Australian Broker Call

Macquarie rates 29M as Downgrade to Underperform from Neutral (5) -

Macquarie downgrades its rating for 29Metals to Underperform from Neutral and lowers the target by -44% to 25c following the suspension of operations at Capricorn Copper due to an extended period of rainfall.

The broker lists the negatives: 29Metals is now a one asset producer with a leveraged balance sheet; there's a high operating cost base at Golden Grove; and the CEO is in transition.

The analyst doesn't assume in forecasts a restart at Capricorn Copper as part of the base case, as that would require a long-term tailings solution. Two proposed tailings capacity options by management do not represent such a long-term solution, in the broker's view.

Target price is $0.25 Current Price is $0.40 Difference: minus $0.15 (current price is over target).
If 29M meets the Macquarie target it will return approximately minus 38% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.43, suggesting upside of 20.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Morgan Stanley rates 29M as Overweight (1) -

Management at 29Metals will ramp-down operations at Capricorn Copper over the next six weeks due to rising water levels from recent rainfall. A re-start plan will be provided at March quarterly results.

From the current $50m cash balance, Morgan Stanley's base case is a minimum of $25m can be maintained over the 2H of 2024, though only $15m (instead of $25m) may be required on current spot commodity prices.

The company may not require additional capital should the spot copper price rise another 5%, suggest the analysts, or debt payments are delayed. An additional insurance payment of around $15m would also help stave off the need for cash.

Overweight rating. Target 50 cents. Industry view: Attractive.

Target price is $0.50 Current Price is $0.40 Difference: $0.1
If 29M meets the Morgan Stanley target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $0.43, suggesting upside of 20.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Bell Potter rates A4N as Speculative Buy (1) -

Management at Alpha HPA have stated the final definitive feasibility study (DFS) and project financing for the full-scale high purity alumina (HPA) First Project Stage 2 is near completion. Production will be 10,000t per year of HPA equivalent.

Bell Potter expects final Project Finance debt funding approvals for Stage 2 within weeks. It's assumed HPA First Project Stage 2 is developed over 2024-25 for first production in 2026.

The company is also on track to commence Alpha Sapphire “Phase A” production from its first two growth units in April 2024.

The broker's Speculative Buy rating is maintained and the target lowered to $1.60 from $1.68 reflecting delays to first production.

Target price is $1.60 Current Price is $0.86 Difference: $0.74
If A4N meets the Bell Potter target it will return approximately 86% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Bell Potter rates AIS as Buy (1) -

Bell Potter remains bullish on the outlook for copper, noting the LME cash copper price has gained 8.5% in the last seven weeks.

The broker reminds investors the valuation and financial performance of Aeris Resources, a high-cost producer, is highly leveraged to the copper price. Around 71% of revenue for the company is derived from copper.

The Buy rating and 23c target are unchanged.

Target price is $0.23 Current Price is $0.14 Difference: $0.085
If AIS meets the Bell Potter target it will return approximately 59% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Ord Minnett rates ALL as Downgrade to Hold from Accumulate (3) -

Ord Minnett expects Aristocrat Leisure's unmatched research and development expenditure within the industy will continue to see the company maintain game quality and differentiate from lower-end competitors. 

Comparing Aristocrat Leisure with Light and Wonder ((LNW)) and International Game Technology, the broker notes Aristocrat Leisure typically spends 12% of revenue on design and development, versus a respective 9% and 7% from peers.

Ord Minnett  expects this spend can ensure consistency in deploying popular titles from Aristocrat Leisure.

The rating is downgraded to Hold from Accumulate and the target price of $45.00 is retained.

Target price is $45.00 Current Price is $42.87 Difference: $2.13
If ALL meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $47.60, suggesting upside of 11.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Ord Minnett rates AMP as Hold (3) -

Ord Minnett has found some of the industry data pertaining to asset manager inflows and outflows presented as part of its inaugural Asset Managers report may be inaccurate. 

The broker does, however, stand by investment conclusions drawn in the report. 

The Hold rating and target price of $1.20 are retained.

Target price is $1.20 Current Price is $1.13 Difference: $0.075
If AMP meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $1.11, suggesting downside of -4.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Ord Minnett rates AX1 as Accumulate (2) -

Ord Minnett notes discretionary retail stocks are currently rallying due to talk of interest rate cuts and impending tax cuts.

