Australian Broker Call

Morgans rates ACF as Add (1) -

Morgans raises its FY23 and FY24 earnings (EBITDA) forecasts after Acrow Formwork and Construction Services announced the acquisition of screens assets from long-term customer Heinrich for -$11.5m.

The transaction, which include the purchase of intellectual property plus existing and secured hire contracts, will be funded by a combination of cash and debt.

Separately, management advised performance during the March quarter has been strong, with secured hire contracts for the nine months to the end of March increased by 34% on the previous corresponding period.

The target rises to $1.00 from 95c and the Add rating is unchanged.

Target price is $1.00 Current Price is $0.77 Difference: $0.235
If ACF meets the Morgans target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $0.98, suggesting upside of 20.6% (ex-dividends)

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

Shaw and Partners rates ACF as Buy (1) -

Shaw and Partners considers the new acquisition will expand the service offering from Acrow Formwork and Construction Services and upgrades estimates for FY23 slightly.

The company will acquire Heinrich Screens assets, intellectual property, and both existing and confirmed forward contracts. The purchase price is -$11.5m, funded by cash and debt.

The broker remains attracted to the stock, given the quality of management and the strong outlook for the sectors in which it operates.

Progress is being made on several fronts with earnings momentum and improved utilisation of assets. Buy rating maintained. Target rises to $1.05 from $1.00.

Target price is $1.05 Current Price is $0.77 Difference: $0.285
If ACF meets the Shaw and Partners target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $0.98, suggesting upside of 20.6% (ex-dividends)

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

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

The ACCC's final determination on ANZ Bank's proposed acquisition of the banking arm of Suncorp Group ((SUN)) is due on June 12.

In the meantime, Morgan Stanley highlights some preliminary views released by the ACCC including: "a competitive fringe of second tier firms... is likely to produce significantly better outcomes for consumers".

There is currently insufficient information to substantiate "the claimed public benefits", including ANZ's commitment to invest in Queensland, noted the ACCC.

The Equal-weight rating and $26.20 target are unchanged. Industry view: In-line.

Target price is $26.20 Current Price is $23.27 Difference: $2.93
If ANZ meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $27.23, suggesting upside of 16.9% (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

Bell Potter rates CHN as Speculative Buy (1) -

Chalice Mining has upgraded the Gonneville resource at the Julimar project in Western Australia. This update has provided around 60% increase in tonnage with more than 50% increases in contained palladium and nickel.

Bell Potter considers this a major positive. Significantly, 95% of the resource is above the depth of 200m and now classified as indicated, meaning it is available for conversion to reserves to underpin a scoping study. The broker retains a Speculative Buy rating and raises the target to $12.00 from $11.10.

Target price is $12.00 Current Price is $7.37 Difference: $4.63
If CHN meets the Bell Potter target it will return approximately 63% (excluding dividends, fees and charges).

Current consensus price target is $9.10, suggesting upside of 20.2% (ex-dividends)

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

Morgan Stanley rates CSL as Overweight (1) -

Following CSL site tours in Marburg and Bern in Germany and Switzerland, Morgan Stanley is now more confident margin improvement will continue into FY24.

The broker anticipates increases in volumes and ongoing immunoglobulin (Ig) yield improvement, and looks forward to a full 12-month contribution from Vifor Pharma.

The Overweight rating and $339 target are unchanged. Industry View: In-Line.

Target price is $339.00 Current Price is $291.47 Difference: $47.53
If CSL meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $337.18, suggesting upside of 14.6% (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: 0.8

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

Bell Potter rates ELD as Hold (3) -

Approaching first half results, Bell Potter downgrades forecasts to reflect continued weakness in livestock markets and global fertiliser prices.

Many of the tailwinds observed in FY22 for Elders have seemingly reverted to headwinds in the first half of FY23.

Net profit estimates are downgraded by -5% for FY23 and -9% for FY24. Target is reduced to $8.60 from $9.40 while the Hold rating is unchanged.

Target price is $8.60 Current Price is $8.58 Difference: $0.02
If ELD meets the Bell Potter target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $12.24, suggesting upside of 44.7% (ex-dividends)

The company's fiscal year ends in September.

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

UBS rates ILU as Neutral (3) -

In light of market developments, UBS lowers its forecasts for rare earths for 2023 to US$86/kg while the long-term real price forecast of US$95/kg is unchanged.

The macro outlook has deteriorated which has compelled the broker to downgrade demand numbers for the shorter term.

As Iluka Resources is still three years away from first production, the valuation is not affected by these forecast changes and a Neutral rating and $11.20 target are maintained.

