Australian Broker Call

Citi rates ALL as Buy (1) -

Citi notes the long-awaited the Doom Tower has been released and has been very well received to date by the RAID player community. This is good news, suggests Citi, especially since it follows after a lot of ecosystem issues leading to a stale game experience for users.

The game aesthetics are impressive, assesses the broker, and remain the key differentiator for RAID versus competing games. This could increase revenue with competing players needing new skills and champions to complete the Doom Tower.

Citi maintains its Buy rating with a target of $40.60.

Target price is $40.60 Current Price is $31.31 Difference: $9.29
If ALL meets the Citi target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $36.42, suggesting upside of 19.5% (ex-dividends)

The company's fiscal year ends in September.

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

Morgans rates AQR as Add (1) -

APN Convenience Retail REIT has announced several new acquisitions valued at $75.3m.

The acquisitions will be funded via new equity and debt. A placement at $3.55 raising $30m has been completed, with a share purchase plan (SPP) of $5m to follow.

FY21 guidance is unchanged and includes funds from operations (FFO) of 21.8-22 cents. Morgans believes any potential upside will likely be due to the quantum of any future acquisitions and timing.

The DPS guidance is for no less than 21.8 cents.

The Add rating is maintained and the target price is increased to $4.01 from $3.92.

Target price is $4.01 Current Price is $3.60 Difference: $0.41
If AQR meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges).

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

Morgans rates BHP as Downgrade to Hold from Add (3) -

Morgans upgrades iron ore forecasts after Brazilian major Vale (again) downgraded forward iron ore shipments guidance.

The broker adjusts forecast 2021 supply balance to a deficit from a surplus, all else remaining equal.

The analyst considers earnings support for big Australian iron ore miners looks set to continue beyond current consensus expectations, though a lot is already factored into share prices.

Taking account of this recent share price strength, Morgans downgrades BHP Group to Hold from Add, while the target price increases to $40.90 from $39.40.

Target price is $40.90 Current Price is $42.73 Difference: minus $1.83 (current price is over target).
If BHP meets the Morgans target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $42.18, suggesting downside of -1.2% (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: 0.7

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

Macquarie rates BWX as Initiation of coverage with Outperform (1) -

Macquarie finds the outlook for organic growth attractive as there are a number of opportunities for the core brand, Sukin, and to a lesser extent Andalou Naturals and Nourished Life.

The broker expects margin expansion of around 3.0% and 13% top-line growth over FY20-23. The broker initiates coverage with an Outperform rating and $4.65 target.

Target price is $4.65 Current Price is $4.08 Difference: $0.57
If BWX meets the Macquarie target it will return approximately 14% (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 CBA as Underweight (5) -

Commonwealth Bank has received regulatory approval for the sale of its equity interest in BoCommLife, expected to finish by 31 December.

Morgan Stanley calculates the sale of BoCommLife along with gains/losses on the sale of several assets will add circa 29bps to Commonwealth Bank's CET1 ratio.

The Underweight rating and target price of $68.50 are unchanged. Industry view: In-line.

Target price is $68.50 Current Price is $83.18 Difference: minus $14.68 (current price is over target).
If CBA meets the Morgan Stanley target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $70.86, suggesting downside of -14.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.4

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

Ord Minnett rates CBA as Hold (3) -

Commonwealth Bank has received Chinese regulatory approval to sell its 37.5% stake in BoCommLife to Japan's MD&AD for $886m. The sale should be completed by the end of the year.

Ord Minnett updates forecasts to account for completion adjustments related to divestments and maintains a Hold rating with a $74.70 target.

Target price is $74.70 Current Price is $83.18 Difference: minus $8.48 (current price is over target).
If CBA meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $70.86, suggesting downside of -14.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.4

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

Macquarie rates CLW as Outperform (1) -

Charter Hall Long WALE has announced a $250m equity raising to partially fund acquisitions. Macquarie estimates the capital raising and acquisitions are -1.3% dilutive to FY21 earnings per share. Still, the company has reaffirmed guidance of 29.1c in earnings per share.

