Australian Broker Call

Morgans rates AFG as Add (1) -

Morgans expects the company to achieve strong growth in its highest margin business, AFG Securities. This should be positive for profitability, cash flow and dividends.

The broker assesses the fiscal, monetary and macroprudential stimuli which have been announced serve to de-risk the outlook for housing and home lending.

Add rating maintained. Target is raised to $2.00 from $1.80.

Target price is $2.00 Current Price is $1.84 Difference: $0.16
If AFG meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Morgan Stanley rates ALL as Upgrade to Overweight from Equal-weight (1) -

Morgan Stanley asserts Aristocrat Leisure does not need to outperform to succeed in digital. The company's land-based success and scale provide a competitive advantage, despite growth moderating in this area.

Morgan Stanley adjusts estimates to allow for top-line growth from stronger digital growth, eases back margins to account for digital's lower margins and adjusts for a lower tax rate.

All up, estimates for earnings per share are reduced by -1% in FY19 and raised by 3% for FY20. Rating is upgraded to Overweight from Equal-weight and the target is raised to $35 from $29. Industry view: Cautious.

Target price is $35.00 Current Price is $29.55 Difference: $5.45
If ALL meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $33.04, suggesting upside of 11.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Citi rates ASB as Buy (1) -

Citi believes Austal is well-placed for medium-term earnings growth amid improved profitability and margin expansion. US profitability is likely to increase as Citi forecasts FY20 US shipbuilding earnings (EBIT) margins to increase around 20 basis points to 7.5%.

This will be driven by increased efficiency, the LCS program and higher prices. Asian earnings are also set to ramp up. The broker maintains a Buy rating and raises the target to $4.04 from $2.76.

Target price is $4.04 Current Price is $3.95 Difference: $0.09
If ASB meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.50, suggesting downside of -11.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Macquarie rates ASB as Outperform (1) -

Austal has again "blown guidance out of the water", the broker suggests. FY19/20 guidance has been upgraded to 7/11% growth compared to the broker's prior 6/2%. The upgrade has been driven by a strong performance in the US and improvement in A&NZ.

The company's strong growth profile continues to be de-risked, the broker believes, as evidenced by the confidence to provide FY20 guidance at this stage. Core ship building programs are mature, reducing construction risk, while improved operational efficiencies support earnings growth.

Outperform retained, target rises to $4.00 from $3.10.

Target price is $4.00 Current Price is $3.95 Difference: $0.05
If ASB meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.50, suggesting downside of -11.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Macquarie rates BHP as Outperform (1) -

Macquarie, in an initial response to the June quarter production report release, believes BHP Group released a "solid" report with "beats" in copper and petroleum and in-line results from iron-ore and metallurgical coal.

Generally speaking, the headline production surprised to the upside, say the analysts, while guidance for FY20 is broadly in-line. The analysts note there remains upside potential from iron ore prices in case the spot price remains elevated.

Outperform. Target $44.

Target price is $44.00 Current Price is $41.74 Difference: $2.26
If BHP meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $41.04, suggesting downside of -1.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

UBS rates BIN as Buy (1) -

UBS finds the majority of the Sydney market has implemented larger-than-expected price increases, off the back of the Queensland landfill levy. The broker believes there is further upside available from recent price increases.

UBS incorporates a -23% fall in residential volumes in FY20. However, recent reductions in official interest rates are expected to soften the potential downturn.

The broker considers the valuation appealing and retains a Buy rating. Target is raised to $2.70 from $2.00.

Target price is $2.70 Current Price is $2.47 Difference: $0.23
If BIN meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.37, suggesting downside of -4.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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

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

Morgan Stanley updates assumptions ahead of the August 13 result. The broker notes a combination of strong equity markets and falling yields have made annuities a relatively less attractive asset class.

Going forward, the broker believes disruption to financial advisers remains a structural and multi-year headwind for Challenger.

Equal-weight rating maintained. Target is $6.85. Industry view: In-line.

Target price is $6.85 Current Price is $6.82 Difference: $0.03
If CGF meets the Morgan Stanley target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $7.31, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Morgans rates ELD as Upgrade to Add from Hold (1) -

Elders will acquire Australian Independent Rural Retailers for $187m. The acquisition will be funded via cash and scrip. Morgans considers the purchase price reasonable, given the size of the group.

This will mean Elders has a presence in the wholesale channel, and the acquisition fills a gap in Queensland and NSW as well as increasing the company's presence in the higher-margin animal health sector.

Morgans calculates the mid point of synergies is 8.9% accretive to earnings per share in FY21. Rating is upgraded to Add from Hold. Target is raised to $7.30 from $6.71.

