Australian Broker Call

Citi rates AIA as Buy (1) -

Citi assesses the NZ$1.4bn equity raisings (NZ$1.2bn placement and NZ$200m retail offer) from Auckland International Airport as both larger and soon than anticipated.

Funds raised will be deployed for the formerly announced aeronautical capex of NZ$6.6bn which started in FY23 and is due for completion in FY32.

An NZ$800m contract was also signed for the construction of a new domestic terminal for the company.

Management reiterated FY25 net profit guidance but the broker highlights there might be a negative impact on EPS from the issue. No changes to Citi's earnings estimates.

Buy rating unchanged with a NZ$8.70 target price.

Current Price is $6.95. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

This company reports in NZD. 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

Macquarie rates AIA as No Rating (-1) -

Auckland International Airport's NZ$1.4bn capital raising will be used to fund its NZ$5.6bn capex program without forfeiting its A- S&P credit rating and dividend policy according to Macquarie.

Funds will also be used to lower net debt, repay a NZ$150m bond and assist with the acceleration in aeronautical spending of around NZ$100m per month.

Management reconfirmed earnings guidance for FY25 and Macquarie will update EPS forecasts on completion of the NZ$200m retail offering on Oct 4.

Macquarie is under research restrictions, no target price of rating.

Current Price is $6.95. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

This company reports in NZD. 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

Citi rates ALL as Buy (1) -

Citi highlights increasing market share for Aristocrat Leisure in the premium-leased sector over the June quarter with industry data revealing better growth in US casino slot turnover for the company's peers.

The analyst notes an improvement in Light & Wonders ((LNW)) Dragon Train with the installed base over around 600units per survey. This is ahead of Dragon Links results at a similar point but there has been no notable impact on unit growth.

Citi believes the estimates for gaming are marginally above market consensus and the analyst points to potential upside in the interactive segment. 

No change to Buy rating and $59 target price.

Target price is $59.00 Current Price is $55.93 Difference: $3.07
If ALL meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $56.22, suggesting downside of -0.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.9

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

Shaw and Partners rates AVL as Buy (1) -

Australian Vanadium announced its electrolyte will be used in a Vanadium Flow Battery at a Kununurra Horizon Power site, Shaw and Partners highlights as a "significant" milestone for the company.

This is the first use of vanadium electrolyte at the Perth facility and significant to the company's vertical integration strategy.

The broker notes the vanadium battery with electrolyte is 220kwh and can generate up to 78kw of power.

Buy rating and 8c target unchanged. High risk.

Target price is $0.08 Current Price is $0.02 Difference: $0.065
If AVL meets the Shaw and Partners target it will return approximately 433% (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

Citi rates BXB as Neutral (3) -

Brambles offered a "steady" outlook according to Citi at the company's investor day. The broker observes much of the growth drivers are from traditional levers -opertional cost efficiencies which the analyst believes carries less earnings risks.

Management's medium-term targets for FY26-FY28 met expectations with Citi emphasising automation and opex "moderation" will generate 100bps and 50bps, respectively in margin improvements.

The broker lifts the cashflow projections for Brambles and the target rises to $18.50 from $17.35. Neutral rated.

Target price is $18.50 Current Price is $18.54 Difference: minus $0.04 (current price is over target).
If BXB meets the Citi target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.95, suggesting downside of -0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

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

Market Sentiment: 0.7

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

Bell Potter rates CAT as Hold (3) -

Bell Potter maintains its Hold rating for Catapult International but acknowledges this has been the wrong call so far as the stock has been one of the best performing the mid-cap technology sector.

Catapult shares have risen by more than 50% since the release of the FY24 result in late-May.

In line with consensus forecasts, the analysts now forecast mid-teens revenue growth in each of the next three years, compared to low-to-mid teens previously.

The broker's target price is raised to $2.35 from $1.75 on the higher revenue forecast, a higher assumed multiple, and a lower weighted average cost of capital (WACC).

Target price is $2.35 Current Price is $2.38 Difference: minus $0.03 (current price is over target).
If CAT meets the Bell Potter target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

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

Market Sentiment: 0.0

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

Shaw and Partners rates FFM as Buy (1) -

Shaw and Partners confirm the latest drilling results from FireFly Metals at Green Bay revealed strong potential for increased resource growth.

The results also revealed high-grade copper/gold mineralisation and a potential new sulphide channel to the west of the main Ming North zone.

Further updates for Green Bay are expected in both the upcoming Sept and March quarters.

