Australian Broker Call

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December 08, 2017

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COMPANIES DISCUSSED IN THIS ISSUE

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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)

THIS REPORT WILL BE UPDATED SHORTLY

Last Updated: 10:36 AM

Your daily news report on the latest recommendation, valuation, forecast and opinion changes.

This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.

For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE

Today's Upgrades and Downgrades
ASX - ASX Downgrade to Sell from Neutral UBS
CIP - CENTURIA INDUSTRIAL REIT Downgrade to Hold from Add Morgans
ASX  ASX LIMITED

Wealth Management & Investments

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Overnight Price: $56.07

Citi rates ASX as Sell (5) -

ASX will proceed with its DLT solution to replace CHESS. At this stage, Citi suggests this is little more than a replacement technology decision but in time could lead to significant changes in revenue streams.

The company believes the change will provide functionality from day one and the proposed timing of the transition is by March next year. Details on capital expenditure are unlikely to be available until August 2018.

Full roll out will take 24 months and that implies the benefits are probably still some time away, Citi asserts. Sell rating maintained as the stock looks expensive. Target rises to $54.90 from $50.30.

Target price is $54.90 Current Price is $56.07 Difference: minus $1.17 (current price is over target).
If ASX meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $52.24, suggesting downside of -6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 210.10 cents and EPS of 233.40 cents.
At the last closing share price the estimated dividend yield is 3.75%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.02.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 232.5, implying annual growth of 3.6%.

Current consensus DPS estimate is 208.7, implying a prospective dividend yield of 3.7%.

Current consensus EPS estimate suggests the PER is 24.1.

Forecast for FY19:

Citi forecasts a full year FY19 dividend of 221.60 cents and EPS of 246.30 cents.
At the last closing share price the estimated dividend yield is 3.95%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 244.8, implying annual growth of 5.3%.

Current consensus DPS estimate is 218.3, implying a prospective dividend yield of 3.9%.

Current consensus EPS estimate suggests the PER is 22.9.

Market Sentiment: -0.6

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


Deutsche Bank rates ASX as Hold (3) -

Deutsche Bank believes the acquisition of distributed ledger technology to replace CHESS is likely to have a limited impact in the near-term but open up significant opportunities for growth in the longer term.

The broker likes the company's strong market position and balance sheet, but as cost growth is currently running at double revenue growth considers the stock to be fairly valued.

Hold retained. Target is $54.50.

Target price is $54.50 Current Price is $56.07 Difference: minus $1.57 (current price is over target).
If ASX meets the Deutsche Bank target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $52.24, suggesting downside of -6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Deutsche Bank forecasts a full year FY18 dividend of 203.00 cents and EPS of 228.00 cents.
At the last closing share price the estimated dividend yield is 3.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 232.5, implying annual growth of 3.6%.

Current consensus DPS estimate is 208.7, implying a prospective dividend yield of 3.7%.

Current consensus EPS estimate suggests the PER is 24.1.

Forecast for FY19:

Deutsche Bank forecasts a full year FY19 dividend of 202.00 cents and EPS of 239.00 cents.
At the last closing share price the estimated dividend yield is 3.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.46.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 244.8, implying annual growth of 5.3%.

Current consensus DPS estimate is 218.3, implying a prospective dividend yield of 3.9%.

Current consensus EPS estimate suggests the PER is 22.9.

Market Sentiment: -0.6

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


UPDATED

Morgans rates ASX as Reduce (5) -

ASX intends to replace CHESS with distributed ledger technology, developed by partner Digital Asset. Morgans suggests full implementation will take place over several years and likely keep capital expenditure at recent levels of around $50m per annum.

At this stage, the broker's best estimate is that using DLT will be neutral to earnings with new functionality perhaps providing some upside.

Reduce retained. Target is raised to $49.09 from $48.63.

Target price is $49.09 Current Price is $56.07 Difference: minus $6.98 (current price is over target).
If ASX meets the Morgans target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $52.24, suggesting downside of -6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 211.00 cents and EPS of 234.00 cents.
At the last closing share price the estimated dividend yield is 3.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.96.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 232.5, implying annual growth of 3.6%.

Current consensus DPS estimate is 208.7, implying a prospective dividend yield of 3.7%.

Current consensus EPS estimate suggests the PER is 24.1.

Forecast for FY19:

Morgans forecasts a full year FY19 dividend of 219.00 cents and EPS of 243.00 cents.
At the last closing share price the estimated dividend yield is 3.91%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.07.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 244.8, implying annual growth of 5.3%.

