Australian Broker Call

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

Citi analysts have been among the market optimists when it comes to AGL Energy, but they now see multiple reasons to become more cautious. One of the reasons includes the current share price. A second reason is that investors will find it hard to accurately value new growth projects, including grid scale batteries.

Equally noteworthy is Citi's suggestion AGL Energy might be venturing onto the acquisition path, having plenty of balance sheet capabilities, including the option of expanding overseas or in new areas such as broadband.

The removal of buybacks has triggered a -6%-10% cut to forecasts, also including lower electricity portfolio margins as well as lower cost-out projections. Price target drops to $22.48 from $23.79 and rating downgraded to Neutral from Buy.

Target price is $22.48 Current Price is $21.33 Difference: $1.15
If AGL meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $20.85, suggesting downside of -2.3% (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

Credit Suisse rates AGL as Underperform (5) -

Credit Suisse finds the reported interim financials in-line, with operational cash flow below forecast and with no share buyback. The company also lowered its cost-out target.

The analysts see a difficult outlook, with lower power prices, also because of cheap additional supply from new wind generation. Underperform rating retained. Target price increases to $17.90 from $17.85.

Target price is $17.90 Current Price is $21.33 Difference: minus $3.43 (current price is over target).
If AGL meets the Credit Suisse target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.85, suggesting downside of -2.3% (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

Deutsche Bank rates AGL as Hold (3) -

First half results were largely as Deutsche Bank expected. Net profit was up 10%. Guidance has been reiterated for underlying net profit of $970-1070m.

Deutsche Bank considers the stock fair value and maintains a Hold rating and $22.25 target.

Target price is $22.25 Current Price is $21.33 Difference: $0.92
If AGL meets the Deutsche Bank target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $20.85, suggesting downside of -2.3% (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

Macquarie rates AGL as Neutral (3) -

First half underlying net profit was ahead of Macquarie's expectations. Guidance has been reiterated while management has deferred any capital management activity because of market uncertainty.

The broker considers the business is working hard against headwinds such as a potential change in government and the implementation of the default market offering.

However, AGL is becoming capital light and, as a result, Macquarie expects significant cash generation should support a growing yield and capital management, possibly in FY20.

Neutral rating maintained. Target is reduced to $20.61 from $21.70.

Target price is $20.61 Current Price is $21.33 Difference: minus $0.72 (current price is over target).
If AGL meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.85, suggesting downside of -2.3% (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

Morgan Stanley rates AGL as Underweight (5) -

AGL has affirmed FY19 net profit guidance, despite a strong first half. Morgan Stanley points out this implies a -10% fall in the second half amid higher fuel and running costs and the Victorian retail price re-set.

Morgan Stanley notes the company is sharpening its focus on customer and employee measures, recognising rising community expectations. Heightened competition is also expected to affect the current industry structure.

The broker retains an Underweight rating in view of the downside risk. Target is $20.23. Industry view is Cautious.

Target price is $20.23 Current Price is $21.33 Difference: minus $1.1 (current price is over target).
If AGL meets the Morgan Stanley target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.85, suggesting downside of -2.3% (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

Ord Minnett rates AGL as Hold (3) -

First half net profit was a new record for a six-month period and 17% ahead of Ord Minnett's expectations. The focus for the market, however, was on full year guidance which implied earnings for the second half will decline by -10%.

The broker suggests AGL is incurring additional discretionary costs as well as lower retail margins. This could well benefit the business in the future but will mean near-term earnings fall within guidance.

Capital returns remain an option, although the company has not declared a share buyback program and will focus on growth opportunities. Hold rating maintained. Target is reduced to $22.60 from $23.20.

Target price is $22.60 Current Price is $21.33 Difference: $1.27
If AGL meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $20.85, suggesting downside of -2.3% (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 AGL as Buy (1) -

FY19 net profit guidance has been reaffirmed, although UBS points out the market focus was on the decision not to recommence the buyback amid reduced cost reductions.

UBS believes the focus on plant reliability allows AGL to reduce its exposure to the spot market and take advantage of higher forward contract prices.