The broker advocates caution as its near-term forecast shows a significant divergence across categories, with sales in cyclicals virtually flat and defensives rising by 4%.

While some appealing opportunities exist, the analyst suspects the market is expecting a much more pronounced recovery than Ord Minnett is forecasting. It's noted the government is still fighting inflation and attempting to firm its economic management credentials.

The analyst still sees value in apparel retailer Accent Group despite near-term concerns over a growing wage bill and slower sales.

The Accumulate rating and $2.40 target are maintained. 

Target price is $2.40 Current Price is $1.99 Difference: $0.41
If AX1 meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $2.36, suggesting upside of 14.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Ord Minnett rates CGF as Hold (3) -

Ord Minnett has found some of the industry data pertaining to asset manager inflows and outflows presented as part of its inaugural Asset Managers report may be inaccurate. 

The broker does, however, stand by investment conclusions drawn in the report. 

The Hold rating and target price of $7.40 are retained.

Target price is $7.40 Current Price is $6.90 Difference: $0.5
If CGF meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $7.16, suggesting upside of 2.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Citi rates CIA as Buy (1) -

A recent Capital Markets Day from Champion Iron offered an opportunity for the company to help investors understand the impact decarbonisation on the steel industry and iron ore pricing.

It was reiterated that higher grade iron products would recieve a premium under a carbon tax regime, and be in higher demand, and that from 2034 all EU steel producers would be exposed to carbon cost obligations.

First production from the company's DR pellet feed project, which will upgrade half of Champion Iron's iron concentrate to a 69% grade, is anticipated by the end of 2025. Citi expects this can demand an initial premium of 30%, rising to 39% by 2034 given carbon tax assumptions. 

The Buy rating and target price of $9.60 are retained.

Target price is $9.60 Current Price is $7.18 Difference: $2.42
If CIA meets the Citi target it will return approximately 34% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.5

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

Ord Minnett rates CKF as Accumulate (2) -

Ord Minnett notes discretionary retail stocks are currently rallying due to talk of interest rate cuts and impending tax cuts.

The broker advocates caution as its near-term forecast shows a significant divergence across categories, with sales in cyclicals virtually flat and defensives rising by 4%.

While some appealing opportunities exist, the analyst suspects the market is expecting a much more pronounced recovery than Ord Minnett is forecasting. It's noted the government is still fighting inflation and attempting to firm its economic management credentials.

Ord Minnett believes trading down by consumers will insulate the performance of Collins Foods, one of the two cheapest names under coverage, along with Domino's Pizza Enterprises.

The Accumulate rating and $14.40 target are maintained for Collins Foods.

Target price is $14.40 Current Price is $10.17 Difference: $4.23
If CKF meets the Ord Minnett target it will return approximately 42% (excluding dividends, fees and charges).

Current consensus price target is $12.28, suggesting upside of 21.2% (ex-dividends)

The company's fiscal year ends in May.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Ord Minnett rates COL as Lighten (4) -

Ord Minnett notes discretionary retail stocks are currently rallying due to talk of interest rate cuts and impending tax cuts.

The broker advocates caution as its near-term forecast shows a significant divergence across categories, with sales in cyclicals virtually flat and defensives rising by 4%.

While some appealing opportunities exist, the analyst suspects the market is expecting a much more pronounced recovery than Ord Minnett is forecasting. It's noted the government is still fighting inflation and attempting to firm its economic management credentials.

Regarding Coles Group, Ord Minnett expects near-term demand for defensive goods like food and liquor will hold up relatively well, though forecasts wage expenses will rise by more than sales.

The Lighten rating and $15 target are maintained.

Target price is $15.00 Current Price is $16.62 Difference: minus $1.62 (current price is over target).
If COL 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 $17.28, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Ord Minnett rates DMP as Accumulate (2) -

Ord Minnett notes discretionary retail stocks are currently rallying due to talk of interest rate cuts and impending tax cuts.

The broker advocates caution as its near-term forecast shows a significant divergence across categories, with sales in cyclicals virtually flat and defensives rising by 4%.

While some appealing opportunities exist, the analyst suspects the market is expecting a much more pronounced recovery than Ord Minnett is forecasting. It's noted the government is still fighting inflation and attempting to firm its economic management credentials.

Ord Minnett believes trading down by consumers will insulate the performance of Domino's Pizza Enterprises, one of the two cheapest names under coverage, along with Collins Foods.

