Australian Broker Call

Ord Minnett rates AMI as Hold (3) -

In an important milestone towards securing funding, according to Ord Minnett, the NSW government has approved Aurelia Metals' Federation project (as expected).

The analyst suggests $110m will be needed to develop Federation.The project represents 32% of the broker's valuation for Aurelia Metals. This valuation includes a -60% risk discount.

The Hold rating is kept until Ord Minnett attains further clarity on funding. The target of 35c is unchanged.

Target price is $0.35 Current Price is $0.12 Difference: $0.235
If AMI meets the Ord Minnett target it will return approximately 204% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Credit Suisse rates ANZ as Outperform (1) -

After analysis of reporting season results for the Bank sector, Credit Suisse now sees increasing headwinds and has a clear preference for business over retail banks.

The broker lists several headwinds including increasing competitive pressures as asset growth slows and a rising cost of funding when banks refinance cheap funding from the Term Funding Facility.

Inflationary pressures on costs and asset quality concerns as consumers confront higher interest rates are additional reasons for caution around the sector, explain the analysts.

Outperform-rated ANZ Bank is the most preferred, followed by National Australia Bank, Westpac and CommBank. Target $29.

Target price is $29.00 Current Price is $23.85 Difference: $5.15
If ANZ meets the Credit Suisse target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $28.09, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Citi rates BEN as Neutral (3) -

In the wake of ANZ Bank's acquisition of Suncorp's bank, and Bank Of Queensland's acquisition of ME Bank, speculation is again mounting of a merger between Bank of Queensland and Bendigo & Adelaide Bank, which individually are way smaller than the majors.

A "merger of equals" would create a fifth pillar, but given the recent strategies implemented by each to remain standalone, Citi doesn't see it.

Neutral retained on both. Target 10.40 for Bendelaide.

Target price is $10.40 Current Price is $9.60 Difference: $0.8
If BEN meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $10.37, suggesting upside of 9.8% (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

UBS rates BHP as Sell (5) -

Having lobbed a $28.25/share bid for OZ Minerals ((OZL)), the independent expert review has concluded BHP Group's offer is "fair and reasonable" with a value assessment of between $27.37 and $30.47/share.

UBS regards the offer as a low-risk transaction that aligns with BHP's stated objective to increase future-facing commodities within its portfolio.

The next steps in the process are the April 13 Scheme meeting and the April 18 lodgement date with ASIC.

The Sell rating and $39 target are unchanged.

Target price is $39.00 Current Price is $48.32 Difference: minus $9.32 (current price is over target).
If BHP meets the UBS target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $43.90, suggesting downside of -9.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Citi rates BOQ as Neutral (3) -

In the wake of ANZ Bank's acquisition of Suncorp's bank, and Bank Of Queensland's acquisition of ME Bank, speculation is again mounting of a merger between Bank of Queensland and Bendigo & Adelaide Bank, which individually are way smaller than the majors.

A "merger of equals" would create a fifth pillar, but given the recent strategies implemented by each to remain standalone, Citi doesn't see it.

Neutral retained on both. Target $7.30 for Bank of Qld.

Target price is $7.30 Current Price is $6.81 Difference: $0.49
If BOQ meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $7.63, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.1

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

Credit Suisse rates CBA as Underperform (5) -

After analysis of reporting season results for the Bank sector, Credit Suisse now sees increasing headwinds and has a clear preference for business over retail banks.

The broker lists several headwinds including increasing competitive pressures as asset growth slows and a rising cost of funding when banks refinance cheap funding from the Term Funding Facility.

Inflationary pressures on costs and asset quality concerns as consumers confront higher interest rates are additional reasons for caution around the sector, explain the analysts.

CommBank is ranked last behind Westpac, National Australia Bank and the most-preferred ANZ Bank. Target $93.

Target price is $93.00 Current Price is $97.75 Difference: minus $4.75 (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 $91.66, suggesting downside of -7.0% (ex-dividends)

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.6

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

Macquarie rates LM8 as Outperform (1) -

Lunnon Metals has reconfirmed historical essay results at its Silver Lake-Fisher project through more than 4,100 re-essays, confirming suitability for the company's exploration.  

While already holding a significant resource inventory, Silver Lake Hanging Wall, where surface diamond drilling in now expected to commence, and Warren offer potential to increase total resource. 

The Outperform rating and target price of $1.30 are retained.

Target price is $1.30 Current Price is $0.96 Difference: $0.345
If LM8 meets the Macquarie target it will return approximately 36% (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

Credit Suisse rates NAB as Neutral (3) -

After analysis of reporting season results for the Bank sector, Credit Suisse now sees increasing headwinds and has a clear preference for business over retail banks.

The broker lists several headwinds including increasing competitive pressures as asset growth slows and a rising cost of funding when banks refinance cheap funding from the Term Funding Facility.

Inflationary pressures on costs and asset quality concerns as consumers confront higher interest rates are additional reasons for caution around the sector, explain the analysts.

National Australia Bank is ranked second by Credit Suisse behind ANZ Bank, but ahead of Westpac and CommBank. Target $31.

Target price is $31.00 Current Price is $29.15 Difference: $1.85
If NAB meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $31.20, suggesting upside of 5.9% (ex-dividends)

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

Ord Minnett rates NHC as Downgrade to Hold from Accumulate (3) -

Following New Hope's recent share price rally, Ord Minnett pulls-back its rating to Hold from Accumulate on valuation. 

No changes are made to forecasts and the broker's $6.50 target is maintained.

Target price is $6.50 Current Price is $5.77 Difference: $0.73
If NHC meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $6.32, suggesting upside of 12.7% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Morgans rates NTD as Hold (3) -

National Tyre & Wheel beat recent guidance with a gross margin of 27.1%, ahead of the 26.5% expected last December by management. 

