Australian Broker Call
November 10, 2016
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COMPANIES DISCUSSED IN THIS ISSUE
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Last Updated: 11:39 AM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
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Today's Upgrades and Downgrades
| JHX - | JAMES HARDIE | Upgrade to Buy from Neutral | Citi |
Citi rates AGL as Buy (1) -
With the company scheduled to organise an Investor Day on Monday 14th November, Citi analysts speculate this could be the catalyst for management to convince analysts it is a growth company, with plenty of growth on the horizon.
The expectation is that management will paint an upbeat picture/outlook for wholesale electricity prices, which should lead to a jump in consensus forecasts, predict the analysts. Citi's forecasts already are some 8% above forecasts that have as yet not been updated this month, report the analysts.
Citi analysts reiterate their view the current share price represents "an enhanced buying opportunity" for investors. Buy rating retained. Target $21.61.
Target price is $21.61 Current Price is $19.28 Difference: $2.33
If AGL meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $21.55, suggesting upside of 10.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 88.00 cents and EPS of 116.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 116.8, implying annual growth of N/A. Current consensus DPS estimate is 83.4, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 16.7. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 104.00 cents and EPS of 137.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 132.7, implying annual growth of 13.6%. Current consensus DPS estimate is 97.7, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 14.7. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates ALL as Neutral (3) -
Credit Suisse believes the transition to Trevor Croker as CEO means growth is likely to continue but decelerate. Aristocrat has made large gains sourced from market share but medium-term growth is likely to be different.
The broker suggests the company can at least hold share in Australia, achieve 25% US ship share and significantly expand the US installed base.
Credit Suisse upgrades earnings per share 4-5%. Neutral retained. Target is $15.65.
Target price is $15.65 Current Price is $14.30 Difference: $1.35
If ALL meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $16.88, suggesting upside of 15.3% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY16:
Credit Suisse forecasts a full year FY16 dividend of 20.00 cents and EPS of 59.04 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 56.4, implying annual growth of 87.4%. Current consensus DPS estimate is 23.2, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 25.9. |
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 22.00 cents and EPS of 67.37 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 70.8, implying annual growth of 25.5%. Current consensus DPS estimate is 33.0, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 20.7. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates AMC as Buy (1) -
Deutsche Bank considers the acquisition of Hebei Qite packing for US$28m a minor positive as it will enhance the company's position in northern China.
Amcor has 11 flexibles plants in China with further opportunities envisaged for growth throughout the Asian region.
Deutsche Bank maintains a Buy rating. Target is $17.35.
Target price is $17.35 Current Price is $14.33 Difference: $3.02
If AMC meets the Deutsche Bank target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $16.30, suggesting upside of 11.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 60.69 cents and EPS of 84.96 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 76.7, implying annual growth of N/A. Current consensus DPS estimate is 57.7, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 19.0. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 68.78 cents and EPS of 97.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 87.4, implying annual growth of 14.0%. Current consensus DPS estimate is 65.2, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 16.7. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates AMC as Outperform (1) -
Amcor will acquire Hebie Qite Packaging, which has one flexible packaging plant in Northern China, raising Amcor's ownership of Chinese flexibles plants to 12. It is a bolt-on acquisition in line with the company's strategy, the broker notes.
Amcor has been sold down in the general rotation out of high PE stocks, the broker notes, but the fundamentals haven't changed -- solid defensive growth prospects and further M&A optionality. Outperform and $16.86 target retained.
Target price is $16.86 Current Price is $14.33 Difference: $2.53
If AMC meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $16.30, suggesting upside of 11.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 58.06 cents and EPS of 81.88 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 76.7, implying annual growth of N/A. Current consensus DPS estimate is 57.7, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 19.0. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 65.64 cents and EPS of 92.44 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 87.4, implying annual growth of 14.0%. Current consensus DPS estimate is 65.2, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 16.7. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates APO as Hold (3) -
The company has upgraded 2016 forecasts after a late surge in bookings for both digital and static billboard advertising for November and December.
Morgans upgrades forecasts and now sits in the middle of the revised 2016 guidance range of $84-86m in EBITDA.
A Hold rating is retained. Target lifts to $5.66 from $5.44.
