Australian Broker Call

Morgan Stanley rates ABC as Downgrade to Underweight from Overweight (5) -

Despite the loss of the Alcoa lime supply contract, Adbri's share price recovered after the initial significant fall and ended off just 4% across the year.

Morgan Stanley sees the valuation as relatively fully priced especially given the relatively modest earnings growth. This prompts the broker to downgrade its rating to Underweight given better upside elsewhere in the sector.

Rating is downgraded to Underweight from Overweight. Target falls to $3.30 from $3.60. Industry view: Cautious.

Target price is $3.30 Current Price is $3.26 Difference: $0.04
If ABC meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $2.97, suggesting downside of -4.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.4

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

Morgan Stanley rates AD8 as Overweight (1) -

Audinate Group has guided to first-half revenues of US$11.1m with the second-quarter revenue at US$5.9m likely to be the highest so far in the group's history. Morgan Stanley highlights all this was achieved even with the live sound segment facing material headwinds.

Post the update, the broker expects USD revenues of the group to rise by 2-7% over FY21-23. Believing the growth story is far from over, Morgan Stanley continues to back the group which is also on the verge of accelerating video adoption. 

The rating is Overweight with the target price rising to $9 from $7.50. Industry view: In-line.

Target price is $9.00 Current Price is $7.84 Difference: $1.16
If AD8 meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $8.33, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

UBS rates AD8 as Buy (1) -

Following a stronger than anticipated recovery in business, Audinate Group reported first-half revenue (unaudited) growth of 19% over the previous half. UBS deems the result strong especially against the backdrop of a challenging macro environment.

Even while expecting fx-related headwinds, UBS believes the underlying trend of a stronger-than-expected recovery will outweigh the headwinds. 

The Buy rating is unchanged with a target price of $8.

Target price is $8.00 Current Price is $7.84 Difference: $0.16
If AD8 meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $8.33, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Macquarie rates AGL as Underperform (5) -

Consider today's update a rather late response to AGL Energy's profit warning delivered in December. Clearly, the analyst was already on holidays, one has to assume.

Anyway, AGL Energy has indicated FY21 shall be weaker than previously anticipated, and FY22 is looking to deliver even more weakness.

Macquarie adds an unfavourable ESG profile due to coal-based power production and finds there is no compelling investment case in AGL Energy.

Estimates have been reduced. Target price has crept up to $11.63 from $11.43. Underperform.

Target price is $11.63 Current Price is $12.07 Difference: minus $0.44 (current price is over target).
If AGL meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.76, suggesting upside of 4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.5

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

Ord Minnett rates ALL as Accumulate (2) -

Ord Minnett has conducted additional analysis on the basis of download data on iPhone devices and on this basis reduced forecasts for Aristocrat Leisure. The data suggest a -20% reduction in downloads in H1 FY21 in comparison with a year ago.

Another negative factor is the stronger AUD with the analysts lifting their AUDUSD forecast to 0.74 from 0.67.

A recovery in landbased machines in addition to emerging opportunity in iGaming are providing offset and keeping the broker's view overall in positive territory.

Target price declines to $36.90 from $38.60. Accumulate rating retained.

Target price is $36.90 Current Price is $31.42 Difference: $5.48
If ALL meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $36.17, suggesting upside of 16.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Citi rates ALU as Neutral (3) -

A trading update indicates to Citi the worst could be behind Altium as revenue growth is expected to accelerate over the course of 2021 due to the vaccine rollout.

The broker highlights the first half was negatively impacted by discounting and covid-19, but the trend is improving. It's considered recent pricing changes, a weaker US dollar and an improving demand environment should support the second half results.

Citi lowers the target price to $32.20 from $36.50 and maintains the Neutral rating.

Target price is $32.20 Current Price is $28.26 Difference: $3.94
If ALU meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $34.23, suggesting upside of 20.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Credit Suisse rates ANZ as Outperform (1) -

Following APRA removing guidance for banks to retain at least half of their earnings, Credit Suisse increases forecast payout ratios to 60% in FY21 (previously 50%) and continues to forecast a 65% payout ratio in FY22 and FY23.

The broker believes that as the year progresses the market will begin to factor in a dividend and earnings recovery before eyeing the potential for capital management in FY22.

With valuations still below pre-covid levels the analyst sees further upside to bank share prices and the broker maintains a positive stance on the sector.