The broker attributes weakness in the share price to disappointment regarding capital management. Buy rating maintained. Target is reduced to $22.70 from $23.00.

Target price is $22.70 Current Price is $21.33 Difference: $1.37
If AGL meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $20.85, suggesting downside of -2.3% (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

Macquarie rates AJM as Underperform (5) -

The company has announced a $23m institutional placement along with a $5m share purchase plan. Funds will be used to complete the ramp up of Altura.

Macquarie suspects the capital raising was difficult and currently anticipates the company needs to cover around $25m in interest over 2019.

The broker reduces the target to 9c from 16c and maintains an Underperform rating.

Target price is $0.09 Current Price is $0.13 Difference: minus $0.04 (current price is over target).
If AJM meets the Macquarie target it will return approximately minus 31% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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

Citi rates ANN as Buy (1) -

The company bought back more shares than Citi expected in the first half while the US$70m acquisition of Ringer Gloves is forecast to be accretive from FY20.

The terms of the transaction will be disclosed at the first half result on February 18.

Raw material costs remain a headwind but the recent decline in prices and price increases put through by Ansell are expected to benefit margins in the second half.

Buy rating and $28.50 target maintained.

Target price is $28.50 Current Price is $24.55 Difference: $3.95
If ANN meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $25.86, suggesting upside of 5.3% (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: 0.5

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

Credit Suisse rates AQZ as Downgrade to Neutral from Outperform (3) -

Credit Suisse observes the share price had risen 29% since the August 2018 result, on continued positive news flow, while the rest of the share market went through a difficult period. Qantas ((QAN)) entering the shareholders' register, with the intention of building a majority stake, has fundamentally complicated matters.

Credit Suisse professes not to have any idea how the competition law sits in between Qantas and Virgin Australia ((VAH)) and Alliance Aviation. The analysts think it's best to take a more cautious stance, hence the downgrade to Neutral from Outperform. Target price increases to $2.50 from $2.45.

Earnings estimates have been reduced, but DPS forecasts have gone up, as the financial report itself seems to have missed expectations on several items, but never in a big way (the analysts talk about favourable operating conditions, but with an adverse mix)

Target price is $2.50 Current Price is $2.47 Difference: $0.03
If AQZ meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Ord Minnett rates AQZ as Buy (1) -

First half results were slightly ahead of forecasts. Ord Minnett continues to like the investment and notes the potential for further contract gains in the FIFO space as well as charter work in the second half.

The long-term partnership with Virgin Australia ((VAH)) appears robust, although the broker notes uncertainty regarding Qantas ((QAN)) intentions.

Buy rating maintained. Target is raised to $2.70 from $2.60.

Target price is $2.70 Current Price is $2.47 Difference: $0.23
If AQZ meets the Ord Minnett 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: 0.5

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

Morgan Stanley rates BAL as Overweight (1) -

Morgan Stanley believes the company's new formulation will be a catalyst for sales and earnings growth. The new formula will be stocked in supermarkets once the old formula has sold.

The main change is the inclusion of Omega, which reportedly supports brain development. Morgan Stanley maintains an Overweight rating, $11 target and Cautious industry view.

Target price is $11.00 Current Price is $9.07 Difference: $1.93
If BAL meets the Morgan Stanley target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $10.13, 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

Macquarie rates BHP as Outperform (1) -

First half earnings are expected to be modestly softer, affected by the copper division. BHP will report its first half results on February 19.

Earnings upgrade momentum remains strong, Macquarie believes, as iron ore prices increase earnings estimates in 2019 by around 36% in a spot price scenario.

The broker considers the stock trading at an attractive FY19 free cash flow yield of 15%. Outperform maintained. Target rises to $39 from $38.

Target price is $39.00 Current Price is $35.37 Difference: $3.63
If BHP meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $35.79, suggesting upside of 1.2% (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: 0.5

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

Morgans rates BKY as Add (1) -

The company has reported a number of favourable assessments, including two from the Spanish Nuclear Safety Council. Berkeley Energia is also responding to outstanding issues raised by the local municipality.