Target price is $5.66 Current Price is $5.18 Difference: $0.48
If APO meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $6.30, suggesting upside of 16.6% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY16:
Morgans forecasts a full year FY16 dividend of 17.00 cents and EPS of 31.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.5, implying annual growth of 17.3%. Current consensus DPS estimate is 17.2, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 17.7. |
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 21.00 cents and EPS of 37.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 36.2, implying annual growth of 18.7%. Current consensus DPS estimate is 20.5, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 14.9. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates CPU as Buy (1) -
Computershare has once again convened the message it has turned the corner, for the better, through rigorous cost cutting and Citi analysts, already on the new growth train, see more confidence seeping into their projections.
On current forecasts, EPS should grow by 15% in FY18 and by 19% in FY19. Buy. Target $11.00. Minor changes have been made to forecasts.
Target price is $11.00 Current Price is $10.23 Difference: $0.77
If CPU meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $10.52, suggesting downside of -7.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 34.93 cents and EPS of 72.69 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 68.6, implying annual growth of N/A. Current consensus DPS estimate is 36.1, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 16.5. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 37.90 cents and EPS of 83.48 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 74.0, implying annual growth of 7.9%. Current consensus DPS estimate is 39.2, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 15.3. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates CPU as Outperform (1) -
Credit Suisse expects concerns around poorly performing acquisitions and lower cost efficiencies should abate as the company has announced US$60-70m in savings initiatives.
The company has also provided an indication of the future profitability of its US mortgage servicing business. This is expected to provide around a 5% profit uplift.
Credit Suisse upgrades earnings estimates by 5% for FY18. The broker also marks to market its forecasts for the currency which leads to a 1% downgrade to FY17 estimates.
Outperform rating retained. Target is lifted to $11.50 from $10.80.
Target price is $11.50 Current Price is $10.23 Difference: $1.27
If CPU meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $10.52, suggesting downside of -7.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 44.50 cents and EPS of 72.34 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 68.6, implying annual growth of N/A. Current consensus DPS estimate is 36.1, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 16.5. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 49.90 cents and EPS of 83.06 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 74.0, implying annual growth of 7.9%. Current consensus DPS estimate is 39.2, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 15.3. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates CPU as Neutral (3) -
The theme of Computershare's AGM was "an inflection point in earnings growth" dependent on mortgage servicing and margin growth. The company is looking towards mortgage servicing for growth, the broker notes, given the mature registry business is facing structural and cyclical pressure and is dependent on higher rates.
FY17 guidance has been maintained and the broker notes further cost-outs are needed in the core business. Neutral retained, target falls to $10.49 from $10.61.
Target price is $10.49 Current Price is $10.23 Difference: $0.26
If CPU meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $10.52, suggesting downside of -7.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 36.55 cents and EPS of 76.74 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 68.6, implying annual growth of N/A. Current consensus DPS estimate is 36.1, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 16.5. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 27.50 cents and EPS of 57.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 74.0, implying annual growth of 7.9%. Current consensus DPS estimate is 39.2, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 15.3. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates CPU as Add (1) -
The company has re-confirmed FY17 guidance, expecting earnings per share to be slightly higher. The review of costs has also identified an additional US$60m-70m to be taken out of the business over FY17-20.
As interest rates bottom globally, Morgans envisages earnings pressures abating to some degree. The broker retains an Add rating and raises the target to $11.28 from $10.82.
Target price is $11.28 Current Price is $10.23 Difference: $1.05
If CPU meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $10.52, suggesting downside of -7.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 35.00 cents and EPS of 56.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 68.6, implying annual growth of N/A. Current consensus DPS estimate is 36.1, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 16.5. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 37.00 cents and EPS of 62.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 74.0, implying annual growth of 7.9%. Current consensus DPS estimate is 39.2, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 15.3. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates CPU as Hold (3) -
The company has reaffirmed guidance for FY17 management defined earnings per share to be slightly higher. The company is aiming to achieve scale in its US mortgage servicing business and intends to generate revenue of $350m per annum with a 20% pre-tax profit margin.
Ord Minnett calculates the company is expecting to generate around $50m in profit from US mortgage servicing once it achieves scale.The broker retains a Hold rating and $10.50 target.