The Accumulate rating and $61 target are maintained.

Target price is $61.00 Current Price is $42.79 Difference: $18.21
If DMP meets the Ord Minnett target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $50.42, suggesting upside of 18.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Ord Minnett rates EDV as Accumulate (2) -

Ord Minnett notes discretionary retail stocks are currently rallying due to talk of interest rate cuts and impending tax cuts.

The broker advocates caution as its near-term forecast shows a significant divergence across categories, with sales in cyclicals virtually flat and defensives rising by 4%.

While some appealing opportunities exist, the analyst suspects the market is expecting a much more pronounced recovery than Ord Minnett is forecasting. It's noted the government is still fighting inflation and attempting to firm its economic management credentials.

Regarding Endeavour Group, Ord Minnett expects near-term demand for defensive goods like food and liquor will hold up relatively well, though forecasts wage expenses will rise by more than sales.

The Accumulate rating and $6.10 target are unchanged.

Target price is $6.10 Current Price is $5.38 Difference: $0.72
If EDV meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $5.74, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Citi rates FLT as Buy (1) -

Citi considers the announcement that American Express Global Business Travel (AMEX GBT) will acquire business travel solutions provider CWT for $570m to be a minor positive for Flight Centre Travel, anticipating an improved industry structure with one less competitor.

The broker sees potential for some forced divestments in some regions amid the merger, offering opportunity. 

The Buy rating and target price of $24.15 are retained.

Target price is $24.15 Current Price is $21.47 Difference: $2.68
If FLT meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $24.51, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Morgans rates HPI as Add (1) -

Hotel Property Investments, a pure-play pub portfolio, has sold four assets for $48.6m (in line with book value last-December) to its major tenant Australian Venue Co.

Proceeds will be recycled into a new capex program, including an agreement with Australian Venue Co to invest up to -$50m to enhance a number of venues. The broker highlights past capex programs with Australian Venue Co have delivered enhanced rental income.

Morgans raises its target to $3.71 from $3.65. Add.

Target price is $3.71 Current Price is $3.29 Difference: $0.42
If HPI meets the Morgans target it will return approximately 13% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Ord Minnett rates HVN as Lighten (4) -

Ord Minnett notes discretionary retail stocks are currently rallying due to talk of interest rate cuts and impending tax cuts.

The broker advocates caution as its near-term forecast shows a significant divergence across categories, with sales in cyclicals virtually flat and defensives rising by 4%.

While some appealing opportunities exist, the analyst suspects the market is expecting a much more pronounced recovery than Ord Minnett is forecasting. It's noted the government is still fighting inflation and attempting to firm its economic management credentials.

The Lighten rating and $4.00 target are maintained for Harvey Norman.

Target price is $4.00 Current Price is $4.96 Difference: minus $0.96 (current price is over target).
If HVN meets the Ord Minnett target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.72, suggesting downside of -6.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Ord Minnett rates IFL as Accumulate (2) -

Ord Minnett has found some of the industry data pertaining to asset manager inflows and outflows presented as part of its inaugural Asset Managers report may be inaccurate. 

The broker does, however, stand by investment conclusions drawn in the report.

The Accumulate rating and target price of $3.60 are retained.

Target price is $3.60 Current Price is $2.45 Difference: $1.15
If IFL meets the Ord Minnett target it will return approximately 47% (excluding dividends, fees and charges).

Current consensus price target is $2.61, suggesting upside of 5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.6

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

Ord Minnett rates JBH as Sell (5) -

Ord Minnett notes discretionary retail stocks are currently rallying due to talk of interest rate cuts and impending tax cuts.

The broker advocates caution as its near-term forecast shows a significant divergence across categories, with sales in cyclicals virtually flat and defensives rising by 4%.

While some appealing opportunities exist, the analyst suspects the market is expecting a much more pronounced recovery than Ord Minnett is forecasting. It's noted the government is still fighting inflation and attempting to firm its economic management credentials.

For JB Hi-Fi, the Sell rating is maintained given the share price is trading at a significant premium to Ord Minnett's $37.50 target.

Target price is $37.50 Current Price is $63.08 Difference: minus $25.58 (current price is over target).
If JBH meets the Ord Minnett target it will return approximately minus 41% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $56.25, suggesting downside of -12.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Ord Minnett rates KGN as Accumulate (2) -

Ord Minnett notes discretionary retail stocks are currently rallying due to talk of interest rate cuts and impending tax cuts.

