Australian Broker Call

Shaw and Partners rates A1M as Buy, High Risk (1) -

Mineralisation at the Jericho copper project has now been traced over 5km of strike, with the project proving much more significant than the market originally thought, highlights Shaw and Partners.

Management announced drilling at the northern limit of the Jericho resource has extended mineralisation 500m north.

The Buy, High Risk rating and $1.10 target price are maintained.

Target price is $1.10 Current Price is $0.36 Difference: $0.745
If A1M meets the Shaw and Partners target it will return approximately 210% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Bell Potter rates BKW as Downgrade to Hold from Buy (3) -

Following FY24 results, Bell Potter raises its target for Brickworks to $31 from $29 and continues to see further value. The rating is downgraded to Hold from Buy on valuation.

Overall, Building Products Australia beat the broker's below-market expectations, while net property rent and Investments [WH Soul Pattinson ((SOL))] were modestly lighter-than-anticipated. 

FY24 operating EBIT beat the broker's estimate by 11% largely due to development profits. Sales and margins at Building Products Australia held up better-than-anticipated following price increases, the exit of Western Australia, and headcount reductions.

Management expects Building Products will remain subdued for the next 12 months, and the near-term priority is to maximise cash via temporary plant closures and capex reductions over FY25-26.

Target price is $31.00 Current Price is $28.52 Difference: $2.48
If BKW meets the Bell Potter target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $30.67, suggesting upside of 7.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Citi rates BKW as Buy (1) -

Citi believes lower interest rates will improve the outlook for building products which continue to experience challenging conditions for Brickworks.

The broker likes the medium-term prospects for the property division boosted by a reversion to market rents, including a potential 40% increase in rental incomes and new development growth from conversion of land assets to industrial assets with Goodman Group ((GMG)).

Citi lifts EPS forecasts by 0.3% and 12.2% for FY25/FY26, respectively.

Citi remains Buy rated. Target price declines to $36.60 from $37.50.

Target price is $36.60 Current Price is $28.52 Difference: $8.08
If BKW meets the Citi target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $30.67, suggesting upside of 7.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Macquarie rates BKW as Neutral (3) -

Macquarie notes better cost management supported FY24 results for Brickworks with ongoing weak markets in Australia and North America. The property valuations were boosted by the interest rate outlook.

The broker observes a potential uplift in rental portfolio incomes; around 30% of the lease portfolio rolls over in the next five years.

Macquarie lifts EPS forecast by 8% in FY25. The target price rises to $27.40 from $27.30 and the analyst is looking for a stronger macro-economic backdrop to improve sentiment.

Neutral rating unchanged.

Target price is $27.40 Current Price is $28.52 Difference: minus $1.12 (current price is over target).
If BKW meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $30.67, suggesting upside of 7.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

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

Brickworks reported a fall in FY24 net profit of -88% with the property segment impacted by a devaluation of -$215m due to a rise in the cap rates. Building products continued to experience challenging conditions, Ord Minnett notes, with a decline in earnings of -16%.

Looking ahead, the broker expects ongoing subdued construction markets with a recovery pushed out to FY26. Industrial property asset growth is believed to offer positive longer-term prospects.

The stock is upgraded to Accumulate from Hold with a rise in the target price to $31 from $27.

Target price is $31.00 Current Price is $28.52 Difference: $2.48
If BKW meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $30.67, suggesting upside of 7.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Morgans rates COI as Speculative Buy (1) -

Comet Ridge's FY24 results show ongoing reserve/resource growth, observes Morgans, but transition into front-end engineering design (FEED) has been restricted.

The Mahalo joint venture is progressing at a slower-than-expected pace, explains the broker, delaying the timeline on possible development of the project.

Also, progress at the 100%-owned Mahalo North is being slowed as the Federal EPBC (Environmental Protection and Biodiversity Conservation) agency is taking longer-than-expected to grant environmental approval, notes the analyst.

The target falls to 23c from 28c. Speculative Buy.

Target price is $0.23 Current Price is $0.17 Difference: $0.06
If COI meets the Morgans target it will return approximately 35% (excluding dividends, fees and charges).

Market Sentiment: 1.0

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

Citi rates LLC as Buy (1) -

Citi observes the ACCC's decision not to block the sale of Lendlease Group's Australian communities business to Stockland ((SGP)) and Thai company Supalai. Stockland will be required to sell the Forest Reach community project under a court ruling.

The broker believes the outcome is positive for Lendlease Group realising around $1.3bn in funds. Out of the $2.8bn in targeted asset sales, the group has another $900m on the market. Once divested a $500m buyback can commence.

Buy rating retained for Lendlease with an unchanged price target of $7.10.

Target price is $7.10 Current Price is $7.08 Difference: $0.02
If LLC meets the Citi target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $6.48, suggesting downside of -8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

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

In a positive outcome for both Lendlease and Stockland, suggests Morgan Stanley, the ACCC will not oppose Stockland's acquisition of 12 residential communities form Lendlease.

The ACCC has set a condition: Stockland must divest its Forest Reach community in the NSW Illawarra region.

The analysts forecast the deal will unlock between $1.1-1.3bn in cash proceeds (first tranche $660m upon settlement), accelerating the path to management's planned $500m buyback.

Equal-weight rating. Target $6.35. Industry view: In-Line. 

Target price is $6.35 Current Price is $7.08 Difference: minus $0.73 (current price is over target).
If LLC 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 $6.48, suggesting downside of -8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

Ord Minnett rates NHF as Buy (1) -

Ord Minnett has reviewed  the investment case for nib Holdings and believes the health insurer is offering "attractive" value. 

The analyst points to upcoming industry data in November as well as next year's premium rate increases.