Target price is $10.50 Current Price is $10.23 Difference: $0.27
If CPU meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $10.52, suggesting downside of -7.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 31.02 cents and EPS of 52.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 68.6, implying annual growth of N/A. Current consensus DPS estimate is 36.1, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 16.5. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 34.24 cents and EPS of 61.63 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 74.0, implying annual growth of 7.9%. Current consensus DPS estimate is 39.2, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 15.3. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates FMG as Outperform (1) -
Fortescue is confident in its operational production and cost targets following a quarter of solid production, management suggested at the AGM. Most importantly for the broker is the current iron ore spot price.
It is 30% higher than the broker's FY17 forecast and 40% higher than FY18. Thus there is material risk to base case earnings forecasts. Outperform and $5.70 target retained.
Target price is $5.70 Current Price is $5.43 Difference: $0.27
If FMG meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $4.85, suggesting downside of -16.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 20.23 cents and EPS of 57.45 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 55.2, implying annual growth of N/A. Current consensus DPS estimate is 17.7, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 10.6. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 16.00 cents and EPS of 25.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.2, implying annual growth of -48.9%. Current consensus DPS estimate is 13.4, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 20.7. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates GNC as Overweight (1) -
Morgan Stanley Is tempted by the bullish upgrades to FY17 crop volumes. The latest Australian Crop Forecasters estimates of 22m tonnes would imply an EBIT upgrade of 23%.
The broker retains an Overweight rating and $9.70 target and awaits the FY16 results next week. Industry view is Attractive.
The broker expects Graincorp to hit net profit guidance of $40-45m.
Target price is $9.70 Current Price is $8.43 Difference: $1.27
If GNC meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $8.94, suggesting upside of 4.2% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY16:
Morgan Stanley forecasts a full year FY16 dividend of 11.30 cents and EPS of 23.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.0, implying annual growth of 56.7%. Current consensus DPS estimate is 11.2, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 40.9. |
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 20.90 cents and EPS of 42.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 43.7, implying annual growth of 108.1%. Current consensus DPS estimate is 21.0, implying a prospective dividend yield of 2.4%. Current consensus EPS estimate suggests the PER is 19.6. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates JHX as Upgrade to Buy from Neutral (1) -
History shows James Hardie shares are more likely to outperform the ASX200 in the year post the election of a new US President, report analysts at Citi. They also note the share price has weakened recently. Two reasons to upgrade to Buy from Hold. Target $20.50.
Target price is $20.50 Current Price is $18.14 Difference: $2.36
If JHX meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $21.54, suggesting upside of 14.9% (ex-dividends)
The company's fiscal year ends in March.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 60.69 cents and EPS of 85.91 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 80.4, implying annual growth of N/A. Current consensus DPS estimate is 56.6, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 23.3. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 68.45 cents and EPS of 96.37 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 98.0, implying annual growth of 21.9%. Current consensus DPS estimate is 64.8, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 19.1. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates MGX as Outperform (1) -
Mount Gibson's AGM focused on Iron Hill approval and a Koolan Island restart as major catalysts for FY17. Utilising its large cash balance to fund acquisitions is a longer term strategy, the broker notes.
It all makes sense to the broker given current spot iron ore prices send internal rates of return into triple digits. Mt Gibson is trading at a 20% discount to its cash balance. Outperform and 48c target retained.
Target price is $0.48 Current Price is $0.31 Difference: $0.175
If MGX meets the Macquarie target it will return approximately 57% (excluding dividends, fees and charges).
Current consensus price target is $0.38, suggesting upside of 14.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 0.00 cents and EPS of 1.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 0.7, implying annual growth of -91.2%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 47.1. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of 0.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -0.4, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is N/A. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates MPL as Neutral (3) -
Citi analysts note GWP has only grown by 1.3% in FY17 to date, below even the subdued guidance the company provided in August. Management has now guided towards a lower health insurance operating profit.
Given where the share price is, Citi analysts can see value emerging, but there's no positive catalyst around. Neutral rating retained. Target falls to $2.70 from $3.05.
The broker is looking forward to the insurer's 30 November Investor Day. Estimates have been lowered, mildly.
