Australian Broker Call

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

Morgan Stanley delves into the 20 year history of demergers and notes outperformance over various time horizons, particularly for the demerged company.

The broker feels AGL Energy's demerger revolves around a re-rate of AGL Australia, once separated from Accel Energy. The latter will have a higher cost of capital, but is expected to have a strong pool price tailwind.

The Equal-Weight rating and target price of $8.48 are retained. Industry view: Cautious.

Target price is $8.48 Current Price is $8.61 Difference: minus $0.13 (current price is over target).
If AGL meets the Morgan Stanley target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.85, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Credit Suisse rates ALQ as Outperform (1) -

ALS' FY22 full-year result met Credit Suisse's forecasts and slightly outpaced consensus.

The broker considers it to be a clean result and expects consensus upgrades for FY23.

Credit Suisse note that FY23 earnings are covered by recent raisings and any concerns about its product shift should not be visible until FY24, and notes strong price rises and margins are being clocked in Life Sciences. Cost inflation remains the wildcard. 

EPS forecasts rise 2.7% in FY23. Outperform rating retained. Target price falls to $14.40 from $15.05.

Target price is $14.40 Current Price is $12.01 Difference: $2.39
If ALQ meets the Credit Suisse target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $13.78, suggesting upside of 8.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Macquarie rates ALQ as Outperform (1) -

ALS has closed out the year at the top end of its net profit guidance range, with the $264m achieved reflecting a 42% increase on the previous year. Macquarie notes a key theme of the company's results was strong ongoing cost and supply chain management.

With price increases sticking, the broker highlights ALS has a good line of sight over growth in the coming year which includes increasing capacity in geochem 10-15%, and a 6-7% price improvement as demand remains strong.

The Outperform rating is retained and the target price decreases to $14.50 from $14.70.

Target price is $14.50 Current Price is $12.01 Difference: $2.49
If ALQ meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $13.78, suggesting upside of 8.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

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

Following FY22 results for ALS (in line with guidance), Morgan Stanley assesses management is dealing well with inflationary pressures.

The broker sees upside risk for Geochemistry earnings over the next year, while margin assumptions for Life Sciences are trimmed.

A discount is likely to be maintained for the Commodities business (38% of group revenues), unless investors price commodities as a medium-term structural tailwind, suggests the analyst. The target rises to $13.30 from $13.20. Equal-weight. Industry view: In-line.

Target price is $13.30 Current Price is $12.01 Difference: $1.29
If ALQ meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $13.78, suggesting upside of 8.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

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

Morgans believes ALS looks cheap on recent share price weakness and upgrades its rating to Add from Hold following a FY22 result which contained few surprises. Underlying profit met the upper end of the guidance range and was in-line with the consensus estimate.

A highlight for the analyst was 13.4% organic revenue growth in Life Sciences and a strong outlook for volumes.

Overall, while inflation pressures were offset by price rises and strong volume leverage via additional capacity, the broker expects margin contraction in FY23. Target rises to $14.38 from $13.57.

Target price is $14.38 Current Price is $12.01 Difference: $2.37
If ALQ meets the Morgans target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $13.78, suggesting upside of 8.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Ord Minnett rates ALQ as Hold (3) -

FY22 results for ALS came in at the top of the prior guidance range and highlighted to Ord Minnett continued strength across the business, led by the Life Sciences and Commodities segments.

Management continues to target margin expansion, despite inflationary pressures, via increased pricing (especially in Commodities) and procurement savings.

The broker lifts its target price to $13.00 from $12.80 and retains its Hold rating.

Target price is $13.00 Current Price is $12.01 Difference: $0.99
If ALQ meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $13.78, suggesting upside of 8.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

UBS rates ALQ as Neutral (3) -

The FY22 result for ALS was in-line with guidance. The Commodities division is benefitting from strong levels of mineral exploration demand, as well as recent capacity additions, explains UBS.

Management highlighted a strong start to the new financial year, with strong volumes across both Life Sciences and Commodities. Given the strong mineral exploration activity, the global Geochemistry lab testing capacity is being increased by 10-15% in FY23.

The Neutral rating is retained, while the target falls to $13.10 from $13.30 on a mark-to-market of global Testing, Inspection & Certification peers.

