Australian Broker Call

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

Morgan Stanley is unsettled by the significant leadership uncertainty for Bank of Queensland resulting from the sudden departure of CEO George Frazis, at a time of complex, multi-year strategic transformation.

The broker hopes for further explanation for the departure at next week's AGM, and in the meantime lowers its target to $7.40 from $8.30, while retaining an Equal-weight rating. Industry view: In-Line.

Target price is $7.40 Current Price is $7.18 Difference: $0.22
If BOQ meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $7.86, suggesting upside of 9.4% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

UBS rates CGC as Neutral (3) -

UBS' Food & Beverage data review weekly prices from Australian Supermarkets focussing specifically on dairy, meat and
fruit & vegetable products, and prices on average increased by 9% through October.

This data, combined with positive recent commentary by management at Costa Group, leads the broker to raise its target to $2.75 from $2.20. The company pointed to an easing in labour and supply chain challenges and a positive upcoming China berry season.

The Neutral rating is maintained.

Target price is $2.75 Current Price is $2.64 Difference: $0.11
If CGC meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $2.72, suggesting upside of 2.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Morgans rates CHL as Add (1) -

Following approval from its extraordinary general meeting, Camplify Holdings has entered into an agreement to acquire 100% of Berlin based Paul Camper for EUR30.9m, and has subsequently announced an $8.5m equity raise. 

Morgans highlights the acquisition is not only the leading peer-to-peer RV marketplace in Germany, with 92% market share, but a presence in the Netherlands, Austria and the UK, and provides a platform for Camplify Holdings to expand in Europe.

The broker finds the purchase to offer prodigious offshore opportunity for Camplify Holdings.

The Add rating is retained and the target price decreases to $2.60 from $3.70 on dilution.

Target price is $2.60 Current Price is $1.99 Difference: $0.61
If CHL meets the Morgans target it will return approximately 31% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Macquarie rates DMP as Downgrade to Underperform from Neutral (5) -

Collins Food's ((CKF)) December-half result revealed continued rising costs for restaurant operators and Macquarie observes menu price rises are not outpacing cost inflation.

While the broker observes Domino's Pizza Enterprises with its franchise model is better positioned to manage inflation, falling franchisee profitability will affect store expansions, one of the company's main profit drivers.

EPS forecasts are cut -9% for FY23; -3% for FY24; and -3% for FY25.

Rating downgraded to Underperform from Neutral. Target price falls to $60 from $61.90.

Target price is $60.00 Current Price is $66.38 Difference: minus $6.38 (current price is over target).
If DMP meets the Macquarie target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $75.23, suggesting upside of 13.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

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

A trading update from Healius for the four months to October 31 revealed to Morgan Stanley cost pressures have risen more materially than anticipated. An earnings (EBITA) margin of 20.1% compared unfavourably to the around 25% expected by the broker and consensus.

Both the cost pressures and declining PCR testing weighed, and the analyst is now skeptical that earnings targets in the Sustainable Investment program can be achieved, given the size of the margin miss.

The target falls to $3.00 from $3.90. Equal-weight. Industry view In-Line.

Target price is $3.00 Current Price is $2.91 Difference: $0.09
If HLS meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $3.48, suggesting upside of 18.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

UBS rates ING as Neutral (3) -

UBS' Food & Beverage data review weekly prices from Australian Supermarkets focussing specifically on dairy, meat and
fruit & vegetable products, and prices on average increased by 9% through October.

This data, combined with a relatively positive recent AGM trading update, leads the broker to increase its target price for Inghams Group to $3.00 from $2.90. The Neutral rating is maintained.

The analyst points out an earnings recovery stems largely from the normalisation of operational disruptions and product range availability, along with significant price increases.

Target price is $3.00 Current Price is $2.82 Difference: $0.18
If ING meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $2.85, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Credit Suisse rates LNK as Neutral (3) -

Link Administration's management reiterated guidance at its AGM trading update, outpacing consensus forecasts by 2% at the low end, thanks to improved margin income, notes Credit Suisse.

The company also issued maiden December-half guidance in line with forecasts.

Corporate markets and Fund Solutions proved a drag. EPS forecasts are trimmed.

Neutral rating retained with much depending on asset sales. Target price is steady at $3.50.

Target price is $3.50 Current Price is $3.54 Difference: minus $0.04 (current price is over target).
If LNK meets the Credit Suisse target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.83, suggesting upside of 8.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Ord Minnett rates LNK as Accumulate (2) -

Link Administration has retained guidance and reiterated it is progressing with the divestment of its PEXA Group ((PXA)) stake, but Ord Minnett notes the company provided no update on its offer from Dye & Durham or on negotiations with UK regulators.

Performance was in line with expectations in the first four months of the year according to management. Ord Minnett has adjusted its forecasts to account for the sale of the company's PEXA Group stake. 

The Accumulate rating and target price of $4.20 are retained.