The broker advocates caution as its near-term forecast shows a significant divergence across categories, with sales in cyclicals virtually flat and defensives rising by 4%.

While some appealing opportunities exist, the analyst suspects the market is expecting a much more pronounced recovery than Ord Minnett is forecasting. It's noted the government is still fighting inflation and attempting to firm its economic management credentials.

Ord Minnett maintains an Accumulate rating and $10.70 target for Kogan.com.

Target price is $10.70 Current Price is $8.01 Difference: $2.69
If KGN meets the Ord Minnett target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $7.73, suggesting downside of -2.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Ord Minnett rates LOV as Lighten (4) -

Ord Minnett notes discretionary retail stocks are currently rallying due to talk of interest rate cuts and impending tax cuts.

The broker advocates caution as its near-term forecast shows a significant divergence across categories, with sales in cyclicals virtually flat and defensives rising by 4%.

While some appealing opportunities exist, the analyst suspects the market is expecting a much more pronounced recovery than Ord Minnett is forecasting. It's noted the government is still fighting inflation and attempting to firm its economic management credentials.

Ord Minnett retains a Lighten rating and $23.50 target for Lovisa Holdings.

Target price is $23.50 Current Price is $32.29 Difference: minus $8.79 (current price is over target).
If LOV meets the Ord Minnett target it will return approximately minus 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.27, suggesting downside of -9.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Ord Minnett rates MFG as Hold (3) -

Ord Minnett has found some of the industry data pertaining to asset manager inflows and outflows presented as part of its inaugural Asset Managers report may be inaccurate. 

The broker does, however, stand by investment conclusions drawn in the report. 

The Hold rating and target price of $9.60 are retained.

Target price is $9.60 Current Price is $9.81 Difference: minus $0.21 (current price is over target).
If MFG 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 $8.91, suggesting downside of -10.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

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

Shaw and Partners rates MMI as Buy (1) -

An optimistic Shaw and Partners welcomes the announcement made by Metro Mining that operations at the Bauxite Hills bauxite mine in Far North Queensland have recommenced post the wet season.

More positive news came through via contract prices being approximately 20% higher in 2Q24 from 4Q23.

The broker believes 2024 is likely to be the year when Metro Mining can finally demonstrate the earnings capacity of the Bauxite Hills operation.

The broker is forecasting a full year EBITDA number of $111m on bauxite shipments of 6.5Mt. Buy. Target 7c. The broker is even suggesting loyal shareholders can expect a 1c dividend in FY25.

Metro Mining is one of Shaw and Partners' Top Picks for 2024.

Target price is $0.07 Current Price is $0.04 Difference: $0.031
If MMI meets the Shaw and Partners target it will return approximately 79% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Bell Potter rates MND as Initiation of coverage with Buy (1) -

Bell Potter highlights the short-and medium-term outlooks for Monadelphous Group are supported by a growing pipeline of committed developments across the energy, lithium and rare earths sectors.

This pipeline is expected to drive strong growth within the Engineering Construction (EC) division, according to the broker.

The other division, Maintenance and Industrial Services (M&I), is expected to partly benefit from the latest wave of resources and energy developments, and a growing renewable energy investment pipeline, explain the analysts.

In general terms, Monadelphous Group is an engineering group providing construction, maintenance and industrial services to the resources, energy and infrastructure sectors.

Bell Potter begins research coverage with a Buy rating and $15.40 target.

Target price is $15.40 Current Price is $13.80 Difference: $1.6
If MND meets the Bell Potter target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $15.18, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Ord Minnett rates MTS as Hold (3) -

Ord Minnett notes discretionary retail stocks are currently rallying due to talk of interest rate cuts and impending tax cuts.

The broker advocates caution as its near-term forecast shows a significant divergence across categories, with sales in cyclicals virtually flat and defensives rising by 4%.

While some appealing opportunities exist, the analyst suspects the market is expecting a much more pronounced recovery than Ord Minnett is forecasting. It's noted the government is still fighting inflation and attempting to firm its economic management credentials.

The broker retains a Hold rating and $4.00 target for Metcash.

Target price is $4.00 Current Price is $3.86 Difference: $0.14
If MTS meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.14, suggesting upside of 5.8% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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 notes discretionary retail stocks are currently rallying due to talk of interest rate cuts and impending tax cuts.