Target price is $13.10 Current Price is $12.01 Difference: $1.09
If ALQ meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $13.78, suggesting upside of 8.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Morgans rates BHP as Add (1) -

Morgans removes BHP Group's Petroleum business from its forecasts and valuation following the demerger which results in a $48.30 target price, down from $54.30. The Add rating is retained.

By commodity, the group's earnings (EBITDA) are now: iron ore 54%, copper 25%, coal 18% and nickel 2%, explains the analyst. From an ESG perspective more investor interest is expected, and would increase again should the thermal coal assets be divested.

Target price is $48.30 Current Price is $43.02 Difference: $5.28
If BHP meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $50.46, suggesting upside of 18.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

UBS rates BHP as Neutral (3) -

Commodity prices have remained stronger-for-longer, and UBS has conducted a compare the pair analysis, trying to determine which one of BHP Group and Rio Tinto offers the most promise for investors.

The broker notes at spot commodity prices BHP and RIO trade respectively on 23% and 18% FCF yields for 2022, adding: growth in future facing commodities remains a key focus.

UBS has a preference for BHP, arguing its exposure to copper is unparalleled with significant optionality in nickel, plus Jansen stage 1 is on the horizon.

 Price target for BHP has fallen to account for the demerger of the petroleum division, now at $38 (was $43). Neutral.

Target price is $38.00 Current Price is $43.02 Difference: minus $5.02 (current price is over target).
If BHP meets the UBS target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $50.46, suggesting upside of 18.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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 CGC as Outperform (1) -

At its recent annual general meeting, Costa Group reported trading has been broadly positive to date, with Macquarie highlighting the first half is important to the company's full year results given a 59% average first half skew in the last two years.

Berry operations across China and Morocco have performed well, with China delivering record production, although Macquarie notes covid impacts at the end of harvest drove pricing below forecast in the final period.

The Outperform rating and target price of $3.80 are retained.

Target price is $3.80 Current Price is $3.16 Difference: $0.64
If CGC meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $3.63, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Morgans rates CGC as Add (1) -

A trading update by Costa Group revealed a strong 1H for the Produce segment, while the performance of International was solid, according to Morgans, despite a few 2Q challenges. Challenges included lockdowns in China and unfavourable weather in Morocco.

Unlike some competitors, the company has successfully managed covid challenges across all operations. With attractive upside to the new target of $3.67, down from $3.70, the broker retains its Add rating.

Target price is $3.67 Current Price is $3.16 Difference: $0.51
If CGC meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $3.63, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Citi rates FPH as Buy (1) -

Citi cuts Fisher & Paykel Healthcare's FY23 and FY24 EPS forecasts by -11% and -13%, anticipating lower hospital sales of covid-related products such as humidifiers and high-flow equipment.

Given many years of demand were pulled back into two years, Citi says estimates are difficult, but the main question is how much revenue can the company now generate from the covid sales windfall.

Citi says while FY23 is a tough one to nail, it believes the business fundamentals of large, under-penetrated markets, limited competition and high margins are solid and believes the recent share-price retreat offers a good entry point for investors.

Buy rating retained. Target price falls to NZ$24.00 from NZ$25.75.

Current Price is $18.29. Target price not assessed.

Current consensus price target is $21.10, suggesting upside of 16.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

This company reports in NZD. 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

Credit Suisse rates FPH as Neutral (3) -

Fisher & Paykel Healthcare's FY22 full-year result met consensus and Credit Suisse reports a sharper decline in the second half as hospital sales fall post covid. This was offset by a beat on costs.

Management has retained its long-term growth target, but the broker notes short-term earnings are vulnerable to the post-covid slide in demand and the company has its work cut out in the meantime.

EPS forecasts fall -16% in FY23 and -13% in FY24. Outer years fall -7%.

Neutral rating retained. Target price falls to $21.10 from $27.00.

Target price is $21.10 Current Price is $18.29 Difference: $2.81
If FPH meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $21.10, suggesting upside of 16.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

This company reports in NZD. 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

Macquarie rates FPH as Outperform (1) -

Fisher & Paykel Healthcare has provided a framework for device utilisation and revenue growth moving ahead, with Macquarie noting gross profit margins look to stabilise ahead as a return to normal pricing cycles should support FY23 and FY24. 