ANZ Bank is Credit Suisse's preferred exposure of the main banks and the broker lifts the target price to $28 from $26.20, while maintaining an Outperform rating.

Target price is $28.00 Current Price is $24.16 Difference: $3.84
If ANZ meets the Credit Suisse target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $24.40, suggesting downside of -0.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Morgan Stanley rates APT as Overweight (1) -

With Afterpay app downloads surging in both the US and the UK, Morgan Stanley expects active customers to reach 13.6m in the first half. This prompts the broker to increase its revenue forecast for the first half by circa 2% even as the company faces currency headwinds.

With the company foraying into new markets as well as higher usage in its existing markets, the broker thinks Afterpay is well on its way to deliver a three year compounded annual growth of more than 60%.

Backed by a stronger outlook in FY22, the target rises to $136 from $120. Overweight maintained. Industry view: In-line.

Target price is $136.00 Current Price is $110.26 Difference: $25.74
If APT meets the Morgan Stanley target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $103.11, suggesting downside of -14.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgan Stanley rates BLD as Upgrade to Overweight from Equal-weight (1) -

Morgan Stanley believes housing momentum is expected to continue into 2021 in the key markets led by affordability, stimulus, changing consumer preferences and a low rate environment continue.

The broker expects infrastructure-focused stimulus to contribute in Australia and gather momentum in the US. As a result, Morgan Stanley retains a preference for Boral given end market momentum, asset sale potential and likely cost out.

Rating upgraded to Overweight from Equal-weight rating. Target rises to $5.80 from $4.80. Industry view is Cautious.

Target price is $5.80 Current Price is $4.94 Difference: $0.86
If BLD meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $5.24, suggesting upside of 5.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Macquarie rates BSL as Outperform (1) -

As fundamentals for steel markets remain strong, Macquarie has increased forecasts for BlueScope Steel which results in its price target lifting to $21.20 from $20.25.

The broker concedes it is not easy to predict how long current positive momentum might last, but seeks solace in the fact market expectations are still relatively low, implying further positive surprise can lead to ongoing strong uplifts to forecasts and valuations.

Outperform rating retained for BlueScope Steel.

Target price is $21.20 Current Price is $18.12 Difference: $3.08
If BSL meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $19.78, suggesting upside of 11.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

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

Morgan Stanley sees support for steel markets in the short term but expects this to moderate in the medium term.

BlueScope Steel seems to be benefitting from strong steel spreads in the US with spreads also improving in Asia and Australia. While positive, the broker feels this is unlikely to persist over the long term and would prefer an entry point at a different stage in the cycle.

Equal-weight. Target is raised to $21 from $18.50. Industry view: Cautious.

Target price is $21.00 Current Price is $18.12 Difference: $2.88
If BSL meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $19.78, suggesting upside of 11.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Credit Suisse rates CBA as Neutral (3) -

Following APRA removing guidance for banks to retain at least half of their earnings, Credit Suisse increases forecast payout ratios to 60% in FY21 (previously 50%) and continues to forecast a 65% payout ratio in FY22 and FY23.

The broker believes that as the year progresses the market will begin to factor in a dividend and earnings recovery before eyeing the potential for capital management in FY22.

With valuations still below pre-covid levels the analyst sees further upside to bank share prices and maintains a positive stance on the sector.

Credit Suisse raises the target price for Commonwealth Bank to $82 from $74.8 and maintains a Neutral rating.

Target price is $82.00 Current Price is $85.97 Difference: minus $3.97 (current price is over target).
If CBA 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 $73.67, suggesting downside of -14.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.4

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

Macquarie rates CHN as Outperform (1) -

Macquarie’s Commodities Strategy team has upgraded its short term nickel price forecasts by 7-8%, medium-term by 10-13% and long-term by 3%.

As one would expect, these changes translate to material earnings estimates upgrades for Australian nickel miners. Western Areas and Nickel Mines remain the broker's preferred pure play producers.

Outperform rating retained for Chalice Gold Mines. Price target gained 10c to $5.40.

Target price is $5.40 Current Price is $4.13 Difference: $1.27
If CHN meets the Macquarie target it will return approximately 31% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates CLQ as No Rating (-1) -

Macquarie’s Commodities Strategy team has upgraded its short term nickel price forecasts by 7-8%, medium-term by 10-13% and long-term by 3%.

As one would expect, these changes translate to material earnings estimates upgrades for Australian nickel miners. Western Areas and Nickel Mines remain the broker's preferred pure play producers.