Current consensus DPS estimate is 218.3, implying a prospective dividend yield of 3.9%.

Current consensus EPS estimate suggests the PER is 22.9.

Market Sentiment: -0.6

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


Ord Minnett rates ASX as Hold (3) -

ASX intends to replace its CHESS system with distributed ledger technology (DLT). The system will be released to the market at the end of March 2018.

The new system will grant permission to access, not blockchain, and Ord Minnett suspects this may be a positive for ASX as it will continue to control the settlement system and ownership data but will make this available without access barriers to market operators and other clearing facilities.

The broker believes the company's legislated monopoly will be replaced by a natural monopoly in providing IT and back-office infrastructure. Costs are expected to increase from FY19. Hold rating maintained. Target is $52.52.

This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.

Target price is $52.52 Current Price is $56.07 Difference: minus $3.55 (current price is over target).
If ASX meets the Ord Minnett target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $52.24, suggesting downside of -6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 209.00 cents and EPS of 236.00 cents.
At the last closing share price the estimated dividend yield is 3.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 232.5, implying annual growth of 3.6%.

Current consensus DPS estimate is 208.7, implying a prospective dividend yield of 3.7%.

Current consensus EPS estimate suggests the PER is 24.1.

Forecast for FY19:

Ord Minnett forecasts a full year FY19 dividend of 216.00 cents and EPS of 244.00 cents.
At the last closing share price the estimated dividend yield is 3.85%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.98.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 244.8, implying annual growth of 5.3%.

Current consensus DPS estimate is 218.3, implying a prospective dividend yield of 3.9%.

Current consensus EPS estimate suggests the PER is 22.9.

Market Sentiment: -0.6

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


UPDATED

UBS rates ASX as Downgrade to Sell from Neutral (5) -

ASX has decided to replace CHESS with a distributed ledger technology (DLT). UBS is not surprised but notes timing and financial implications are still unclear. The broker believes the boost to the share price in the lead up to the decision is likely to fade.

Also, buoyant equity markets over the first half have not translated into stronger revenue and valuation metrics appear increasingly stretched. UBS downgrades to Sell from Neutral. Target is raised to $52.90 from $51.60.

Target price is $52.90 Current Price is $56.07 Difference: minus $3.17 (current price is over target).
If ASX meets the UBS target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $52.24, suggesting downside of -6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 206.00 cents and EPS of 228.00 cents.
At the last closing share price the estimated dividend yield is 3.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 232.5, implying annual growth of 3.6%.

Current consensus DPS estimate is 208.7, implying a prospective dividend yield of 3.7%.

Current consensus EPS estimate suggests the PER is 24.1.

Forecast for FY19:

UBS forecasts a full year FY19 dividend of 218.00 cents and EPS of 242.00 cents.
At the last closing share price the estimated dividend yield is 3.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.17.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 244.8, implying annual growth of 5.3%.

Current consensus DPS estimate is 218.3, implying a prospective dividend yield of 3.9%.

Current consensus EPS estimate suggests the PER is 22.9.

Market Sentiment: -0.6

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

AVN  AVENTUS RETAIL PROPERTY FUND

REITs

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Overnight Price: $2.25

Macquarie rates AVN as Outperform (1) -

The company's single largest tenant, which provides 9% of gross income, retailer Steinhoff, is being investigated regarding accounting irregularities.

Macquarie notes, whilst this represents the company's largest single exposure, it is not that concentrated. If Steinhoff Asia Pacific was to close there are potential leasing opportunities for 31 tenancies.

Macquarie suggests the issue remains fluid and, hence, retains an Outperform rating and $2.40 target.

Target price is $2.40 Current Price is $2.25 Difference: $0.15
If AVN meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $2.42, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 16.40 cents and EPS of 18.90 cents.
At the last closing share price the estimated dividend yield is 7.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.90.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.5, implying annual growth of -52.8%.

Current consensus DPS estimate is 16.3, implying a prospective dividend yield of 7.2%.

Current consensus EPS estimate suggests the PER is 12.2.

Forecast for FY19:

Macquarie forecasts a full year FY19 dividend of 17.00 cents and EPS of 19.60 cents.
At the last closing share price the estimated dividend yield is 7.56%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.48.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.1, implying annual growth of 3.2%.

Current consensus DPS estimate is 16.8, implying a prospective dividend yield of 7.5%.