Macquarie remains attracted to the distribution yield and cash flow certainty provided by strong tenant covenants and retains an Outperform rating. Target is reduced to $5.34 from $5.54.

Target price is $5.34 Current Price is $4.81 Difference: $0.53
If CLW meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $5.21, suggesting upside of 11.0% (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

Ord Minnett rates CLW as Hold (3) -

The company will raise $250m via an institutional placement to partially fund three acquisitions. The largest asset is the Telco Exchange in the Sydney CBD which has development potential.

The other acquisitions include a new Bunnings ((WES)) asset in Caboolture and an interest in an Endeavour Group-leased pub in Darwin.

Ord Minnett forecasts a minor dilution from the announcement. Hold rating retained. Target is reduced to $4.81 from $4.82.

Target price is $4.81 Current Price is $4.81 Difference: $0
If CLW meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $5.21, suggesting upside of 11.0% (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

UBS rates CLW as Neutral (3) -

Charter Hall Long WALE REIT is raising $250m to acquire $319m worth of assets including 76-78 Pitt Street (Telco exchange leased to Telstra Corp ((TLS)) for 10 years).

UBS highlights the benefits of this transaction will be a higher weighting towards NSW, increased exposures to triple net leases and lesser gearing. On the flip side, the transaction will lead to earnings dilution of -3-4%.

UBS retains its Neutral rating with a target price of $5.20.

Target price is $5.20 Current Price is $4.81 Difference: $0.39
If CLW meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $5.21, suggesting upside of 11.0% (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

Citi rates ELD as Buy (1) -

Chinese authorities have suspended sheepmeat exports from two Victorian abattoirs which had previously experienced covid outbreaks.

Citi notes while there is no impact on the current lamb exports to China, the suspension signals further risk of restrictions on Australian sheepmeat exports, which could adversely impact sheep prices.

This will not bode well for Elders’ livestock agency business, which accounted for 27% of the FY20 gross profit, suggests the broker.

Buy rating is maintained with a $13 target.

Target price is $13.00 Current Price is $10.25 Difference: $2.75
If ELD meets the Citi target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $12.89, suggesting upside of 25.0% (ex-dividends)

The company's fiscal year ends in September.

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 FMG as Neutral (3) -

Fortescue Metals Group is targeting a reduction of -26% in emissions by 2030 and net-zero operational emissions by 2040. Cost and production guidance for FY21 remains intact.

The group highlighted Fortescue Future Industries is assessing a number of renewable energy opportunities and will be funded without any recourse to the group.

Citi reaffirms its Neutral rating with a target of $21.

Target price is $21.00 Current Price is $21.80 Difference: minus $0.8 (current price is over target).
If FMG meets the Citi target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.80, suggesting downside of -16.6% (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: 0.2

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

Credit Suisse rates FMG as Neutral (3) -

The investor briefing was in line with Credit Suisse expectations. The company reiterated the strong returns being delivered to shareholders and outlined an increased focus on decarbonisation.

A lack of detail meant there was nothing to move the dial, in the broker's view. Nevertheless, with iron ore at US$150/t the company appears on track to deliver another robust dividend in February. Neutral and $16.50 target retained.

Target price is $16.50 Current Price is $21.80 Difference: minus $5.3 (current price is over target).
If FMG 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 $18.80, suggesting downside of -16.6% (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: 0.2

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

Macquarie rates FMG as Outperform (1) -

Macquarie observes the operating performance and buoyant iron ore prices have allowed Fortescue Metals to pursue sustainability goals.

The broker continues to expect dividends at the upper end of the dividend policy, forecasting a further US$27.3bn over the next decade will be paid out.

Upgrade momentum remains strong. At spot prices the stock is trading on FY21 and FY22free cash flow yields of 16% and 18%, respectively. Macquarie retains an Outperform rating and $23 target.