Macquarie is currently under research restriction on Clean Teq Holdings.

Current Price is $0.32. Target price not assessed.

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Citi rates DBI as No Rating (-1) -

Citi initiates coverage of Dalrymple Bay Infrastructure with a Buy rating and a target price of $2.42 and alerts investors to the around 8% dividend yield and attractive valuation.

The broker explains the Dalrymple Bay Port is a regulated asset with a high degree of cash flow certainty given take-or-pay contracts,
socialisation of default risk and pass-through of operational costs.

Dalrymple Bay’s current gearing is regarded by Citi as relatively high, but the broker believes management will likely prioritise its dividend
and avoid raising equity.

The analyst understands caution on coal in the current environment, but believes met coal trade flows are more likely to adjust then be displaced.

Target price is $2.42

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Morgan Stanley rates FBU as Overweight (1) -

Morgan Stanley believes housing momentum is expected to continue into 2021 in the key markets led by affordability, stimulus, changing consumer preferences and a low rate environment continue.

The broker expects infrastructure-focused stimulus to contribute in Australia and gather momentum in the US. As a result, Morgan Stanley likes Fletcher Building on valuation and earnings upside risk.

Overweight rating reiterated. Target rises to NZ$7 from NZ$6.90. Industry view is Cautious.

Overweight rating and NZ$6.30 target. Industry view is Cautious.

Current Price is $5.57. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

This company reports in NZD. 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

Macquarie rates FCL as Outperform (1) -

Macquarie has reviewed insurance industry dynamics and concluded the sector knows full well they will migrate to the cloud, but they simply may not be ready to do so as yet.

Fineos should benefit from this trend, say the analysts. They believe the key risk comes in the form of timing of new contract announcements.

Outperform rating retained alongside a price target of $5.22.

Target price is $5.22 Current Price is $3.83 Difference: $1.39
If FCL meets the Macquarie target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $4.86, suggesting upside of 24.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.9

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

Macquarie rates IGO as No Rating (-1) -

Macquarie’s Commodities Strategy team has upgraded its short term nickel price forecasts by 7-8%, medium-term by 10-13% and long-term by 3%.

As one would expect, these changes translate to material earnings estimates upgrades for Australian nickel miners. Western Areas and Nickel Mines remain the broker's preferred pure play producers.

Macquarie is under research restriction for IGO.

Current Price is $7.10. Target price not assessed.

Current consensus price target is $5.32, suggesting downside of -25.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Morgan Stanley rates IPL as Upgrade to Overweight from Equal-weight (1) -

It looks like Morgan Stanley's wait for a catalyst for Incitec Pivot is finally over with the broker noting an improvement in all commodities for the company. 

Fertiliser prices are expected to strengthen during FY21-22 and the broker sees Incitec well-positioned to benefit from this improving trend.

Rating is upgraded to Overweight from Equal-weight with the target rising to $2.75 from $2.45. Industry view: Cautious.

Target price is $2.75 Current Price is $2.38 Difference: $0.37
If IPL meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $2.59, suggesting upside of 2.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Morgan Stanley rates JHX as Overweight (1) -

Morgan Stanley believes housing momentum is expected to continue into 2021 in the key markets led by affordability, stimulus, changing consumer preferences and a low rate environment continue.

The broker expects infrastructure-focused stimulus to contribute in Australia and gather momentum in the US. As a result, Morgan Stanley retains a preference for James Hardie on quality and share growth.

Overweight rating reiterated. Target rises to $43 from $42. Industry view is Cautious.

Target price is $43.00 Current Price is $36.85 Difference: $6.15
If JHX meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $40.76, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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 MCR as Outperform (1) -

Macquarie’s Commodities Strategy team has upgraded its short term nickel price forecasts by 7-8%, medium-term by 10-13% and long-term by 3%.

As one would expect, these changes translate to material earnings estimates upgrades for Australian nickel miners. Western Areas and Nickel Mines remain the broker's preferred pure play producers.

Mincor Resources' price target has improved by 20c to $1.40. Outperform.

Target price is $1.40 Current Price is $1.19 Difference: $0.21
If MCR meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Credit Suisse rates NAB as Outperform (1) -

Following APRA removing guidance for banks to retain at least half of their earnings, Credit Suisse increases forecast payout ratios to 60% in FY21 (previously 50%) and continues to forecast a 65% payout ratio in FY22 and FY23.