The broker advocates caution as its near-term forecast shows a significant divergence across categories, with sales in cyclicals virtually flat and defensives rising by 4%.

While some appealing opportunities exist, the analyst suspects the market is expecting a much more pronounced recovery than Ord Minnett is forecasting. It's noted the government is still fighting inflation and attempting to firm its economic management credentials.

The Hold rating and 75c target are maintained for Myer.

Target price is $0.75 Current Price is $0.85 Difference: minus $0.1 (current price is over target).
If MYR meets the Ord Minnett target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in July.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Citi rates PMV as Buy (1) -

Premier Investments has reported a first half earnings result of $209.8m, exceeding its own guidance as gross margins performed better than expected.

Citi points out sales were disappointing, falling -3.4% year-on-year amid broad misses from apparel brands, with Peter Alexander reporting a surprising 7% growth. 

The company provided timelines for the demergers of Smiggle and Peter Alexander, planning to demerge the former by January 2025, and is exploring demerging the latter within the same calendar year. Meantime, Peter Alexander will enter the UK market with two stores.

The Buy rating and target price of $30.20 are retained.

Target price is $30.20 Current Price is $32.00 Difference: minus $1.8 (current price is over target).
If PMV 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 $29.14, suggesting downside of -6.1% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Morgan Stanley rates PMV as Overweight (1) -

The earnings upgrade cycle continues at Premier Investments, observes Morgan Stanley, with 1H earnings (EBIT) beating guidance by 5% on higher gross margins and lower capex.

The key takeaway for the analysts was progress on the de-mergers of Smiggle and Peter Alexander. It's also noted the global expansion is accelerating with Smiggle targeting 100 freestanding stores in Indonesia with an existing wholesale partner.

The target rises to $38 from $32 reflecting the broker's higher earnings forecasts and after marking-to-market for higher valuations for Breville Group ((BRG)) and Myer ((MYR)).

Premier remains Morgan Stanley's preferred small/mid cap retailer. Overweight rating. Industry view: In-Line.

Target price is $38.00 Current Price is $32.00 Difference: $6
If PMV meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $29.14, suggesting downside of -6.1% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Ord Minnett rates PMV as Sell (5) -

Premier Investments delivered a beat to Ord Minnett's expectations with its first half results. Net profits of $156m reflected a -6% decline, but the broker had anticipated a steeper drop, and Ord Minnett now anticipates an -11% decline over the full year.

The broker finds Premier Investments to be trading at a significant premium, and while some retail stocks, including Premier Investments, are rallying, the broker feels the market anticipates a more pronounced recovery.

With Peter Alexander the only brand within Premier Investments' portfolio with positive first half sales growth, Ord Minnett anticipates soft consumer demand for fashion over the second half.

The Sell rating is retained and the target price increases to $20.50 from $19.50.

Target price is $20.50 Current Price is $32.00 Difference: minus $11.5 (current price is over target).
If PMV meets the Ord Minnett target it will return approximately minus 36% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.14, suggesting downside of -6.1% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

UBS rates PMV as Upgrade to Neutral from Sell (3) -

Premier Investments delivered 1H earnings (EBIT) of $209.8m, exceeding forecasts by consensus, UBS and also beating management guidance for around $200m. The broker upgrades to Neutral from Sell and the target rises to $31 from $27.

Even though sales growth missed expectations held by the broker and consensus, higher gross margins and good management of cost-of-doing-business (CODB) won the day, explains the analyst.

UBS is now more confident of earnings margin expansion beyond FY24, given a change in channel and brand mix along with the sound
cost-of-goods sold (COGS) and CODB management.

The company is working towards a demerger of Smiggle into a separately listed entity by January 2025, and is exploring a demerger of Peter Alexander into a separately listed entity during 2025.

Target price is $31.00 Current Price is $32.00 Difference: minus $1 (current price is over target).
If PMV meets the UBS target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.14, suggesting downside of -6.1% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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 has found some of the industry data pertaining to asset manager inflows and outflows presented as part of its inaugural Asset Managers report may be inaccurate. 

The broker does, however, stand by investment conclusions drawn in the report.

The Hold rating and target price of $27.50 are retained.