Target price is $7.30 Current Price is $7.01 Difference: $0.29
If ELD meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Ord Minnett rates GPT as Hold (3) -

Ord Minnett has updated estimates to incorporate recent transactions and the June capital raising of $800m as well as a restructure of the hedge book.

Funds from operations growth forecasts are now 2.5% for 2019, in line with guidance, and 2.6% in 2020. Hold rating maintained and the target is raised to $5.90 from $5.50.

Target price is $5.90 Current Price is $6.15 Difference: minus $0.25 (current price is over target).
If GPT 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 $6.01, suggesting downside of -2.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.2

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

Citi rates GXY as Downgrade to Neutral from Buy (3) -

Operations were strong at Mount Cattlin in the June quarter, with spodumene production up 35% quarter on quarter. Full year 2019 production guidance is unchanged at 180-210,000t.

Citi believes spodumene has the weakest fundamentals within the lithium supply chain because of low barriers to entry and the dependence on conversion capacity. There is also excess supply in the near term.

The company's current earnings are 100% exposed to spodumene which presents a downside risk to forecasts. Citi downgrades to Neutral from Buy and reduces the target to $1.60 from $2.70.

Target price is $1.60 Current Price is $1.27 Difference: $0.33
If GXY meets the Citi target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $1.74, suggesting upside of 37.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

Credit Suisse rates GXY as Outperform (1) -

June quarter production was ahead of expectations amid higher mined grades and recoveries. Concentrate grade is also higher, at 5.9%, improving marketability and realised pricing to benchmark but, Credit Suisse notes, at the cost of further structural recovery decline.

The broker believes the net cash balance of US$176m provides insulation against a challenging market but the ability to fund growth projects is being diminished as cash is being consumed on the current sales/price mix. Outperform rating maintained. Target reduced to $2.50 from $2.75.

Target price is $2.50 Current Price is $1.27 Difference: $1.23
If GXY meets the Credit Suisse target it will return approximately 97% (excluding dividends, fees and charges).

Current consensus price target is $1.74, suggesting upside of 37.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

Macquarie rates GXY as Underperform (5) -

Strong grades led to Mt Caitlin posting its best quarter to date. Galaxy Resources is now prioritising product quality rather than recoveries and this leads the broker to increase its target to $1.30 from $1.20.

Key risks nevertheless remain in an ability to deliver ongoing processing improvements and to find a buyer for 59kt of inventory over the second half, the broker suggests. Underperform retained.

Target price is $1.30 Current Price is $1.27 Difference: $0.03
If GXY meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $1.74, suggesting upside of 37.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

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

Morgan Stanley is watching for a return to a normalised shipment schedule at Mount Cattlin. June quarter production was boosted by improved grades which facilitated higher recoveries.

Galaxy Resources expects 60-70,000t to be shipped in the September quarter, implying a significant uplift will be required in the fourth quarter to reach the mid point of 2019 production guidance.

Equal-weight rating retained. Target is $1.45. Industry View: Attractive.

Target price is $1.45 Current Price is $1.27 Difference: $0.18
If GXY meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $1.74, suggesting upside of 37.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

UBS rates GXY as Neutral (3) -

The June quarter was strong for Galaxy Resources, driven largely by the processing of above-reserve grade ore. The company produced 56,000t, ahead of guidance and UBS estimates. Recoveries were up 10% sequentially.

However, the broker does not believe the quarterly rate is sustainable. Meanwhile, projects such as Sal de Vida continue to move forward.

The company considers the market challenging, with excess spodumene at the converters and a move to de-stock internal combustion engine vehicles ahead of any policy changes affecting the sale of electric vehicles. Neutral rating and $1.40 target maintained.

Target price is $1.40 Current Price is $1.27 Difference: $0.13
If GXY meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $1.74, suggesting upside of 37.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

Ord Minnett rates NGI as Buy (1) -

The June quarter update was disappointing for Ord Minnett, with outflows the main source of weakness. On the plus side, the company has indicated FY19 operating earnings (EBITDA) of US$37.5m, around 4% above the broker's forecasts.

The broker continues to envisage merits in the investment case, being drawn to the long-term track record and a proven ability to attract new mandates, maintaining a Buy rating. Target is $4.

Target price is $4.00 Current Price is $3.44 Difference: $0.56
If NGI meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

This company reports in USD. 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 ORG as Add (1) -

The price of FY20 electricity contracts has rallied. Morgans notes major outages at Loy Yang A and Mortlake power stations on top of low storage volumes for Snowy Hydro at Lake Eucumbene point to potentially higher spot prices.

As a result, the broker has lifted spot price assumptions to be closer to the futures curve and this lifts underlying operating earnings (EBITDA) forecasts for FY20 energy markets by 4%.