Target price is $23.00 Current Price is $21.80 Difference: $1.2
If FMG meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $18.80, suggesting downside of -16.6% (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: 0.2

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

Morgans rates FMG as Hold (3) -

After guidance by management, Morgans lifts the dividend payout ratio of underlying earnings to 80% from 50% for the next two years.

The company has flagged an intention to move into renewable energy. This will be achieved with an independent management team and energy portfolio, still sitting within the iron ore business.

The broker is puzzled by the move, given renewable energy is rapidly becoming a crowded market, deteriorating return profiles observed across renewables and the company’s lack of experience and core competencies in energy.

Morgans also upgrades iron ore forecasts after Brazilian major Vale (again) downgraded forward iron ore shipments guidance.

The broker adjusts forecast 2021 supply balance to a deficit from a surplus, all else remaining equal.

The analyst considers earnings support for big Australian iron ore miners looks set to continue beyond current consensus expectations, though a lot is already factored into share prices.

Taking account of this recent share price strength, Morgans maintains the Hold rating, while the target price is increased to $17.60 from $15.80.

Target price is $17.60 Current Price is $21.80 Difference: minus $4.2 (current price is over target).
If FMG meets the Morgans target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.80, suggesting downside of -16.6% (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: 0.2

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

Ord Minnett rates FMG as Downgrade to Accumulate from Buy (2) -

Ord Minnett was impressed with the company's deep review of the operating performance. Fortescue Metals has guided to 175-180mt of ore shipped at a cost of US$13-13.50/t. Capital expenditure budget remains at US$3-3.4bn.

Further gains are expected from the installation of a wet high intensity magnetic separator at Christmas Creek.

Fortescue Metals has also outlined a target of 2040 for net zero emissions although provided no update on plans for 235GW of renewable power or specifically on the Bell Bay project.

Rating is downgraded to Accumulate from Buy following the recent run up in the share price. Target is unchanged at $20.40.

Target price is $20.40 Current Price is $21.80 Difference: minus $1.4 (current price is over target).
If FMG meets the Ord Minnett target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.80, suggesting downside of -16.6% (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: 0.2

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

UBS rates FMG as Buy (1) -

At its virtual Investor Day, Fortescue Metals Group made no changes to its FY21 guidance but noted costs to be under pressure from a strengthening Australian dollar.

The company reassured investors that Fortescue Future Industries will be structured as a separate entity to target renewables projects with no recourse back to the group for future investments.

Management reiterated that cash returns will remain unchanged with the pay-out ratio at 50-80% of the net profit remaining the target for dividends.

UBS retains a Buy rating with a target price of $19.

Target price is $19.00 Current Price is $21.80 Difference: minus $2.8 (current price is over target).
If FMG meets the UBS target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.80, suggesting downside of -16.6% (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: 0.2

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

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

G8 Education's operating income for the 11 months to November was $98m (including the -$12m provision taken for the remediation of employee underpayments).

The outlook for FY21 includes normalising occupancy, which is -4.5% below last year currently, and circa -$50m of capex. 

On the flip side, Morgan Stanley notes certainty around occupancy rebound is still lacking and closure of underperforming centres continues with oversupply still a risk.

Lacking conviction on the earnings trajectory, Morgan Stanley reaffirms its Equal-weight rating. Target is $1. Industry view: In-line.

Target price is $1.00 Current Price is $1.23 Difference: minus $0.23 (current price is over target).
If GEM 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 $1.09, suggesting downside of -10.3% (ex-dividends)

The company's fiscal year ends in December.

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

Macquarie rates GUD as Resume Coverage with Outperform (1) -

Macquarie resumes coverage after the acquisition of the Automotive Components and Accessories division of AMA Group ((AMA)). The implied transaction multiple is 7.6x enterprise value/FY21 EBITA pre synergies.

Macquarie calculates the acquisition is 6% accretive, pre synergies, to FY22 earnings per share and resumes coverage with an Outperform rating and $12.60 target.

The acquisition should provide a footprint in a large and rapidly growing 4WD accessory market with opportunities for future M&A.