The broker believes that as the year progresses the market will begin to factor in a dividend and earnings recovery before eyeing the potential for capital management in FY22.

With valuations still below pre-covid levels the analyst sees further upside to bank share prices and maintains a positive stance on the sector.

Credit Suisse raises the target price for National Australia Bank to $26 from $22 and maintains the Outperform rating.

Target price is $26.00 Current Price is $23.48 Difference: $2.52
If NAB meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $22.79, suggesting downside of -4.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Ord Minnett rates NCM as Accumulate (2) -

Ord Minnett believes Newcrest Mining is staring towards a better 2021 with newsflow from growth projects Havieron and Red Chris of key importance.

Now that the first stage of Havieron has been approved, the broker believes this project is on track for delivery of a pre-feasibility study (PFS) in late 2021 with first production following within three years.

Accumulate rating retained. Target price $34.70.

Target price is $34.70 Current Price is $26.96 Difference: $7.74
If NCM meets the Ord Minnett target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $32.67, suggesting upside of 22.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.5

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

Macquarie rates NIC as Outperform (1) -

Macquarie’s Commodities Strategy team has upgraded its short term nickel price forecasts by 7-8%, medium-term by 10-13% and long-term by 3%.

As one would expect, these changes translate to material earnings estimates upgrades for Australian nickel miners. Western Areas and Nickel Mines remain the broker's preferred pure play producers.

Outperform. The new target price of $1.40 compares with $1.20 prior.

Target price is $1.40 Current Price is $1.22 Difference: $0.18
If NIC meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $1.38, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

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

Morgan Stanley believes packaging stocks are a valuable defensive addition but favour Amcor ((AMC)) which the broker considers a quality defensive name with an attractive yield.

While Orora offers a similar yield along with upside from better performance in the North America segment, concerns around wine volume prompt caution and lead the broker to downgrade its rating to Equal-weight from Overweight.

The target price falls to $3 from $3.40. Industry view: Cautious.

Target price is $3.00 Current Price is $2.58 Difference: $0.42
If ORA meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $2.70, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Macquarie rates ORG as Neutral (3) -

On Macquarie's assessment, Origin Energy's outlook is two-pronged as weaker pricing in energy markets is offset by APLNG gains from higher LNG and Brent oil prices.

The broker believes key risk stems from government policy driven NEM oversupply while the opportunity lays with batteries.

Neutral rating retained. Price target is $5.58 (up from $5.47). Earnings estimates have been lowered due reflect lower electricity prices.

Target price is $5.58 Current Price is $5.16 Difference: $0.42
If ORG meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $6.16, suggesting upside of 19.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Macquarie rates PAN as Neutral (3) -

Macquarie’s Commodities Strategy team has upgraded its short term nickel price forecasts by 7-8%, medium-term by 10-13% and long-term by 3%.

As one would expect, these changes translate to material earnings estimates upgrades for Australian nickel miners. Western Areas and Nickel Mines remain the broker's preferred pure play producers.

Price target for Panoramic Resources has lifted to 16c from 13c. Neutral.

Target price is $0.16 Current Price is $0.17 Difference: minus $0.01 (current price is over target).
If PAN meets the Macquarie 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 June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Morgan Stanley rates PGH as Downgrade to Underweight from Equal-weight (5) -

While Morgan Stanley's earnings forecast for Pact Group Holdings remains unchanged, the stock has traded beyond the broker's price target and is thus the least attractive among packaging companies with the broker preferring Amcor ((AMC)) and Orora ((ORA)).

The broker believes the key to performance for the group will be delivery on key turnaround milestones and progress on the targeted sale of the contract manufacturing business. Since those remain uncertain, the broker adopts a wait and watch approach.

Rating is downgraded to Underweight from Overweight. Target is unchanged at $2.60. Industry view: Cautious.

Target price is $2.60 Current Price is $2.71 Difference: minus $0.11 (current price is over target).
If PGH meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.65, suggesting downside of -0.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Citi rates PMV as Neutral (3) -

Premier Investments' first half guidance of 75-85% retail earnings (EBIT) growth was well ahead of Citi's expectations and was driven by gross margin expansion and operating leverage.

The broker estimates gross margins expanded by 300 basis points year-on-year, reflecting industry-wide reductions in promotions as inventory levels were low.

