy rating and $2.80 target.

Target price is $2.80 Current Price is $2.70 Difference: $0.1
If S32 meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $3.12, suggesting upside of 14.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

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

Market Sentiment: 0.9

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

Macquarie rates SXL as Neutral (3) -

The company has reached an agreement for the sale of Southern Cross Northern NSW TV assets and operations for $55m. Macquarie believes this is a good outcome for a regional TV asset.

That said, the broker notes the advertising market remains challenging while radio assets are trading in line with expectations. Neutral retained. Target is $1.30.

Target price is $1.30 Current Price is $1.37 Difference: minus $0.07 (current price is over target).
If SXL meets the Macquarie target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.28, suggesting downside of -5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.2

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

Credit Suisse rates SYR as Outperform (1) -

The company has signed a non-binding Memorandum of Understanding with BTR New Energy Materials regarding sales and supply chain co-operation.

BTR is the world's largest manufacturer of battery anode materials and, as a counter party endorsing the company's graphite, Credit Suisse suggests that significant product testing has been undertaken.

The announcement also implies further volume offtake once commercial negotiations progress. Outperform and $7.80 target retained.

Target price is $7.80 Current Price is $2.91 Difference: $4.89
If SYR meets the Credit Suisse target it will return approximately 168% (excluding dividends, fees and charges).

Current consensus price target is $5.21, suggesting upside of 72.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.8

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

Deutsche Bank rates SYR as Buy (1) -

The company has signed a non-binding Memorandum of Understanding with BTR New Energy Materials, a global battery anode materials supplier.

Little information was disclosed regarding the scope of the partnership but Deutsche Bank interprets the statement to imply a concentrate offtake agreement. Supply chain co-operation implies greater participation to allow Balama concentrate to be sold to end markets.

The broker believes a more formal agreement could be most significant as it would  de-risk the stock, which is struggling to offset management changes, construction delays and concerns around the graphite market over the last six months.

Buy recommendation retained. Target is $6.00.

Target price is $6.00 Current Price is $2.91 Difference: $3.09
If SYR meets the Deutsche Bank target it will return approximately 106% (excluding dividends, fees and charges).

Current consensus price target is $5.21, suggesting upside of 72.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.8

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

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

The MoU with BTR formalises ongoing discussions, Morgan Stanley observes, and conversion to a formal offtake agreement is an upside risk to forecasts.

The company's current relationships for downstream products are sufficient to underpin construction of the spherical plants, the broker believes. Nevertheless, flake graphite offtakes are required to generate cash flow and fund construction of the downstream strategy.

Equal-weight retained. Target is $2.75. Industry view is Attractive.

Target price is $2.75 Current Price is $2.91 Difference: minus $0.16 (current price is over target).
If SYR 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 $5.21, suggesting upside of 72.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.8

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

UBS rates TLS as Neutral (3) -

UBS believes the company should cut its dividend to be prudent, as there is execution risk around its ability to fill the $2-3bn EBITDA gap, looming capital requirements and the potential threat of a fourth mobile entrant.

With the capital allocation review still underway, the broker suspects the company will hold the near-term dividend at $0.31 but aligns FY19 and beyond with a long-term forecast for earnings per share of $0.29.

Neutral retained. UBS reduces the target to $4.65 from $5.00.

Target price is $4.65 Current Price is $4.60 Difference: $0.05
If TLS meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $4.78, suggesting upside of 3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

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

The company's waste services contract with Chevron will cease by the end of FY17. Macquarie notes this was the largest contract during the peak of construction. The company retains its contract with the balance of Chevron operations.

The loss of this particular part of the contract will affect FY18 EBITDA by -$1-2m. The broker downgrades to Neutral from Outperform, requiring earnings estimates to stabilise to put a floor under the share price.Target is raised to $2.45 from $2.42.

Target price is $2.45 Current Price is $2.37 Difference: $0.08
If TOX meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $2.31, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Morgan Stanley rates TOX as Downgrade to Equal-weight from Overweight (3) -

The loss of a Chevron contract suggests to Morgan Stanley margin pressure in the resources market continues. The broker envisages the trough in earnings per share will be pushed out to FY18 and, although earnings quality is improving, the valuation now appears full.

That said, the broker notes the company's resources exposure continues to reduce and the initial performance of Daniels appears on track. Morgan Stanley downgrades to Equal-weight from Overweight and reduces the target to $2.25 from $2.75. Industry view: In-line.

Target price is $2.25 Current Price is $2.37 Difference: minus $0.12 (current price is over target).
If TOX 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 $2.31, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

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

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Ord Minnett rates TOX as Hold (3) -

As the company has informed the market the provision of waste management services to Chevron’s operations on Barrow Island will cease by the end of the financial year, Ord Minnett analysts point out the value of the Chevron contract had already been scaled back in years past.

In the light of recent contract wins, the company has indicated earnings should still improve in FY18 and Ord Minnett seems happy with that. Target price of $2.20 and Hold rating maintained.

Target price is $2.20 Current Price is $2.37 Difference: minus $0.17 (current price is over target).
If TOX meets the Ord Minnett target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.31, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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