Australian Broker Call
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October 02, 2018
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)
THIS REPORT WILL BE UPDATED SHORTLY
Last Updated: 10:40 AM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
| WPL - | WOODSIDE PETROLEUM | Downgrade to Sell from Neutral | Citi |
Overnight Price: $2.19
Credit Suisse rates AQG as Outperform (1) -
While the Turkish lira has slumped over the September quarter, and should be favourable for Alacer Gold, Credit Suisse does not model the adjustment as it is not relevant to cash flow or valuation. History also suggests the advantage is short lived and likely to be offset by lagged cost inflation.
Fortunately, the broker suggests, the company likely consumed all its lira hedging on completion of the major sulphide project construction and should be well-positioned for incremental lira-based additional cost savings relative to the US dollar-denominated capital budget.
Outperform and $5.30 target retained.
Target price is $5.30 Current Price is $2.19 Difference: $3.11
If AQG meets the Credit Suisse target it will return approximately 142% (excluding dividends, fees and charges).
Current consensus price target is $3.91, suggesting upside of 78.7% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 3.48 cents and EPS of 6.07 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.0, implying annual growth of N/A. Current consensus DPS estimate is 1.2, implying a prospective dividend yield of 0.5%. Current consensus EPS estimate suggests the PER is 27.4. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 21.31 cents and EPS of 52.37 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.9, implying annual growth of 298.8%. Current consensus DPS estimate is 8.4, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 6.9. |
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
Overnight Price: $2.13
Macquarie rates BPT as Underperform (5) -
Beach Energy has forecast production growing to 34-40 mmboe by FY23, driven by both developed and risked exploration success. Macquarie suggests this higher production forecast is far from certain.
The forecast is heavily reliant on exploration drilling. With the major de-risking of exploration not taking place until FY20/21 the broker suggests it may be two years before the potential of this plan is revealed.
Underperform rating and $1.75 target maintained.
Target price is $1.75 Current Price is $2.13 Difference: minus $0.38 (current price is over target).
If BPT meets the Macquarie target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $1.74, suggesting downside of -18.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 2.00 cents and EPS of 26.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.6, implying annual growth of 13.9%. Current consensus DPS estimate is 2.0, implying a prospective dividend yield of 0.9%. Current consensus EPS estimate suggests the PER is 9.4. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 2.50 cents and EPS of 22.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.1, implying annual growth of -2.2%. Current consensus DPS estimate is 2.8, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 9.6. |
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
ECX ECLIPX GROUP LIMITED
Vehicle Leasing & Salary Packaging
More Research Tools In Stock Analysis - click HERE
Overnight Price: $2.64
Morgan Stanley rates ECX as Overweight (1) -
Morgan Stanley suggests the stock has rebounded on the back of SG Fleet's ((SGF)) offer at $2.52 a share. The broker suspects the bid was a catalyst for the market to ascribe value to Right2Drive and Grays.
Morgan Stanley values the core leasing business at $2.50 a share and now includes $0.50 a share for Right2Drive and Grays. The broker maintains an Overweight rating and raises the target to $3.00 from $2.50. Industry view is In-Line.
Target price is $3.00 Current Price is $2.64 Difference: $0.36
If ECX meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $2.55, suggesting downside of -3.6% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 14.70 cents and EPS of 22.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.0, implying annual growth of 18.2%. Current consensus DPS estimate is 15.3, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 11.0. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 15.70 cents and EPS of 24.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 25.2, implying annual growth of 5.0%. Current consensus DPS estimate is 15.8, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 10.5. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
LLC LEND LEASE CORPORATION LIMITED
Infra & Property Developers
More Research Tools In Stock Analysis - click HERE
Overnight Price: $19.50
Macquarie rates LLC as Outperform (1) -
Macquarie reviews the urban regeneration projects won in the UK over the past 12 months and considers the end value of $18bn could prove conservative.
The broker upgrades estimates for earnings per share for the years post FY21 because of near-term UK residential opportunities while expecting some profits will occur over the longer term. Outperform rating maintained. Target is raised 2% to $21.81.