The company had $38.1m in cash at the end of June, which the broker assesses as a good level of funding capacity for ongoing works.

Buy rating. High risk, No change to $1.10 target price.

Target price is $1.10 Current Price is $0.98 Difference: $0.125
If FFM meets the Shaw and Partners target it will return approximately 13% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Bell Potter rates IMM as Buy (1) -

Immutep is developing novel LAG-3 immunotherapy for cancer and autoimmune disease via a technology based on LAG-3 (lymphocyte activation gene-3) protein, a key mediator of the immune system.

Bell Potter believes new Phase 2 B trial data presented at oncology conference supports further clinical investigation of Eftilagimod alpha (Efti) in head and  neck cancer.

Nonetheless, the most compelling data is still around lung cancer where Efti in particular has a huge opportunity, according to Bell Potter.

The Speculative Buy rating is retained and the target slips to 70c from 75c.

Target price is $0.70 Current Price is $0.36 Difference: $0.345
If IMM meets the Bell Potter target it will return approximately 97% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Morgan Stanley rates MIN as Overweight (1) -

The just released maiden gas and oil resource for the Lockyer Gas and Erregulla Oil projects in the Perth Basin is around 45% better than the valuation encapsulated in Morgan Stanley's base case.

The broker points out this is just another asset management at Mineral Resources could utilise to ease balance sheet pressures, should that be necessary.

Target $70. Industry View: Attractive.

Target price is $70.00 Current Price is $38.27 Difference: $31.73
If MIN meets the Morgan Stanley target it will return approximately 83% (excluding dividends, fees and charges).

Current consensus price target is $52.00, suggesting upside of 36.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.5

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

Ord Minnett rates MIN as Accumulate (2) -

Ord Minnett incorporates the Lockyer Gas project and Erregulla oil project into forecasts following the release of intial resource estmates by Mineral Resources.

The broker now values Lockyer at $880m before any LNG export potential is included, while the Erregulla valuation is less than $100m once high transport costs and the required capital expenditure are included.

Accumulate rating. Target rises to $58.00 from $56.50.

Target price is $58.00 Current Price is $38.27 Difference: $19.73
If MIN meets the Ord Minnett target it will return approximately 52% (excluding dividends, fees and charges).

Current consensus price target is $52.00, suggesting upside of 36.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.5

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

UBS rates ORG as Buy (1) -

As a result of weaker global oil demand from slowing GDP growth, UBS lowers its Q4 Brent oil forecast to US$75bbl from US$83bbl and the 2025-26 forecasts also fall by -US$5bbl to US$75bbl. The long-term price is unchanged at US$75bbl.

For LNG, the broker raises its 4Q JKM price forecast by 4% to $14.5mmBtu given 3Q strength and driven by geopolitical risks, including
uncertainty of future Ukraine transit flows.

The 2025 JKM forecast is also increased by 2% to $12.8/mmBtu and the long-term forecast is unchanged.

Origin Energy remains the broker's most preferred across the UBS coverage of Australian Energy and Utilities.

The target for Origin falls to $11.65 from $11.70. Buy.

Target price is $11.65 Current Price is $9.55 Difference: $2.1
If ORG meets the UBS target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $10.65, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.4

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

UBS rates PRU as Initiation of coverage with Buy (1) -

UBS is bullish on both the prospects for the gold price and the outlook for Perseus Mining's portfolio of African assets. The latter underpins a production profile of circa 500kozpa at a competitive cost (AIC) of circa US$1,600/oz until 2030, highlights the analyst.

The company's Yaoure gold mine in Cote d'Ivoire represents around 42% of the broker's sum-of-the-parts valuation. Perseus has also acquired the Nyanzaga project in Tanzania and has a stake in Predictive Discovery's ((PDI)) Bankan project.

The analyst's Buy rating is also supported by a $100m buy-back on top of dividends.

Key upcoming value drivers, according to UBS, include the ramp-up of the Yaoure pit through 2025 and development of the CMA underground mine ahead of commercial production from April 2027.

A $3.00 target is set.

Target price is $3.00 Current Price is $2.52 Difference: $0.48
If PRU meets the UBS target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $3.06, suggesting upside of 19.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

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

Market Sentiment: 0.8

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

Shaw and Partners rates RDY as Buy (1) -

Shaw and Partners observes the ReadyTech Holdings share price has receded -9% since mid-July, prior to the FY24 results and suggests the analyst is surprised by the reaction.