The broker finds the earnings visibility high into 2021 as GUD Holdings is primarily focused on trade, less impacted by the pandemic than retail channel.

Target price is $12.60 Current Price is $11.18 Difference: $1.42
If GUD meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $12.88, suggesting upside of 13.7% (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

Citi rates HLS as Neutral (3) -

Healius' update post the sale of the Medical Centre business outlines that the current initiatives by the company have the potential to increase the operating income margins by circa 300bp. Citi forecasts 100bp margin increase by FY23.

The company also reaffirmed the progress of the pathology IT system upgrade which is now expected to cost -$105-$110m from $100m. Citi assumes benefits worth $7.5m from FY24 onwards.

Neutral rating with the target rising to $4.10 from $3.80.

Target price is $4.10 Current Price is $3.90 Difference: $0.2
If HLS meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $4.11, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Credit Suisse rates HLS as Outperform (1) -

Healius has outlined new capital management strategies as well as cost savings, expecting to generate $80m of annualised savings by FY23.

Despite the bold cost assumptions, Credit Suisse assesses the targets incorporate conservative revenue assumptions with no benefit from long-term coronavirus testing or potential contract gains.

Credit Suisse raises estimates for FY22 and FY23 by 10% and 31% respectively, factoring in the $200m buyback and an improved cost performance. Outperform retained. Target rises to $4.30 from $4.00.

Target price is $4.30 Current Price is $3.90 Difference: $0.4
If HLS meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $4.11, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Macquarie rates HLS as Outperform (1) -

The investor briefing provided targets for FY23 that were ahead of Macquarie's expectations. The broker anticipates margin improvement as well as an opportunity for growth both organically and via acquisitions, reflecting the improved balance sheet.

Recent pathology revenue has been supported by coronavirus and base testing while sustained growth in imaging revenue has been recorded in all states. Day hospital revenue was materially ahead of the prior comparable period.

Macquarie retains an Outperform rating and $4.35 target.

Target price is $4.35 Current Price is $3.90 Difference: $0.45
If HLS meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $4.11, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Morgan Stanley rates HLS as Resume coverage with Equal-weight (3) -

Free from constraints of the underperforming Medical Centre business, Morgan Stanley's investment case for Healius turns to quantifying the benefit from covid testing and deploying capital from a de-leveraged balance sheet.

The company has flagged a share buyback of up to $200m in 2021, which Morgan Stanley estimates will be 4.2% accretive to the FY22 earnings at the current share price.

Considering 3-5% revenue growth range in pathology along with 2-4% revenue growth in diagnostic imaging, the broker estimates target operating income to be $180-190m from pathology and $60-65m in diagnostic imaging in FY23.

Morgan Stanley resumes coverage on Healius with an Equal-weight rating and a target price of $4. Industry view: In-line.

Target price is $4.00 Current Price is $3.90 Difference: $0.1
If HLS meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $4.11, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Ord Minnett rates HLS as Resume Coverage with Accumulate (2) -

Healius has announced a $200m share buyback. Ord Minnett believes the improvement program may prove ambitious, considering the mixed track record at the medical centres that have recently been sold.

The update highlighted the size of the opportunities, nonetheless, with a 40-50% boost to earnings from cost savings. The risks going forward include a likely rapid drop in coronavirus testing in 2021.

The broker resumes coverage with an Accumulate rating and $4.35 target, reflecting the undemanding valuation and the reliability of the core diagnostic divisions.

Target price is $4.35 Current Price is $3.90 Difference: $0.45
If HLS meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $4.11, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

UBS rates HLS as No Rating (-1) -

Post-divestment of its Medical Centres business for $483m, Healius will be buying back 10% of shares in 2021. The company also announced a revised dividend payout policy of 50-70% on the net profit going forward.

UBS notes the company posted strong group revenue growth in October and November driven by PCR volume growth, recovering non-covid-19 pathology revenues and improving diagnostic imaging revenue growth.

The broker is currently restricted from making a recommendation.