Pre-covid, utilisation at the mid-point equated to around 20-30 consumables per device annually and company management has suggested it can get around 85% of devices back to this level of utilisation, while Macquarie assumes a more conservative 80%.

Current lower utilisation sees the broker reduce earnings per share estimates -9%, -9% and -5% through to FY25.

The Outperform rating is retained and the target price decreases to NZ$27.46 from NZ$28.21.

Current Price is $18.29. Target price not assessed.

Current consensus price target is $21.10, suggesting upside of 16.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

This company reports in NZD. 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

Ord Minnett rates MPL as Accumulate (2) -

Ord Minnett extracts from March quarter APRA data that Medibank Private grew policy numbers faster than the industry over the December half. Overall, industry volumes continued to grow strongly and depressed claims are still being recorded.

APRA expects some give-back in the future by insurers, due to the industry’s promise to not profit from covid. The broker maintains its Accumulate rating and $3.50 target price.

Target price is $3.50 Current Price is $3.22 Difference: $0.28
If MPL meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.44, suggesting upside of 8.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

UBS rates MPL as Neutral (3) -

UBS assesses from APRA data a strong period for the private health insurance industry with solid premium growth and benign claims delivering considerable improvement in net margin. 

Overall benefits paid were considerably lower due to underutilisation, attributable to widespread restrictions on non-urgent elective procedures, explains the analyst. Further industry givebacks are likely to be announced by 30 June.

Medibank Private has already deferred price increases until October. UBS keeps its Neutral rating and $3.25 target price.

Target price is $3.25 Current Price is $3.22 Difference: $0.03
If MPL meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.44, suggesting upside of 8.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Morgans rates NAN as Add (1) -

As part of a trading update, management at Nanosonics anticipates the consensus estimate for FY22 revenue will be met. Morgans points out the transition to a direct sales model with GE is on-track.

The sales and clinical applications team has been expanded to meet the end of June transition-completion date. The broker maintains its Add rating and $5.43 target price.

Target price is $5.43 Current Price is $3.87 Difference: $1.56
If NAN meets the Morgans target it will return approximately 40% (excluding dividends, fees and charges).

Current consensus price target is $4.34, suggesting upside of 19.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.3

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

UBS rates NEC as Buy (1) -

UBS continues to have a favourable view on traditional media names and has Buy ratings on all five under its sector coverage. Top picks are Nine Entertainment and News Corp ((NWS)).

For Nine Entertainment, the recent trading update indicated continued strength in the Metro Free-to-Air Television advertising market, while advertising market conditions are improving for metropolitan radio. The $3.90 target price is retained.
 

Target price is $3.90 Current Price is $2.34 Difference: $1.56
If NEC meets the UBS target it will return approximately 67% (excluding dividends, fees and charges).

Current consensus price target is $3.55, suggesting upside of 55.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Ord Minnett rates NHF as Lighten (4) -

Ord Minnett extracts from March quarter APRA data that nib Holdings had very high gross margins in the December half, driven by covid benefits. Overall, industry volumes continued to grow strongly and depressed claims are still being recorded.

APRA expects some give-back in the future by insurers, due to the industry’s promise to not profit from covid. The broker maintains its Lighten rating and $6.20 target price.

Target price is $6.20 Current Price is $7.42 Difference: minus $1.22 (current price is over target).
If NHF meets the Ord Minnett target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.89, suggesting downside of -5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.1

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

UBS rates NHF as Neutral (3) -

UBS assesses from APRA data a strong period for the private health insurance industry with solid premium growth and benign claims delivering considerable improvement in net margin. 

Overall benefits paid were considerably lower due to underutilisation, attributable to the widespread restrictions on non-urgent elective procedures, explains the analyst. Further industry givebacks are likely to be announced by 30 June.

nib Holdings has already deferred price increases until September. UBS keeps its Neutral rating and $7.10 target price.

Target price is $7.10 Current Price is $7.42 Difference: minus $0.32 (current price is over target).
If NHF meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.89, suggesting downside of -5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.1

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

UBS rates NWS as Buy (1) -

UBS continues to have a favourable view on traditional media names and has Buy ratings on all five under its sector coverage. Top picks are Nine Entertainment ((NEC)) and News Corp.

Following 3Q results for News Corp earlier in May, the broker lowers its target price to $38.50 from $42.50.