Citi maintains a Neutral rating and lifts the target price to $25 from $20.60

Target price is $25.00 Current Price is $25.35 Difference: minus $0.35 (current price is over target).
If PMV meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $23.04, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Credit Suisse rates PMV as Neutral (3) -

Credit Suisse considers Premier Investments produced a very strong trading update, with Retail earnings (EBIT) guidance for the first half exceeding consensus forecasts for the full year by around 18%.

The broker highlights continued strength in online and gross margin expansion were supportive of significant profit growth. Due to an increased cash balance forecast, the broker believes there is a possibility the company may pay a special dividend to shareholders.

Changes to  the analyst's earnings estimates are driven by short-term upgrades to gross margin assumptions, partially offset by pushing out the full recovery of Smiggle sales to FY22. The target price moves to $23.09 from $20.39 and the rating remains Neutral.

Target price is $23.09 Current Price is $25.35 Difference: minus $2.26 (current price is over target).
If PMV 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 $23.04, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

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

Morgan Stanley notes Premier Investments' first-half operating income guidance at $221-233m not only implies a 75-80% year on year growth but is also ahead of the broker's full-year FY21 operating income forecast of $190m.

While the strong momentum is likely to continue in the near term, Morgan Stanley thinks earnings growth will decelerate in FY22 as conditions normalise.

Equal-weight rating with the target price unchanged at $18.40. Industry view: In-Line.

Target price is $18.40 Current Price is $25.35 Difference: minus $6.95 (current price is over target).
If PMV meets the Morgan Stanley target it will return approximately minus 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $23.04, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

UBS rates PMV as Downgrade to Neutral from Buy (3) -

Premier Investments' first-half operating income guidance is circa 80% ahead of UBS's expectations led by strong sales momentum and higher gross margins.

While UBS is optimistic on the outlook for the next 12-24 months (driven by a falling AUD and potential rent reductions), the circa 52% share price rally over the last few months may mean this strong outlook has already been priced in. 

Rating is downgraded to Neutral from Buy with the target rising to $24.50 from $20.50.

Target price is $24.50 Current Price is $25.35 Difference: minus $0.85 (current price is over target).
If PMV meets the UBS target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $23.04, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Macquarie rates RDY as Outperform (1) -

ReadyTech is in the process of acquiring Open Office. While the deal is expected to conclude in March, there are still several conditions attached to the agreement, but Macquarie has decided to already incorporate the transaction into its modeling.

Assuming the deal concludes successfully, Macquarie highlights it adds a third pillar to the company's existing Education and Employment divisions, in the form of Government & Justice.

The broker finds the stock is cheaply valued, in particular when assessed against what Macquarie believes is a solid growth outlook. Target lifts to $2.85 from $2.40. Outperform.

Target price is $2.85 Current Price is $1.84 Difference: $1.01
If RDY meets the Macquarie target it will return approximately 55% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

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

Driven by its low-cost iron ore business, Rio Tinto's returns on capital employed have been better and less volatile than peers, remarks Morgan Stanley.

On the flip side, iron ore contributes to 85% of the company's operating income with Rio Tinto having limited exposure to future-facing commodities. Also, the Jukaan Gorge incident necessitates the need to rebuild the company's social license, adds the broker.

Equal-weight rating retained, alongside an Attractive industry view. Target price is unchanged at $116.

Target price is $116.00 Current Price is $120.74 Difference: minus $4.74 (current price is over target).
If RIO meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $118.00, suggesting downside of -1.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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 RMD as Lighten (4) -

Is Ord Minnett confused? Only three days ago, the broker published a general sector report which clearly stated ResMed was rated Hold. Today, an update following a prominent healthcare conference in the US states the rating is Lighten, unchanged.

Yes, beats us too.

Target remains $21.30. Maybe the most important sentence from today's report is the following: "With more than 80% of sleep apnea undiagnosed across the world, the opportunity remains large with education and awareness through digital channels seen as a key opportunity."

Target price is $21.30 Current Price is $27.90 Difference: minus $6.6 (current price is over target).
If RMD meets the Ord Minnett target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $27.79, suggesting downside of -1.0% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

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

Morgan Stanley rates RWC as Underweight (5) -

With copper prices lifting and a likely impact from further UK lockdowns, Morgan Stanley sees headwinds to Reliance Worldwide Corp's earnings profile and believes the risks lay to the downside.

Target falls to $3.70 from $4.00. Industry view is Cautious. Underweight.

