Australian Broker Call
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January 07, 2020
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1).
Last Updated: 05:00 PM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
| SYD - | SYDNEY AIRPORT | Downgrade to Equal-weight from Overweight | Morgan Stanley |
ANN ANSELL LIMITED
Commercial Services & Supplies
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Overnight Price: $30.06
Ord Minnett rates ANN as Hold (3) -
A general update on the healthcare sector for FX movements has revealed the largest negative impact on Cochlear forecasts, and to a lesser extent on forecasts for Sonic Healthcare.
Hold rating retained for Ansell. Price target has lost -$1.50 to $25.50.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $25.50 Current Price is $30.06 Difference: minus $4.56 (current price is over target).
If ANN 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 $28.10, suggesting downside of -6.5% (ex-dividends)
Forecast for FY20:
Ord Minnett forecasts a full year FY20 dividend of 69.05 cents and EPS of 163.98 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 168.4, implying annual growth of N/A. Current consensus DPS estimate is 73.7, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 17.9. |
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 73.36 cents and EPS of 175.49 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 182.7, implying annual growth of 8.5%. Current consensus DPS estimate is 79.8, implying a prospective dividend yield of 2.7%. Current consensus EPS estimate suggests the PER is 16.5. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $225.58
Ord Minnett rates COH as Lighten (4) -
A general update on the healthcare sector for FX movements has revealed the largest negative impact on Cochlear forecasts, and to a lesser extent on forecasts for Sonic Healthcare.
Ord Minnett has equally grabbed the opportunity to lower its risk ratings for Cochlear and ResMed to Low Risk from Medium. Lighten rating retained for Cochlear. Price target has lost -5c to $180.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $180.00 Current Price is $225.58 Difference: minus $45.58 (current price is over target).
If COH meets the Ord Minnett target it will return approximately minus 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $198.53, suggesting downside of -12.0% (ex-dividends)
Forecast for FY20:
Ord Minnett forecasts a full year FY20 dividend of 361.00 cents and EPS of 516.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 517.6, implying annual growth of 7.9%. Current consensus DPS estimate is 365.2, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 43.6. |
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 400.00 cents and EPS of 571.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 565.2, implying annual growth of 9.2%. Current consensus DPS estimate is 399.2, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 39.9. |
Market Sentiment: -0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
CSL CSL LIMITED
Pharmaceuticals & Biotech/Lifesciences
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Overnight Price: $283.76
Ord Minnett rates CSL as Hold (3) -
A general update on the healthcare sector for FX movements has revealed the largest negative impact on Cochlear forecasts, and to a lesser extent on forecasts for Sonic Healthcare.
Hold rating retained for CSL. Price target has lost -$5 to $265.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $265.00 Current Price is $283.76 Difference: minus $18.76 (current price is over target).
If CSL meets the Ord Minnett target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $279.70, suggesting downside of -1.4% (ex-dividends)
Forecast for FY20:
Ord Minnett forecasts a full year FY20 dividend of 340.91 cents and EPS of 717.78 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 673.6, implying annual growth of N/A. Current consensus DPS estimate is 302.1, implying a prospective dividend yield of 1.1%. Current consensus EPS estimate suggests the PER is 42.1. |
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 394.13 cents and EPS of 819.91 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 775.8, implying annual growth of 15.2%. Current consensus DPS estimate is 345.9, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 36.6. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
DHG DOMAIN HOLDINGS AUSTRALIA LIMITED
Real Estate
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Overnight Price: $3.77
Ord Minnett rates DHG as Accumulate (2) -
Ord Minnett has used an update on the online industry to reiterate its preference for Domain Holdings over REA Group ((REA)), a preference that is based on the fact that markets in Sydney and Melbourne represent a larger proportional impact for the former versus its more dominant competitor.
The analysts note new listings are now down -16.2% in the fiscal YTD on average versus their own first-half forecasts of -17.0% for REA and -15.0% for Domain. No changes have been made to either the Accumulate rating or $3.65 price target.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $3.65 Current Price is $3.77 Difference: minus $0.12 (current price is over target).
If DHG meets the Ord Minnett target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $3.15, suggesting downside of -16.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Ord Minnett forecasts a full year FY20 dividend of 6.00 cents and EPS of 7.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 7.5, implying annual growth of N/A. Current consensus DPS estimate is 6.2, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 50.3. |
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 7.00 cents and EPS of 10.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 9.9, implying annual growth of 32.0%. Current consensus DPS estimate is 7.3, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 38.1. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $12.09
Morgan Stanley rates DXS as Equal-weight (3) -
It appears Morgan Stanley has resumed coverage of Dexus Property Group. This time last year coverage was ceased because the responsible analyst had left the firm.
