Australian Broker Call

Morgans rates AFG as Hold (3) -

The company is scheduled to report its first half result on February 21. Morgans expects results will be supported by net interest margin expansion and strong growth in AFG Securities settlements.

The broker notes the ACCC has pushed back the proposed date for announcing findings regarding the Connective Group merger to February 13. As a result, Morgans is yet to factor in completion of the transaction.

Hold rating maintained. Target rises to $2.50 from $2.30.

Target price is $2.50 Current Price is $2.88 Difference: minus $0.38 (current price is over target).
If AFG meets the Morgans target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

UBS rates AGL as Downgrade to Sell from Neutral (5) -

UBS notes AGL Energy is heavily exposed to changes in average wholesale electricity prices. All else being equal, the broker calculates a -$5/megawatt-hour annual reduction in average prices across all National Electricity Markets equates to a -$190m reduction in annual earnings (EBIT).

Lower electricity price forecasts mean the broker's FY20-22 estimates for earnings per share are reduced by -5-7% from prior estimates.

While the share price has risen 7% over the last three months, and will be supported as the remainder of the buyback is completed, earnings headwinds remain, the stockbroker finds.

As a result, UBS downgrades to Sell from Neutral, reducing the target to $18.35 from $18.85.

Target price is $18.35 Current Price is $20.25 Difference: minus $1.9 (current price is over target).
If AGL meets the UBS target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.89, suggesting downside of -6.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.8

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

Credit Suisse rates ANN as Neutral (3) -

Credit Suisse assesses recent weak PMI data and a moderation in sales growth from US distributors in the December quarter signals subdued demand for the company's industrial division.

The broker expects Ansell will miss its 3-5% organic sales growth target in FY20. However, the softness is unlikely to be large enough to warrant a downgrade to guidance.

Credit Suisse retains a Neutral rating and raises the target to $30 from $28.

Target price is $30.00 Current Price is $31.38 Difference: minus $1.38 (current price is over target).
If ANN meets the Credit Suisse target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.39, suggesting downside of -9.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

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

New car sales are under pressure and Morgans downgrades 2019-21 forecast by -1-2.4%. In the short term the broker is also wary of the wide divergence in consensus forecasts.

The stock provides strong leverage to a recovery in vehicle sales but the potential for further downgrades is a risk the broker would prefer to avoid until there is further clarity.

Rating is downgraded to Hold from Add. Target is reduced to $11.96 from $12.02.

Target price is $11.96 Current Price is $9.60 Difference: $2.36
If APE meets the Morgans target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $12.44, suggesting upside of 29.6% (ex-dividends)

The company's fiscal year ends in December.

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

Citi rates BHP as Neutral (3) -

Neutral rating and $40 target maintained as Citi analysts observe the December quarter production report proved, overall, in line with expectations. In addition, BHP is aiming to finalise Scarborough agreements with Woodside Petroleum ((WPL)) by end March 2020 with FID expected from mid 2020.

Citi also observes iron ore is simply not achieving the run rate targeted, and seems unlikely to do so in the medium term. The analysts have incorporated higher oil prices and lower taxes in their modeling.

The net effect from the above is a small increase to the stockbroker's Net Asset Value (NAV), up by 1% to $40.10.

Target price is $40.00 Current Price is $41.23 Difference: minus $1.23 (current price is over target).
If BHP 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 $39.65, suggesting downside of -3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.1

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

Credit Suisse rates BHP as Neutral (3) -

Credit Suisse now has a far more constructive view on crude steel in China in 2020 and beyond and upgrades numbers to reflect this impact on iron ore and metallurgical coal price forecasts.

With strong Chinese rhetoric, around infrastructure in particular, the broker lifts estimates to assume a 1.6% increase in Chinese steel demand in 2020. The broker retains a Neutral rating and raises the target to $41 from $37.

Target price is $41.00 Current Price is $41.23 Difference: minus $0.23 (current price is over target).
If BHP meets the Credit Suisse target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $39.65, suggesting downside of -3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.1

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

Macquarie rates BHP as Outperform (1) -

December quarter results were firm with copper beating Macquarie's estimates. FY20 production and cost guidance is unchanged. The broker notes buoyant iron ore prices continue to drive upgrade momentum.