Target price is $2.70 Current Price is $2.45 Difference: $0.25
If MPL meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $2.67, suggesting upside of 9.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 11.50 cents and EPS of 14.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.8, implying annual growth of -2.6%. Current consensus DPS estimate is 11.3, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 16.4. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 12.50 cents and EPS of 15.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.9, implying annual growth of 0.7%. Current consensus DPS estimate is 11.5, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 16.3. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates MPL as Neutral (3) -
Management expects FY17 health insurance operating profit to be around $490m, in line with FY16 at an underlying level.Credit Suisse notes, with gross margins continuing to be elevated, the outlook for 2017 price increases becomes more challenging.
The broker increases FY17 net profit estimates by 6.6%. Credit Suisse expects the focus will now turn to regulatory risk, which may limit growth in earnings per share for an extended period of time.
A Neutral rating and $2.50 target are maintained.
Target price is $2.50 Current Price is $2.45 Difference: $0.05
If MPL meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $2.67, suggesting upside of 9.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 12.00 cents and EPS of 15.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.8, implying annual growth of -2.6%. Current consensus DPS estimate is 11.3, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 16.4. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 11.00 cents and EPS of 14.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.9, implying annual growth of 0.7%. Current consensus DPS estimate is 11.5, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 16.3. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates MPL as Outperform (1) -
Medibank expects its 2017 profit to be broadly in line with 2016, featuring slowing market growth and loss of market share.
A high level of disputes creates revenue risk to the downside, the broker suggests, but modest claims growth creates margin risk to the upside. Target falls to $2.75 from $2.79. Outperform retained.
Target price is $2.75 Current Price is $2.45 Difference: $0.3
If MPL meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $2.67, suggesting upside of 9.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 11.10 cents and EPS of 14.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.8, implying annual growth of -2.6%. Current consensus DPS estimate is 11.3, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 16.4. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 10.70 cents and EPS of 14.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.9, implying annual growth of 0.7%. Current consensus DPS estimate is 11.5, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 16.3. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates MPL as Hold (3) -
The company has signalled the first quarter operating environment is broadly in line with guidance. On claims costs management still expects industry conditions to be comparable to the second half of FY16.
While further cost reductions and low claims utilisation may provide a near-term tailwind, Morgans believes current profitability is at the peak of the cycle. A Hold rating is retained and the target of $2.51.
Target price is $2.51 Current Price is $2.45 Difference: $0.06
If MPL meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $2.67, suggesting upside of 9.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 11.20 cents and EPS of 15.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.8, implying annual growth of -2.6%. Current consensus DPS estimate is 11.3, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 16.4. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 11.60 cents and EPS of 15.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.9, implying annual growth of 0.7%. Current consensus DPS estimate is 11.5, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 16.3. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates MPL as Accumulate (2) -
The company has started to an FY17 operating profit of $490m. Industry conditions are considered to be similar to the second half of FY16. Ord Minnett remains cautious about the likely benefits to customers of the initiatives being added.
These include hospital cover members having accident cover and all members having unlimited emergency ambulance cover as well as the previously flagged free dental checks for Extras members.
Accumulate rating and $3.00 target retained.
Target price is $3.00 Current Price is $2.45 Difference: $0.55
If MPL meets the Ord Minnett target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $2.67, suggesting upside of 9.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 11.00 cents and EPS of 15.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.8, implying annual growth of -2.6%. Current consensus DPS estimate is 11.3, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 16.4. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 12.00 cents and EPS of 16.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.9, implying annual growth of 0.7%. Current consensus DPS estimate is 11.5, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 16.3. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates MPL as Neutral (3) -
The company has initiated a specific guidance metric for FY17 - operating profit guidance of $490m. UBS reduces claims growth assumptions to capture more optimistic health insurance operating profit.
The broker observes the AGM commentary had an air of caution, particularly about the investment required to change ongoing negative policyholder experience and stem linkage.
The broker finds it hard to adopt a more positive view and retains a Neutral rating. Target is steady at $2.70.
Target price is $2.70 Current Price is $2.45 Difference: $0.25
If MPL meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $2.67, suggesting upside of 9.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 11.00 cents and EPS of 14.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.8, implying annual growth of -2.6%. Current consensus DPS estimate is 11.3, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 16.4. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 11.00 cents and EPS of 14.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.9, implying annual growth of 0.7%. Current consensus DPS estimate is 11.5, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 16.3. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates NST as Underperform (5) -
Credit Suisse analyses the Jundee assumptions, extending my life expectations to a very aggressive 10 years. Earnings estimates now reflect the low-capital mill expansion supporting the FY18 production target.
