Australian Broker Call

Morgan Stanley rates ANZ as Overweight (1) -

Morgan Stanley believes trading multiples for Australian banks now reflect all the potential benefits of a soft landing and a less competitive environment.

The broker's concerns include: ongoing modest loan growth; a less than meaningful rebound for margins; expense growth will remain elevated; and provision releases will be smaller and later-than-anticipated.

The broker's major bank order of preference is ANZ Bank, National Australia Bank, Westpac and CommBank. 

The Overweight rating is retained for ANZ Bank and target price rises to $27.90 from $27.80. Industry view: In-Line.

First half results are due on May 7.

Target price is $27.90 Current Price is $29.38 Difference: minus $1.48 (current price is over target).
If ANZ 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 $28.02, suggesting downside of -3.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Ord Minnett rates ANZ as Hold (3) -

Ord Minnett believes Australian banks will raise margins via changes to loan and deposit pricing to counteract low credit growth, softer net interest margins and an increase in short-term loan losses over FY24.

The broker finds it difficult to pinpoint the reason for the 23% rally in major bank share prices since last November, but suggests the potential for a lower cash rate eases housing fears and provides the opportunity to reprice loans and deposits.

The analysts prefer Westpac and ANZ Bank on valuation and because they have addressed lacklustre loan growth concerns. CommBank is considered the most expensive. Bank of Queensland is the preferred regional bank.

For ANZ Bank, the Hold and $31 target retained.

Target price is $31.00 Current Price is $29.38 Difference: $1.62
If ANZ meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $28.02, suggesting downside of -3.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Shaw and Partners rates ASK as Buy (1) -

In meeting with management, Shaw and Partners learned self-storage industry trading conditions (occupancy and pricing) remain generally buoyant.

NSW, Abacus Storage King’s largest market, is solid. WA is strong, and NZ is surprisingly solid despite recession-like conditions.

Shaw believes Abacus Storage continues to gain share with strong brand recognition and on-line marketing. Market share gains in a buoyant operating environment suggests occupancy should exceed 90% for the second half.

The company's technology and operating platform is delivering results, and new features are being planned for step-change, the broker notes. Buy and $1.30 target retained.

Target price is $1.30 Current Price is $1.21 Difference: $0.09
If ASK meets the Shaw and Partners target it will return approximately 7% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Morgan Stanley rates BEN as Overweight (1) -

Morgan Stanley believes trading multiples for Australian banks now reflect all the potential benefits of a soft landing and a less competitive environment.

The broker's concerns include: ongoing modest loan growth; a less than meaningful rebound for margins; expense growth will remain elevated; and provision releases will be smaller and later-than-anticipated.

The broker's major bank order of preference is ANZ Bank, National Australia Bank, Westpac and CommBank. 

The Overweight rating and $10.20 target are kept for Bendigo & Adelaide Bank. Industry View: In-Line.

Target price is $10.20 Current Price is $9.98 Difference: $0.22
If BEN meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $9.16, suggesting downside of -6.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.4

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

Ord Minnett rates BEN as Hold (3) -

Ord Minnett believes Australian banks will raise margins via changes to loan and deposit pricing to counteract low credit growth, softer net interest margins and an increase in short-term loan losses over FY24.

The broker finds it difficult to pinpoint the reason for the 23% rally in major bank share prices since last November, but suggests the potential for a lower cash rate eases housing fears and provides the opportunity to reprice loans and deposits.

The analysts prefer Westpac and ANZ Bank on valuation and because they have addressed lacklustre loan growth concerns. CommBank is considered the most expensive. 

The broker's Hold and $10.50 target are retained for Bendigo & Adelaide Bank. Accumulate-rated Bank of Queensland is considered the better alternative among the regional banks.

Target price is $10.50 Current Price is $9.98 Difference: $0.52
If BEN meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $9.16, suggesting downside of -6.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.4

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

Morgan Stanley rates BOQ as Underweight (5) -

Morgan Stanley believes trading multiples for Australian banks now reflect all the potential benefits of a soft landing and a less competitive environment.

