Australian Broker Call

UBS rates ANZ as Buy (1) -

With bank reporting season looming, UBS notes rising interest rates have been a tailwind for net interest margins (NIMs) and revenue, but these trends are expected to slow into FY24 and beyond.

In line with first half results, the analysts incorporate strong NIM expansion of 9.6bps into forecasts and 8% volume growth for the majors. The escalation in funding costs and greater chance of a 'higher for longer' rates story, are also allowed for in estimates.

ANZ Bank reports its FY23 result on November 13 and UBS is expecting a strong result. The consensus forecast is for the FY23 Cash profit to rise by 15% year-on-year. The Buy rating and $26 target are unchanged.

The broker's top picks in the sector are Buy-rated Macquarie Group and ANZ Bank, along with Neutral-rated Commbank.

This summary relates to research released yesterday by UBS.

Target price is $26.00 Current Price is $25.57 Difference: $0.43
If ANZ meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $26.94, suggesting upside of 5.0% (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

Macquarie rates APE as Neutral (3) -

Eagers Automotive has acquired a 12-brand dealership portfolio with a prestige skew along with three properties in Victoria. The acquisition adds around $1.0bn of turnover at a 4x profit before tax acquisition multiple and is some 3-4% accretive, Macquarie estimates.

As supply continues to normalise, demand is starting to wane given the macroeconomic backdrop, Macquarie notes. This will be supported by a clearing of the order bank, however looking into 2024 the broker expects margins to normalise.

The rate of normalisation will depend on how much demand softens and how willing manufacturers are to not tip the market back into oversupply as was the case pre-covid.

Target falls to $14.60 from $14.70 on increased net debt. Neutral retained.

Target price is $14.60 Current Price is $14.32 Difference: $0.28
If APE meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $14.86, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Morgan Stanley rates APE as Overweight (1) -

Morgan Stanley likes Eagers Automotive's proposed acquisition in Victoria of a large dealership for -$245m, to be paid via -$220m cash and the balance in shares of Eagers Automotive.

Advantages of the transaction include greater scale in Victoria, providing network optimisation/efficiences, and will provide further scope for organic/inorganic expansion. Supply for the company's used car strategy EA123 is also expected to improve.

The Overweight rating and target price of $16.00 are retained. Industry view: In-Line. 

Target price is $16.00 Current Price is $14.32 Difference: $1.68
If APE meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $14.86, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in December.

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

Ord Minnett rates APE as Buy (1) -

Eagers Automotive has announced the acquisition of a portfolio of Victorian dealerships for $245m, subject to shareholder approval.

The acquired businesses have a combined revenue of $1.0bn, and Ord Minnett expects the purchase to provide a 4-5% incremental increase to profit before tax. 

Ord Minnett continues to expect Eagers Automotive to benefit from stronger margins for longer, expecting in the medium-term that dealership inventories will never return to pre-covid levels.

The broker's full year revenue expectations are towards the top end of company guidance of $9.5-10.0bn. The Buy rating and target price of $16.20 are retained.

Target price is $16.20 Current Price is $14.32 Difference: $1.88
If APE meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $14.86, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in December.

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 APE as Neutral (3) -

While still subject to a shareholder vote, notes UBS, Eagers Automotive has announced the potential acquisition for -$245m of a portfolio of Victorian car dealers with a weighting to the prestige end of the market. Turnover from the portfolio is around $1bn annually.

The broker does not yet factor the transaction into its forecasts, but suggests it would be around 4-5% EPS accretive for Eagers Automotive on current metrics. 

There has been a muted share price reaction to the proposed deal, which UBS attributes to well flagged M&A intentions and a large acquisition at the top of the cycle. Some caution seems warranted, suggests the broker, due to the related-party nature of the deal.

Neutral. Target $14.10.

Target price is $14.10 Current Price is $14.32 Difference: minus $0.22 (current price is over target).
If APE meets the UBS target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.86, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

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

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for Arena REIT falls to $3.85 from $4.36. Equal-weight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $3.85 Current Price is $3.36 Difference: $0.49
If ARF meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Market Sentiment: 0.5

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

Shaw and Partners rates AZY as Buy (1) -

Antipa Minerals has started an intensive drilling period to targets at Tetris and Pacman and Shaw and Partners expects first assays in the next few weeks with many more to follow.