Target price is $11.20 Current Price is $10.99 Difference: $0.21
If ILU meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $11.31, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in December.

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

Bell Potter rates IPG as Buy (1) -

Bell Potter believes IPD Group's future growth prospects have evolved significantly and the company is now on track for two consecutive years of around 15% growth in volume.

The reasons include a more comprehensive product offering as well as an increasing proportion of sales stemming from replacement and upgrade of existing building infrastructure.

The broker raises estimates for earnings per share across FY23-25 by 4-6%. Buy rating maintained. Target rises to $4.00 from $3.50.

Target price is $4.00 Current Price is $3.50 Difference: $0.5
If IPG meets the Bell Potter target it will return approximately 14% (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

UBS rates LYC as Upgrade to Buy from Neutral (1) -

In light of market developments, UBS lowers its forecasts for rare earths for 2023 to US$86/kg while the long-term real price forecast of US$95/kg is unchanged.

This has led to a reduction in estimates for earnings per share for Lynas Rare Earths of -19% and -15% in FY23 and FY24, respectively.

While the target is lowered to $8.80 from $9.00, the rating is upgraded to Buy from Neutral as the share price is now down -33% from its peak in January.

While aware of the risks around near-term production the broker, consistent with company guidance, models Kalgoorlie feed starting in the fourth quarter of FY23.

Target price is $8.80 Current Price is $6.52 Difference: $2.28
If LYC meets the UBS target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $7.71, suggesting upside of 23.8% (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

Macquarie rates MCR as Neutral (3) -

Wyloo has declared its offer for Mincor Resources as "best and final" in the absence of a competing proposal. Mincor has withdrawn its FY23 production guidance because of the impact of off-specification product.

Macquarie retains its FY23 production forecasts but envisages increased downside risk to output because of the quality challenges. Target is reduced to $1.40 from $1.50, in line with the offer price. Neutral retained.

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

Current consensus price target is $1.40, suggesting downside of -1.6% (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

Shaw and Partners rates MCR as Downgrade to Sell from Buy (5) -

The board of Mincor Resources has advised shareholders to accept the offer from Wyloo, at $1.40 a share. Shaw and Partners continues to believe the bid undervalues the long-term potential but follows suit and advises shareholders to sell into the offer.

The broker points out the bid from Wyloo highlights the scarcity value in high-grade nickel sulphide deposits in low-risk jurisdictions. Target is reduced to $1.40 from $1.80, in line with the bid price, and the rating is downgraded to Sell from Buy.

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

Current consensus price target is $1.40, suggesting downside of -1.6% (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

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

Analysts at Citi are adopting the view that rising share prices for landlords in Australia likely have further to run as worst case scenarios for property prices don't seem to be materialising.

Ofsetting the negatives, Citi argues rising immigration along with low supply create a positive medium-term backdrop for the sector.

Mirvac Group has been upgraded to Buy from Neutral. Stockland, also upgraded today, is the preferred exposure. No change has been made to the $2.40 price target.

Target price is $2.40 Current Price is $2.17 Difference: $0.23
If MGR meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting upside of 16.8% (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 ORI as Upgrade to Outperform from Neutral (1) -

Macquarie reviews the fundamentals and ascertains Orica's relative earnings defensiveness is driven by solid demand for resources, internal margin improvement as well as a recovery after the pandemic.

Rating is upgraded to Outperform from Neutral as the stock offers an attractive growth outlook for earnings. FY23-25 estimates are lifted by 5-6% because of the improved price/mix and demand recovery. Target is raised to $17 from $16.

Target price is $17.00 Current Price is $15.54 Difference: $1.46
If ORI meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $16.59, suggesting upside of 4.2% (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

Bell Potter rates PAR as Speculative Buy (1) -

Paradigm Biopharmaceuticals has further data on its phase 2 randomised clinical trial that provides more evidence of the efficacy and safety of iPPS.

The data will be used to request a "Type D" meeting with the US FDA to seek guidance regarding the adequacy of the proposed endpoints in the upcoming phase 3 trials. This is intended to support a future label claim for a disease modifying osteoarthritis drug.

Bell Potter's Speculative Buy rating and target price of $2.20 are retained.

Target price is $2.20 Current Price is $1.35 Difference: $0.855
If PAR meets the Bell Potter target it will return approximately 64% (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

Shaw and Partners rates RPL as Buy (1) -

Shaw and Partners believes a consolidation opportunity exists as the sector has de-rated. Current conditions support increasing penetration of private debt in Australia amid robust M&A activity.