The broker's concerns include: ongoing modest loan growth; a less than meaningful rebound for margins; expense growth will remain elevated; and provision releases will be smaller and later-than-anticipated.

The broker's major bank order of preference is ANZ Bank, National Australia Bank, Westpac and CommBank. 

The Underweight rating is kept for Bank of Queensland and the target falls to $5.60 from $5.70. Industry View: In-Line.

First half results are due on April 17.

Target price is $5.60 Current Price is $6.06 Difference: minus $0.46 (current price is over target).
If BOQ meets the Morgan Stanley target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.59, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.8

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

Ord Minnett rates BOQ as Accumulate (2) -

Ord Minnett believes Australian banks will raise margins via changes to loan and deposit pricing to counteract low credit growth, softer net interest margins and an increase in short-term loan losses over FY24.

The broker finds it difficult to pinpoint the reason for the 23% rally in major bank share prices since last November, but suggests the potential for a lower cash rate eases housing fears and provides the opportunity to reprice loans and deposits.

The analysts prefer Westpac and ANZ Bank on valuation and because they have addressed lacklustre loan growth concerns. CommBank is considered the most expensive. Bank of Queensland is the preferred regional bank.

The Accumulate rating and $8.00 target are retained for Bank of Queensland.

Target price is $8.00 Current Price is $6.06 Difference: $1.94
If BOQ meets the Ord Minnett target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $5.59, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.8

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

Morgan Stanley rates CBA as Underweight (5) -

Morgan Stanley believes trading multiples for Australian banks now reflect all the potential benefits of a soft landing and a less competitive environment.

The broker's concerns include: ongoing modest loan growth; a less than meaningful rebound for margins; expense growth will remain elevated; and provision releases will be smaller and later-than-anticipated.

The broker's major bank order of preference is ANZ Bank, National Australia Bank, Westpac and CommBank. 

The Underweight rating and $93 target are maintained for CommBank. Sector view is In-Line. 

Target price is $93.00 Current Price is $118.21 Difference: minus $25.21 (current price is over target).
If CBA meets the Morgan Stanley target it will return approximately minus 21% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $93.15, suggesting downside of -20.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.8

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

Ord Minnett rates CBA as Hold (3) -

Ord Minnett believes Australian banks will raise margins via changes to loan and deposit pricing to counteract low credit growth, softer net interest margins and an increase in short-term loan losses over FY24.

The broker finds it difficult to pinpoint the reason for the 23% rally in major bank share prices since last November, but suggests the potential for a lower cash rate eases housing fears and provides the opportunity to reprice loans and deposits.

The analysts prefer Westpac and ANZ Bank on valuation and because they have addressed lacklustre loan growth concerns. CommBank is considered the most expensive. Bank of Queensland is the preferred regional bank.

The Hold rating and $90 target are maintained for CommBank.

Target price is $90.00 Current Price is $118.21 Difference: minus $28.21 (current price is over target).
If CBA meets the Ord Minnett target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $93.15, suggesting downside of -20.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.8

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

Bell Potter rates CMM as Buy (1) -

Capricorn Metals reported March quarter gold production in line with Bell Potter's forecast, but management stated material movements at the Karlawinda Gold project are still being restricted by recent rainfall.

June quarter gold production will now be in the range of 26-29koz, implying to the broker FY24 production of 112-115koz, which is below original FY24 guidance for 115-125koz.

The Buy rating is retained. The broker's target rises to $6.15 from $5.95 after a valuation roll-forward and after allowing for strong free cash flow generation from the Mt Gibson gold project.

Target price is $6.15 Current Price is $5.35 Difference: $0.8
If CMM meets the Bell Potter target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Macquarie rates CNI as Neutral (3) -

Centuria Capital now has an 80% stake in the Centuria Bass real estate credit business after snapping up a further 30% holding for -$57m. Payment will be split evenly between cash and scrip.