The broker retains an Underperform rating.The target is raised to $4.20 from $3.75.
Target price is $4.20 Current Price is $4.64 Difference: minus $0.44 (current price is over target).
If NST meets the Credit Suisse target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $4.58, suggesting upside of 3.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 11.94 cents and EPS of 39.79 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 39.8, implying annual growth of 57.9%. Current consensus DPS estimate is 12.3, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 11.1. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 16.01 cents and EPS of 53.36 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 50.4, implying annual growth of 26.6%. Current consensus DPS estimate is 12.5, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 8.8. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates REA as Outperform (1) -
REA's update revealed 14% Aust revenue growth in the Sep Q, which the broker describes as a "formidable result" given an 8% headwind from lower housing listings. Cost growth remains elevated but is expected to ease in the second half.
Having recently upgraded its forecasts and rating, the broker retains Outperform and a $56 target, foreseeing solid medium term growth from a strong market position, and potential upside in yield.
Target price is $56.00 Current Price is $51.79 Difference: $4.21
If REA meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $56.04, suggesting upside of 6.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 91.40 cents and EPS of 183.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 187.7, implying annual growth of -2.2%. Current consensus DPS estimate is 97.9, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 28.0. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 115.00 cents and EPS of 230.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 227.8, implying annual growth of 21.4%. Current consensus DPS estimate is 122.9, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 23.0. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates RWC as Hold (3) -
The company remains confident of achieving its prospectus forecasts for FY17 of $63m in net profit.
Deutsche Bank continues to expect the company to take advantage of the opportunity to expand its US presence through growth in market share and upside from the Lowe's contract.
Hold rating retained. Target is $2.93.
Target price is $2.93 Current Price is $2.83 Difference: $0.1
If RWC meets the Deutsche Bank target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $3.16, suggesting upside of 5.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 6.00 cents and EPS of 12.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 12.0, implying annual growth of N/A. Current consensus DPS estimate is 6.0, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 24.9. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 6.00 cents and EPS of 15.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.0, implying annual growth of 16.7%. Current consensus DPS estimate is 6.8, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 21.4. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates S32 as Outperform (1) -
Recent price rises in manganese, coking coal and alumina have exceeded South32's expectations but the company is committed to managing price volatility through its balance sheet and not through hedging, the broker learned in discussions. Manganese and alumina prices are expected to hold up for some months yet.
The stock looks cheap on the broker's base case price forecasts, which are well below spot. At spot prices the substantial jump in cash should lead to capital management, the broker suggests. Outperform and $3.30 target retained.
Target price is $3.30 Current Price is $2.48 Difference: $0.82
If S32 meets the Macquarie target it will return approximately 33% (excluding dividends, fees and charges).
Current consensus price target is $2.62, suggesting downside of -2.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 4.18 cents and EPS of 22.52 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 16.9, implying annual growth of N/A. Current consensus DPS estimate is 7.4, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 15.9. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 7.28 cents and EPS of 18.21 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 13.2, implying annual growth of -21.9%. Current consensus DPS estimate is 6.7, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 20.3. |
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 SCG as Outperform (1) -
Credit Suisse suspects many investors are unwilling to ascribe material value to future development upside, which in part reflects the company's current balance sheet position.
The broker's analysis suggests that, even allowing for development margins below historical levels and organic EBIT growth of just 2.4% per annum, the company can sustain its pace of development spending.
Outperform rating retained. Target is raised to $5.30 from $5.27.
Target price is $5.30 Current Price is $4.27 Difference: $1.03
If SCG meets the Credit Suisse target it will return approximately 24% (excluding dividends, fees and charges).
Current consensus price target is $4.68, suggesting upside of 12.9% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY16:
Credit Suisse forecasts a full year FY16 dividend of 21.00 cents and EPS of 23.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 23.4, implying annual growth of 3.6%. Current consensus DPS estimate is 21.2, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 17.7. |
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 22.00 cents and EPS of 24.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 23.6, implying annual growth of 0.9%. Current consensus DPS estimate is 22.0, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 17.6. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates SGM as Neutral (3) -
The company has indicated first half FY17 should be similar to the FY16 second half's earnings. Credit Suisse is more upbeat on the outlook than the company's subdued outlook suggests.