APLNG production forecasts are also up for FY19-24, but this comes with higher drilling expenditure that will consume some of the additional cash. Add rating maintained. Target is raised to $8.04 from $7.69.

Target price is $8.04 Current Price is $7.43 Difference: $0.61
If ORG meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $8.30, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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

Citi rates OSH as Neutral (3) -

The company has indicated that the Papua LNG gas agreement was being reviewed by the new government. Citi notes it is uncertain how long the process will take and whether it will lead to more onerous fiscal terms.

If the new government's desire is to increase fiscal terms for the optics of claiming more economic rent, then the broker believes the P'nyang gas agreement provides a better pathway.

Yet Citi is also concerned about the schedule, as delays are not helpful in the current competitive marketing environment. Neutral rating maintained. Target is reduced to $7.01 from $7.09.

Target price is $7.01 Current Price is $6.95 Difference: $0.06
If OSH meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $8.13, suggesting upside of 17.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

Credit Suisse rates OSH as Underperform (5) -

There were no major surprises for Credit Suisse in the June quarter update, although the recovery from the earthquake was slower than expected.

The broker observes Oil Search is going through material internal changes at a critical point in the PNG political and project development, which presents a risk.

The broker cannot rule out the new petroleum minister taking a tough approach to the Papua gas agreement, given questions about fair share of government tax take.

Should this prove surmountable, there is still the risk of a delay at P'nyang, which may bear the brunt of political misgivings, the broker fears.

Underperform rating maintained and the target is lowered to $6.96 from $7.02.

Target price is $6.96 Current Price is $6.95 Difference: $0.01
If OSH meets the Credit Suisse target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $8.13, suggesting upside of 17.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

Macquarie rates OSH as Outperform (1) -

The impact of the PNG earthquake lingered into the June quarter for Oil Search, as evidenced by a miss on production compared to the broker's forecast. Guidance for 2019 has been lowered due to higher operating costs, leading the broker to lower its earnings forecast by -7%.

The broker nevertheless believes the market is being overly cautious about "fiscal risk" in PNG, with the new government yet to make its case clear. This means no value is being attributed to the PNG LNG expansion and Papua LNG project. Outperform retained, target falls to $8.90 from $9.00.

Target price is $8.90 Current Price is $6.95 Difference: $1.95
If OSH meets the Macquarie target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $8.13, suggesting upside of 17.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

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

Oil Search appears to be moving closer to expansion but Morgan Stanley notes a number of critical items need to be completed. Confirmation of these items could lead to a multi-year re-rating, in the broker's opinion.

The two major work streams include a review of the Papua LNG gas agreement and then, once this is completed, the P'nyang gas agreement will be negotiated. This is required to underpin the train-3 expansion and move into FEED.

Equal-weight rating retained as Oil Search needs to deliver on the catalysts. Target is $8.00. Industry view is In-Line.

Target price is $8.00 Current Price is $6.95 Difference: $1.05
If OSH meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $8.13, suggesting upside of 17.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

Ord Minnett rates OSH as Hold (3) -

The June quarter production report confirms some of Ord Minnett's concerns over the PNG liquefied natural gas expansion. The PNG government will review the agreement, signed in April, before it will consider the P'nyang gas agreement.

Both agreements are required to finalise fiscal terms ahead of front end engineering design. While more onerous fiscal terms could test the viability of the project, Ord Minnett believes the risk of this playing out is small, albeit material for Oil Search.

Hold rating maintained. Target is reduced to $7.90 from $7.95.

Target price is $7.90 Current Price is $6.95 Difference: $0.95
If OSH meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $8.13, suggesting upside of 17.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

UBS rates OSH as Neutral (3) -

Weaker realised LNG pricing and a slower ramp up in oil production led to a weak finish to the first half, UBS observes. 2019 production guidance has been revised down marginally to 28-31mmboe.

The broker also notes there is a risk that PNG expansion could be delayed as other joint-venture partners focus on other projects in their portfolios. Neutral rating maintained. Target is reduced to $7.60 from $7.65.

Target price is $7.60 Current Price is $6.95 Difference: $0.65
If OSH meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $8.13, suggesting upside of 17.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

UBS rates PPT as Neutral (3) -

Funds under management ended FY19 down -12% with the company suffering its highest level of net outflows in over a decade. UBS expects this to continue into FY21, driving earnings for Perpetual Investments down -6% per annum.

However, with group earnings increasingly less exposed to Perpetual Investments and a net cash balance sheet the broker retains a Neutral rating. Target is reduced to $39.70 from $41.20.

Target price is $39.70 Current Price is $38.52 Difference: $1.18
If PPT meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $39.42, suggesting upside of 2.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Morgan Stanley rates QBE as Overweight (1) -

Morgan Stanley assesses a revision to the UK Ogden Rate, the discount rate insurers are required to use when discounting lump sum automotive industry claims, is a small negative surprise for QBE Insurance.