Ord Minnett is forecasting FY25 claims inflation of 5.5%, slowing to 5% in FY26 as the covid impacts recede.

nib Holdings is Buy rated with a $7.25 target price.

Target price is $7.25 Current Price is $5.91 Difference: $1.34
If NHF meets the Ord Minnett target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $7.18, suggesting upside of 20.7% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.6

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

Bell Potter rates PBH as Downgrade to Hold from Buy (3) -

While making no changes to forecasts, Bell Potter increases its sum-of-the-parts valuation for PointsBet Holdings, now valuing the Australian business at $189m, up from $160m. The value of the Canadian business is also increased to $47m from $30.

The target rises to 77c from 66c, and the rating is downgraded to Hold from Buy, with upside risk should the market latch onto upside value for the emerging Canadian business, or a potential takeover of PointsBet Holdings arises.

Target price is $0.77 Current Price is $0.74 Difference: $0.035
If PBH meets the Bell Potter target it will return approximately 5% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.5

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

Bell Potter rates PMV as Buy (1) -

The key update from largely pre-reported FY24 results for Premier Investments, according to Bell Potter, was a -7% revenue miss for the Smiggle brand, while Peter Alexander was the key outperformer.

These trends continued for Smiggle and Peter Alexander in the first seven weeks of FY25, with overall global sales declining by -3.5% on the previous corresponding period; weaker than the broker's forecast.

The Smiggle de-merger was delayed with management prioritising the divestment of non-core Apparel Brands to Myer ((MYR)), explains Bell Potter.

Buy rating maintained. Target price falls to $34 from $37.

Target price is $34.00 Current Price is $30.67 Difference: $3.33
If PMV meets the Bell Potter target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $31.86, suggesting upside of 3.5% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Macquarie rates PMV as Neutral (3) -

Macquarie highlights FY24 sales for Premier Investments were below consensus forecasts with Smiggle sales down -7% year-on-year and apparel brands declining -6.4% over the period. Cost of doing business rose and FY25 sales are weaker.

The broker did like the growth in Peter Alexander sales, up 5.2% and higher gross margins, 35bps to 62.6%. Inventory declined -5.8% and a record final dividend of 70c was a lift of 16.7% on FY23.

Macquarie downgrades EPS estimates by -8.5% and -6.2% for FY25/FY26, respectively. The company is no longer working on the demerger of Smiggle by end of Jan 2025.

Neutral rating remains. Target price falls to $31.90 from $33.50.

Target price is $31.90 Current Price is $30.67 Difference: $1.23
If PMV meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $31.86, suggesting upside of 3.5% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Citi rates SGP as Buy (1) -

Citi observes the ACCC's decision not to block the sale of Lendlease Group's Australian communities' business to Stockland ((SGP)) and Thai company Supalai. Stockland under a court ruling will be required to sell the Forest Reach community project.

This is viewed as positive development for Stockland including a potential increase in the share price.

The Buy rating and $5.30 target are maintained.

Target price is $5.30 Current Price is $5.31 Difference: minus $0.01 (current price is over target).
If SGP meets the Citi target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.00, suggesting downside of -5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.6

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

Morgan Stanley rates SGP as Overweight (1) -

In a positive outcome for both Stockland and Lendlease, suggests Morgan Stanley, the ACCC will not oppose Stockland's acquisition of 12 residential communities form Lendlease.

The ACCC has set a condition: Stockland must divest its Forest Reach community in the NSW Illawarra region.

After factoring in this sale, the broker forecasts the overall acquisition will be around 2-3% accretive to Stockland's existing FY25 funds from operations (FFO) guidance.

Overweight rating. Target $5.30. In-Line Industry view.

Target price is $5.30 Current Price is $5.31 Difference: minus $0.01 (current price is over target).
If SGP meets the Morgan Stanley target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.00, suggesting downside of -5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.6

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

Shaw and Partners rates SXG as Buy, High Risk (1) -

Drilling results (from AI generated targets) have extended mineralisation at the Apollo prospect at Southern Cross Gold's Sunday Creek Gold-Antimony project, notes Shaw and Partners.

The company is progressing well to meet the goal of doubling the existing Exploration Target (ET) to 3moz gold equivalent, note the analysts.

Management utilises the VRIFY AI program to identify mineralisation patterns within multiple layers of data to delineate additional targets.

The Buy, High Risk rating and $3.26 target price are unchanged.

Target price is $3.26 Current Price is $3.12 Difference: $0.14
If SXG meets the Shaw and Partners target it will return approximately 4% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Ord Minnett rates VMM as Hold (3) -

Ord Minnett notes Viridis Mining and Minerals has announced its first production of mixed rare earth carbonate from a sample from 26 diamond cores across Northern concessions.

The testing revealed robust Treo and Mreo recoveries.

Hold rating and $1 target price are retained.

Target price is $1.00 Current Price is $0.70 Difference: $0.3
If VMM meets the Ord Minnett target it will return approximately 43% (excluding dividends, fees and charges).

Market Sentiment: 0.0

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

Macquarie rates WBC as Underperform (5) -

Westpac presented an update on its business units and technology teams. Macquarie observes there was no update to the bank's strategy, but improvements were evident to the analyst across the various operations.

The broker points to some positive aspects in the consumer business with Ai applications for mortgage processing in some instances.

Macquarie highlights there was less optimism around the business segment.

No changes to the broker's forecasts. Underperform rating and $26 target price remain.

FY24 results are due on Nov 4.

Target price is $26.00 Current Price is $32.34 Difference: minus $6.34 (current price is over target).
If WBC meets the Macquarie target it will return approximately minus 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $27.76, suggesting downside of -12.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

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