Target price is $21.81 Current Price is $19.50 Difference: $2.31
If LLC meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $21.29, suggesting upside of 9.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 72.70 cents and EPS of 146.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 148.1, implying annual growth of 8.1%. Current consensus DPS estimate is 74.4, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 13.2. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 75.20 cents and EPS of 150.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 155.2, implying annual growth of 4.8%. Current consensus DPS estimate is 77.8, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 12.6. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $4.17
Credit Suisse rates OGC as Outperform (1) -
Credit Suisse expects September quarter production to be similar to the March quarter. Both the Haile expansion and Didipio underground are expected to be confirmed as on schedule and on budget.
Exploration highlights are expected to include high-grade extension drilling at Waihi/WKP. High-grade gold mineralisation is open along strike in both directions. Outperform rating and $3.80 target maintained.
Target price is $3.80 Current Price is $4.17 Difference: minus $0.37 (current price is over target).
If OGC meets the Credit Suisse target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $4.63, suggesting upside of 11.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 5.26 cents and EPS of 29.07 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.8, implying annual growth of N/A. Current consensus DPS estimate is 5.0, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 13.5. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 5.26 cents and EPS of 20.52 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.6, implying annual growth of 2.6%. Current consensus DPS estimate is 6.6, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 13.2. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $8.27
Citi rates ORG as Neutral (3) -
Share prices of energy producers are on a tear on the back of abundant market optimism and rising crude oil prices but Citi analysts are warning there are risks in LNG markets, and investors should reconsider whether paying up now might be too early or too risky.
Citi's LNG specialists summarise the investment proposition as follows: investing in stocks such as Woodside and/or Santos ((STO)) today is as much a call on countries including Bangladesh and Pakistan materially growing gas imports as it relates to China doing the same.
Earnings estimates have increased, but valuation declines by -1% to $8.74. Neutral rating retained.
Target price is $8.74 Current Price is $8.27 Difference: $0.47
If ORG meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $9.25, suggesting upside of 11.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Citi forecasts a full year FY19 EPS of 75.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 69.5, implying annual growth of 337.1%. Current consensus DPS estimate is 29.0, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 11.9. |
Forecast for FY20:
Citi forecasts a full year FY20 EPS of 74.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 79.2, implying annual growth of 14.0%. Current consensus DPS estimate is 38.3, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 10.4. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $9.03
Citi rates OSH as Sell (5) -
Share prices of energy producers are on a tear on the back of abundant market optimism and rising crude oil prices but Citi analysts are warning there are risks in LNG markets, and investors should reconsider whether paying up now might be too early or too risky.
Citi's LNG specialists summarise the investment proposition as follows: investing in stocks such as Woodside and/or Santos today is as much a call on countries including Bangladesh and Pakistan materially growing gas imports as it relates to China doing the same.
Earnings estimates have been lifted by up to 4%, but Sell rating retained. Target price gains 1c to $7.07.
Target price is $7.07 Current Price is $9.03 Difference: minus $1.96 (current price is over target).
If OSH meets the Citi target it will return approximately minus 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $8.79, suggesting downside of -2.6% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
Citi forecasts a full year FY18 EPS of 35.76 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 32.5, implying annual growth of N/A. Current consensus DPS estimate is 13.9, implying a prospective dividend yield of 1.5%. Current consensus EPS estimate suggests the PER is 27.8. |
Forecast for FY19:
Citi forecasts a full year FY19 EPS of 50.88 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 49.8, implying annual growth of 53.2%. Current consensus DPS estimate is 22.7, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 18.1. |
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
Overnight Price: $78.65
Macquarie rates RIO as Outperform (1) -
The Robe River joint venture has approved the US$1.55bn expenditure budget to fund a number of mine replacements. Macquarie has already factored these developments into forecasts. Construction is expected to commence in 2019 and first ore is scheduled for 2021.
Rio Tinto has already guided to US$2.7bn in replacement capital expenditure for 2018-20 and these projects are part of this budget. Macquarie maintains an Outperform rating and $91 target.