Meanwhile, funding is in place from the Sultanate of Oman. Morgans factors in a delay to development and, as development milestones are reached, would look to unwind that discount to valuation.

Add rating maintained. Target is reduced to $1.09 from $1.18.

Target price is $1.09 Current Price is $0.46 Difference: $0.63
If BKY meets the Morgans target it will return approximately 137% (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

Morgans rates CAT as Under Review (-1) -

Joe Powell has resigned as CEO and managing director. This follows the resignation of the finance director late last year, whose replacement is yet to be announced.

For the sake of prudence, Morgans is suspending its recommendation and target. High level management instability raises questions about the ongoing strategy and the broker awaits further clarity.

Current Price is $0.64. Target price not assessed.

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

UBS rates CBA as Neutral (3) -

First half results were below UBS expectations, with broad based revenue weakness a feature. Net interest margins also disappointed the broker.

The bank is now targeting a lower absolute cost base and a cost-to-income ratio of less than 40%. UBS does not envisage this a stretch, as costs blew out during the years of the housing bubble.

The broker retains a Neutral rating and $72 target.

Target price is $72.00 Current Price is $74.77 Difference: minus $2.77 (current price is over target).
If CBA meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $70.59, suggesting downside of -5.6% (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

UBS rates CSR as Reinstate Coverage with Sell (5) -

UBS observes CSR is heavily exposed to housing activity and earnings uncertainty is heightened. Building product margins troughed in the last cycle at 8% and this time the company is targeting 10%.

The aluminium business is also under pressure from high energy costs. The company is positioning for a downturn, having closed one kiln at Cecil Park and reduced shifts at the WA gyprock facility.

UBS believes this is just the start. The broker reinstates coverage with a Sell rating and $2.70 target.

Target price is $2.70 Current Price is $3.07 Difference: minus $0.37 (current price is over target).
If CSR meets the UBS target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.36, suggesting upside of 9.4% (ex-dividends)

The company's fiscal year ends in March.

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

Citi rates DOW as Buy (1) -

First half results missed Citi's forecasts, compounded by a change in segment reporting. The broker envisages medium-term upside from the leverage to increased expenditure on infrastructure and resources.

Meanwhile, Citi notes the debate over Spotless continues, which missed forecasts although margins improved.

Buy rating maintained. Target is raised to $8.50 from $8.45.

Target price is $8.50 Current Price is $7.23 Difference: $1.27
If DOW meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $7.96, suggesting upside of 10.0% (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

Deutsche Bank rates DOW as Buy (1) -

First half results were lacklustre, in Deutsche Bank's view. Revenue growth was strong but earnings were weaker than expected.

The broker is also disappointed with the two loss-making construction projects which, when combined with the poor performance on renewable projects, could mean a delay to investors ascribing a higher valuation multiple to the business.

Still, the broker retains a Buy rating on valuation grounds. Target is $8.26.

Target price is $8.26 Current Price is $7.23 Difference: $1.03
If DOW meets the Deutsche Bank target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $7.96, suggesting upside of 10.0% (ex-dividends)

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

Macquarie rates DOW as Outperform (1) -

First half results were broadly in line with guidance. Macquarie notes two construction jobs underperformed but were contained within guidance, highlighting the benefits of scale and diversity.

The broker believes the stock continues to provide leverage to a favourable services, infrastructure & mining environment. Outperform rating maintained. Target is raised to $8.13 from $8.01.

Target price is $8.13 Current Price is $7.23 Difference: $0.9
If DOW meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $7.96, suggesting upside of 10.0% (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

Ord Minnett rates DOW as Lighten (4) -

First half net profit was slightly below Ord Minnett's forecasts. On the positive side, there was 9% growth in earnings and revenue growth prospects appear strong in a number of divisions.

The broker calculates the risk/reward ratio is negative as earnings do not fully convert into cash.

The broker also envisages a possible delay to some of the positive catalysts, maintaining a Lighten rating. Target rises to $6.37 from $6.01.