There is also a shift towards attractive fixed or secured yield propositions as spreads have widened and the curve is shifting downwards.

Regal Partners recently acquired a $200m binding commitment from a prominent Australian family in its private credit strategy with an option to invest a further $100m.

With net inflow potential being flagged to support further growth, the broker retains a Buy rating and $5.74 target.

Target price is $5.74 Current Price is $3.06 Difference: $2.68
If RPL meets the Shaw and Partners target it will return approximately 88% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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

Citi rates SBM as Neutral (3) -

St Barbara is in a trading halt along with Genesis Minerals ((GMD)) as alternative transaction structures and capital requirements are evaluated in line with the merger plans.

Outside of Gwalia, Citi assesses the portfolio is generating cash and the concerns more likely centre on capital for Leonora and performance issues.

The proposed merger with Genesis Minerals to form Hoover House would come with a $275m conditional placement from Genesis Minerals. The broker believes the valuation outlook for Hoover House and Phoenician is "murky".

St Barbara needs the merger and the $275m in new equity which the deal should bring, the broker ascertains. Neutral/High Risk rating retained. Target is $0.65.

Target price is $0.65 Current Price is $0.67 Difference: minus $0.02 (current price is over target).
If SBM meets the Citi target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.05, suggesting upside of 62.8% (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

Macquarie rates SBM as No Rating (-1) -

St. Barbara and Genesis Minerals ((GMD)) are discussing a potential alternative transaction, albeit still committed to advancing the merger. Meanwhile, St Barbara has announced poor model reconciliation and mining rates at Leonora have reduced FY23 production guidance.

Cost guidance has also been withdrawn. Reducing second half production expectations by -12,000 ounces means Macquarie's FY23 loss estimate grows by 25% and a larger loss is also expected in FY25. Macquarie remains restricted and cannot provide a rating or target.

Current Price is $0.67. Target price not assessed.

Current consensus price target is $1.05, suggesting upside of 62.8% (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

Macquarie rates SEK as Upgrade to Outperform from Neutral (1) -

After the Seek investor briefing Macquarie upgrades to Outperform from Neutral, assessing the five-year growth aspirations of high single digits for Australasia are conservative.

While the company downgraded FY23 revenue guidance to reflect softer job advertisements this, the broker observes, was entirely offset by cuts to operating expenditure. The risk/reward is now skewed to the upside, Macquarie asserts. Target is raised to $32.50 from $23.50.

Target price is $32.50 Current Price is $23.98 Difference: $8.52
If SEK meets the Macquarie target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $28.28, suggesting upside of 13.2% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates SEK as Hold (3) -

Seek has slightly downgraded full-year revenue guidance by around -$15m to $1.25bn. Nevertheless, lower operating expenditure is expected to offset this decline; EBITDA and net profit guidanceas are unchanged.

Ord Minnett already expected a dip in revenue and maintains its forecasts, believing, at current prices, the shares are fairly valued.

At its investor briefing, the company highlighted several innovations to its product, which the broker found engaging. Ord Minnett retains a Hold rating with a $22.80 target.

Target price is $22.80 Current Price is $23.98 Difference: minus $1.18 (current price is over target).
If SEK meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.28, suggesting upside of 13.2% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates SEK as Buy (1) -

Seek's investor briefing gives UBS confidence about top-line growth beyond FY24 in both Australasia and Asia. The company's $2bn revenue target by FY28 is partly driven by its yield growth aspirations in Australasia.

UBS suspects these aspirations are conservative as Australia is under-monetised for job listing costs and HR personnel are increasingly considering outsourcing recruitment activity.

The broker raises FY24-28 Asian revenue growth rates to 10% from 4% amid increased confidence in the company's aspirations for the region. Buy rating reiterated. Target is raised to $27.70 from $27.20.

Target price is $27.70 Current Price is $23.98 Difference: $3.72
If SEK meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $28.28, suggesting upside of 13.2% (ex-dividends)

The company's fiscal year ends in June.

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

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

Analysts at Citi are adopting the view that rising share prices for landlords in Australia likely have further to run as worst case scenarios for property prices don't seem to be materialising.

Ofsetting the negatives, Citi argues rising immigration along with low supply create a positive medium-term backdrop for the sector.

Citi's rating for Stockland has been upgraded to Buy from Neutral. Stockland becomes the broker's preferred exposure. The target lifts to $4.60 from $3.90.

Target price is $4.60 Current Price is $4.15 Difference: $0.45
If SGP meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $4.27, suggesting upside of 3.5% (ex-dividends)

The company's fiscal year ends in June.

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