Australian Broker Call

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

Ord Minnett has greater confidence in the economic outlook, finding evidence of an improving funding cost environment and anticipating less downside from the economic downturn for Bendigo and Adelaide Bank compared with peers.

The broker notes the capital position appears solid and should be less pro-cyclical. Rating is upgraded to Accumulate from Hold, with the target raised to $8.10 from $6.00.

Target price is $8.10 Current Price is $8.02 Difference: $0.08
If BEN meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $6.89, suggesting downside of -14.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Ord Minnett rates BWP as Upgrade to Buy from Hold (1) -

Ord Minnett assesses assets with long lease expiries are typically -20% undervalued. Early indicators suggest equity inflows are returning to preferred property sectors quickly.

Ord Minnett recommends increasing exposure to long weighted average lease expiry (WALE) A-REITs as part of its view on the recovery post the pandemic.

The broker upgrades to Buy from Hold and raises the target to $4.40 from $3.50.

Target price is $4.40 Current Price is $3.95 Difference: $0.45
If BWP meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $3.61, suggesting downside of -8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Ord Minnett rates CHC as Accumulate (2) -

Demand for industrial assets is strong. Ord Minnett assesses Charter Hall has strong exposure to this theme and, with 12 established vehicles to deploy capital, remains better equipped to counter declines in shopping centre and office asset values.

The broker lifts estimates of earnings for assets under management and maintains an Accumulate rating. Target is raised to $11.50 from $9.00.

Target price is $11.50 Current Price is $10.35 Difference: $1.15
If CHC meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $9.99, suggesting downside of -3.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.9

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

Ord Minnett rates CLW as Upgrade to Buy from Hold (1) -

Ord Minnett upgrades to Buy from Hold. The broker assesses assets with long lease expiries are typically -20% undervalued. Early indicators suggest equity inflows are returning to preferred property sectors quickly.

Ord Minnett recommends increasing exposure to long weighted average lease expiry (WALE) A-REITs as part of its view on the recovery post the pandemic. Target is raised to $5.80 from $4.80.

Target price is $5.80 Current Price is $4.52 Difference: $1.28
If CLW meets the Ord Minnett target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $5.30, suggesting upside of 17.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

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

Macquarie reviews the near-term growth assumptions and assumes a less substantial impact from the pandemic. The broker believes Healius is positively leveraged to improved activity levels heading into FY21.

The company has highlighted the potential divestment of its medical centres, and if proceeds are used to repay debt, Macquarie calculates this would reduce pro forma gearing to 1.5x from 2.7x.

Rating is upgraded to Outperform from Neutral and the target is raised to $3.00 from $2.70.

Target price is $3.00 Current Price is $2.62 Difference: $0.38
If HLS meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $2.91, suggesting upside of 11.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.7

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

Credit Suisse rates KGN as Neutral (3) -

The company sustained another strong month of sales and earnings growth in May. This stems from consumers switching to online and increased marketing expenditure.

Credit Suisse expects June will also be strong, given this is a typically higher month of sales because of tax incentives at the end of the financial year.

While not "overly enthusiastic" about discretionary retail exposure during the early stages of a recession, the broker acknowledges the company is clearly benefiting from an acceleration in online shopping.

Neutral rating maintained. Target rises to $11.82 from $8.36.

Target price is $11.82 Current Price is $12.30 Difference: minus $0.48 (current price is over target).
If KGN meets the Credit Suisse target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Credit Suisse rates PTM as Underperform (5) -

Funds under management of $21.8bn in May were down -1.7% because of negative market movements. Total net outflows improved and were at the lowest level for 2020.

The medium-term performance of the international fund is still well under benchmark. Credit Suisse upgrades FY21-22 earnings estimates by 2% to reflect the benefit of lower year-end distributions.

Underperform maintained. Target is raised to $3.20 from $3.15.

Target price is $3.20 Current Price is $4.19 Difference: minus $0.99 (current price is over target).
If PTM meets the Credit Suisse target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.96, suggesting downside of -29.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.8

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

Macquarie rates SKI as Outperform (1) -

The Australian Energy Regulator has released the final outcome for the South Australia Power Network. Macquarie assesses the result is positive for Spark Infrastructure as it ensures growth in the regulated asset base.

The broker believes pressure on the dividend is now alleviated. Outperform rating and $2.33 target maintained. 2021 and 2022 estimates are increased by 5.1% and 6%, respectively.

Target price is $2.33 Current Price is $2.12 Difference: $0.21
If SKI meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $2.18, suggesting upside of 2.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

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

The Australian Energy Regulator has released a final determination for the South Australian Power Network. Incentive allowances and regulatory depreciation have been increased.

The maximum allowable revenue is higher than the draft and Morgan Stanley's estimates, so no change to distribution guidance is anticipated.

Equal-weight. Target is $2.10. Industry view is Cautious.

Target price is $2.10 Current Price is $2.12 Difference: minus $0.02 (current price is over target).
If SKI meets the Morgan Stanley target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.18, suggesting upside of 2.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Credit Suisse rates WOR as Upgrade to Outperform from Neutral (1) -

Credit Suisse assesses the company has more exposure to less volatile industries and a recovery in the next 6-12 months is expected.

Worley is now less exposed to oil & gas capital projects but has a higher exposure to oil & gas customer operating activities. There is also around 37% of revenue emanating from the chemical sector.

The broker expects an update on trading conditions at the investor briefing on June 10. Rating is upgraded to Outperform from Neutral on valuation grounds and the target is lowered to $10.50 from $15.00.

Target price is $10.50 Current Price is $10.66 Difference: minus $0.16 (current price is over target).
If WOR meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $10.09, suggesting downside of -5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.7

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

UBS rates Z1P as Downgrade to Neutral from Buy (3) -

The company has announced the scrip acquisition of Quadpay, a US business in which it held a 14% stake previously. The broker envisages a number of positives, including exposure to the world's largest retail market.

Quadpay has been a strong performer during the pandemic. Through a capital raising of up to $200m the company has resolved near-term equity funding concerns, say the analysts.

However, UBS suggests there are some unknowns, including the precise economics of Quadpay. There is also intense competition in the US.

UBS believes it prudent to take a conservative approach to the acquisition and downgrades to Neutral from Buy. Target is raised to $5.60 from $3.70.

Target price is $5.60 Current Price is $6.48 Difference: minus $0.88 (current price is over target).
If Z1P meets the UBS target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.33, suggesting downside of -17.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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