The broker believes the second half of FY17 should be stronger, supported by higher scrap prices and the completion of loss-making divestments.
While coking coal and iron ore prices are expected to drive higher ferrous scrap in the December quarter these prices are unlikely to persist in the medium term. Hence, the broker expects these should support a stronger second half, but beyond that coking coal should retreat and undermine scrap prices.
A Neutral rating is retained. Target rises to $9.90 from $9.30.
Target price is $9.90 Current Price is $10.90 Difference: minus $1 (current price is over target).
If SGM meets the Credit Suisse target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $10.33, suggesting downside of -15.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 28.52 cents and EPS of 56.98 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 51.4, implying annual growth of -4.3%. Current consensus DPS estimate is 26.7, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 23.7. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 31.78 cents and EPS of 63.57 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 65.9, implying annual growth of 28.2%. Current consensus DPS estimate is 33.4, implying a prospective dividend yield of 2.7%. Current consensus EPS estimate suggests the PER is 18.5. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates SGM as Hold (3) -
Management expects recent increases in coal and iron ore prices should lead to improved ferrous scrap demand in FY17.
While Deutsche Bank is positive about the acceleration of the company's optimisation plan it does not expect iron ore and coking coal prices to remain at current levels.
Hold rating and $9.33 target retained.
Target price is $9.33 Current Price is $10.90 Difference: minus $1.57 (current price is over target).
If SGM meets the Deutsche Bank target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $10.33, suggesting downside of -15.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 25.00 cents and EPS of 45.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 51.4, implying annual growth of -4.3%. Current consensus DPS estimate is 26.7, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 23.7. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 30.00 cents and EPS of 55.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 65.9, implying annual growth of 28.2%. Current consensus DPS estimate is 33.4, implying a prospective dividend yield of 2.7%. Current consensus EPS estimate suggests the PER is 18.5. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates SGM as Underperform (5) -
Sims remains committed to cost reduction and notes improving competitiveness for scrap given the rise in steel input prices, ie iron ore and coal. The broker agrees the fundamentals are approaching the bottom, but remains cautious on the potential for price pullbacks and weak scrap demand in the US.
The stock has run up hard of late and the broker believes it has been overdone. Target rises to $9.40 from $8.40. Underperform retained.
Target price is $9.40 Current Price is $10.90 Difference: minus $1.5 (current price is over target).
If SGM meets the Macquarie target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $10.33, suggesting downside of -15.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 23.00 cents and EPS of 45.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 51.4, implying annual growth of -4.3%. Current consensus DPS estimate is 26.7, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 23.7. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 32.00 cents and EPS of 64.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 65.9, implying annual growth of 28.2%. Current consensus DPS estimate is 33.4, implying a prospective dividend yield of 2.7%. Current consensus EPS estimate suggests the PER is 18.5. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates SGM as Buy (1) -
The company's trading update was upbeat. Recent positive trends for iron ore and coal prices are expected to lead to improved scrap exports over FY17.
The company is now expecting flat sequential EBIT in the first half, which UBS estimates at around $65m. The broker notes the typical seasonality in the second half, which provides potential upside to market estimates.
UBS continues to envisage value in Sims and retains a Buy rating. Target is raised to $12.35 from $10.80.
Target price is $12.35 Current Price is $10.90 Difference: $1.45
If SGM meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $10.33, suggesting downside of -15.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 27.00 cents and EPS of 55.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 51.4, implying annual growth of -4.3%. Current consensus DPS estimate is 26.7, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 23.7. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 36.00 cents and EPS of 72.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 65.9, implying annual growth of 28.2%. Current consensus DPS estimate is 33.4, implying a prospective dividend yield of 2.7%. Current consensus EPS estimate suggests the PER is 18.5. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates SWM as Hold (3) -
The company has pointed to a continuation of soft advertising market conditions, with TV bookings considered exceptionally short.
The company has implemented further cost-cutting measures and, taking this into account, now expects FY17 EBIT to be at the lower end of its previously guided range for a 15-20% decline.
Deutsche Bank revises forecasts to take into account the latest guidance. The broker now expects a decline in FY17 EBIT to $252m.
Hold rating retained. Target lowered to 85c from 90c.