Target price is $6.37 Current Price is $7.23 Difference: minus $0.86 (current price is over target).
If DOW meets the Ord Minnett target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.96, suggesting upside of 10.0% (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

UBS rates DOW as Buy (1) -

First half results were in line with UBS estimates. The broker observes the market focus appears to have narrowed to a few peripheral issues, which drove a negative share price reaction.

This comes despite Downer reiterating underlying FY19 earnings guidance. UBS maintains a Buy rating and raises the target to $8.22 from $8.21.

Target price is $8.22 Current Price is $7.23 Difference: $0.99
If DOW meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $7.96, suggesting upside of 10.0% (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

Credit Suisse rates FBU as Neutral (3) -

Credit Suisse has taken an in-depth look into Fletcher Building's residential division. The analysts have come to the conclusion that these operations will not be immune to the impacts of a downturn, but the review has highlighted this remains a business well positioned on things inside its control.

The analysts are looking forward to the upcoming interim report, also anticipating the core NZ building products performance should be "solid". Minor changes have been made to forecasts. Target price remains NZ$5.43. Neutral.

Current Price is $4.81. Target price not assessed.

Current consensus price target is $4.72, suggesting downside of -1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

This company reports in NZD. 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

Macquarie rates IEL as Outperform (1) -

Macquarie considers the first half result hard to fault. The benefits of the diversified platform are increasingly evident and the digital channels should drive improved unit economics.

These benefits are yet to be reflected in margins and earnings. The broker maintains an Outperform rating and raises the target to $15.20 from $11.50.

Target price is $15.20 Current Price is $13.91 Difference: $1.29
If IEL meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $14.53, suggesting upside of 4.5% (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

Morgan Stanley rates IEL as Overweight (1) -

First half result beat Morgan Stanley's estimates. Earnings are re-based higher while sales growth assumptions are lifted for FY20 and beyond.

Despite reinvestment in operating expenditure, earnings margins (EBITDA) expanded to 22.0%. The company's commentary included scope for geographic expansion, with new offices in Pakistan, and Nigeria added to the list by FY20.

Target is raised to $16.00 from $11.80. Overweight rating. Industry view is In-Line.

Target price is $16.00 Current Price is $13.91 Difference: $2.09
If IEL meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $14.53, suggesting upside of 4.5% (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

Morgans rates IEL as Hold (3) -

Morgans was impressed with the growth in the first half, as operating earnings (EBITDA) were up 33%. IELTS testing volumes and margin expansion were ahead of expectations.

Additionally, the company is rolling out its computer-delivered testing which is expected to increase volumes and pricing over time.

Morgans maintains a Hold rating, given the current valuation. Target is raised to $14.40 from $10.77.

Target price is $14.40 Current Price is $13.91 Difference: $0.49
If IEL meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $14.53, suggesting upside of 4.5% (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

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

Ord Minnett was impressed with the first half result, which beat estimates by 13.4%. Strong revenue growth was demonstrated across-the-board and student placement was up 40%.

The broker observes there are few companies listed on the ASX that provide the same kind of exposure to the Indian growth story and there are few reasons why the company cannot capitalise on the opportunities ahead.

The broker considers the valuation lofty but "irresistible" and upgrades to Accumulate from Hold. Target is raised to $14.16 from $8.41.

Target price is $14.16 Current Price is $13.91 Difference: $0.25
If IEL meets the Ord Minnett target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $14.53, suggesting upside of 4.5% (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 IEL as Downgrade to Sell from Neutral (5) -

UBS observes almost every section of the company's business is delivering growth and the digital strategy is progressing well. This presents a real opportunity to take market share. First half results were ahead of expectations.

UBS believes valuation at current levels is stretched and downgrades to Sell from Neutral. Target is raised to $12.90 from $11.30.

Target price is $12.90 Current Price is $13.91 Difference: minus $1.01 (current price is over target).
If IEL meets the UBS target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.53, suggesting upside of 4.5% (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 MGR as Neutral (3) -

First half results were ahead of Citi's estimates. The benefits of the deliberate re-positioning in office and industrial are now clearly evident to the broker, highlighted by 10% growth in office operating income.

