Australian Broker Call

Deutsche Bank rates AMC as Buy (1) -

Deutsche Bank observes the outlook for paper & packaging is improving. Demand remains stable and resin & aluminium costs have started to ease. Amcor remains the broker's preferred exposure, trading at a -16% discount to valuation.

Buy rating and $16.65 target maintained.

Target price is $16.65 Current Price is $13.82 Difference: $2.83
If AMC meets the Deutsche Bank target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $15.23, suggesting upside of 10.2% (ex-dividends)

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: 0.5

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

Credit Suisse rates FSF as Upgrade to Neutral from Underperform (3) -

The disappointing FY18 results were well flagged with two downgrades in the second half. The FY19 guidance of 25-35c per share is disappointing but Credit Suisse views management's more conservative intentions as a positive.

The broker believes the company's ability to forecast earnings is challenged by the complexity of the business and limited control over input costs.

Credit Suisse upgrades to Neutral from Underperform and lowers the target price to NZ$5.09 from NZ$5.12.

Current Price is $4.56. Target price not assessed.

The company's fiscal year ends in July.

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

UBS rates FSF as Neutral (3) -

UBS notes poor earnings delivery continues to plague the company. The broker believes the long-term strategy of moving towards value-add products remains sensible, but it is hard to see material share price appreciation without a better earnings track record.

The broker lowers EPS forecasts for FY19 and FY20 by -23% and -14% respectively, driven by higher ingredients expenditure and overheads plus slower gross margins recovery. UBS does not expect dividends to resume in FY19 although EPS should jump substantially in FY20.

Neutral rating retained and target reduced to NZ$5.05 from NZ$5.55.

Current Price is $4.56. Target price not assessed.

The company's fiscal year ends in July.

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

Credit Suisse rates HT1 as Reinstate Coverage with Neutral (3) -

Credit Suisse updates estimates to take into account the sale of Adshel and factors in a special dividend of $220m as well as a $55m buyback following the sale. The broker reinstates coverage with a Neutral rating and $2.95 target and a new analysts covers the stock.

Australian Radio Network, the company's main remaining asset, has been supported by a strong market which the broker expects will continue to grow into the second half. A more focused business can also increase corporate appeal, although Credit Suisse suggests the ongoing dispute with the ATO may deter potential acquirers.

Target price is $2.95 Current Price is $2.85 Difference: $0.1
If HT1 meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $2.70, suggesting downside of -5.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Morgan Stanley rates LNK as Overweight (1) -

Morgan Stanley believes the market has priced in the dilution from the equity raising in April but has overlooked the potential upside from deploying capital to grow asset services. The broker believes the market is missing the opportunity for Link to build a leading European asset servicing franchise.

Overweight rating and $9.00 target. Industry view is In-Line.

Target price is $9.00 Current Price is $7.62 Difference: $1.38
If LNK meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $8.43, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Credit Suisse rates OML as Reinstate Coverage with Outperform (1) -

Credit Suisse updates forecasts to account for the Adshel acquisition. Full cost synergies are unlikely to be achieved until 2020, which contributes to double-digit earnings upgrades for that period. Credit Suisse reinstates coverage with a $5.80 target and Outperform rating. A new analyst assumes coverage of the stock.

Given the strength of the market in 2018 the broker increases underlying revenue growth estimates to 9.5%. Following recent transactions, oOh!media and JC Decaux will have around 85% revenue share in the Australian outdoor advertising market.

Target price is $5.80 Current Price is $5.19 Difference: $0.61
If OML meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $5.46, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.9

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

Deutsche Bank rates PRY as Hold (3) -

The Fair Work Commission's determination for support employees at the Dorevitch pathology business is estimated to have around a -$4.5m impact, post-tax, on FY19 underlying net profit. The company aims to offset this through a range of strategies and has made no changes to guidance.

The determination is not final, but Deutsche Bank notes Primary Health Care does not expect the substance of the draft to change materially. Hold rating and $3.00 target maintained.