Outperform rating maintained. Target is raised to $43 from $41.

Target price is $43.00 Current Price is $41.23 Difference: $1.77
If BHP meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $39.65, suggesting downside of -3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.1

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

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

December quarter production was in line with expectations and guidance is unchanged other than for petroleum, which is expected to be at the lower end of prior guidance. Costs appear better at Escondida, Morgan Stanley notes.

As a result, the broker's revenue forecasts for the first half are largely unchanged. Equal-weight maintained. Industry view: In-Line. Target is $37.70.

Target price is $37.20 Current Price is $41.23 Difference: minus $4.03 (current price is over target).
If BHP meets the Morgan Stanley target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $39.65, suggesting downside of -3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.1

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

Ord Minnett rates BHP as Hold (3) -

Outside of copper, quarterly production volumes were softer than Ord Minnett expected. Car dumper maintenance in the Pilbara affected iron ore output although shipments were in line with guidance.

Overall, better iron ore prices have offset the lower-than-expected production. Ord Minnett expects the company will return around 70% of earnings to shareholders in February. Hold rating and $42 target maintained.

Target price is $42.00 Current Price is $41.23 Difference: $0.77
If BHP meets the Ord Minnett target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $39.65, suggesting downside of -3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.1

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

UBS rates BHP as Neutral (3) -

Production was in line with expectations in the December quarter. Copper production benefited from record concentrator throughput, which more than offset the impact related to stoppages in Chile.

Nickel production was down -24% because of maintenance at Kwinana and Kalgoorlie. Production guidance is unchanged as is cost guidance for FY20. UBS maintains a Neutral rating and $38 target.

Target price is $38.00 Current Price is $41.23 Difference: minus $3.23 (current price is over target).
If BHP 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 $39.65, suggesting downside of -3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.1

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

Macquarie rates CLW as Upgrade to Neutral from Underperform (3) -

Macquarie upgrades to Neutral from Underperform, to reflect a new valuation methodology. The broker assesses the portfolio is backed by long-term sustainable cash flow that is attractive for those investors seeking income return.

Underlying growth is supported by fixed and CPI-linked annual reviews. Target is raised to $5.88 from $4.74.

Target price is $5.88 Current Price is $5.68 Difference: $0.2
If CLW meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $5.93, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

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

Ord Minnett upgrades Charter Hall Social Infrastructure REIT to Accumulate from Hold in view of the longer weighted average lease expiry and considers the stock oversold. Target is $3.65.

The sector is trading broadly in line with valuation, yet appears attractive relative to the domestic market on a range of metrics, in the broker's view. The broker expects A-REITs will remain net buyers and fund acquisitions with a combination of debt and equity.

Target price is $3.65 Current Price is $3.65 Difference: $0
If CQE meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Macquarie rates CQR as Upgrade to Outperform from Underperform (1) -

Macquarie reviews the outlook for convenience landlords and upgrades to Outperform from Underperform. The broker remains attracted to the defensive nature of the cash flow.

Direct market transactions limit the downside risk to net tangible assets and the stock offers a 6.4% distribution yield, which is cash backed. Target is raised 33% to $5.20.

Target price is $5.20 Current Price is $4.65 Difference: $0.55
If CQR meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $4.34, suggesting downside of -6.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.2

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

Ord Minnett rates CWN as Hold (3) -

Ord Minnett notes the NSW Independent Liquor and Gaming Authority has commenced its inquiry into the planned sale by James Packer of 19.99% of Crown Resorts to Melco Resorts & Entertainment.

The focus of the inquiry will be on whether Crown Resorts is fit to hold a licence in NSW and whether the sale is legal. The first of five public hearings will take place on February 24 and submissions will be accepted up until March 27.

Hold rating maintained. Target is $11.75.