The brokerage notes unlisted GIC has acquired an additional 24% of Dexus Aust Logistics Trust (DALT), an unlisted fund originally set up in Nov 2018 with DXS/GIC holding 75%/25%.
No material impact is expected this financial year with the deal expected to close in April. Equal-weight rating alongside an In-Line sector view. Price target is $12.
Target price is $12.00 Current Price is $12.09 Difference: minus $0.09 (current price is over target).
If DXS 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 $12.82, suggesting upside of 6.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 52.90 cents and EPS of 68.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 66.7, implying annual growth of -46.4%. Current consensus DPS estimate is 53.0, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 18.1. |
Forecast for FY21:
Morgan Stanley forecasts a full year FY21 dividend of 54.80 cents and EPS of 72.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 69.2, implying annual growth of 3.7%. Current consensus DPS estimate is 54.9, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 17.5. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
FNP FREEDOM FOODS GROUP LIMITED
Food, Beverages & Tobacco
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Overnight Price: $4.67
Citi rates FNP as Buy (1) -
Citi observes Freedom Foods' milk sourcing has to date remained largely unaffected by Australia's bush fires. But this doesn't exclude the possibility for indirect consequences.
The analysts highlight Australia's dairy industry is already under pressure from a prolonged drought, which has resulted in higher feed and water costs for farmers, and subsequently lower milk production.
Freedom Foods could be impacted by higher prices, suggest the analysts.This despite the company having in place long-term, fixed price agreements with suppliers. For now, Buy rating retained, alongside an unchanged target price of $5.90.
No changes were made to forecasts.
Target price is $5.90 Current Price is $4.67 Difference: $1.23
If FNP meets the Citi target it will return approximately 26% (excluding dividends, fees and charges).
Current consensus price target is $6.05, suggesting upside of 29.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 8.00 cents and EPS of 14.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.9, implying annual growth of 217.7%. Current consensus DPS estimate is 6.8, implying a prospective dividend yield of 1.5%. Current consensus EPS estimate suggests the PER is 31.3. |
Forecast for FY21:
Citi forecasts a full year FY21 dividend of 12.50 cents and EPS of 21.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.3, implying annual growth of 63.1%. Current consensus DPS estimate is 9.3, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 19.2. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
RHC RAMSAY HEALTH CARE LIMITED
Healthcare services
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Overnight Price: $73.89
Ord Minnett rates RHC as Hold (3) -
A general update on the healthcare sector for FX movements has revealed the largest negative impact on Cochlear forecasts, and to a lesser extent on forecasts for Sonic Healthcare.
Hold rating retained for Ramsay Health Care. Price target has lost -$2 to $72.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $72.00 Current Price is $73.89 Difference: minus $1.89 (current price is over target).
If RHC meets the Ord Minnett target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $68.39, suggesting downside of -7.4% (ex-dividends)
Forecast for FY20:
Ord Minnett forecasts a full year FY20 dividend of 159.00 cents and EPS of 299.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 294.8, implying annual growth of 11.3%. Current consensus DPS estimate is 159.1, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 25.1. |
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 169.00 cents and EPS of 318.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 314.4, implying annual growth of 6.6%. Current consensus DPS estimate is 168.6, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 23.5. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $22.54
Ord Minnett rates RMD as Hold (3) -
A general update on the healthcare sector for FX movements has revealed the largest negative impact on Cochlear forecasts.
Ord Minnett has equally grabbed the opportunity to lower its risk ratings for Cochlear and ResMed to Low Risk from Medium. Hold rating retained for ResMed. Price target has lost -$1 to $19.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $19.00 Current Price is $22.54 Difference: minus $3.54 (current price is over target).
If RMD meets the Ord Minnett target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $20.34, suggesting downside of -9.7% (ex-dividends)
Forecast for FY20:
Ord Minnett forecasts a full year FY20 dividend of 23.02 cents and EPS of 60.41 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 59.8, implying annual growth of N/A. Current consensus DPS estimate is 23.1, implying a prospective dividend yield of 1.0%. Current consensus EPS estimate suggests the PER is 37.7. |
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 24.45 cents and EPS of 67.61 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 67.8, implying annual growth of 13.4%. Current consensus DPS estimate is 24.9, implying a prospective dividend yield of 1.1%. Current consensus EPS estimate suggests the PER is 33.2. |
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
Overnight Price: $29.54
Ord Minnett rates SHL as Accumulate (2) -
A general update on the healthcare sector for FX movements has revealed the largest negative impact on Cochlear forecasts, and to a lesser extent on forecasts for Sonic Healthcare.