Current Price is $3.90. Target price not assessed.

Current consensus price target is $4.11, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Morgan Stanley rates IEL as Overweight (1) -

In FY15, China as a source market for IDP Education was 22% of its total students while Australia as a destination represented 84% of the business.

In FY20, China represents 21% of the company's total source markets but Australia's share is just 47% of IDP's total business. India is becoming the dominant source market with Canada and UK emerging as destinations.

Morgan Stanley notes IDP Education's gross profit from the China-Australia lane has reduced to less than 10% ($15m) in FY20 from 18% in FY15. Should Chinese students stop coming to Australia, the broker expects the gross profit of the company would decline by -4%.

Morgan Stanley maintains its Overweight rating with a target price of $24. Industry view: In-line.

Target price is $24.00 Current Price is $21.86 Difference: $2.14
If IEL meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $22.66, suggesting upside of 6.3% (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

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

IGO will acquire a 25% interest in Greenbushes lithium and a 49% interest in downstream Kwinana lithium hydroxide, for US$1.4bn. Funding will be via debt and equity.

The deal is expected to be accretive from FY23 and cash flow accretive from FY24. Credit Suisse welcomes the deal, as the transaction is at the bottom of the cycle from a forced seller in a sector where the structural growth theme prevails.

It also addresses the mine life deficiency in the company's portfolio. Rating is upgraded to Outperform from Neutral and the target raised to $6.00 from $4.90.

Target price is $6.00 Current Price is $5.09 Difference: $0.91
If IGO meets the Credit Suisse target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $5.22, suggesting upside of 2.4% (ex-dividends)

The company's fiscal year ends in June.

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

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

IGO will be buying 24.99% of Greenbushes for US$1.4bn. Morgan Stanley finds the purchase price of both Greenbushes and Kwinana reasonable compared to Mineral Resources' sale of Wodgina.

Also, the broker notes Greenbushes is a higher reserve grade asset at 2.05% versus Wodgina's 1.17% and the deal is in-sync with IGO’s clean energy M&A strategy.

Equal-weight. Target price rises to $5.05 from $$4.90. Industry view: Attractive.

Target price is $5.05 Current Price is $5.09 Difference: minus $0.04 (current price is over target).
If IGO 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 $5.22, suggesting upside of 2.4% (ex-dividends)

The company's fiscal year ends in June.

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

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

Strong US demand and higher fertiliser prices over the last month have underpinned Incitec Pivot, which has also been able to capture some of the premium in US diammonium phosphate prices via US exports.

Macquarie expects this will continue over the short term before supply moves to the key Australian season.

The share price is still at a discount to traditional fertiliser price correlation and book value, hence Macquarie upgrades to Outperform from Neutral. Target is raised to $2.67 from $2.30.

Target price is $2.67 Current Price is $2.40 Difference: $0.27
If IPL meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $2.55, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in September.

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

Credit Suisse rates LNK as No Rating (-1) -

Credit Suisse updates forecasts to reflect the trading update, reducing estimates for earnings per share by -5% for FY21 and raising estimates by 5% for FY22.

First half guidance includes revenue of $594m, EBIT of $77m with net profit of $57m. Credit Suisse is restricted on providing a rating and target at present.

Current Price is $5.56. Target price not assessed.

Current consensus price target is $5.51, suggesting downside of -1.9% (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

Macquarie rates LNK as No Rating (-1) -

Link Administration has upgraded cost reduction targets, increasing the target for FY22 to $75m of annualised benefits. First half guidance is for revenue of $594m and net profit of $57m.

The demerger of PEXA remains in progress and the company is expected to provide an update in the second half. The PES acquisition is expected to be completed by the end of FY21.

Macquarie is currently restricted on providing a rating or target.

Current Price is $5.56. Target price not assessed.

Current consensus price target is $5.51, suggesting downside of -1.9% (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 rates LNK as Hold (3) -

Guidance for first half revenue and operating profit (NPATA) were broadly in-line with Morgans' estimates.