Target price is $0.85 Current Price is $0.67 Difference: $0.18
If SWM meets the Deutsche Bank target it will return approximately 27% (excluding dividends, fees and charges).
Current consensus price target is $0.80, suggesting upside of 18.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 6.00 cents and EPS of 9.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 10.6, implying annual growth of -13.1%. Current consensus DPS estimate is 6.5, implying a prospective dividend yield of 9.6%. Current consensus EPS estimate suggests the PER is 6.4. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 6.00 cents and EPS of 9.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 9.6, implying annual growth of -9.4%. Current consensus DPS estimate is 6.3, implying a prospective dividend yield of 9.3%. Current consensus EPS estimate suggests the PER is 7.0. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates SWM as Neutral (3) -
The company is guiding to the bottom end of its FY17 EBIT range which implies a 15-20% decline on the prior year, and this signals TV revenue growth is weaker than expected.
UBS was already forecasting at the bottom end of guidance and, while cutting FY17 TV revenue growth assumptions, a commensurate reduction in TV costs leads to minimal changes to forecasts.
Neutral rating is maintained. Target is 75c.
Target price is $0.75 Current Price is $0.67 Difference: $0.08
If SWM meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $0.80, suggesting upside of 18.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 6.00 cents and EPS of 10.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 10.6, implying annual growth of -13.1%. Current consensus DPS estimate is 6.5, implying a prospective dividend yield of 9.6%. Current consensus EPS estimate suggests the PER is 6.4. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 5.00 cents and EPS of 9.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 9.6, implying annual growth of -9.4%. Current consensus DPS estimate is 6.3, implying a prospective dividend yield of 9.3%. Current consensus EPS estimate suggests the PER is 7.0. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates WEB as Outperform (1) -
The company's guidance confirms for Credit Suisse the strong transaction value growth across all channels. Moreover, the sale of the problematic Zuji business will concentrate the company on its verticals where it enjoys a competitive advantage.
The broker points to the fact that Zuji was the company's most volatile business, exposed to competitive forces which exceeded any operational improvements that were undertaken.
Credit Suisse makes modest upgrades to forecasts and retains an Outperform rating. Target rises to $10.90 from $10.40.
Target price is $10.90 Current Price is $9.75 Difference: $1.15
If WEB meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $10.40, suggesting upside of 1.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 21.95 cents and EPS of 39.84 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 42.4, implying annual growth of 55.0%. Current consensus DPS estimate is 19.4, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 24.3. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 27.96 cents and EPS of 48.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 47.6, implying annual growth of 12.3%. Current consensus DPS estimate is 24.5, implying a prospective dividend yield of 2.4%. Current consensus EPS estimate suggests the PER is 21.6. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates WEB as Equal-weight (3) -
Webjet has sold its Asian business, Zuji, less than four years after it was acquired, realising a US$26m profit. This was a strong commercial outcome in Morgan Stanley's opinion.
Yet the strategy is considered a massive about-face and raises questions for the broker, given the company is pursuing acquisitions to drive business-to-business growth.
The company has guided to $60m in EBITDA from ongoing business. Morgan Stanley expects the contribution from Thomas Cook to be slightly ahead of the Zuji Asian earnings, implying a slightly lower target for the remaining B2B.
Equal-weight retained. Industry view: In line. Target is $9.30.
Target price is $9.30 Current Price is $9.75 Difference: minus $0.45 (current price is over target).
If WEB 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 $10.40, suggesting upside of 1.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 20.00 cents and EPS of 39.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 42.4, implying annual growth of 55.0%. Current consensus DPS estimate is 19.4, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 24.3. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 23.90 cents and EPS of 44.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 47.6, implying annual growth of 12.3%. Current consensus DPS estimate is 24.5, implying a prospective dividend yield of 2.4%. Current consensus EPS estimate suggests the PER is 21.6. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates WEB as Accumulate (2) -
The company's update provides further evidence for Ord Minnett that business-to-consumer strength can be maintained and business-to-business will begin to enjoy earnings growth.
The divestment of Zuji For $56m is considered a positive. Since acquisition, Zuji has struggled to generate meaningful earnings as margins are challenged in a competitive market, the broker believes, and an exit of the business should divert management attention to more attractive earnings drivers.
Accumulate rating retained. Target lifts to $12.00 from $10.50.