The company anticipates further gross margin improvement in the 2H. While freight rates are now lower and supply costs have eased, management noted a mixed demand outlook (weaker consumer/strong commercial). Cost cutting measures will be implemented.

Morgans is cautious on the balance sheet given the weaker consumer backdrop and awaits greater earnings visibilty before upgrading from its current Hold rating. The target rises to 73c from 68c.

Target price is $0.73 Current Price is $0.55 Difference: $0.185
If NTD meets the Morgans target it will return approximately 34% (excluding dividends, fees and charges).

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

Citi rates NUF as Buy (1) -

The US Department of Agriculture's recent 2023 US outlook forum suggests a strong US ag market, Citi notes. USDA projects a 3% year on year increase in combined corn, soybean and wheat acreages in 2023. Key crop prices are expected to moderate, but remain higher than last ten year average.

While high interest rates, input cost inflation, tight supply chains, the ongoing conflict in Ukraine, and weather remain as key near-term risks, the broker views current crop and farmer’s economics as favorable for Nufarm and retains a Buy rating and $6.90 target.

Target price is $6.90 Current Price is $5.74 Difference: $1.16
If NUF meets the Citi target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $7.02, suggesting upside of 22.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Citi rates PME as Upgrade to Neutral from Sell (3) -

Citi views Pro Medicus' business model as attractive, given a real competitive advantage in the Picture Archiving & Communication Systems space, but a valuation of some 70x PE on FY25 forecasts is keeping the broker on the sideline.

Citi does not yet explicitly forecast any contribution from Cardiology or AI, awaiting more details on the new products, nor any significant revenue contribution from Europe. These could be sources of upside over the medium to longer term, but difficult to quantify at this stage, the broker notes.

But following an -8% share price decline post-result, the broker upgrades to Neutral from Sell. Target unchanged at $61.

Target price is $61.00 Current Price is $60.09 Difference: $0.91
If PME meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $50.28, suggesting downside of -17.5% (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 PPH as Hold (3) -

Ord Minnett is surprised Pushpay Holdings shareholders didn't pass the scheme of arrangement to allow the $1.34/share takeover by Pegasus Bidco.

The analyst believes Pegasus Bidco will return with a higher offer which will likely be below $1.37, the top-end of the independent adviser's valuation range.

The Hold rating and $1.20 target are unchanged.

Target price is $1.20 Current Price is $1.11 Difference: $0.093
If PPH meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

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

Macquarie rates RGN as Upgrade to Neutral from Underperform (3) -

Highlighting that Region Group has underperformed the ASX200 A-REIT index by -6% since releasing its first half result, Macquarie notes it remains cautious on the company's earnings trajectory, particularly heading into FY24. 

The broker does remain positive on the company's defensive topline, with Region Group's tenant base performing strongly in the first half and leasing spreads improving to 4.4% from 3.3% partially as a result of the company delaying lease negotiations during covid-impacted periods. 

The rating is upgraded to Neutral from Underperform and the target price of $2.52 is retained.

Target price is $2.52 Current Price is $2.50 Difference: $0.02
If RGN meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $2.77, suggesting upside of 11.0% (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

Citi rates SHL as Upgrade to Buy from Neutral (1) -

Citi has upgraded its earnings forecasts for Sonic Healthcare after adjusting for the AUDUSD, and rolled forward its valuation. The result is a target increase to $36.00 from $34.50 and an upgrade to Buy from Neutral.

The broker notes ample balance sheet capacity for acquisitions/new contracts or share buybacks and further upgrades its FY23-25 forecasts on higher margin expectations.

Target price is $36.00 Current Price is $32.32 Difference: $3.68
If SHL meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $34.81, suggesting upside of 5.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

UBS rates TWE as Buy (1) -

UBS anticipates 25% group earnings (EBITS) margins will be reiterated by management at upcoming investor days on March 8 and 9, while no trading update is expected.

The analyst will be ready with questions on the progress for Penfolds global distribution opportunity and the potential uplift from a China tourism recovery and future changes in duties.

The $15 target and Buy rating are unchanged.

Target price is $15.00 Current Price is $13.58 Difference: $1.42
If TWE meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $14.16, suggesting upside of 4.9% (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

Macquarie rates UMG as Outperform (1) -

Recent financial results have pointed to resilience in the beer industry, with trends largely in line with United Malt's performance according to Macquarie. According to the broker, brewers are benefiting from improved performance year-to-date after some softness in North American volumes in the December quarter. 

The broker feels recent guidance confirmation from United Malt has been an important driver of renewed market confidence, and sees a credible path to earnings recovery for the company through to FY24.

The Outperform rating and target price of $3.99 are retained.

Target price is $3.99 Current Price is $3.43 Difference: $0.56
If UMG meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $3.86, suggesting upside of 14.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Credit Suisse rates WBC as Neutral (3) -

After analysis of reporting season results for the Bank sector, Credit Suisse now sees increasing headwinds and has a clear preference for business over retail banks.

The broker lists several headwinds including increasing competitive pressures as asset growth slows and a rising cost of funding when banks refinance cheap funding from the Term Funding Facility.

Inflationary pressures on costs and asset quality concerns as consumers confront higher interest rates are additional reasons for caution around the sector, explain the analysts.

ANZ Bank is the most preferred, followed by National Australia Bank, Westpac and CommBank. The Westpac target is $24.40.

Target price is $24.40 Current Price is $21.73 Difference: $2.67
If WBC meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $26.24, suggesting upside of 18.7% (ex-dividends)

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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