Target price is $11.75 Current Price is $12.14 Difference: minus $0.39 (current price is over target).
If CWN meets the Ord Minnett target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.10, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Citi rates DMP as Downgrade to Sell from Neutral (5) -

Citi analysts believe Domino's Pizza's High PE multiple is directly linked to the prospect for more store openings and growth in Europe, but thus far in FY20, they note, store growth has been soft.

The analysts observe their forecasts are -3-4% below consensus at the moment. As equities are on a tear, including for the company's peers, they have added 5% to their price target, to $48.60.

However, given the prospect for disappointment, directly related to store rollouts, Citi has decided to downgrade to Sell from Neutral.

Target price is $48.60 Current Price is $55.99 Difference: minus $7.39 (current price is over target).
If DMP meets the Citi target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $43.96, suggesting downside of -21.5% (ex-dividends)

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.4

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

Macquarie rates DXS as Upgrade to Outperform from Underperform (1) -

Macquarie finds the earnings trajectory solid, with underlying growth in the office portfolio supplemented by trading profits. The buyback is also supporting the share price.

The broker notes the outlook for office market rents is moderating but the earnings profile of Dexus Property remains sound. Rating is upgraded to Outperform from Underperform. Target is raised 6.3% to $13.26.

Target price is $13.26 Current Price is $12.76 Difference: $0.5
If DXS meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $13.19, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

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

Ord Minnett upgrades to Accumulate from Hold on the basis of further office capitalisation rate compression.

The sector is trading broadly in line with valuation, yet appears attractive relative to the domestic market on a range of metrics, in the broker's view.

The broker expects A-REITs will remain net buyers and fund acquisitions with a combination of debt and equity. Target is $13.50.

Target price is $13.50 Current Price is $12.76 Difference: $0.74
If DXS meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $13.19, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

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

Credit Suisse observes recent travel data have been weak, consumer sentiment is poor and there is a strong second half skew to guidance.

At this point, the broker queries the assumptions about a recovery that are implied in FY20 guidance and downgrades to Neutral from Outperform, lowering the target to $44.83 from $47.49.

Target price is $44.83 Current Price is $41.07 Difference: $3.76
If FLT meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $43.85, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

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

The commodity price outlook is far more accommodative and Credit Suisse lifts the target to $11.00 from $7.50. Rating is upgraded to Neutral from Underperform.

This reflects not just material changes in estimates for earnings per share but also the strength of Fortescue Metals' balance sheet and a buoyant outlook for dividends.

Credit Suisse expects China's steel demand will remain firm in the first half but decline from the second half as property construction may ease.

However, given the strong rhetoric around infrastructure a 1.6% increase in Chinese steel demand is assumed for 2020, well above previous forecasts.

Target price is $11.00 Current Price is $12.74 Difference: minus $1.74 (current price is over target).
If FMG meets the Credit Suisse target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.25, suggesting downside of -27.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Citi rates HUB as Buy (1) -

Citi found the company's quarterly update was in-line. The broker continues to point at ongoing upside risk from better than expected funds flows.

Citi analysts consider the 26% growth in advisers using Hub24’s platform in 2Q as a positive forward indicator. In addition, the analysts predict Hub24’s investment in the distribution team will support flows in 2H20, and beyond.

The emergence of robo advice is also considered a positive. Revenue margins are projected to decline, but Citi at this stage is forecasting the company will manage to keep cash admin margins stable. Buy. Target $15.20.

Target price is $15.20 Current Price is $11.23 Difference: $3.97
If HUB meets the Citi target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $13.27, suggesting upside of 18.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Credit Suisse rates HUB as Neutral (3) -

Record quarterly flows were experienced in the second quarter and appear set to continue. The company remains optimistic about the sales pipeline and Credit Suisse anticipates net flows will be assisted by a larger distribution team and recently signed distribution agreements.

Some revenue margin pressure has been flagged because of the business mix, as first half outflows were assisted by larger account balances which had a lower revenue margin. Credit Suisse maintains a Neutral rating and $13 target.

Target price is $13.00 Current Price is $11.23 Difference: $1.77
If HUB meets the Credit Suisse target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $13.27, suggesting upside of 18.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

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

Funds under administration in the December quarter were up 10%. Net inflows were 2% higher. The obvious headwinds, Morgans suggests, are pricing pressure and earnings on cash transaction account balances.