A key highlight for the broker is the continued outperformance of PEXA, with revenue growing over four times from FY18 to FY20.

Morgans upgrades FY21-FY23 EPS forecasts by around 6%, 7% and 8%, respectively, mainly on higher global transformation program (GTP) benefits.

The Hold rating is unchanged and the target price is increased to $5.74 from $5.40.

Target price is $5.74 Current Price is $5.56 Difference: $0.18
If LNK meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $5.51, suggesting downside of -1.9% (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

Ord Minnett rates LNK as Hold (3) -

Link Administration expects a rebound in net profit in the second quarter and has upgraded synergy targets. There was no mention of the takeover proposals. As a result of the update, Ord Minnett increases FY21 net profit estimates by 18%.

The broker suspects within the next two weeks Pacific Equity could decide to either launch a formal takeover or walk away.

The broker observes that, unlike the Pacific Equity offer, the board did not issue a statement saying the SS&C indicative offer was inadequate. Hold maintained. Target rises to $5.60 from $5.00.

Target price is $5.60 Current Price is $5.56 Difference: $0.04
If LNK meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $5.51, suggesting downside of -1.9% (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

UBS rates LNK as No Rating (-1) -

Despite a challenging operating environment, UBS finds Link Administration's business update positive. The company's first half guidance is ahead of expectations and supported by a strong PEXA result.

Link remains well-positioned for a cyclical earnings recovery but not until FY22, assesses UBS, driven by rebounding corporate activity and higher cost-out by FY22.

The broker is currently research restricted on providing a rating and target.

Current Price is $5.56. Target price not assessed.

Current consensus price target is $5.51, suggesting downside of -1.9% (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

Credit Suisse rates MFG as Downgrade to Neutral from Outperform (3) -

Credit Suisse lowers estimates to allow for weaker funds under management and first half performance fees. The Global Fund underperformed in November and the broker notes the one-year performance is at risk of deteriorating.

The broker suggests this could remove "a little of Magellan Financial's shine" amid concerns over fund flows and a small PE de-rating.

The broker estimates only the High Conviction Fund is on track to generate performance fees, although these will be modest. Rating is downgraded to Neutral from Outperform and the target is lowered to $58.50 from $66.00.

Target price is $58.50 Current Price is $58.10 Difference: $0.4
If MFG meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $60.11, suggesting upside of 7.7% (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 rates ONT as Add (1) -

After a trading update by 1300 Smiles, Morgans highlights the ongoing rebound from June and monthly revenue records.

Should the trend continue, the broker believes forecast upgrades will be necessary, most likely after first half results in February.

The Add rating is maintained and the target increased to $7.68 from $6.99.

Target price is $7.68 Current Price is $6.79 Difference: $0.89
If ONT meets the Morgans target it will return approximately 13% (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

Citi rates OZL as Neutral (3) -

Looking at the positive update on the pre-feasibility study (PFS), Oz Minerals has decided to progress the West Musgrave nickel-copper project to a definitive feasibility study. The final investment decision is expected in 2022.

The large-scale, long-life project offers further base metals exposure with exploration upside. In 2023, the challenge for the miner, in Citi's view, will be choosing between deploying around $1bn on a nickel project or developing a block cave at Carrapateena.

Citi retains a Neutral rating with the target rising to $19.40 from $19.10.

Target price is $19.40 Current Price is $18.87 Difference: $0.53
If OZL meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $17.11, suggesting downside of -8.2% (ex-dividends)

The company's fiscal year ends in December.

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

Macquarie rates OZL as Outperform (1) -

OZ Minerals has expanded the scope of the West Musgrave project, now expecting 32,000tpa of copper and 26,000tpa of nickel.

Incorporating the development into its modelling drives a reduction of -4% to Macquarie's estimates for earnings between 2020-24 because of higher capital expenditure.

The project is shaping up as a strong growth option, in the broker's view. The inclusion of West Musgrave lifts the 10-year copper equivalent production growth rate to 8.6% from 5%.