Target price is $38.50 Current Price is $23.68 Difference: $14.82
If NWS meets the UBS target it will return approximately 63% (excluding dividends, fees and charges).

Current consensus price target is $38.63, suggesting upside of 60.9% (ex-dividends)

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 1.0

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

Credit Suisse rates PGH as Outperform (1) -

Credit Suisse lowers FY22 earnings (EBIT) forecasts to account for rising electricity prices, noting baseload electricity futures have jumped 50% since February 2022 - three times the previous corresponding period.

The broker also expects resin and steel prices to remain elevated.

Target price falls to $4.00 from $4.45. Outperform rating retained, Credit Suisse perceiving the company to offer deep value outside of cyclical shifts, and reviews developments in the Australian Plastic business.

Target price is $4.00 Current Price is $2.14 Difference: $1.86
If PGH meets the Credit Suisse target it will return approximately 87% (excluding dividends, fees and charges).

Current consensus price target is $3.18, suggesting upside of 50.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

UBS rates RIO as Neutral (3) -

UBS awaits news on whether Rio Tinto will participate in the Simandou iron ore development. It's thought the company should weigh the risk/reward around the definitive agreement and JV partners support for development to meet international ESG standards.

Simandou is one of the largest iron ore resources in the world with around 5.4bn tonnes of resource, points out the analyst. The Neutral rating and $104 target price are maintained.

Target price is $104.00 Current Price is $111.96 Difference: minus $7.96 (current price is over target).
If RIO meets the UBS target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $125.07, suggesting upside of 12.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

UBS rates RIO as Neutral (3) -

Commodity prices have remained stronger-for-longer, and UBS has conducted a compare the pair analysis, trying to determine which one of BHP Group and Rio Tinto offers the most promise for investors.

The broker notes at spot commodity prices BHP and RIO trade respectively on 23% and 18% FCF yields for 2022, adding: growth in future facing commodities remains a key focus.

UBS remains cautious on iron ore pricing beyond the near-term and this explains, partially, why its preference lays with BHP. Rio Tinto's growth avenues consist of copper, aluminium and lithium, suggests the broker.

Neutral rating with a $104 price target.

Target price is $104.00 Current Price is $111.96 Difference: minus $7.96 (current price is over target).
If RIO meets the UBS target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $125.07, suggesting upside of 12.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Citi rates S32 as Buy (1) -

South32's strategy day did little to change Citi's investment thesis, the only material variable being a forecast rise in FY23 and FY24 capital expenditure.

Management reports industry-wide costs are rising, but that does not alter S32's position relative to peers.

Citi considers the company's transformation to be successful and admires the alumina/aluminium business, the spinning out of ageing assets and the timing of the Sierra Gorda acquisition, which exposes the company toward green commodities.

Challenges remain but with the company trading at a discount to valuation and on low multiples relative to peers, Citi retains a Buy rating and $5.50 target price, while keeping a keen eye peeled to China's near-term demand profile.

Target price is $5.50 Current Price is $4.68 Difference: $0.82
If S32 meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $6.05, suggesting upside of 29.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 1.0

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

Credit Suisse rates S32 as Outperform (1) -

South32's strategy day confirmed the company's shift towards base/criticals metals and Credit Suisse expects the company is awaiting DND approval prior to determining the fate of the Illawarra metallurgical coal assets.

Management suggests it has room to an extra asset into its portfolio - ideally zinc or copper, says the broker.

Capital expenditure is on the rise but the broker says a sale of the company's coal assets would take it back to previous levels.

The broker reports the company plans to spend US$140m on ESG over the next two years. Worsley is main target, South32 planning to switch from coal to gas, debottlenecking and establishing new mining areas. The company is also fiddling with emissions capture at Illawarra. 

The target price is $6.10, compared with $6 earlier this month. Outperform rating retained.

Target price is $6.10 Current Price is $4.68 Difference: $1.42
If S32 meets the Credit Suisse target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $6.05, suggesting upside of 29.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 1.0

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

Macquarie rates S32 as Outperform (1) -

Acquisitions should support 20% copper equivalent volume growth in FY23 compared to FY21 for South32, wth Macquarie noting a stakes in Sierra Gorda and Mozal Aluminium, as well as the restart of Brazilian Aluminium, should support growth. 