Target price is $4.20 Current Price is $3.54 Difference: $0.66
If LNK meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $3.83, suggesting upside of 8.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

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

Morgan Stanley upgrades its target to $2.00 from $1.20 after Nitro Software entered into a binding Implementation Deed with Alludo on November 15 at $2.00 cash/share.

There is an implied probability of a higher bid, notes the analyst, given shares are currently trading above $2.00.

The Equal-weight rating is maintained. Industry View: In-Line.

Target price is $2.00 Current Price is $2.12 Difference: minus $0.12 (current price is over target).
If NTO meets the Morgan Stanley target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.0

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

Morgan Stanley rates RIO as Overweight (1) -

While Rio Tinto's 2023 guidance was mildly weaker than Morgan Stanley had forecast, lower capex provides a free cash flow offset.

At its investor day, Rio announced some new investments for its Pilbara renewables project. The company's medium-term decarbonisation target were also reaffirmed.

The goal at the Pilbara operations is to develop 1GW of renewable energy. To that end, Rio announced US$600m of spending to construct solar facilities and battery storage.

The Overweight rating and target price of $121.00 are retained. Industry View: Attractive.

Target price is $121.00 Current Price is $109.62 Difference: $11.38
If RIO meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $104.43, suggesting downside of -4.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.6

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

Ord Minnett rates RIO as Hold (3) -

Despite a 43m tonne per annum ramp up at its Gudai-Darri asset, Rio Tinto anticipates iron ore shipments in 2023 will be flat year-on-year. The company also trimmed capital expenditure expectations by -US$1bn to US$8-9bn, largely on deferred growth expenditure.

Ord Minnett doesn't find the update material to its investment view on the company. The broker anticipates some conservatism in guidance given Rio Tinto has downgraded seven of the last eight years. 

The Hold rating and target price of $93.00 are retained.

Target price is $93.00 Current Price is $109.62 Difference: minus $16.62 (current price is over target).
If RIO meets the Ord Minnett target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $104.43, suggesting downside of -4.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.6

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

Credit Suisse rates TPW as Neutral (3) -

Temple & Webster's trading update for July through to November 27 disappointed Credit Suisse.

While sales improved through a mix-shift to furniture, and web traffic improved  slightly, it was not enough to convince the broker of the company's prospects in an increasingly volatile market.

Add to that a rise in the broker's depreciation assumptions, and EPS forecasts are cut -19.1% in FY23; -11.4% in FY24; and -9.5% in FY25.

Neutral rating retained, reflecting the company's long-term prospects, strong operating margins, profitability and net cash. Target price falls to $5.03 from $5.24.

Target price is $5.03 Current Price is $5.27 Difference: minus $0.24 (current price is over target).
If TPW meets the Credit Suisse target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.37, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Morgan Stanley rates TPW as Overweight (1) -

A trading update by Temple & Webster for July 1 to November 27 was in line with Morgan Stanley's forecast and little change to consensus estimates is expected.

While the analyst acknowledges macroeconomic conditions are set to tighten, the balance sheet allows capacity for organic growth and/or M&A activity.

The Overweight rating and target price of $7.00 are retained. Industry view: In-Line.

Target price is $7.00 Current Price is $5.27 Difference: $1.73
If TPW meets the Morgan Stanley target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $5.37, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

UBS rates TPW as Neutral (3) -

From a trading update by Temple & Webster, UBS notices improving year-on-year revenue trends through the 1H, with the 2Q-to-date only down by -3%.

Management expects a return to double-digit growth in the 2H and reiterated FY23 earnings margin guidance.

Temple & Webster remains the broker's preferred e-commerce pick under research coverage. The Neutral rating and $5.40 target are unchanged.

Target price is $5.40 Current Price is $5.27 Difference: $0.13
If TPW meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $5.37, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

UBS rates WDS as Neutral (3) -

Woodside Energy's FY23 capex and production guidance missed consensus forecasts.

The production guidance fell -15% short of the forecast by UBS due to delays to growth projects (Senegal and Mad Dog Phase 2) and a major (planned) shutdown at Pluto LNG.

Cuts to the broker's near-term EPS forecasts are largely offset by greater expected production at Mad Dog, based on UBS's new East
coast gas price outlook. The target falls to $34 from $34.40. Neutral.

Target price is $34.00 Current Price is $37.29 Difference: minus $3.29 (current price is over target).
If WDS meets the UBS target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $37.39, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.4

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

Citi rates XRO as Buy (1) -

Xero's competitor Intuit has reported strength in its North American operations and weakness in Australia, in an inversion of Xero's results, which Citi expects likely reflects the strength of both players in these regions. 

While Intuit did implement price increases in North America, growth was driven by customer growth. Citi highlights this compares to a -35% year-on-year net add decline.

The broker considers Intuit's results a positive read-through for Xero, with digitisation appearing a key driver. The Buy rating and target price of $97.90 are retained.

Target price is $97.90 Current Price is $70.64 Difference: $27.26
If XRO meets the Citi target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $83.76, suggesting upside of 11.6% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.6

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