Macquarie maintains an Outperform rating and raises the target to $22.00 from $17.40.

Target price is $22.00 Current Price is $18.87 Difference: $3.13
If OZL meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $17.11, suggesting downside of -8.2% (ex-dividends)

The company's fiscal year ends in December.

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

Morgan Stanley rates OZL as Overweight (1) -

Oz Minerals' first study update since its 100% ownership of West Musgrave disclosed $67m has been committed to studies with a final decision due in 2022.

Morgan Stanley believes the route to development is likely to be part-sale. The broker sees a capital shortfall considering both Prominent Hill Expansion and Carrapateena are more time-sensitive and likely to precede West Musgrave.

Overweight rating. Target is $17.10. Industry view: Attractive.

Target price is $17.10 Current Price is $18.87 Difference: minus $1.77 (current price is over target).
If OZL meets the Morgan Stanley target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $17.11, suggesting downside of -8.2% (ex-dividends)

The company's fiscal year ends in December.

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

Citi rates PPT as Neutral (3) -

Citi was disappointed with the lack of new financial information during Perpetual’s investor day. The company merely indicated a rise in Barrow's assets under management from US$41bn to US$46bn in November.

Perpetual also indicated better Trillium performance which provides Citi with some hope of seeing better flows if the performance is maintained.

Earnings forecasts have been reduced for FY21-23 by -4-7%. The price target rises to $33 from $32.30. Neutral rating retained.

Target price is $33.00 Current Price is $34.04 Difference: minus $1.04 (current price is over target).
If PPT meets the Citi target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $35.85, suggesting downside of -0.3% (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 PPT as Upgrade to Outperform from Neutral (1) -

Credit Suisse now assesses Perpetual is offering value, amid a reduced attrition risk and a likely moderation in outflows.

The broker believes the recent outperformance of value versus growth could benefit the company through reduced gross outflows as client retention improves, amid higher gross inflows because of allocations to value strategies.

Rating is upgraded to Outperform from Neutral and the target is raised to $39 from $31.

Target price is $39.00 Current Price is $34.04 Difference: $4.96
If PPT meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $35.85, suggesting downside of -0.3% (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 PPT as Overweight (1) -

Perpetual's investor day disclosed better performance across all of Perpetual's equity strategies.

Morgan Stanley considers the Barrow Hanley acquisition timely with most of its equity strategies ahead of the benchmarks over 1, 3 and 5 years to November. 

Trillium’s global equity ESG strategy has also been doing well and is more than 4% higher than the benchmark over 1,3 and 5 years to September.

Morgan Stanley retains its Overweight rating. The target price is $42.50. Industry view: In-line.

Target price is $42.50 Current Price is $34.04 Difference: $8.46
If PPT meets the Morgan Stanley target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $35.85, suggesting downside of -0.3% (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 PPT as Hold (3) -

Ord Minnett found little in the company's investor update of concern, although execution on acquisitions remains a key risk.

The broker observes the recent rotation to value has been a significant tailwind for the majority of the new and recently acquired asset management strategies.

Still, a re-rating of the share price is considered unlikely until there is a sustained turnaround in flows. Hold maintained. Target rises to $33.50 from $31.50.

Target price is $33.50 Current Price is $34.04 Difference: minus $0.54 (current price is over target).
If PPT meets the Ord Minnett target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $35.85, suggesting downside of -0.3% (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 PSI as Initiation of coverage with Outperform (1) -

Macquarie notes a consistent track record of accretive acquisitions, including underperforming businesses that have improved over time.

In a bull case scenario, Macquarie believes the company is well-placed to pursue acquired revenue growth as high as 15% per annum out to FY23 before reaching the top end of its target leverage range.

The broker initiates coverage with an Outperform rating and $3.60 target and retains a preference for insurance brokers over insurers. Among the insurance brokers, PSC Insurance is a preferred pick because of the upside risk from acquisitions.