Target price is $3.70 Current Price is $3.88 Difference: minus $0.18 (current price is over target).
If RWC 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 $4.36, suggesting upside of 13.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Macquarie rates SGM as Outperform (1) -

As fundamentals for steel markets remain strong, Macquarie has increased forecasts for Sims which results in its price target lifting to $16.40 from $11.60.

The broker concedes it is not easy to predict how long current positive momentum might last, but seeks solace in the fact market expectations are still relatively low, implying further positive surprise can lead to ongoing strong uplifts to forecasts and valuations.

Outperform rating retained for Sims. Estimates have received a significant boost, including DPS forecasts.

Target price is $16.40 Current Price is $13.86 Difference: $2.54
If SGM meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $13.38, suggesting downside of -3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

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

Scrap prices have staged a dramatic rally since mid-late 2020, notes Morgan Stanley. The broker considers Sims is well-positioned to benefit from this trend and has upgraded its earnings forecasts across FY21-23.

Equal-weight rating retained. Target is raised to $15.50 from $12. Industry view is Cautious.

Target price is $15.50 Current Price is $13.86 Difference: $1.64
If SGM meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $13.38, suggesting downside of -3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Ord Minnett rates SZL as Buy (1) -

As Ord Minnett points out in its update on Sezzle Inc today, not many businesses are able to achieve more than 200% growth from key drivers, but this company's recent market update showed 205% year-on-year growth in Underlying Merchant Sales (UMS) over the December quarter.

The broker observes the shares are still valued at a sizeable discount to peers such as Afterpay. In addition, the analysts point out penetration for the BNPL space in the USA remains relatively low in comparison with markets like Australia, which implies plenty of growth should still be ahead.

Target price gains 20c to $11.20. Buy.

Target price is $11.20 Current Price is $6.50 Difference: $4.7
If SZL meets the Ord Minnett target it will return approximately 72% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 1.0

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

Macquarie rates TLS as Outperform (1) -

Macquarie is already looking forward to Telstra selling equity in some of its assets. TowerCo, valued at $5-6bn, is expected to see 50% divested.

Marking-to-market of InfraCo sees Macquarie estimating an asset value in the range of $2.69-$4.29 for Telstra. Any value release from this asset would be a positive catalyst in the broker's view.

Outperform rating retained. Price target $4, up from $3.50 prior.

Target price is $4.00 Current Price is $3.09 Difference: $0.91
If TLS meets the Macquarie target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $3.57, suggesting upside of 15.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Morgans rates UNI as Add (1) -

In the wake of a first half trading update from Universal Store Holdings, Morgans makes 12-20% EPS upgrades across the forecast years and raises the price target to $6.93 from $6.05.

The broker highlights gross margins have improved year-on-year, while the earnings uplift (EBIT growth of 49.7%) reflects both gross margin expansion and material operating expense leverage.

The analyst considers this a big period of growth for the group, reflecting strong trading out of peak disruptions caused by covid-19 and despite continued impacts from Victoria over the half.

The Add rating is unchanged.

Target price is $6.93 Current Price is $5.89 Difference: $1.04
If UNI meets the Morgans target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Credit Suisse rates WBC as Outperform (1) -

Following APRA removing guidance for banks to retain at least half of their earnings, Credit Suisse increases forecast payout ratios to 60% in FY21 (previously 50%) and continues to forecast a 65% payout ratio in FY22 and FY23.

The broker believes that as the year progresses the market will begin to factor in a dividend and earnings recovery before eyeing the potential for capital management in FY22.

With valuations still below pre-covid levels the analyst sees further upside to bank share prices and maintains a positive stance on the sector.

Credit Suisse raises the target price for Westpac Bank to $22.50 from $20.60 and maintains the Outperform rating.

Target price is $22.50 Current Price is $20.60 Difference: $1.9
If WBC meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $22.30, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Macquarie rates WSA as Outperform (1) -

Macquarie’s Commodities Strategy team has upgraded its short term nickel price forecasts by 7-8%, medium-term by 10-13% and long-term by 3%.

As one would expect, these changes translate to material earnings estimates upgrades for Australian nickel miners. Western Areas and Nickel Mines remain the broker's preferred pure play producers.

Western Areas' rating remains Outperform with a price target of $3.30, up from $2.80, on a significant rise in earnings and DPS forecasts.

Target price is $3.30 Current Price is $2.88 Difference: $0.42
If WSA meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $2.78, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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