Current consensus EPS estimate suggests the PER is 11.8.

Market Sentiment: 0.7

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

CIP  CENTURIA INDUSTRIAL REIT

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Overnight Price: $2.62

Morgans rates CIP as Downgrade to Hold from Add (3) -

The A-REIT has revalued its portfolio, resulting in pro forma net tangible assets increasing $0.12 to $2.47. The portfolio is valued at around $1bn across 39 assets.

Centuria Industrial also recently acquired a 7.7% stake in Propertylink ((PLG)) for $0.95 per share.

Morgans downgrades to Hold from Add as the stock is now trading around the revised price target. The stock offers an attractive 7.4% distribution yield paid quarterly, the broker notes. Target rises to $2.59 from $2.54.

Target price is $2.59 Current Price is $2.62 Difference: minus $0.03 (current price is over target).
If CIP meets the Morgans target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 19.40 cents and EPS of 19.80 cents.
At the last closing share price the estimated dividend yield is 7.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.23.

Forecast for FY19:

Morgans forecasts a full year FY19 dividend of 19.60 cents and EPS of 20.60 cents.
At the last closing share price the estimated dividend yield is 7.48%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.72.

Market Sentiment: 0.0

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

CMA  CENTURIA METROPOLITAN REIT

REITs

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Overnight Price: $2.41

UBS rates CMA as Buy (1) -

UBS updates numbers post the acquisition of two assets for $128m and a $60m equity raising. The main benefits of the transaction include diversifying individual tenant risk, increasing liquidity and improving the portfolio quality.

The company will buy a 50% interest in 201 Pacific Highway St Leonards and 100% of 77 Market St Wollongong.

The main drawbacks, in the broker's opinion, are the acquisition price and the risk around the company's ability to find a buyer for the other 50% of the St Leonards property.

Price target is $2.60. Buy rating retained.

Target price is $2.60 Current Price is $2.41 Difference: $0.19
If CMA meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 18.10 cents and EPS of 18.70 cents.
At the last closing share price the estimated dividend yield is 7.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.89.

Forecast for FY19:

UBS forecasts a full year FY19 dividend of 18.20 cents and EPS of 18.70 cents.
At the last closing share price the estimated dividend yield is 7.55%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.89.

Market Sentiment: 1.0

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

EHL  EMECO HOLDINGS LTD

Mining Sector Contracting

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Overnight Price: $0.25

Morgans rates EHL as Add (1) -

The acquisition of Force Equipment and Maintenance will double the company's exposure to Western Australia, while Morgans suggests the maintenance facilities provide the potential for cost reductions and growth opportunities.

The broker considers the acquisition a natural fit and the price of $69.8m implies an attractive multiple. Add rating retained. Target is raised to $0.33 from $0.20.

Target price is $0.33 Current Price is $0.25 Difference: $0.08
If EHL meets the Morgans target it will return approximately 32% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 0.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 83.33.

Forecast for FY19:

Morgans forecasts a full year FY19 dividend of 0.00 cents and EPS of 1.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.83.

Market Sentiment: 1.0

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

IGO  INDEPENDENCE GROUP NL

Nickel

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Overnight Price: $4.07

ADDED

Credit Suisse rates IGO as Underperform (5) -

The company has now committed to the expansion at Tropicana, extending life to 2027 and increasing metallurgical recovery of gold by 3%.

An underground scoping study has commenced at Boston Shaker for the potential mining and processing of a high-grade supplement for mill feed from 2021.

The commitment and further detail contains no surprises for Credit Suisse. The broker retains an Underperform rating and $3.70 target.

Target price is $3.70 Current Price is $4.07 Difference: minus $0.37 (current price is over target).
If IGO meets the Credit Suisse target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.04, suggesting downside of -0.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 7.27 cents and EPS of 24.23 cents.
At the last closing share price the estimated dividend yield is 1.79%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.2, implying annual growth of 589.4%.

Current consensus DPS estimate is 7.2, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 20.1.

Forecast for FY19:

Credit Suisse forecasts a full year FY19 dividend of 10.94 cents and EPS of 36.46 cents.
At the last closing share price the estimated dividend yield is 2.69%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.16.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 33.2, implying annual growth of 64.4%.

Current consensus DPS estimate is 10.0, implying a prospective dividend yield of 2.5%.

Current consensus EPS estimate suggests the PER is 12.3.