As a result of the transaction, Macquarie anticipates around 3% accretion to its operating EPS forecasts in the long-term, with upside risk from additional growth.

Since the original 50%-interest in Centuria Bass was acquired in April 2021, the broker highlights funds under management (FUM) 
have grown to $1.7bn from $0.3bn, or at a compound annual growth rate (CAGR) of circa 85%.

The target rises to $1.70 from $1.68. Neutral.

Target price is $1.70 Current Price is $1.79 Difference: minus $0.09 (current price is over target).
If CNI meets the Macquarie target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.69, suggesting downside of -4.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Ord Minnett rates CNI as Hold (3) -

Centuria Capital has increased its equity stake in Centuria Bass Credit to 80% from 50% at a cost of -$57m and Ord Minnett suggests the price paid seems fair.

The broker's fair value estimate remains at $1.75, which is not too far off from where the shares are trading. Hold rating thus retained.

Ord Minnett is of the view Centuria Capital is carrying too much debt, but its balance sheet looks reasonably robust nonetheless.

Target price is $1.75 Current Price is $1.79 Difference: minus $0.04 (current price is over target).
If CNI meets the Ord Minnett target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.69, suggesting downside of -4.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Macquarie rates CNU as Outperform (1) -

Following the release of a 3Q connections update, Macquarie highlights slower connection activity for Chorus through January, and a general slowdown in greenfield growth, consistent with broader macroeconomic trends.

Overall fibre uptake for the company increased by 0.4 percentage points to 71%, with broadband connections steady at 1,188,000. Copper withdrawal continues to accelerate in fibre areas, explains the broker.

The Outperform rating and target price of NZ$8.32 are retained.

Current Price is $7.01. Target price not assessed.

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Bell Potter rates ELD as Buy (1) -

FY24 earnings (EBIT) guidance by Elders for $120-140m fell short of the $169m expected by consensus due to lower crop protection prices and a material 1Q headwind in livestock activity, explains Bell Potter.

The analysts also note subdued March trading in one of the company's largest markets, WA, reflecting a slower start to the season.

More positively, soil moisture profiles in key winter cropping regions have improved and livestock activity levels have firmed from those subdued 1Q levels, highlights the broker.

The Buy rating is retained and the target price falls to $9.10 from $9.50.

Target price is $9.10 Current Price is $8.17 Difference: $0.93
If ELD meets the Bell Potter target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $8.81, suggesting upside of 4.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Macquarie rates ING as Outperform (1) -

Macquarie raises its earnings (EBITDA) forecasts for Inghams Group for FY25 and FY26 by 3%, driven by lower feed costs and the recent Bostock Brothers NZ acquisition. Continuous improvement projects are also expected to deliver earnings benefits in FY25.

The broker anticipates steady revenue growth for Inghams due to both population growth and an ongoing increase in consumption of chicken meat.

The Outperform rating and $4.20 target are maintained.

Target price is $4.20 Current Price is $3.60 Difference: $0.6
If ING meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $4.26, suggesting upside of 18.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Ord Minnett rates JDO as Hold (3) -

Ord Minnett has used a general update on the banking sector to express its preference for Westpac and ANZ Bank, while also suggesting analysts are too conservative with their forecasts for Bank of Queensland and Mystate.

Judo Capital operates at a relative cost disadvantage vis a vis the larger banks but the broker continues to see strong loan growth on offer as there are plenty of bank customers across the country that simply are not satisfied with the service provided by the larger banks.

Hold. Fair value estimated at $1.20.

Target price is $1.20 Current Price is $1.36 Difference: minus $0.155 (current price is over target).
If JDO meets the Ord Minnett target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.20, suggesting downside of -12.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Morgan Stanley rates MQG as Overweight (1) -

Morgan Stanley believes the market is overlooking Macquarie Group's operating leverage from rising revenues. It's thought Macquarie stands to benefit the most from a global capital markets recovery, compared to ASX ((ASX)) and Computershare ((CPU)).

Stable interest rates remove a headwind to asset prices and deal activity, while falling rates present a tailwind for Macquarie Group, explain the analysts.