The broker is cautious about the impact on sentiment and earnings from any change to pooled client cash. Taking a longer-term view, Morgans expects the company will scale up successfully and deliver solid earnings growth.

Rating is upgraded to Add from Hold and the target reduced to $13.35 from $13.79.

Target price is $13.35 Current Price is $11.23 Difference: $2.12
If HUB meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $13.27, suggesting upside of 18.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Citi rates IFL as Neutral (3) -

Neutral/High Risk retained with the analysts adopting the view management at the helm of the troubled financial services provider has successfully stabilised the business. Next step is to execute the necessary transformation.

Citi has slightly increased forecasts, pushing up the price target to $7.90 from $7.30 (also positively impacted by rolling forward of the modeling). The analysts suggest the added scale and cost synergies from the ANZ Bank P&I deal should provide IOOF with some earnings flexibility in future years.

Having said so, Citi has adopted a cautious view towards further funds outflows for the ANZ Bank P&I operations, despite IOOF management's confidence it can successfully stem outflows once in full control.

Target price is $7.90 Current Price is $8.30 Difference: minus $0.4 (current price is over target).
If IFL meets the Citi target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.60, suggesting downside of -8.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Citi rates IGO as Neutral (3) -

Citi saw a strong quarterly update, anticipating a positive outcome for H1, while also noting FY20 guidance has been left intact. Now that the Panoramic Resources ((PAN)) offer is no more, management can redirect the focus to exploration success or, who knows, other opportunities through acquisitions, Citi suggests.

The analysts explain they are trying to balance the prospect for higher prices for both nickel and gold with the observation this share price has already rallied some 30%. Neutral rating retained. Target price $6.40 (unchanged).

EPS forecasts for FY20/FY21 have been decreased by -10% and -12% respectively.

Target price is $6.40 Current Price is $6.66 Difference: minus $0.26 (current price is over target).
If IGO 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 $5.95, suggesting downside of -10.7% (ex-dividends)

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.2

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

Morgans rates LVH as Add (1) -

December quarter client additions were better than expected, as was cash collection and growth in annualised recurring revenue. Direct sales remain the principal growth driver.

Should the company be successful in implementing its strategy, Morgans assesses the rewards for shareholders could be substantial.

Add rating maintained. Target is $0.76.

Target price is $0.76 Current Price is $0.22 Difference: $0.54
If LVH meets the Morgans target it will return approximately 245% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Ord Minnett rates MGR as Upgrade to Hold from Lighten (3) -

Ord Minnett upgrades to Hold from Lighten because of the value-accretive development pipeline, and raises the target to $3.20 from $2.95.

The sector is trading broadly in line with valuation, yet appears attractive relative to the domestic market on a range of metrics, in the broker's view.

The broker expects A-REITs will remain net buyers and fund acquisitions with a combination of debt and equity.

Target price is $3.20 Current Price is $3.49 Difference: minus $0.29 (current price is over target).
If MGR meets the Ord Minnett target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.36, suggesting downside of -3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

UBS rates ORG as Buy (1) -

Lower wholesale prices translate to lower earnings for the company's generation fleet, UBS assesses. However the net short position and a greater proportion of peaking generation reduces Origin Energy's exposure to average wholesale prices.

The broker is not concerned about the setback at Beetaloo, despite stability issues with drilling the first well, although if a similar situation arises again this year it may be a different matter.

UBS is also mindful that, in recent years, the company has not grown its customer base organically and so declining numbers could present downside risk. Buy rating maintained. Target is raised to $9.35 from $9.10.

Target price is $9.35 Current Price is $8.74 Difference: $0.61
If ORG meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $8.84, suggesting upside of 1.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Credit Suisse rates PGH as Outperform (1) -

Pact Group intends to divest its manufacturing division. Credit Suisse is not surprised, having considered this would be the likely outcome of the review.

The company has decided to prioritise allocation of capital to the packaging division where there is a clear competitive advantage.