Market Sentiment: -0.2

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

NUF  NUFARM LIMITED

Agriculture

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Overnight Price: $8.51

Citi rates NUF as Neutral (3) -

The AGM revealed a soft start to FY18. First half guidance is for operating earnings to be down -12% on the prior year. Guidance for full year earnings growth is unchanged.

Given the second half seasonality, Citi believes consensus forecasts have largely captured the outlook. Neutral rating retained. Target price is $9.07.

Target price is $9.07 Current Price is $8.51 Difference: $0.56
If NUF meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $9.40, suggesting upside of 10.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 15.00 cents and EPS of 52.70 cents.
At the last closing share price the estimated dividend yield is 1.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 51.8, implying annual growth of 10.9%.

Current consensus DPS estimate is 14.9, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 16.4.

Forecast for FY19:

Citi forecasts a full year FY19 dividend of 16.00 cents and EPS of 57.90 cents.
At the last closing share price the estimated dividend yield is 1.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 62.5, implying annual growth of 20.7%.

Current consensus DPS estimate is 17.8, implying a prospective dividend yield of 2.1%.

Current consensus EPS estimate suggests the PER is 13.6.

Market Sentiment: 0.3

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


ADDED

Credit Suisse rates NUF as Neutral (3) -

The first half update is softer than Credit Suisse expected, driven by an extended shutdown at Laverton and margin pressure in Latin America.

Guidance for growth in operating earnings in the full year appears achievable to the broker, given the typical 75% skew to the second half.

Credit Suisse believes the stock is reasonably good value and maintains a Neutral rating. Target is raised to $9.23 from $9.29.

Target price is $9.23 Current Price is $8.51 Difference: $0.72
If NUF meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $9.40, suggesting upside of 10.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 16.00 cents and EPS of 52.18 cents.
At the last closing share price the estimated dividend yield is 1.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.31.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 51.8, implying annual growth of 10.9%.

Current consensus DPS estimate is 14.9, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 16.4.

Forecast for FY19:

Credit Suisse forecasts a full year FY19 dividend of 19.00 cents and EPS of 64.76 cents.
At the last closing share price the estimated dividend yield is 2.23%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 62.5, implying annual growth of 20.7%.

Current consensus DPS estimate is 17.8, implying a prospective dividend yield of 2.1%.

Current consensus EPS estimate suggests the PER is 13.6.

Market Sentiment: 0.3

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


Deutsche Bank rates NUF as Sell (5) -

Deutsche Bank was disappointed with the AGM update on the first half as EBIT guidance of $70-80m is down -6-18% on the prior corresponding half.

Australia has been affected by scheduled shutdowns for maintenance while the Latin America market has been softer than expected.

The company did reiterate full year guidance for improved operating earnings, assuming average seasonal conditions.

Sell rating retained. Target is $6.85.

Target price is $6.85 Current Price is $8.51 Difference: minus $1.66 (current price is over target).
If NUF meets the Deutsche Bank target it will return approximately minus 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.40, suggesting upside of 10.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY18:

Deutsche Bank forecasts a full year FY18 dividend of 12.00 cents and EPS of 42.00 cents.
At the last closing share price the estimated dividend yield is 1.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.26.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 51.8, implying annual growth of 10.9%.

Current consensus DPS estimate is 14.9, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 16.4.

Forecast for FY19:

Deutsche Bank forecasts a full year FY19 dividend of 14.00 cents and EPS of 51.00 cents.
At the last closing share price the estimated dividend yield is 1.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.69.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 62.5, implying annual growth of 20.7%.

Current consensus DPS estimate is 17.8, implying a prospective dividend yield of 2.1%.

Current consensus EPS estimate suggests the PER is 13.6.

Market Sentiment: 0.3

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


Macquarie rates NUF as Outperform (1) -

Macquarie found the AGM update light on outlook, although the company has reaffirmed growth expectations for FY18 underlying earnings.

The broker's  FY18 forecasts for EBIT growth of 18% are underpinned by 5% organic growth/cost savings and 13% from acquisitions, Century and FMC.

The broker considers the relatively soft  update as a buying opportunity. Outperform rating retained. Target is reduced to $10.29 from $10.70.

Target price is $10.29 Current Price is $8.51 Difference: $1.78
If NUF meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $9.40, suggesting upside of 10.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 16.30 cents and EPS of 54.80 cents.
At the last closing share price the estimated dividend yield is 1.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.53.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 51.8, implying annual growth of 10.9%.