Moreover, re-opening capital markets provides the group with a greater opportunity for asset realisations via gains on sale from on balance sheet assets, and performance fees from funds.

The Overweight rating and $225 target are retained. Industry view: In-Line.

Target price is $225.00 Current Price is $191.24 Difference: $33.76
If MQG meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $187.08, suggesting downside of -1.4% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Ord Minnett rates MQG as Hold (3) -

Ord Minnett believes Australian banks will raise margins via changes to loan and deposit pricing to counteract low credit growth, softer net interest margins and an increase in short-term loan losses over FY24.

The broker finds it difficult to pinpoint the reason for the 23% rally in major bank share prices since last November, but suggests the potential for a lower cash rate eases housing fears and provides the opportunity to reprice loans and deposits.

The analysts prefer Westpac and ANZ Bank on valuation and because they have addressed lacklustre loan growth concerns. CommBank is considered the most expensive. Bank of Queensland is the preferred regional bank.

The Hold rating and $175 target price are retained for Macquarie Group.

Target price is $175.00 Current Price is $191.24 Difference: minus $16.24 (current price is over target).
If MQG 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 $187.08, suggesting downside of -1.4% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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 believes trading multiples for Australian banks now reflect all the potential benefits of a soft landing and a less competitive environment.

The broker's concerns include: ongoing modest loan growth; a less than meaningful rebound for margins; expense growth will remain elevated; and provision releases will be smaller and later-than-anticipated.

The broker's major bank order of preference is ANZ Bank, National Australia Bank, Westpac and CommBank. 

The Equal-weight rating and $30.60 target are maintained for National Australia Bank. Industry View: In-Line.

First half results are due on May 2.

Target price is $30.60 Current Price is $34.63 Difference: minus $4.03 (current price is over target).
If NAB meets the Morgan Stanley target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.69, suggesting downside of -13.6% (ex-dividends)

The company's fiscal year ends in September.

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 NAB as Hold (3) -

Ord Minnett believes Australian banks will raise margins via changes to loan and deposit pricing to counteract low credit growth, softer net interest margins and an increase in short-term loan losses over FY24.

The broker finds it difficult to pinpoint the reason for the 23% rally in major bank share prices since last November, but suggests the potential for a lower cash rate eases housing fears and provides the opportunity to reprice loans and deposits.

The analysts prefer Westpac and ANZ Bank on valuation and because they have addressed lacklustre loan growth concerns. CommBank is considered the most expensive. Bank of Queensland is the preferred regional bank.

For National Australia Bank, the Hold rating and $31 target are maintained.

Target price is $31.00 Current Price is $34.63 Difference: minus $3.63 (current price is over target).
If NAB meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.69, suggesting downside of -13.6% (ex-dividends)

The company's fiscal year ends in September.

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

Shaw and Partners rates PDN as Buy (1) -

Paladin Energy has announced that Langer Heinrich has returned to production with the first uranium concentrate being drummed on March 30.

This is an exciting milestone for the company, Shaw and Partners suggests, as there are very few uranium producers listed on the Canadian exchange or on the ASX.

For those investors looking for exposure to uranium production, Paladin is now a viable alternative to Cameco, Shaw believes.

Buy retained, target rises to $1.64 from $1.50.

Target price is $1.64 Current Price is $1.53 Difference: $0.11
If PDN meets the Shaw and Partners target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $1.60, suggesting upside of 4.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Ord Minnett rates SUN as Lighten (4) -

Ord Minnett believes bank share prices have rallied on the prospect of a lower cash rate down the track. From the moment the RBA starts loosening, this provides banks with the opportunity to reprice loans and deposits and, by doing so, protect their margins.

The broker has used the general update on the banking sector to express its preference for Westpac and ANZ Bank, while also suggesting analysts are too conservative with their forecasts for Bank of Queensland and Mystate.

The rating for Suncorp Group has changed to Lighten (was Hold) while the fair value estimate remains $13.50.