Target price is $12.00 Current Price is $9.75 Difference: $2.25
If WEB meets the Ord Minnett target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $10.40, suggesting upside of 1.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 19.00 cents and EPS of 56.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 42.4, implying annual growth of 55.0%. Current consensus DPS estimate is 19.4, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 24.3. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 28.00 cents and EPS of 53.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 47.6, implying annual growth of 12.3%. Current consensus DPS estimate is 24.5, implying a prospective dividend yield of 2.4%. Current consensus EPS estimate suggests the PER is 21.6. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| AGL - | AGL ENERGY | Buy - Citi | Overnight Price $19.28 |
| ALL - | ARISTOCRAT LEISURE | Neutral - Credit Suisse | Overnight Price $14.30 |
| AMC - | AMCOR | Buy - Deutsche Bank | Overnight Price $14.33 |
| Outperform - Macquarie | Overnight Price $14.33 | ||
| APO - | APN OUTDOOR | Hold - Morgans | Overnight Price $5.18 |
| CPU - | COMPUTERSHARE | Buy - Citi | Overnight Price $10.23 |
| Outperform - Credit Suisse | Overnight Price $10.23 | ||
| Neutral - Macquarie | Overnight Price $10.23 | ||
| Add - Morgans | Overnight Price $10.23 | ||
| Hold - Ord Minnett | Overnight Price $10.23 | ||
| FMG - | FORTESCUE | Outperform - Macquarie | Overnight Price $5.43 |
| GNC - | GRAINCORP | Overweight - Morgan Stanley | Overnight Price $8.43 |
| JHX - | JAMES HARDIE | Upgrade to Buy from Neutral - Citi | Overnight Price $18.14 |
| MGX - | MOUNT GIBSON IRON | Outperform - Macquarie | Overnight Price $0.31 |
| MPL - | MEDIBANK PRIVATE | Neutral - Citi | Overnight Price $2.45 |
| Neutral - Credit Suisse | Overnight Price $2.45 | ||
| Outperform - Macquarie | Overnight Price $2.45 | ||
| Hold - Morgans | Overnight Price $2.45 | ||
| Accumulate - Ord Minnett | Overnight Price $2.45 | ||
| Neutral - UBS | Overnight Price $2.45 | ||
| NST - | NORTHERN STAR | Underperform - Credit Suisse | Overnight Price $4.64 |
| REA - | REA GROUP | Outperform - Macquarie | Overnight Price $51.79 |
| RWC - | RELIANCE WORLDWIDE | Hold - Deutsche Bank | Overnight Price $2.83 |
| S32 - | SOUTH32 | Outperform - Macquarie | Overnight Price $2.48 |
| SCG - | SCENTRE GROUP | Outperform - Credit Suisse | Overnight Price $4.27 |
| SGM - | SIMS METAL MANAGEMENT | Neutral - Credit Suisse | Overnight Price $10.90 |
| Hold - Deutsche Bank | Overnight Price $10.90 | ||
| Underperform - Macquarie | Overnight Price $10.90 | ||
| Buy - UBS | Overnight Price $10.90 | ||
| SWM - | SEVEN WEST MEDIA | Hold - Deutsche Bank | Overnight Price $0.67 |
| Neutral - UBS | Overnight Price $0.67 | ||
| WEB - | WEBJET | Outperform - Credit Suisse | Overnight Price $9.75 |
| Equal-weight - Morgan Stanley | Overnight Price $9.75 | ||
| Accumulate - Ord Minnett | Overnight Price $9.75 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 16 |
| 2. Accumulate | 2 |
| 3. Hold | 14 |
| 5. Sell | 2 |
Thursday 10 November 2016
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Disclaimer:
The content of this information does in no way reflect the opinions of
FNArena, or of its journalists. In fact we don't have any opinion about
the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe
and comment on. By doing so we believe we provide intelligent investors
with a valuable tool that helps them in making up their own minds, reading
market trends and getting a feel for what is happening beneath the surface.
This document is provided for informational purposes only. It does not
constitute an offer to sell or a solicitation to buy any security or other
financial instrument. FNArena employs very experienced journalists who
base their work on information believed to be reliable and accurate, though
no guarantee is given that the daily report is accurate or complete. Investors
should contact their personal adviser before making any investment decision.
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