Current consensus DPS estimate is 14.9, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 16.4.

Forecast for FY19:

Macquarie forecasts a full year FY19 dividend of 21.30 cents and EPS of 70.90 cents.
At the last closing share price the estimated dividend yield is 2.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 62.5, implying annual growth of 20.7%.

Current consensus DPS estimate is 17.8, implying a prospective dividend yield of 2.1%.

Current consensus EPS estimate suggests the PER is 13.6.

Market Sentiment: 0.3

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


UPDATED

Morgans rates NUF as Add (1) -

First half guidance was weaker than Morgans expected. Operating EBIT is expected to be between $70-80m. This reflects the impact of a six-week shutdown at Laverton and a flat result in Latin America.

Morgans still believes the company is well-placed to report solid growth in earnings over coming years and that the benefits of geographic diversity will be forthcoming.

The valuation is undemanding and the broker retains an Add rating. Target is reduced to $10.15 from $10.30.

Target price is $10.15 Current Price is $8.51 Difference: $1.64
If NUF meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $9.40, suggesting upside of 10.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 15.00 cents and EPS of 54.00 cents.
At the last closing share price the estimated dividend yield is 1.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 51.8, implying annual growth of 10.9%.

Current consensus DPS estimate is 14.9, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 16.4.

Forecast for FY19:

Morgans forecasts a full year FY19 dividend of 17.00 cents and EPS of 68.00 cents.
At the last closing share price the estimated dividend yield is 2.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.51.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 62.5, implying annual growth of 20.7%.

Current consensus DPS estimate is 17.8, implying a prospective dividend yield of 2.1%.

Current consensus EPS estimate suggests the PER is 13.6.

Market Sentiment: 0.3

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

PTM  PLATINUM ASSET MANAGEMENT LIMITED

Wealth Management & Investments

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Overnight Price: $7.43

Macquarie rates PTM as Underperform (5) -

November funds under management were up 1.8%, affected by modest outflows and the underperformance of the Platinum International Fund.

Macquarie believes the performance is not sufficient to justify the current valuation. Underperform retained. Target rises to $5.21 from $5.11.

Target price is $5.21 Current Price is $7.43 Difference: minus $2.22 (current price is over target).
If PTM meets the Macquarie target it will return approximately minus 30% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.12, suggesting downside of -31.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 33.00 cents and EPS of 33.20 cents.
At the last closing share price the estimated dividend yield is 4.44%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.38.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.8, implying annual growth of -3.0%.

Current consensus DPS estimate is 29.9, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 24.1.

Forecast for FY19:

Macquarie forecasts a full year FY19 dividend of 31.70 cents and EPS of 31.70 cents.
At the last closing share price the estimated dividend yield is 4.27%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.44.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.4, implying annual growth of -1.3%.

Current consensus DPS estimate is 29.3, implying a prospective dividend yield of 3.9%.

Current consensus EPS estimate suggests the PER is 24.4.

Market Sentiment: -0.8

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

SGM  SIMS METAL MANAGEMENT LIMITED

Steel & Scrap

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Overnight Price: $14.91

ADDED

Credit Suisse rates SGM as Neutral (3) -

While it is not possible to attribute earnings benefit in the near term from the recent executive appointments Credit Suisse believes they are positive and recognise the depleted experience in the company.

A newly created role, chief technology officer, headed by Brendan McDonnell, is considered an important appointment which is designed to restore the company's historical leadership in technology and address both the challenges and strategic opportunities.

Neutral retained. Target is $14.00.

Target price is $14.00 Current Price is $14.91 Difference: minus $0.91 (current price is over target).
If SGM meets the Credit Suisse target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.72, suggesting downside of -1.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 40.73 cents and EPS of 81.46 cents.
At the last closing share price the estimated dividend yield is 2.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 83.4, implying annual growth of -19.0%.

Current consensus DPS estimate is 43.7, implying a prospective dividend yield of 2.9%.

Current consensus EPS estimate suggests the PER is 17.9.

Forecast for FY19:

Credit Suisse forecasts a full year FY19 dividend of 43.85 cents and EPS of 87.71 cents.
At the last closing share price the estimated dividend yield is 2.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 88.8, implying annual growth of 6.5%.

Current consensus DPS estimate is 49.2, implying a prospective dividend yield of 3.3%.

Current consensus EPS estimate suggests the PER is 16.8.