Target price is $3.00 Current Price is $2.92 Difference: $0.08
If PRY meets the Deutsche Bank target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $3.04, suggesting upside of 4.2% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Ord Minnett rates PRY as Upgrade to Accumulate from Hold (2) -

The Fair Work Commission has intervened in a dispute relating to the Dorevitch pathology business, ordering Primary Health Care to offer pay increases of up to 20% to around 1800 workers. The company has confirmed the impact on underlying net profit in FY19 would be -$4.5m and plans to take measures to mitigate the impact.

Clarification on the long-delayed ruling removes an overhang, Ord Minnett suggests. The broker reduces FY19 earnings estimates by -2%. Rating is upgraded to Accumulate from Hold and the target increases to $3.30 from $3.10. The broker expects attention can now turn to improving the business under the new management team, with the potential for a boost to Medicare funding ahead of the next federal election.

Target price is $3.30 Current Price is $2.92 Difference: $0.38
If PRY meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.04, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

UBS rates PRY as Sell (5) -

The Fair Work Commission has released a draft determination on the wages of support employees at the company's Dorevitch pathology business in Victoria. Primary Health Care estimates the determination will have a -$4.5m impact on underlying net profit in FY19. The company does not expect the final outcome to change materially and aims to fully offset the impact.

Support staff will get a 9%, one-off increase to hourly wage rates and this will be back paid one-year, effectively forming the new FY18 base. UBS maintains a Sell rating and reduces the target to $2.70 from $2.77.

Target price is $2.70 Current Price is $2.92 Difference: minus $0.22 (current price is over target).
If PRY meets the UBS target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.04, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

UBS rates RHC as Neutral (3) -

The UK NHS has published hospital activity data for July. NHS e-referrals represent around 80% of Ramsay's total admissions in the UK and around 8% of group revenue. July volumes increased 4.1%.

The update suggests a possible divergences in the performance of Ramsay versus its UK peers, UBS points out. There is potential for the NHS, in order to improve waiting lists for elective surgery, to drive increase utilisation of the private system and, while the broker acknowledges it is too early to be sure, the July data indicates a relatively stronger performance for the company's UK volumes.

Neutral and $54 target retained.

Target price is $54.00 Current Price is $55.39 Difference: minus $1.39 (current price is over target).
If RHC 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 $57.53, suggesting upside of 3.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Citi rates RMD as Neutral (3) -

ResMed has unveiled its AirFit F30 full face mask. This is a surprise to Citi as Fisher & Paykel ((FPH)) was expected to announce new masks before ResMed. The broker expects this mask will help the company maintain its leading market share although it will not be launched before the end of the year and will not contribute to revenue until the third quarter of FY19.

The full face mask category is 35% of the total market for masks and the broker estimates ResMed has around a 50% market share. Unlike previous generation full face masks, AirFit F30 sits below the nasal bridge and allows the user to wear glasses. Neutral rating and $15.50 target maintained.

Target price is $15.50 Current Price is $15.94 Difference: minus $0.44 (current price is over target).
If RMD meets the Citi target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.50, suggesting downside of -9.0% (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

Ord Minnett rates TGR as Lighten (4) -

The company has completed the acquisition of Fortune Group prawn aquaculture. The purchase price and capital expenditure requirements total $68m.

Ord Minnett considers the benefits of the acquisition lie in diversifying the business and capturing margin in the seafood value chain through vertical integration. Still, the broker finds the stock has a relatively unattractive risk/reward profile. Lighten rating and $4.05 target maintained.

Target price is $4.05 Current Price is $4.30 Difference: minus $0.25 (current price is over target).
If TGR meets the Ord Minnett target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.64, suggesting upside of 7.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Citi rates WPL as Neutral (3) -

Citi's analysis suggests that at a US$65/bbl oil price, Woodside's balance sheet should be able to fund Browse as well as Scarborough/Pluto, provided that ratings agencies allow a temporary breach of the 30% FFO/debt limit.

While acknowledging that forecasting this far out increases uncertainty, Citi suggests Woodside could also turn on the dividend reinvestment plan or accept stepping down its credit rating, rather than raise more equity at the time of a Browse final investment decision. Neutral rating and $34.14 target.

Target price is $34.14 Current Price is $36.79 Difference: minus $2.65 (current price is over target).
If WPL meets the Citi target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $34.71, suggesting downside of -5.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

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