Accumulate rating retained for Sonic Healthcare. Price target has lost -$1 to $31.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $31.00 Current Price is $29.54 Difference: $1.46
If SHL meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $29.26, suggesting downside of -0.9% (ex-dividends)
Forecast for FY20:
Ord Minnett forecasts a full year FY20 dividend of 88.00 cents and EPS of 122.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 123.4, implying annual growth of 0.7%. Current consensus DPS estimate is 88.9, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 23.9. |
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 92.00 cents and EPS of 127.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 131.1, implying annual growth of 6.2%. Current consensus DPS estimate is 93.2, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 22.5. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
SYD SYDNEY AIRPORT HOLDINGS LIMITED
Infrastructure & Utilities
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Overnight Price: $8.74
Morgan Stanley rates SYD as Downgrade to Equal-weight from Overweight (3) -
Morgan Stanley notes Sydney Airport will be re-negotiating most of its aeronautical agreements this year. The importance of this is highlighted by the fact the responsible analysts have today released a 32 page report on this prospect.
Bottom line: the analysts see good prospects for a balanced price path and accretive returns on airport investment over at least five years. This, they argue, is sufficient to support the stock's premium valuation.
The previous update saw Morgan Stanley reiterating its Overweight rating, but today's report includes a downgrade to Equal-weight. Target lifts to $8.77 from $8.50. Industry view remains Cautious.
Target price is $8.77 Current Price is $8.74 Difference: $0.03
If SYD meets the Morgan Stanley target it will return approximately 0% (excluding dividends, fees and charges).
Current consensus price target is $8.38, suggesting downside of -4.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 39.00 cents and EPS of 19.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.2, implying annual growth of 4.1%. Current consensus DPS estimate is 39.0, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 50.8. |
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 40.50 cents and EPS of 20.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 19.6, implying annual growth of 14.0%. Current consensus DPS estimate is 40.4, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 44.6. |
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Today's Price Target Changes
| Company | Last Price | Broker | New Target | Prev Target | Change | |
| ANN | ANSELL | $30.06 | Ord Minnett | 25.50 | 27.00 | -5.56% |
| COH | COCHLEAR | $225.58 | Ord Minnett | 180.00 | 185.00 | -2.70% |
| CSL | CSL | $283.76 | Ord Minnett | 265.00 | 270.00 | -1.85% |
| DXS | DEXUS PROPERTY | $12.09 | Morgan Stanley | 12.00 | N/A | - |
| RHC | RAMSAY HEALTH CARE | $73.89 | Ord Minnett | 72.00 | 74.00 | -2.70% |
| RMD | RESMED | $22.54 | Ord Minnett | 19.00 | 20.00 | -5.00% |
| SHL | SONIC HEALTHCARE | $29.54 | Ord Minnett | 31.00 | 32.00 | -3.13% |
| SYD | SYDNEY AIRPORT | $8.74 | Morgan Stanley | 8.77 | 8.50 | 3.18% |
Summaries
| ANN | ANSELL | Hold - Ord Minnett | Overnight Price $30.06 |
| COH | COCHLEAR | Lighten - Ord Minnett | Overnight Price $225.58 |
| CSL | CSL | Hold - Ord Minnett | Overnight Price $283.76 |
| DHG | DOMAIN HOLDINGS | Accumulate - Ord Minnett | Overnight Price $3.77 |
| DXS | DEXUS PROPERTY | Equal-weight - Morgan Stanley | Overnight Price $12.09 |
| FNP | FREEDOM FOODS | Buy - Citi | Overnight Price $4.67 |
| RHC | RAMSAY HEALTH CARE | Hold - Ord Minnett | Overnight Price $73.89 |
| RMD | RESMED | Hold - Ord Minnett | Overnight Price $22.54 |
| SHL | SONIC HEALTHCARE | Accumulate - Ord Minnett | Overnight Price $29.54 |
| SYD | SYDNEY AIRPORT | Downgrade to Equal-weight from Overweight - Morgan Stanley | Overnight Price $8.74 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 1 |
| 2. Accumulate | 2 |
| 3. Hold | 6 |
| 4. Reduce | 1 |
Tuesday 07 January 2020
Access Broker Call Report Archives here
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