Australian Broker Call

Morgans rates AMC as Hold (3) -

Morgans continues to believe the company is a high-quality, defensive business with leading market positions globally. The broker expects FY19 earnings (EBIT) to be up 3% when Amcor reports on August 21.

Market factors appear to be moving in the company's favour although there are risks remaining around the integration of Bemis. Hold maintained. Target reduced to $15.45 from $15.55.

Target price is $15.45 Current Price is $15.24 Difference: $0.21
If AMC meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $16.48, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Ord Minnett rates ANN as Hold (3) -

Ord Minnett remains cautious heading into the FY19 result, due on August 12. The broker expects an underlying net profit of US$147m. Lower latex cost should be a tailwind, although the benefit is expected to dissipate in FY20.

The broker is concerned that the outlook will be tempered by softening global demand. Hold rating and $26 target maintained.

Target price is $26.00 Current Price is $25.70 Difference: $0.3
If ANN meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $27.56, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Morgan Stanley rates BEN as Underweight (5) -

The bank faces earnings downgrades from lower interest rates. Morgan Stanley believes the impact on Bendigo and Adelaide Bank will be faster than at its mid-tier rival Bank of Queensland ((BOQ)), as it faces more deposit pricing pressure.

Both face risks to the dividend in the next 12 months, in the broker's view. Underweight maintained. Industry view: In-Line. Target is reduced to $10.10 from $10.20.

Target price is $10.10 Current Price is $10.72 Difference: minus $0.62 (current price is over target).
If BEN meets the Morgan Stanley target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.78, suggesting downside of -8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -1.0

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

Morgan Stanley rates BOQ as Underweight (5) -

Morgan Stanley expects there will be ongoing challenges for the retail bank because of weak mortgage loan growth, downward pressure on margins and the need for significant investment.

While management has lowered the risk profile and is pursuing niche growth options the broker believes there is a risk to dividends if profitability continues to fall.

Underweight rating retained. Industry view is In-Line. Price target is reduced to $8.40 from $8.70.

Target price is $8.40 Current Price is $8.84 Difference: minus $0.44 (current price is over target).
If BOQ 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 $8.80, suggesting downside of -0.5% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.6

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

Macquarie rates CIA as Outperform (1) -

The company has completed its feasibility study for the phase II expansion at Bloom Lake. Champion Iron will purchase, via subsidiary Quebec Iron Ore, the remaining 36.7% of the mine for CAD211m.

Macquarie expects buoyant iron ore prices to drive upgrade momentum and increases estimates for earnings per share by 80% for FY20.

Outperform rating and $4.30 target maintained.

Target price is $4.30 Current Price is $2.58 Difference: $1.72
If CIA meets the Macquarie target it will return approximately 67% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

This company reports in CAD. 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 CRN as Outperform (1) -

Credit Suisse suspects the subdued reaction to the larger-than-expected distribution in the first half likely reflected broader sentiment and softening coal prices. The broker notes there is a commitment to release 11% of the stock from voluntary escrow six months early.

While selling down the stake remains an option versus a commitment, the broker suggests this signals the major owners are keen to alleviate the liquidity headwinds that have capped the share price.

Credit Suisse maintains an Outperform rating but suspects the coal price and macro sentiment are overshadowing company specific factors. Target is reduced to $4.60 from $4.80.

Target price is $4.60 Current Price is $3.12 Difference: $1.48
If CRN meets the Credit Suisse target it will return approximately 47% (excluding dividends, fees and charges).

Current consensus price target is $4.18, suggesting upside of 34.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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 CRN as Add (1) -

First half distributions were better than Morgans expected but any upside in terms of dividend policy now looks limited. The broker tempers 2019-20 forecasts because of softer coal prices.

The company has pointed to a mixed market, particularly in China, suggesting it is too soon to know if notional import controls will affect pricing and product mix in other jurisdictions.

Morgans is positive about the stock for the longer term but believes the lack of clarity currently in metallurgical coal markets may weigh on the share price. Add maintained. Target is reduced to $3.94 from $4.00.

Target price is $3.94 Current Price is $3.12 Difference: $0.82
If CRN meets the Morgans target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $4.18, suggesting upside of 34.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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 GNC as Hold (3) -

The company has provided weaker FY19 guidance and expects to report an underlying net loss of $70-90m. Morgans is disappointed and concerned about the trading and risk management policies.

However, the broker acknowledges the anti-dumping investigation is out of the company's control. Challenging seasons are expected in FY20.

The ACCC has announced preliminary concerns about the sale of the bulk liquid terminals. The de-merger timetable is now pushed out to the first quarter of 2020.

Morgans maintains a Hold rating and raises the target to $8.25 from $8.04.

Target price is $8.25 Current Price is $7.56 Difference: $0.69
If GNC meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $8.95, suggesting upside of 18.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Macquarie rates GOR as Neutral (3) -

Macquarie recently visited the Gruyere gold project. Guidance of 75-100,000 ozs is maintained, with commissioning of the ball mill the key. The mill is going through final stages of alignment.

Macquarie expects full capacity will be reached in the first quarter of 2020. Neutral rating and $1.40 target maintained.

Target price is $1.40 Current Price is $1.40 Difference: $0
If GOR meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Macquarie rates IGO as Outperform (1) -

Macquarie is more convinced after a site tour that Nova is a world-class nickel asset while Tropicana remains a significant gold producer. Grade control drilling has been completed at Nova and capital expenditure is expected to remain at low levels.