While residential is clearly slowing it was better than feared. Still, in a bullish office/industrial environment the broker suspects investors are likely to favour pure plays and this limits the potential for a sustainable re-rating.

Neutral rating maintained. Target rises to $2.44 from $2.29.

Target price is $2.44 Current Price is $2.55 Difference: minus $0.11 (current price is over target).
If MGR meets the Citi target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.52, suggesting downside of -1.0% (ex-dividends)

The company's fiscal year ends in June.

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

Deutsche Bank rates MGR as Buy (1) -

First half results were weaker than expected because of the timing of residential settlements. However, Deutsche Bank observes office and industrial compensated.

The broker maintains a Buy rating, believing there is further potential for asset upside. Target is $2.62.

Target price is $2.62 Current Price is $2.55 Difference: $0.07
If MGR meets the Deutsche Bank target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $2.52, suggesting downside of -1.0% (ex-dividends)

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

Macquarie rates MGR as Outperform (1) -

First half earnings were ahead of expectations. The company has refined FY19 guidance and indicated Sydney and Melbourne residential markets could be undersupplied over the medium term, while looking to re-stock at appropriate prices.

The inclusion of a buyback in guidance slightly disappointed Macquarie, although the investment outlook remains intact. The broker maintains an Outperform rating and raises the target to $2.79 from $2.71.

Target price is $2.79 Current Price is $2.55 Difference: $0.24
If MGR meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.52, suggesting downside of -1.0% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates MGR as Hold (3) -

First half results were in line with Ord Minnett's forecasts. Office business was strong, with 5% operating income growth. Residential is more challenging and pre-sales were down -7%.

Ord Minnett expects pre--sales should run down significantly in FY20, a big year of largely pre-sold apartment settlements, and forecasts 10% growth in earnings per share.

The broker acknowledges the market may look through this and view FY19 and FY21 as more representative. Hold rating maintained. Target increases to $2.55 from $2.50.

Target price is $2.55 Current Price is $2.55 Difference: $0
If MGR meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $2.52, suggesting downside of -1.0% (ex-dividends)

The company's fiscal year ends in June.

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 NAB as Buy (1) -

Citi observes, on top of the departures of the CEO and chairman, the bank faces a delay to the de-merger of the wealth business, a tight capital position and further remediation.

Shareholder benefits from the transformation program are considered, at best, on hold in 2019. The broker believes the share price is unlikely to re-rate until stability returns.

Buy rating is maintained and the target is cut to $29.50 from $31.00.

Target price is $29.50 Current Price is $24.72 Difference: $4.78
If NAB meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $27.23, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in September.

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

Deutsche Bank rates NAB as Buy (1) -

Deutsche Bank believes management changes announced by the bank should be a positive catalyst.

The broker believes NAB should now consider cutting the dividend payout-out ratio to a more realistic level to remove any remaining uncertainty.

The stock has been pricing these issues for some time, the broker adds. Buy rating and $29 target maintained.

Target price is $29.00 Current Price is $24.72 Difference: $4.28
If NAB meets the Deutsche Bank target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $27.23, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in September.

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

Macquarie rates NAB as Neutral (3) -

Macquarie found the first quarter performance respectable, in the face of challenging conditions. However, the removal of the CEO and chairman in the middle of a major transformation program increases the execution risk, in the broker's view.

The broker believes, furthermore, that the weaker capital position relative to peers is likely to result in a reduction in the dividend. The broker maintains a Neutral rating and raises the target to $26.50 from $25.50.

Target price is $26.50 Current Price is $24.72 Difference: $1.78
If NAB meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $27.23, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in September.

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

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

Morgan Stanley found the first quarter trading update satisfactory. Cash earnings were up 2% and revenue was stable, while margins declined.

The broker considers the appointment of Phil Chronican as acting CEO will be a good interim measure while the bank seeks a new CEO and chairman of the board.

Equal-weight. Target is $25.60. Industry view: In-line.

Target price is $25.60 Current Price is $24.72 Difference: $0.88
If NAB meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $27.23, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in September.

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

Morgans rates NAB as Downgrade to Hold from Add (3) -

Morgans considers the leadership changes a negative development, amid increased risk of a cut to dividends, disruption to the transformation strategy and more remediation charges.