Target price is $13.50 Current Price is $16.21 Difference: minus $2.71 (current price is over target).
If SUN meets the Ord Minnett target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.61, suggesting upside of 2.1% (ex-dividends)

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

Morgan Stanley rates WBC as Underweight (5) -

Morgan Stanley believes trading multiples for Australian banks now reflect all the potential benefits of a soft landing and a less competitive environment.

The broker's concerns include: ongoing modest loan growth; a less than meaningful rebound for margins; expense growth will remain elevated; and provision releases will be smaller and later-than-anticipated.

The broker's major bank order of preference is ANZ Bank, National Australia Bank, Westpac and CommBank. 

The Underweight rating is maintained for Westpac and the target increased to $23 from $22.40. Industry View: In-Line.

First half results are due on May 6.

Target price is $23.00 Current Price is $26.39 Difference: minus $3.39 (current price is over target).
If WBC meets the Morgan Stanley target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $24.20, suggesting downside of -7.5% (ex-dividends)

The company's fiscal year ends in September.

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 WBC as Hold (3) -

Ord Minnett believes Australian banks will raise margins via changes to loan and deposit pricing to counteract low credit growth, softer net interest margins and an increase in short-term loan losses over FY24.

The broker finds it difficult to pinpoint the reason for the 23% rally in major bank share prices since last November, but suggests the potential for a lower cash rate eases housing fears and provides the opportunity to reprice loans and deposits.

The analysts prefer Westpac and ANZ Bank on valuation and because they have addressed lacklustre loan growth concerns. CommBank is considered the most expensive. Bank of Queensland is the preferred regional bank.

The Hold rating and $28 target are maintained for Westpac.

Target price is $28.00 Current Price is $26.39 Difference: $1.61
If WBC meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $24.20, suggesting downside of -7.5% (ex-dividends)

The company's fiscal year ends in September.

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

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

Macquarie downgrades its rating for Westgold Resources to Neutral from Outperform after the company agreed to merge with Canadian-based Karoa Resources. 

Westgold will acquire all shares in Karoa whose assets include the Beta Hunt and Higginsville gold projects near Kalgoorlie, Western Australia.

The -$1.2bn consideration is made up of 2.524 Westgold Resources shares for every Karoroa Resources share held ($1,075m) along with $0.68/share in cash ($127m value), explains the broker.

The target falls by -19% to $2.20 after taking into account a doubling of shares on issue and an around 70% production lift over the next five years, and double on a ten-year view at a similar cost (AISC).

Target price is $2.20 Current Price is $2.10 Difference: $0.1
If WGX meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Macquarie rates WHC as Upgrade to Outperform from Neutral (1) -

Whitehaven Coal's now-completed acquisition of the Daunia and Blackwater assets moves the company to a primary metallurgical coal exposure, highlights Macquarie.

After a period of research restriction, the broker incorporates the transaction into forecasts, resulting in a 35% increase in the FY24 EPS forecast and 200-500% increases over FY25-28.

The broker's new target price for Whitehaven Coal is $9, which compares to the $6 level (in the FNArena database) set by Macquarie prior to research restriction. Outperform (previously Neutral).

Target price is $9.00 Current Price is $7.58 Difference: $1.42
If WHC meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $8.44, suggesting upside of 9.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Citi rates WOR as Buy (1) -

Citi has overhauled its Worley model to better forecast seasonality, procurement, and cash conversion. The broker sees more than 5% upside to FY24 consensus earnings forecasts from revenue seasonality alone, before considering growth.

Citi does not understand why consensus is forecasting zero growth for Worley when the company is guiding to "growth".

The broker's stronger revenue growth assumptions in FY25 reflect the view that Saudi Arabia, Calcasieu Pass 2 and New Energy opportunities are stronger than the market appreciates.

Citi has nevertheless trimmed its target to $20.00 from $20.50, Buy retained.

Target price is $20.00 Current Price is $16.84 Difference: $3.16
If WOR meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $18.34, suggesting upside of 8.0% (ex-dividends)

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