Target price is $91.00 Current Price is $78.65 Difference: $12.35
If RIO meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $86.98, suggesting upside of 10.6% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 404.94 cents and EPS of 675.91 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 723.0, implying annual growth of N/A. Current consensus DPS estimate is 397.3, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 10.9. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 362.87 cents and EPS of 607.28 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 714.4, implying annual growth of -1.2%. Current consensus DPS estimate is 396.1, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 11.0. |
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
Overnight Price: $0.51
Citi rates SXY as Buy (1) -
Share prices of energy producers are on a tear on the back of abundant market optimism and rising crude oil prices but Citi analysts are warning there are risks in LNG markets, and investors should reconsider whether paying up now might be too early or too risky.
Citi's LNG specialists summarise the investment proposition as follows: investing in stocks such as Woodside and/or Santos ((STO)) today is as much a call on countries including Bangladesh and Pakistan materially growing gas imports as it relates to China doing the same.
For Senex Energy, only minor changes have been implemented for forecasts. Valuation/price target remains 56c. Buy/High Risk.
Target price is $0.56 Current Price is $0.51 Difference: $0.05
If SXY meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $0.50, suggesting downside of -2.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 0.00 cents and EPS of 2.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 1.6, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 31.9. |
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 0.00 cents and EPS of 3.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 3.0, implying annual growth of 87.5%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 17.0. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $38.45
Citi rates WPL as Downgrade to Sell from Neutral (5) -
Share prices of energy producers are on a tear on the back of abundant market optimism and rising crude oil prices but Citi analysts are warning there are risks in LNG markets, and investors should reconsider whether paying up now might be too early or too risky.
Citi's LNG specialists summarise the investment proposition as follows: investing in stocks such as Woodside and/or Santos ((STO)) today is as much a call on countries including Bangladesh and Pakistan materially growing gas imports as it relates to China doing the same.
Citi thinks today's share price looks "full value" no matter what metric used. Hence it downgrades to Sell from Neutral. Target price moves to $34.64 from $34.14. Estimates have lifted.
Target price is $34.64 Current Price is $38.45 Difference: minus $3.81 (current price is over target).
If WPL meets the Citi target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $36.68, suggesting downside of -4.6% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
Citi forecasts a full year FY18 EPS of 219.83 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 211.0, implying annual growth of N/A. Current consensus DPS estimate is 174.8, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 18.2. |
Forecast for FY19:
Citi forecasts a full year FY19 EPS of 238.89 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 266.9, implying annual growth of 26.5%. Current consensus DPS estimate is 209.6, implying a prospective dividend yield of 5.5%. Current consensus EPS estimate suggests the PER is 14.4. |
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
Today's Price Target Changes
| Company | Broker | New Target | Prev Target | Change | |
| CTX | CALTEX AUSTRALIA | Citi | 37.46 | 37.34 | 0.32% |
| ECX | ECLIPX GROUP | Morgan Stanley | 3.00 | 2.50 | 20.00% |
| LLC | LEND LEASE CORP | Macquarie | 21.81 | 21.36 | 2.11% |
| ORG | ORIGIN ENERGY | Citi | 8.74 | 8.80 | -0.68% |
| OSH | OIL SEARCH | Citi | 7.07 | 7.06 | 0.14% |
| WPL | WOODSIDE PETROLEUM | Citi | 34.64 | 34.14 | 1.46% |
Summaries
| AQG | ALACER GOLD | Outperform - Credit Suisse | Overnight Price $2.19 |
| BPT | BEACH ENERGY | Underperform - Macquarie | Overnight Price $2.13 |
| ECX | ECLIPX GROUP | Overweight - Morgan Stanley | Overnight Price $2.64 |
| LLC | LEND LEASE CORP | Outperform - Macquarie | Overnight Price $19.50 |
| OGC | OCEANAGOLD | Outperform - Credit Suisse | Overnight Price $4.17 |
| ORG | ORIGIN ENERGY | Neutral - Citi | Overnight Price $8.27 |
| OSH | OIL SEARCH | Sell - Citi | Overnight Price $9.03 |
| RIO | RIO TINTO | Outperform - Macquarie | Overnight Price $78.65 |
| SXY | SENEX ENERGY | Buy - Citi | Overnight Price $0.51 |
| WPL | WOODSIDE PETROLEUM | Downgrade to Sell from Neutral - Citi | Overnight Price $38.45 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 6 |
| 3. Hold | 1 |
| 5. Sell | 3 |
Tuesday 02 October 2018
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