First quarter cash earnings were slightly lower than the broker expected with revenue the main area of softness.

Going forward, the run rate is expected to improve as increases to standard variable rates become effective.

Morgans downgrades to Hold from Add and reduces the target to $25.00 from $31.50.

Target price is $25.00 Current Price is $24.72 Difference: $0.28
If NAB meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $27.23, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in September.

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

Ord Minnett rates NAB as Accumulate (2) -

The exit of the CEO and chairman have come at a difficult time for the bank, Ord Minnett observes. However, the early release of the trading update for the first quarter shows better revenue trends, which is key to the broker's investment thesis.

Ord Minnett reduces cash net profit forecasts by around -1.5% on average over FY19-21.

The broker retains an Accumulate rating but acknowledges the noise around management changes will not help the stock in re-rating versus its peers. Target is reduced to $30.20 from $31.80.

Target price is $30.20 Current Price is $24.72 Difference: $5.48
If NAB meets the Ord Minnett target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $27.23, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in September.

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

UBS rates NAB as Sell (5) -

First quarter trading was slightly ahead of UBS estimates. The broker considers the resignation of the CEO and chairman necessary, following the Hayne Royal Commission findings.

The broker fears the bank's "Accelerate" restructuring strategy is geared to a more positive environment and a larger focus on operating expenses may be required by the new management team.

Moreover, NAB is highly leveraged to any deterioration in the business credit book and many SMEs are exposed to the deteriorating housing market. Sell rating and $23 target maintained.

Target price is $23.00 Current Price is $24.72 Difference: minus $1.72 (current price is over target).
If NAB meets the UBS target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $27.23, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in September.

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

Ord Minnett rates PPH as Downgrade to Hold from Buy (3) -

The company's third quarter update appeared solid to Ord Minnett at first glance, although management has indicated that revenue in FY19 will be at the lower end of guidance.

With respect to FY20, 30% growth off the FY19 base is considered a reasonable target. Nevertheless, the broker's confidence in stated targets is low, suspecting that increasing online penetration with existing customers is getting harder to obtain.

Rating is downgraded to Hold from Buy. Target is reduced to $3.47 from $3.89.

Target price is $3.47 Current Price is $3.15 Difference: $0.32
If PPH meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

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

Macquarie rates PTM as Underperform (5) -

Macquarie notes net outflows of -$111m in January. The broker had expected a sustained period of weakness, although the rate of outflows accelerated in January relative to December.

Assets under management were up 2.8%, supported by market performance. Macquarie maintains an Underperform rating and $4.20 target.

Target price is $4.20 Current Price is $4.73 Difference: minus $0.53 (current price is over target).
If PTM meets the Macquarie target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.22, suggesting downside of -10.9% (ex-dividends)

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 QAN as Reinstate Coverage with Equal-weight (3) -

Morgan Stanley reinstates coverage with an Equal-weight rating and $5.70 target. The broker believes the next 12 months will feature a battle between a weak Australian consumer and the airline industry's ability to manage capacity.

The broker expects revenue growth will ease but the market has priced in the emerging risks. Morgan Stanley also assesses the airline against global peers and, despite conservative earnings estimates, believes it is appropriately priced. Industry view is Cautious.

Target price is $5.70 Current Price is $5.62 Difference: $0.08
If QAN meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $6.31, suggesting upside of 12.2% (ex-dividends)

The company's fiscal year ends in June.

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 REA as Buy (1) -

Citi analysts saw yet another solid performance amid challenging operational dynamics, but management also explicitly guided towards slower revenue growth in H2 due to upcoming NSW and federal elections.

Subdued guidance is seen as the key negative, even with the analysts anticipating this is merely a temporary phenomenon, and growth should accelerate again in FY20. The result itself was in-line. The company seems to be keeping a lid on cost growth, the analysts note.

Buy. Valuation/target $105.

Target price is $105.00 Current Price is $73.99 Difference: $31.01
If REA meets the Citi target it will return approximately 42% (excluding dividends, fees and charges).