The broker stresses the company has established a base case for margins, 17.8% for EBITDA in FY24 which is around 150bps above FY23 and the first since the 2019 IPO.

Management also guided to a 100bps improvement in FY25 and retains a FY27 target of over 20% by FY27.

Buy rated, High risk with a $4.80 target price. Shaw and Partners highlights the stock has not been this "cheap" since 2021.

Target price is $4.80 Current Price is $3.00 Difference: $1.8
If RDY meets the Shaw and Partners target it will return approximately 60% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Citi rates REA as Buy (1) -

Citi highlights listings performance for August is stronger than anticipated according to REA Group.

Last year August came in better than the six-year average, but the analyst still expects 1Q25 is performing below forecasts of 5% year-on-year growth with extra working days in July assisting.

Citi views 1H25 earnings growth could be more slanted to 2Q25.

Buy rated with a $230 target.

Target price is $230.00 Current Price is $201.64 Difference: $28.36
If REA meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $218.46, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.7

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

Macquarie rates SDF as Outperform (1) -

Macquarie focuses on potential impacts from brand damage resulting from the media attention on the strata industry,

From a client perspective the client is the strata manager not the customer which the broker believes the media distorted. From an ESG point this matters but the overall impact is expected to be minimal to Steadfast Group with only some churn in strata manager customers.

The analyst highlights Steadfast Group commissioned the Trowbridge Report to improve industry practice and work with the NSW government on better legislation and "oversight" of the industry.

The Outperform rating and $6.80 target are maintained.

Target price is $6.80 Current Price is $5.64 Difference: $1.16
If SDF meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $6.75, suggesting upside of 19.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.6

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

UBS rates STO as Buy (1) -

As a result of weaker global oil demand from slowing GDP growth, UBS lowers its Q4 Brent oil forecast to US$75bbl from US$83bbl and the 2025-26 forecasts also fall by -US$5bbl to US$75bbl. The long-term price is unchanged at US$75bbl.

For LNG, the broker raises its 4Q JKM price forecast by 4% to $14.5mmBtu given 3Q strength and driven by geopolitical risks, including
uncertainty of future Ukraine transit flows.

The 2025 JKM forecast is also increased by 2% to $12.8/mmBtu and the long-term forecast is unchanged.

Origin Energy remains the broker's most preferred across the UBS coverage of Australian Energy and Utilities.

The Santos target is lowered to $8.70 from $8.80. Buy.

Target price is $8.70 Current Price is $7.00 Difference: $1.7
If STO meets the UBS target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $8.23, suggesting upside of 17.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.7

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

UBS rates WDS as Neutral (3) -

As a result of weaker global oil demand from slowing GDP growth, UBS lowers its Q4 Brent oil forecast to US$75bbl from US$83bbl and the 2025-26 forecasts also fall by -US$5bbl to US$75bbl. The long-term price is unchanged at US$75bbl.

For LNG, the broker raises its 4Q JKM price forecast by 4% to $14.5mmBtu given 3Q strength and driven by geopolitical risks, including
uncertainty of future Ukraine transit flows.

The 2025 JKM forecast is also increased by 2% to $12.8/mmBtu and the long-term forecast is unchanged.

Origin Energy remains the broker's most preferred across the UBS coverage of Australian Energy and Utilities.

The target for Woodside Energyfalls to $28.10 from $31 after the analyst reduces EPS forecasts over 24-26 by between -6-22% having lifted the estimated Sangomar D&A expense and cut oil price forecasts.

Target price is $28.10 Current Price is $24.10 Difference: $4
If WDS meets the UBS target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $29.35, suggesting upside of 21.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.2

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

Morgan Stanley rates WTC as Overweight (1) -

Over time, Morgan Stanley expects a lift in earnings (EBITDA) of between $40-60m for WiseTech Global after current customer DSV has agreed to acquire DB Schenker (which doesnt's use CargoWise software). The deal was confirmed on September 13.

DB Scenker is the number four global freight forwarder by revenue behind DSV in third place.

The broker's forecast earnings rise represents between 4-7% of the FY26 consensus earnings estimate range.

This transaction supports Morgan Stanley's Overweight-rated investment case partly based on key WiseTech customers growing their businesses faster than the industry average. The $120 target is retained. Industry View: Overweight.

Target price is $120.00 Current Price is $131.45 Difference: minus $11.45 (current price is over target).
If WTC meets the Morgan Stanley target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $112.60, suggesting downside of -14.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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