Australian Broker Call

Macquarie rates AIA as Outperform (1) -

Macquarie observes the NZ$1.4bn equity raising from Auckland International Airport will assist with the company's circa -NZ$1.5bn p.a. capex commitments over the next two-to-three years.

The company will be able to retain its S&P A credit rating, the broker observes.

Macquarie lowers EPS forecasts for the equity dilution by -1% in FY25 and -4.5% in FY26 with an expectation FY25 net profit guidance range will be provided on Oct 17th at the shareholder's meeting.

Outperform rating with a NZ$9.30 target price.

Current Price is $6.79. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

This company reports in NZD. 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

Bell Potter rates BIO as Buy (1) -

Bell Potter observes the three-year strategic plan, named Vision 27 for Biome Australia, including a revenue target of $75-$85m.

Management is aiming to lift the share of the Australian distribution market to around 67% from 40%, and increase exposure in Europe, North America via supply chain efficiency gains.

Bell Potter makes no changes to earnings forecasts. The analyst believes the strategy is a positive for the company with management's scale of ambitions provided for investors.

The company's 1Q25 sales rose around 55% year-on-year, and are on track to meet the broker's FY25 estimate.

Unchanged Buy rating and 85c target.

Target price is $0.85 Current Price is $0.70 Difference: $0.15
If BIO meets the Bell Potter target it will return approximately 21% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Macquarie rates CPU as Outperform (1) -

Macquarie marks-to-market the repricing of futures markets for a decline in interest rates on Computershare, highlighting each 25bps of non-hedged margin income equals a circa 1.3% impact on the company's EPS.

Macquarie cuts EPS forecasts by -3.3% in FY25 and -2.3% in FY26.

Target price is revised to $28 from $29. Outperform rating unchanged.

Target price is $28.00 Current Price is $25.30 Difference: $2.7
If CPU meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $29.40, suggesting upside of 18.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

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

Market Sentiment: 0.8

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

Macquarie rates GNC as Outperform (1) -

Macquarie raises its FY25 EPS forecast by 20% reflecting expectations for a strong 2024/25 season with the harvest commencing in the northern regions of Australia in coming weeks.

De-risking earnings delivery, suggests the analyst, there were strong growing conditions over most of the season in Queensland and much of NSW offset by a dry Victoria.

For FY24, management guidance will likely be met, according to Macquarie, with grain export volumes in line with expectations though soft grain pricing and tepid crush margins may weigh.

Outperform rating retained. Target price rises to $10.07 from $9.65.

Target price is $10.07 Current Price is $9.15 Difference: $0.92
If GNC meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $9.91, suggesting upside of 8.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Citi rates GOZ as Buy (1) -

Growthpoint Properties Australia has announced a new partnership with nasdaq-listed TPG Inc involving six existing industrial assets currently owned by the REIT. The intention is to grow the partnership beyond this initial transaction.

Proceeds will be used for a 2.1cps special distribution and to reduce gearing to 38.7%, explains Citi. The transaction tilts exposure towards office and away from industrial by around 2% to 65.4%, highlight the analysts.

Utilising differentiated third-party capital to grow the platform is a positive step for Growthpoint's funds management strategy, in the broker's opinion.

The $2.60 target and Buy rating are maintained.

Target price is $2.60 Current Price is $2.70 Difference: minus $0.1 (current price is over target).
If GOZ meets the Citi target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.55, suggesting downside of -5.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.7

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

Macquarie rates IPH as Outperform (1) -

Macquarie highlights IPH's Australian filing volumes fell by -0.5% in September compared to the -1.1% overall market decline, while the company's market share of 32.4% rose from 30.4% at the end of June.

The broker anticipates headwinds that impacted IPH over the last 24 months will abate and to turn into tailwinds.

The Outperform rating and $7.31 target price are maintained.

Target price is $7.31 Current Price is $6.00 Difference: $1.31
If IPH meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $7.97, suggesting upside of 32.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Citi rates JHX as Neutral (3) -

Citi was already questioning the sequential volume growth required in winter for James Hardie Industries to meet expectations, before the potential delaying of permits, starts, and sales due to the impact of Hurricane Helene.

The broker believes at least between -15-25% of the company's end market may be impacted.

Neutral rating and $50.90 target price unchanged.

Target price is $50.90 Current Price is $56.42 Difference: minus $5.52 (current price is over target).
If JHX meets the Citi target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $56.98, suggesting upside of 2.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

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 JHX as Outperform (1) -

Macquarie keeps its Outperform rating for James Hardie Industries as market conditions should continue to trend up, even if slightly delayed due to election uncertainty.

The effect of interest rate reductions is not yet evident for the housing and repair and renovation (R&R) market, explains the analyst.

A sharp recent spike in gas prices causes the broker to implement an EPS forecast downgrade, but the target rises to $64.20 from $64.00 on a gradual roll-forward of the analyst's financial model.

Target price is $64.20 Current Price is $56.42 Difference: $7.78
If JHX meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $56.98, suggesting upside of 2.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

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

Shaw and Partners rates LM8 as Buy, High Risk (1) -

Shaw and Partners describes "phenomenal hits" by Lunnon Metals at the Lady Herial gold target at Kambalda, including the best result received so far of 23m at 16.61g/t gold at surface.

The prospect continues to deliver significant, near surface, high-grade intercepts from the current diamond and RC program, observes the broker.

The Buy, High Risk rating and 60c target are unchanged.