Target price is $3.60 Current Price is $2.99 Difference: $0.61
If PSI meets the Macquarie target it will return approximately 20% (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

Morgans rates RIO as Hold (3) -

Morgans upgrades iron ore forecasts after Brazilian major Vale (again) downgraded forward iron ore shipments guidance.

The broker adjusts forecast 2021 supply balance to a deficit from a surplus, all else remaining equal.

The analyst considers earnings support for big Australian iron ore miners looks set to continue beyond current consensus expectations, though a lot is already factored into share prices.

Taking account of this recent share price strength, Morgans maintains the Hold rating, while the target price is increased to $107 from $103.

Target price is $107.00 Current Price is $115.44 Difference: minus $8.44 (current price is over target).
If RIO meets the Morgans target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $110.07, suggesting downside of -4.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

This company reports in USD. 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

Macquarie rates SCG as Downgrade to Underperform from Neutral (5) -

Macquarie assesses online penetration will increase to 20% of retail sales by 2025, double pre-pandemic levels. Accounting for supply additions and online leakage, the broker estimates like-for-like bricks and mortar sales growth of 0.7% per annum.

This is below the typical rental escalators the specialties of 4-5%. The broker also assesses online models can deliver competitive margins.

Scentre Group's portfolio does have an inherent advantage in the quality of its assets but the broker envisages downside risk as cash flows remain under pressure with the rise in e-commerce penetration.

Rating is downgraded to Underperform from Neutral, and the target is lifted to $2.68 from $2.18 given a less negative view on the outlook of retail asset values post a coronavirus vaccine.

Target price is $2.68 Current Price is $2.88 Difference: minus $0.2 (current price is over target).
If SCG meets the Macquarie target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.57, suggesting downside of -9.1% (ex-dividends)

The company's fiscal year ends in December.

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

Morgan Stanley rates SCG as Overweight (1) -

Morgan Stanley does not expect Scentre Group will be raising equity any time soon despite the share price going towards $3, the level some investors had thought the group might consider raising equity.

The group has -$1bn of debt maturing in 2021 with -$1.8bn maturing in 2022. Post the hybrid issue of $4.1bn in September 2020, the group has enough cash to almost fully retire its maturing debt over the next three years, assesses the broker.

Overweight rating. Target is $3.15. Industry view: In-line.

Target price is $3.15 Current Price is $2.88 Difference: $0.27
If SCG meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.57, suggesting downside of -9.1% (ex-dividends)

The company's fiscal year ends in December.

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

Macquarie rates VCX as Neutral (3) -

Macquarie assesses online penetration will increase to 20% of retail sales by 2025, double pre-pandemic levels. Accounting for supply additions and online leakage, the broker estimates like-for-like bricks and mortar sales growth of 0.7% per annum.

This is below the typical rental escalators the specialties of 4-5%. The broker also assesses online models can deliver competitive margins.

The company's exposure to CBDs and Chadstone means there is greater in short-term downside risk to cash flows, in the broker's view, given stores are being rationalised (CBDs) and tourism will take time to re-emerge (Chadstone).

Offsetting this is the sound balance sheet and valuation. Macquarie retains a Neutral rating and raises the target to $1.70 from $1.42.

Target price is $1.70 Current Price is $1.74 Difference: minus $0.04 (current price is over target).
If VCX meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.58, suggesting downside of -8.2% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates Z1P as Neutral (3) -

Citi notes Zip Co’s share price has underperformed Afterpay ((APT)) in recent weeks despite a strong November update. Citi expects Zip Co will raise $100m in additional equity in the first half of FY22.

The broker does concede the capital could be required earlier and the size of the raising may be larger especially given the strong growth from Quadpay along with the increase in marketing and promotional activity and potential entry into new markets.

While Citi acknowledges the early mover advantage in entering new markets, the broker is concerned Zip Co could be taking on too much.

Neutral rating is retained with the target reducing to $6.40 from $6.70.

Target price is $6.40 Current Price is $5.30 Difference: $1.1
If Z1P meets the Citi target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $6.67, suggesting upside of 29.3% (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