The broker also highlighted South32 continues to benefit from elevated spot pricing, estimating that at current levels prices could support 37% and 89% increases to earnings expectations. 

The Outperform rating and target price of $6.90 are retained.

Target price is $6.90 Current Price is $4.68 Difference: $2.22
If S32 meets the Macquarie target it will return approximately 47% (excluding dividends, fees and charges).

Current consensus price target is $6.05, suggesting upside of 29.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 1.0

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

Ord Minnett rates S32 as Buy (1) -

While cost and sustaining capital expenditure pressure remained a theme during a business and strategy update, South32 remains focused on growth, notes Ord Minnett.

Further M&A activity may arise, suggests the analyst, after the company alluded to the need for another base metal asset. Management expects zinc and copper demand to double by 2040.

The broker maintains its Buy rating and eases its target price to $5.70 from $5.80.

Target price is $5.70 Current Price is $4.68 Difference: $1.02
If S32 meets the Ord Minnett target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $6.05, suggesting upside of 29.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 1.0

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

Morgans rates SLC as Add (1) -

Following a trading update by Superloop, Morgans assesses strong organic sales momentum in the core business, which is continuing to gather pace. The Add rating and $1.37 target price are retained.

The company intends to acquire the Melbourne-based white label platform and managed service company Acurus for -$15m upfront, plus an earn out capped at -$20m. The analyst expects the transaction will be accretive in FY23.

Target price is $1.37 Current Price is $0.81 Difference: $0.56
If SLC meets the Morgans target it will return approximately 69% (excluding dividends, fees and charges).

Current consensus price target is $1.26, suggesting upside of 53.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

UBS rates SWM as Buy (1) -

UBS continues to have a favourable view on traditional media names and has Buy ratings on all five under its sector coverage. Top picks are Nine Entertainment ((NEC)) and News Corp ((NWS)).

For Seven West Media, the recent trading update indicated continued strength in the metropolitan free-to-air television advertising market. The $0.95 target price is retained.

Target price is $0.95 Current Price is $0.57 Difference: $0.38
If SWM meets the UBS target it will return approximately 67% (excluding dividends, fees and charges).

Current consensus price target is $0.89, suggesting upside of 55.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

UBS rates SXL as Buy (1) -

UBS continues to have a favourable view on traditional media names and has Buy ratings on all five under its sector coverage. Top picks are Nine Entertainment and News Corp ((NWS)).

For Southern Cross Media, its noted recent trading updates by Nine Entertainment and Seven West Media ((SWM)) indicated continued strength in the Metro Free-to-Air Television advertising market, while advertising market conditions are improving for metropolitan radio.

The target price is lowered to $2.30 from $2.45.

Target price is $2.30 Current Price is $1.45 Difference: $0.85
If SXL meets the UBS target it will return approximately 59% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Ord Minnett rates TAH as Hold (3) -

Ord Minnett's new earnings estimates for Tabcorp factor in the removal of Lotteries and Keno, while estimates for the remaining wagering and media operations, and the gaming services business, are largely unchanged.

The target is now $1.10 following the demerger, down from $4.90. Hold.

The broker estimates some intrinsic value for the wagering arm though it continues to seek a floor for market share losses. Meanwhile, licensing risks and the performance of Max Performance Solutions (formerly known as Tabcorp Gaming Solutions) raises outlook concerns.

Despite the above commentary, the broker feels Tabcorp has compelling value. The FY22 dividend will benefit from five months of Lottery Corp pre-demerger earnings, and a one-off jump of 5.3cps is estimated.

Target price is $1.10 Current Price is $1.02 Difference: $0.08
If TAH meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $2.37, suggesting upside of 141.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Citi rates VVA as Buy (1) -

Citi expects US gyms could take a hit as economic conditions slide, and this should very quickly affect Viva Leisure's revenue given its short-term membership model.

But the broker forecasts continued brownfield and greenfield expansion of the network and more affordable pricing should cushion the blow, and expects Viva will incentivise customers to sign up for longer contracts (the majority are for two weeks).

Overall, Citi believes membership growth has continued in the June half and retains a Buy rating. Target price falls to $1.98 from $2.34.

Target price is $1.98 Current Price is $1.62 Difference: $0.36
If VVA meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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