The broker expects interested buyers may include private equity, competitors and former owners and does not believe the company will wait for full value to be obtained. Outperform rating and $3.60 target.

Target price is $3.60 Current Price is $2.71 Difference: $0.89
If PGH meets the Credit Suisse target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $2.92, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Morgans rates PGH as Hold (3) -

The company will sell its contract manufacturing division and focus on its core packaging business. Morgans values contract manufacturing at around $120-140m and believes proceeds of a sale would go a long way to improving the stretched balance sheet.

However, the broker prefers to obtain further details on the strategic review and clarity about the operating environment before moving to a more positive view. Hold rating maintained. Target is raised to $2.96 from $2.39.

Target price is $2.96 Current Price is $2.71 Difference: $0.25
If PGH meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.92, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

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

Macquarie is concerned about the risks associated with FY20 earnings per share, forecasting this to drop -36%. The forecast assumes significant sales in the first half are settled in the second half.

While residential markets are improving the broker envisages downside risk. Rating is downgraded to Neutral from Outperform. Target is steady at $1.25.

Target price is $1.25 Current Price is $1.34 Difference: minus $0.09 (current price is over target).
If PPC meets the Macquarie target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Citi rates QBE as Upgrade to Buy from Neutral (1) -

Citi has upgraded to Buy from Neutral as the insurer updated with worse than expected impact from crop insurance, but with otherwise in-line underlying performance. Citi thinks the market will look through this short term impact, and so do Citi analysts, clearly.

Forecasts have been sliced due to the crop insurance impact, and the analysts point out QBE Insurance remains a business containing many moving parts. Citi retains a positive outlook medium term. Price target shifts to $15.20 from $13.45.

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

Current consensus price target is $13.75, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.6

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

Macquarie rates QBE as Neutral (3) -

Macquarie considers the underlying business is moving in the right direction but weakening bond yields and pressures in the global casualty market means a Neutral rating is maintained.

The broker makes a positive adjustment to estimates for the second half on the back of equity markets. With 2020 guidance already released the broker envisages few risks for the 2019 result. Target is raised to $12.70 from $12.60.

Target price is $12.70 Current Price is $13.91 Difference: minus $1.21 (current price is over target).
If QBE meets the Macquarie target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.75, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.6

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

Morgans rates QUB as Hold (3) -

While the share price has moved beyond valuation, Morgans assesses there is potential for upside to be realised from monetising Moorebank.

Ahead of the first half result on February 25, the broker lowers estimates for operating earnings by -1-2% and now targets 6% growth in FY20.

Morgans maintains a Hold rating and raises the target to $3.01 from $2.90.

Target price is $3.01 Current Price is $3.59 Difference: minus $0.58 (current price is over target).
If QUB meets the Morgans target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.08, suggesting downside of -14.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.4

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

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

Following recent share price strength, amid expectations of a cyclical upswing, Morgans downgrades to Hold from Add.

Estimates for earnings per share in FY20 are reduced by -7%, to reflect lower local demand and revised appreciation assumptions. Target is raised to $12.45 from $11.47.

Target price is $12.45 Current Price is $11.34 Difference: $1.11
If REH meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Credit Suisse rates RIO as Underperform (5) -

Credit Suisse takes a far more constructive view on Chinese crude steel in 2020 and beyond and upgrades valuation and earnings to reflect the lift to iron ore price forecasts.

The broker now envisages iron ore prices will be around US$90/t in 2020 and US$80/t in 2021. This drives upgrades to earnings per share of 14% for 2020.

Despite raising the target to $94 from $86, Credit Suisse finds it is unable to bridge the gap between valuation and the share price. Underperform rating maintained.

Target price is $94.00 Current Price is $107.72 Difference: minus $13.72 (current price is over target).
If RIO meets the Credit Suisse target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $100.34, suggesting downside of -6.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

Credit Suisse rates RWC as Outperform (1) -

Credit Suisse suspects the upcoming first half result will be better than the company has guided. Forecasts for US sales growth are increased to 7.3% in FY20.