Market Sentiment: 0.3

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

TWE  TREASURY WINE ESTATES LIMITED

Food, Beverages & Tobacco

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Overnight Price: $16.13

Citi rates TWE as Sell (5) -

The company continues to lose share in the Americas and Australian markets. Citi notes European volumes are rising but pricing is weak. Hence, upside risks to earnings from Asian growth is likely to be offset by the weakness in other regions.

The broker observes the stock's PE multiple is increasingly tied to Chinese demand growth more so than its US market recovery. Demand trends are strong in Asia but prices have declined. Overall, the broker suggests there is little room for any slowing in momentum.

Sell rating and $10.90 target maintained.

Target price is $10.90 Current Price is $16.13 Difference: minus $5.23 (current price is over target).
If TWE meets the Citi target it will return approximately minus 32% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.36, suggesting downside of -17.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 30.00 cents and EPS of 46.40 cents.
At the last closing share price the estimated dividend yield is 1.86%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 34.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 45.8, implying annual growth of 25.5%.

Current consensus DPS estimate is 30.2, implying a prospective dividend yield of 1.9%.

Current consensus EPS estimate suggests the PER is 35.2.

Forecast for FY19:

Citi forecasts a full year FY19 dividend of 40.00 cents and EPS of 58.40 cents.
At the last closing share price the estimated dividend yield is 2.48%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.62.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 57.7, implying annual growth of 26.0%.

Current consensus DPS estimate is 38.6, implying a prospective dividend yield of 2.4%.

Current consensus EPS estimate suggests the PER is 28.0.

Market Sentiment: -0.2

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

WFD  WESTFIELD CORPORATION

Infra & Property Developers

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Overnight Price: $8.43

Macquarie rates WFD as Outperform (1) -

The stock may be expensive versus its offshore peers but Macquarie believes there is a reason. The broker assesses the company's flagship portfolio to be the highest quality and the active development pipeline will mean a greater mix of flagship properties enter the mix from here on.

Other factors supporting a higher multiple include a $3.8bn development pipeline that is partially factored into the share price but not yet in earnings per share.

Target is $9.59. Outperform maintained.

Target price is $9.59 Current Price is $8.43 Difference: $1.16
If WFD meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $8.99, suggesting upside of 6.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 33.41 cents and EPS of 40.49 cents.
At the last closing share price the estimated dividend yield is 3.96%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.82.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 42.6, implying annual growth of N/A.

Current consensus DPS estimate is 33.1, implying a prospective dividend yield of 3.9%.

Current consensus EPS estimate suggests the PER is 19.8.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 34.07 cents and EPS of 42.32 cents.
At the last closing share price the estimated dividend yield is 4.04%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.92.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 44.9, implying annual growth of 5.4%.

Current consensus DPS estimate is 34.1, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 18.8.

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

Summaries
ASX ASX Sell - Citi Overnight Price $56.07
Hold - Deutsche Bank Overnight Price $56.07
Reduce - Morgans Overnight Price $56.07
Hold - Ord Minnett Overnight Price $56.07
Downgrade to Sell from Neutral - UBS Overnight Price $56.07
AVN AVENTUS RETAIL PROPERTY Outperform - Macquarie Overnight Price $2.25
CIP CENTURIA INDUSTRIAL REIT Downgrade to Hold from Add - Morgans Overnight Price $2.62
CMA CENTURIA METROPOLITAN REIT Buy - UBS Overnight Price $2.41
EHL EMECO Add - Morgans Overnight Price $0.25
IGO INDEPENDENCE GROUP Underperform - Credit Suisse Overnight Price $4.07
NUF NUFARM Neutral - Citi Overnight Price $8.51
Neutral - Credit Suisse Overnight Price $8.51
Sell - Deutsche Bank Overnight Price $8.51
Outperform - Macquarie Overnight Price $8.51
Add - Morgans Overnight Price $8.51
PTM PLATINUM Underperform - Macquarie Overnight Price $7.43
SGM SIMS METAL MANAGEMENT Neutral - Credit Suisse Overnight Price $14.91
TWE TREASURY WINE ESTATES Sell - Citi Overnight Price $16.13
WFD WESTFIELD CORP Outperform - Macquarie Overnight Price $8.43
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

6

3. Hold

6

5. Sell

7

Friday 08 December 2017

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Disclaimer:
The content of this information does in no way reflect the opinions of FNArena, or of its journalists. In fact we don't have any opinion about the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface. This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FNArena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.