Current consensus price target is $87.72, suggesting upside of 18.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.6

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

Macquarie rates REA as Outperform (1) -

First half results were stronger than expected, highlighting the strength in the business at present and Macquarie expects another strong half ahead.

However, revenue growth should slow because of cyclical volume weakness, compounded by the upcoming NSW and federal elections.

The company is also calling out slower developer growth. Macquarie maintains an Outperform rating and $90 target.

Target price is $90.00 Current Price is $73.99 Difference: $16.01
If REA meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $87.72, suggesting upside of 18.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.6

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

Macquarie rates RIO as Outperform (1) -

2018 earnings are expected to be flat, dominated by steady iron ore. Macquarie suggests asset disposals over the year will allow for further capital management and assumes a US$2 special dividend.

Earnings upgrade momentum remains strong, in the broker's view. The company will report its results on February 27. Macquarie maintains an Outperform rating and raises the target to $98 from $94.

Target price is $98.00 Current Price is $90.57 Difference: $7.43
If RIO meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $86.94, suggesting downside of -4.0% (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: 0.4

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

Deutsche Bank rates TLS as Buy (1) -

Last update we had on Telstra by Deutsche Bank dates from mid-May last year. Deutsche Bank has now returned ("initiation" in their own lingo, but we prefer re-initiation) with a Buy rating and a price target of $3.70 (versus $3.90 in May last year).

The Australian telco sector is currently transforming, in the analysts' description. They have decided to zoom in on the opportunity that might result because of the many changes to the competitive landscape.

Most importantly, on refreshed forecasts, cash flow is expected to exceed  earnings, which not only suggests the dividend is sustainable; it opens up the opportunity of Telstra being able to offer shareholders capital returns.

Target price is $3.70 Current Price is $3.24 Difference: $0.46
If TLS meets the Deutsche Bank target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $3.09, suggesting downside of -4.7% (ex-dividends)

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

Deutsche Bank rates VOC as Hold (3) -

In an Australian telco sector that is going through a dramatic transformation, Vocus is a company in turnaround mode, argue analysts at Deutsche Bank. They do not discount the fact this turnaround might well be achieved successfully; it's just that the current share price already assumes success is virtually guaranteed.

Deutsche Bank's contra argument is more about risks, with the analysts stating they happily forego the first 10%-20% in share price upside in case of success. In their view, the immediate outlook is still for earnings decline in FY19.

We last heard from Deutsche Bank on Vocus in February last year. At that time, the rating was Hold alongside a price target of $2.35. Today, upon re-initiation of coverage, the rating remains Hold, but the new price target sits at $3.10; below the current share price.

Target price is $3.10 Current Price is $3.42 Difference: minus $0.32 (current price is over target).
If VOC meets the Deutsche Bank target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.10, suggesting downside of -9.3% (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

Credit Suisse rates WOR as Outperform (1) -

Credit Suisse notes Jacobs Engineering has released a strong Q1 performance, which matters as WorleyParsons has signed an agreement to purchase some of its operations (ECR), probably by late March/April this year.

The analysts seem pleased by the implied higher than usual margin for ECR in the released update. There is a suggestion the US government shutdown can possibly delay the deal, but it is the analysts' view WorleyParsons shares look cheap when the ECR deal is incorporated.

Interim result is scheduled for February 20. Outperform. Target $17.60.

Target price is $17.60 Current Price is $14.13 Difference: $3.47
If WOR meets the Credit Suisse target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $19.47, suggesting upside of 37.8% (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

Deutsche Bank rates WOR as Buy (1) -

WorleyParsons will buy the Jacob Engineering ECR segment, although awaits regulatory approval.

Deutsche Bank calculates the ECR segment revenue growth has accelerated and, as a result, this is a positive for WorleyParsons.

The broker maintains a Buy rating and $20.65 target.

Target price is $20.65 Current Price is $14.13 Difference: $6.52
If WOR meets the Deutsche Bank target it will return approximately 46% (excluding dividends, fees and charges).

Current consensus price target is $19.47, suggesting upside of 37.8% (ex-dividends)

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