Target price is $27.50 Current Price is $24.67 Difference: $2.83
If PPT meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $26.69, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Ord Minnett rates PTM as Hold (3) -

Ord Minnett has found some of the industry data pertaining to asset manager inflows and outflows presented as part of its inaugural Asset Managers report may be inaccurate. 

The broker does, however, stand by investment conclusions drawn in the report. 

The Hold rating and target price of $1.25 are retained.

Target price is $1.25 Current Price is $1.31 Difference: minus $0.055 (current price is over target).
If PTM meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.14, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.4

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

Citi rates SKO as Buy (1) -

Following the announcement that American Express Global Business Travel (AMEX GBT) will acquire business travel solutions provider CWT for $570m, Citi considers there to be some risk to Serko's international expansion, particularly expansion into the US market.

However, it also notes the segment isn't a significant contributor to its forecasts, with the US accounting for less than 1% of estimated FY26 group revenue.

As per the broker, it is as yet unknown what impact this news could have on Serko's Booking.com for Business partnership with CWT, which the broker had considered a growth driver.

The Buy rating and target price of $4.90 are retained.

Target price is $4.90 Current Price is $3.55 Difference: $1.35
If SKO meets the Citi target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $5.18, suggesting upside of 47.9% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. 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

Morgans rates SOL as Add (1) -

WH Soul Pattinson's 1H results displayed a broadly resilient performance by the investment portfolio, assesses Morgans. For the 24th consecutive year the dividend increased, with a 40cps fully franked interim dividend declared.

The management team continues to deliver both organic and inorganic growth over the long term, enthuses the analyst.

Net cash flows from investments (NCFI) rose by 7% on the previous corresponding period. The broker explains this increase was largely due to higher dividends and income from the company's core strategic investments and structured yield/credit portfolios.

Morgans maintains an Add rating and the target lifts to $35.60 from $34.75.

Target price is $35.60 Current Price is $33.59 Difference: $2.01
If SOL meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in July.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Ord Minnett rates SUL as Sell (5) -

Ord Minnett notes discretionary retail stocks are currently rallying due to talk of interest rate cuts and impending tax cuts.

The broker advocates caution as its near-term forecast shows a significant divergence across categories, with sales in cyclicals virtually flat and defensives rising by 4%.

While some appealing opportunities exist, the analyst suspects the market is expecting a much more pronounced recovery than Ord Minnett is forecasting. It's noted the government is still fighting inflation and attempting to firm its economic management credentials.

The Sell rating and $10.50 target are maintained for Super Retail.

Target price is $10.50 Current Price is $15.61 Difference: minus $5.11 (current price is over target).
If SUL meets the Ord Minnett target it will return approximately minus 33% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.99, suggesting downside of -3.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Ord Minnett rates WES as Sell (5) -

Ord Minnett notes discretionary retail stocks are currently rallying due to talk of interest rate cuts and impending tax cuts.

The broker advocates caution as its near-term forecast shows a significant divergence across categories, with sales in cyclicals virtually flat and defensives rising by 4%.

While some appealing opportunities exist, the analyst suspects the market is expecting a much more pronounced recovery than Ord Minnett is forecasting. It's noted the government is still fighting inflation and attempting to firm its economic management credentials.

For Wesfarmers, the Sell rating is maintained given the share price is trading at a significant premium to Ord Minnett's $43 target.

Target price is $43.00 Current Price is $67.13 Difference: minus $24.13 (current price is over target).
If WES meets the Ord Minnett target it will return approximately minus 36% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $56.73, suggesting downside of -15.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Ord Minnett rates WOW as Lighten (4) -

Ord Minnett notes discretionary retail stocks are currently rallying due to talk of interest rate cuts and impending tax cuts.

The broker advocates caution as its near-term forecast shows a significant divergence across categories, with sales in cyclicals virtually flat and defensives rising by 4%.

While some appealing opportunities exist, the analyst suspects the market is expecting a much more pronounced recovery than Ord Minnett is forecasting. It's noted the government is still fighting inflation and attempting to firm its economic management credentials.

Regarding Woolworths Group, Ord Minnett expects near-term demand for defensive goods like food and liquor will hold up relatively well, though forecasts wage expenses will rise by more than sales.

The Lighten rating and target price of $27.50 are retained.

Target price is $27.50 Current Price is $32.39 Difference: minus $4.89 (current price is over target).
If WOW meets the Ord Minnett target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $34.03, suggesting upside of 3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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