Target price is $0.60 Current Price is $0.23 Difference: $0.37
If LM8 meets the Shaw and Partners target it will return approximately 161% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

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

In a strategic move to streamline costs, NobleOak Life will essentially buy back trail commissions at less than 100 cents in the dollar while still providing access to 480,000 potential customers, explains Shaw and Partners.

The company has struck a conditional sale agreement with RevTech Media Pty Ltd.

Trail commissions are ongoing payments made to financial advisors for the duration of a policy.

Management revealed the acquisition will be value accretive, exceeding the company's investment hurdles, and generating free annual cash flow over an extended period as the portfolio eventually winds down.

Buy, High Risk rating retained. Target is steady at $2.85.

Target price is $2.85 Current Price is $1.64 Difference: $1.21
If NOL meets the Shaw and Partners target it will return approximately 74% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Macquarie rates QBE as Neutral (3) -

Macquarie forecasts FY24 gross written premium growth of 3.3% for QBE Insurance with a circa 10bps forex tailwind which sits just above guidance.

Macquarie lowers EPS forecasts by -2.4% for FY25 and -6.2% in FY26 with a lift in the target price to $17.10 from $16.90 due to changes in the discounted cashflow model.

Earnings forecast changes follow an update market-to-market on investment income and forex on the company's global portfolio, the analyst highlights.

Neutral rating unchanged with the stock trading around a 6.3% premium to international peers on a weighted basis.

Target price is $17.10 Current Price is $16.28 Difference: $0.82
If QBE meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $18.81, suggesting upside of 14.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.7

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

Citi rates REA as Buy (1) -

Putting in place a short-term upside call, Citi anticipates REA Group will provide a positive 1Q trading update in early-November underpinned by the core Residential business.

The analysts suggest shareholders are probably relieved management has finished the pursuit of Rightmove in the UK.

Anticipating a net cash position once the proceeds from the PropertyGuru sale come in, the broker sees potential for a special dividend in FY25.

Buy rated with a $230 target unchanged.

Target price is $230.00 Current Price is $210.80 Difference: $19.2
If REA meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $224.31, suggesting upside of 6.9% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.7

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

Ord Minnett rates REA as Hold (3) -

Following the end of the takeover attempt on Rightmove in the UK, Ord Minnett highlights REA Group still has ample growth potential in its underlying business, and possibly in the Indian market.

Management is unlikely to make a hostile offer, suggests the analyst, given the 90% threshold required to gain complete control of Rightmove.

Noting August listings are tracking in line with expectations, and likely above in the prime Sydney and Melbourne markets, the broker's target price for the group is increased to $225 from $200. Hold.

Target price is $225.00 Current Price is $210.80 Difference: $14.2
If REA meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $224.31, suggesting upside of 6.9% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.7

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

Citi rates RMD as Neutral (3) -

ResMed provided a five-year financial outlook at its investor day noting ongoing operating leverage will result in EPS growth greater than
revenue growth, with numbers slightly ahead of consensus forecasts, notes Citi.

While lacking details, observe the analysts, management highlighted a pivot to “Overall Sleep Health” from “Sleep Apnea” as insomnia opens a new potential target market.

Back in 2022, points out the broker, ResMed acquired Germany-based Mementor, which offers a reimbursed prescription app that uses cognitive behavioural therapy to help treat insomnia.

The Neutral rating and $34 target are unchanged. 

Target price is $34.00 Current Price is $35.51 Difference: minus $1.51 (current price is over target).
If RMD meets the Citi target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $35.78, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

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 SGR as Neutral (3) -

Star Entertainment is facing ongoing earnings challenges, according to Macquarie, despite the FY24 results coming in line with the broker's expectations. 

The analyst highlights the first two months of trading in FY25 are challenged by rising costs and slowing revenues, with a $360m equity injection into Queen's Wharf Brisbane expected by management in FY25-FY27.

The sale of non-core assets, generating $300m is viewed positively by the broker, while the outcome of the Bell Two report remains an overhang to the NSW's licence.

Macquarie cuts EBITDA forecasts by -52% in FY25 and -8% in FY26 which includes -$200m in cost outs over the two-year period and "mandatory card play impacts" in NSW over FY25 and Queensland in FY26.

Neutral rating with a 24c target price.

Target price is $0.24 Current Price is $0.28 Difference: minus $0.035 (current price is over target).
If SGR meets the Macquarie target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.39, suggesting upside of 37.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

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

Southern Cross Gold's operational report at Golden Dyke confirmed the third high-grade mineralised domain at Sunday Creek joining the Rising Sun and Apollo deposits, observes Shaw and Partners.

Drilling at Rising Sun also extended high grade mineralisation with notable intercepts, highlights the broker.

Recent drilling has identified significant mineralisation outside of management's existing Exploration Target (ET). Shaw now believes the company is on track to achieve the goal of doubling the ET to 3Moz gold equivalent.

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

Target price is $3.26 Current Price is $3.00 Difference: $0.26
If SXG meets the Shaw and Partners target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Bell Potter rates WTC as Hold (3) -

Bell Potter considers the FY24 August results and last month's acquisition by DSV of Schenker. DSV is a global rollout customer of WiseTech Global the broker notes.

The analyst makes no changes to FY25 estimates which are in line with management's guidance. FY26 EPS is lifted 1% with a slight rise in revenue forecasts.

Target price is raised to $132.50 from $115 due to an upgrade in valuation targets. The stock is Hold rated due to the current valuation, although the broker remains positive on the longer-term outlook for WiseTech Global.

Target price is $132.50 Current Price is $137.46 Difference: minus $4.96 (current price is over target).
If WTC meets the Bell Potter target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $115.10, suggesting downside of -14.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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