A flat outcome is expected for John Guest and, while the market appears concerned about the business, Credit Suisse is encouraged by the fourth quarter update from Geberit, which shows its defensive pipe/fittings segment is relatively stronger.

Outperform rating maintained. Target is raised to $4.80 from $4.25.

Target price is $4.80 Current Price is $4.42 Difference: $0.38
If RWC meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $4.37, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Macquarie rates SCP as Upgrade to Neutral from Underperform (3) -

Amid a sector wide review, Macquarie upgrades to Neutral from Underperform. Target is $2.91.

While the broker prefers the convenience-based landlords over regional landlords, given defensive cash flows, the stock is already trading on a 5.4% distribution yield and 25% premium to net tangible assets so the broker finds it is difficult to become more positive.

Target price is $2.91 Current Price is $2.83 Difference: $0.08
If SCP meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $2.55, suggesting downside of -10.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Citi rates SGP as Sell (5) -

Citi analysts have conducted a deep dive analysis into Stockland's retail and residential businesses, combined good for circa 81% of group earnings. Their conclusion is both divisions have been over-earning. Now a range of factors will start weighing on the outlook.

No double guessing as to why the Sell rating remains in place. Target price has lifted to $4.10 from $3.87 despite the analysts maintaining the outlook remains for a flat earnings growth profile.

Retail earnings in particular are being singled out as the most likely source of future disappointment.

Target price is $4.10 Current Price is $5.01 Difference: minus $0.91 (current price is over target).
If SGP meets the Citi target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.58, suggesting downside of -8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.5

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

Ord Minnett rates SGP as Downgrade to Lighten from Hold (4) -

Ord Minnett downgrades Stockland to Lighten from Hold following a period of flat earnings growth and the recent surge in the share price. Target is raised to $4.30 from $4.20.

The sector is trading broadly in line with valuation, yet appears attractive relative to the domestic market on a range of metrics, in the broker's view. The broker expects A-REITs will remain net buyers and fund acquisitions with a combination of debt and equity.

Target price is $4.30 Current Price is $5.01 Difference: minus $0.71 (current price is over target).
If SGP meets the Ord Minnett target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.58, suggesting downside of -8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.5

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

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

On the bank-insurer's own acknowledgment, natural hazard costs including bushfires have risen some -$109m above 1H allowances. In isolation this reduces Citi's forecast for 1H20 by -14%, point out the analysts.

A repeat for H2 seems unlikely because of aggregate and stop loss reinsurance protections. Citi explains this means the opposite is likely to occur in H2, leaving no net impact on FY20 numbers.

Citi analysts have made only minimal adjustments to their forecasts. There is one looming negative, however, and that will be the next round of negotiations with the reinsurers. Citi pulls back its rating to Neutral from Buy. Price target falls to $14.30 from $14.50.

Target price is $14.30 Current Price is $13.35 Difference: $0.95
If SUN meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $13.33, suggesting downside of -0.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Macquarie rates SUN as Underperform (5) -

Macquarie assesses the earnings outlook is weak, with ongoing challenges to gross written premium growth and the risk of hazard costs breaching reinsurance cover.

While acknowledging the -12% relative discount to Insurance Australia Group ((IAG)) arguably reflects the downside risk, Macquarie believes it will be difficult for Suncorp to outperform until the downgrade cycle stops.

Underperform rating maintained. Target is reduced to $13.00 from $13.20.

Target price is $13.00 Current Price is $13.35 Difference: minus $0.35 (current price is over target).
If SUN 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 $13.33, suggesting downside of -0.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Ord Minnett rates TCL as Downgrade to Accumulate from Buy (2) -

The company is moving to become a tax-paying entity over the next two years although Ord Minnett does not consider this a major headwind for earnings.

The broker estimates the annual tax impost will normalise quickly in FY22 and peak at 10% of free cash flow. The broker downgrades to Accumulate from Buy based on valuation. Target is raised to $16.50 from $16.00.

Target price is $16.50 Current Price is $15.89 Difference: $0.61
If TCL meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $14.40, suggesting downside of -9.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.2

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