Production at the upper end of guidance is forecast for FY20. Macquarie maintains an Outperform rating and $5.90 target. Independence Group is expected to report its results on August 29.

Target price is $5.90 Current Price is $5.15 Difference: $0.75
If IGO meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $5.03, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Macquarie rates KLL as No Rating (-1) -

The company has reported that Beyondie sulphate of potash project is now fully funded as the capital raising is being finalised. Early works are underway with a final investment decision expected shortly.

Macquarie is restricted on rating and target at present.

Current Price is $0.51. Target price not assessed.

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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 observes the company's strategy briefing has focused on presenting Pogo as the best asset in the portfolio, with material resource growth available.

The broker notes, however, managing the business to a $1000/oz all-in sustainable cost (AISC) rate was not re-stated. The stated aim is now a 50% AISC margin and sustaining peer-leading returns.

Underperform rating and $6.30 target maintained.

Target price is $6.30 Current Price is $12.69 Difference: minus $6.39 (current price is over target).
If NST meets the Credit Suisse target it will return approximately minus 50% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.85, suggesting downside of -30.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.7

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

Morgan Stanley rates OSH as Overweight (1) -

Oil Search has indicated that the PNG cabinet has agreed in principle to stand behind the Papua LNG gas agreement. Morgan Stanley welcomes the news as this underpins the reason the stock was recently upgraded to Overweight.

The government has indicated it will reserve its right to discuss a short list of matters with developers. The broker assumes no substantial changes and a conclusion is expected in around two weeks. Target is $8.00. Industry view is In-Line.

Target price is $8.00 Current Price is $6.90 Difference: $1.1
If OSH meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $8.13, suggesting upside of 17.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

This company reports in USD. 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

Morgans rates PGH as Hold (3) -

Morgans expects operating earnings (EBITDA) in FY19 to be down -3% and at the low end of management's guidance. The company will report its results on August 14.

Morgans maintains a Hold rating and raises the target to $2.85 from $2.62.

Target price is $2.85 Current Price is $2.61 Difference: $0.24
If PGH meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.10, suggesting upside of 18.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

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

Morgan Stanley believes the investments business needs to be realigned, noting the CEO has flagged M&A as an option. The broker considers the transformation is priced into the stock.

The company is also open to exploring new listed distribution channels and Morgan Stanley welcomes this, suggesting a change is needed given the higher-margin retail and intermediary channels produced a combined outflow of -$1.2bn in the June half.

Equal-weight rating. Target is lowered to $35.60 from $38.00. Industry view: In-line.

Target price is $35.60 Current Price is $36.53 Difference: minus $0.93 (current price is over target).
If PPT meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $38.39, suggesting upside of 5.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Morgan Stanley rates PTM as Underweight (5) -

Morgan Stanley considers the stock too expensive and expects outflows to accelerate in the first half. While management is trying to diversify the business the broker suspects a turnaround will take time.

Underweight rating maintained. In-Line industry view. Target is raised to $3.50 from $3.40. Estimates for FY20 earnings per share are increased by 7% to take into account stronger equity markets. Outflow forecasts, however, are increased by 3-4% for FY20 and FY21.

Target price is $3.50 Current Price is $4.39 Difference: minus $0.89 (current price is over target).
If PTM meets the Morgan Stanley target it will return approximately minus 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.35, suggesting downside of -0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

Morgan Stanley rates RWC as Downgrade to Equal-weight from Overweight (3) -

Morgan Stanley suspects the outlook has deteriorated since the company downgraded its FY19 guidance in May. Headwinds ensue from Brexit, US tariffs and weak Australian housing construction.

Envisaging that commentary at the results may be disappointing, Morgan Stanley downgrades to Equal-weight from Overweight. Increased tariffs on goods from China are likely to place further pressure on the company's US margins in FY20.

The broker also suspects the risks are to the downside for underlying economic activity in the UK and ultimately to margins for the John Guest operations. Target is reduced to $3.75 from $5.00. Industry view is Cautious.

Target price is $3.75 Current Price is $3.24 Difference: $0.51
If RWC meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $4.43, suggesting upside of 36.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Macquarie rates SAR as Neutral (3) -

After a site visit, Macquarie highlights the measured pace of development at the Thunderbox underground mine. Saracen Mineral's outlook for the next seven years is now completely supported by reserves.

However, as with many of its peers, Macquarie assesses the share price is ahead of fundamental valuation. Neutral rating maintained. Target is reduced to $3.30 from $3.50.

Target price is $3.30 Current Price is $4.45 Difference: minus $1.15 (current price is over target).
If SAR meets the Macquarie target it will return approximately minus 26% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.5

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

Ord Minnett rates TAH as Lighten (4) -

Ord Minnett expects a deterioration in wagering will continue until at least 2021 when UBET is expected to cease being dilutive.

Wagering and media operating earnings (EBITDA) are forecast at $439.3m, down -2.8%. Lotteries and Keno operating earnings are forecast at $481.7m, up 22%.

The company will report its FY19 result on August 14. Ord Minnett maintains a Lighten rating and $4.10 target.

Target price is $4.10 Current Price is $4.29 Difference: minus $0.19 (current price is over target).
If TAH meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.01, suggesting upside of 16.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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