The rate has been revised to -0.25% from -0.75%. Since 2017, QBE Insurance has used a discount rate of 0.25% and this will need to be revised down by -50 basis points, driving a revaluation of reserves.

Morgan Stanley suspects the market has been pricing for a higher expected rate and may now need to re-price policies. Overweight rating maintained. Target is $12.70. Industry view is In-Line.

Target price is $12.70 Current Price is $11.73 Difference: $0.97
If QBE meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $12.88, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

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

Macquarie notes Ramsay Health Care's NHS volume growth in the UK remains above sector average, but strong prior periods will be cycled over the balance of 2019.

Earnings growth into FY20 will be supported by incremental brownfield contributions and more favourable tariff outcomes in the UK and France.

But it's all now captured in the price, hence Macquarie pulls its rating back to Neutral. Target unchanged at $75.

Target price is $75.00 Current Price is $71.62 Difference: $3.38
If RHC meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $67.16, suggesting downside of -6.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Citi rates RIO as Buy (1) -

June quarter production fell short of of forecasts, although Citi notes iron ore problems were known given the recent admission regarding Brockman hub difficulties and the Pilbara impact. Rio Tinto is behind on stripping and has already reduced 2019 guidance for the Pilbara.

The broker notes Oyu Tolgoi overshadowed a better copper performance. Rio Tinto is still considering changes to the mine plan, given geotechnics, which will probably result in some infrastructure being redesigned or relocated. Citi maintains a Buy rating and $114 target.

Target price is $114.00 Current Price is $103.29 Difference: $10.71
If RIO meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $104.33, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Credit Suisse rates RIO as Neutral (3) -

Credit Suisse believes the update on Oyu Tolgoi overshadowed a relatively uneventful quarterly report. The underground mine design continues to be reviewed amid ongoing concerns around the stability of the orebody.

Rio Tinto has flagged a 16-30 month delay and an increase to capital expenditure of US$1.2-1.9bn. Credit Suisse makes no changes to its view but asserts the stock is looking increasingly toppy. Neutral rating. Target is $95.

Target price is $95.00 Current Price is $103.29 Difference: minus $8.29 (current price is over target).
If RIO meets the Credit Suisse target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $104.33, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Macquarie rates RIO as Outperform (1) -

Rio Tinto posted a mixed June Q production report. Key iron ore shipments were in line with expectation but given rail maintenance planned in October, a strong Sep Q will be needed to achieve FY guidance, the broker notes. Buoyant iron prices nevertheless continue to drive earnings upgrades.

Meanwhile, Oyu Tolgoi capex will increase and the underground project will be delayed by 16-30 months. Outperform retained, target falls to $117 from $119.

Target price is $117.00 Current Price is $103.29 Difference: $13.71
If RIO meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $104.33, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

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

June quarter production missed Morgan Stanley's forecasts for aluminium and iron ore while copper was mixed. Price realisations were weaker and new guidance implies -2% downgrades to 2019 operating earnings (EBITDA) forecasts.

Morgan Stanley expects the shares to underperform in response to the report, as the company provided an update for Oyu Tolgoi underground development and there is some slippage on the timing and costs.

Western Australian iron ore production was up 5% in the quarter versus the preceding quarter but declined -7% year-on-year. Shipments bettered forecast by 5%.

Morgan Stanley maintains an Equal-weight rating and GBP47 target. Industry view is In-Line.

Current Price is $103.29. Target price not assessed.

Current consensus price target is $104.33, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Ord Minnett rates RIO as Hold (3) -

Ord Minnett notes the Oyu Tolgoi underground project is facing delays of 16-30 months with capital expenditure over-runs of US$1.2-1.9bn amid potential asset impairment.

Quarterly volumes were mixed, although the broker notes no material changes to 2019 guidance. Ord Minnett does not expect capital management, heading into the August result.

While iron ore markets are strong and the company's valuation is not stretched, the broker cannot envisage any near-term catalyst to re-rate the stock. Hold rating maintained and the target is reduced to $106 from $109.

Target price is $106.00 Current Price is $103.29 Difference: $2.71
If RIO meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $104.33, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

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

The stock has performed strongly and the company will report its results on July 26. UBS expects a continuation of strong mask and accessory revenue growth in FY20, up 9% in the Americas and 11% for the rest of the world.

UBS downgrades to Neutral from Buy. Target is raised to US$122 from US$119. US industry feedback remains positive based on re-supply and the 2021 competitive bidding round is the next hurdle, in the broker's opinion.

Current Price is $17.40. Target price not assessed.

Current consensus price target is $16.77, suggesting downside of -3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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