The broker believes the company represents cheap exposure to a strengthening gold price as markets approach the end of an interest rate hike cycle and deal with geopolitical tension.

Buy rating and 6c target price retained.

Target price is $0.06 Current Price is $0.01 Difference: $0.047
If AZY meets the Shaw and Partners target it will return approximately 362% (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

Citi rates BBN as Buy (1) -

Baby Bunting's trading update at its AGM disappointed Citi, like for like sales momentum lagging expectations.

Improved gross margins were in line with the broker's forecast (although above consensus), suggesting loyalty program optimisation, lower international freight costs, and benefits from private label expansion.

Buy rating and $2.20 target price retained.

Target price is $2.20 Current Price is $2.00 Difference: $0.2
If BBN meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $2.16, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Macquarie rates BBN as Neutral (3) -

Baby Bunting's AGM revealed total sales down -3.3% in first half FY24 to date, but the company is cycling 12% a year ago Macquarie notes.

Gross margins expanded by 70 basis points to 37.9% but the broker expects forex to become a headwind as hedges roll off.

Forex headwinds come on top of what Macquarie already suggests is an uncertain macro environment for retailers.

Neutral and $2.10 target retained.

Target price is $2.10 Current Price is $2.00 Difference: $0.1
If BBN meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $2.16, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Citi rates BOQ as Sell (5) -

Bank of Queensland released FY23 financials this morning and Citi, upon initial glance, reports cash earnings of $450m missed consensus by between -1%-5% with both revenues and the net interest margin below forecasts.

The broker highlights underlying earnings declined by -20% sequentially. Judging from management's commentary, Citi doesn't think we can assume earnings have troughed as yet.

Keeping a lid on costs continues to be one key problem, the broker suggests. Getting a better return out of mortgages remains a problem too.

Sell. Target $5. Citi describes today's release as "very weak", anticipates further downgrades to consensus forecasts and suggests management at the regional lender will have a tough task in building credibility in the bank's medium term productivity story.

Target price is $5.00 Current Price is $5.78 Difference: minus $0.78 (current price is over target).
If BOQ meets the Citi target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.78, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in August.

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 BOQ as Sell (5) -

With bank reporting season looming, UBS notes rising interest rates have been a tailwind for net interest margins (NIMs) and revenue, but these trends are expected to slow into FY24 and beyond.

In line with first half results, the analysts incorporate strong NIM expansion of 9.6bps into forecasts and 8% volume growth for the majors. The escalation in funding costs and greater chance of a 'higher for longer' rates story, are also allowed for in estimates.

Bank of Queensland reports its FY23 result today (just out) and UBS was expecting a soft result. The broker forecasts a 2H cash profit of around $206m, down -20% year-on-year and a diluted cash EPS of $0.26cps. Sell. Target $5.00.

The broker's top picks in the sector are Buy-rated Macquarie Group and ANZ Bank, along with Neutral-rated Commbank.

This summary relates to research released yesterday by UBS.

Target price is $5.00 Current Price is $5.78 Difference: minus $0.78 (current price is over target).
If BOQ meets the UBS target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.78, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in August.

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 BOQ as Sell (5) -

It is UBS' initial opinion that Bank of Queensland's FY23 performance, released earlier today, is a "poor result". The broker asks rhetorically where to from here for the regional lender given regulatory risk and uncertainty about strategy delivery.

UBS does point out the market already was expecting a poor result, yet cash profit still missed forecasts. The compression in net interest margin is seen as "concerning".

The broker observes the shares are already trading one standard deviation below their historical average. Sell. Target $5.

Target price is $5.00 Current Price is $5.78 Difference: minus $0.78 (current price is over target).
If BOQ meets the UBS target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.78, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in August.

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

Citi rates BWP as Sell (5) -

Citi says BWP Trust's sale of its former Bunnings Warehouse in Wollongong for an 81.8% premium over its $22m June 2023 valuation for $40m represents an estimated cap rate of 5.4%, in line with the company's June 30 cap rate.

The proceeds will most likely be used to pay down debt and support acquisitions and developments, says the broker.

Citi says the main takeout is that it represents a positive data point in Bunnings warehouse transaction values and another liquidity cap rate data point for small to medium-sized retail assets.

The broker expects more of the same from the trust. Sell rating and $3.40 target price retained.

Target price is $3.40 Current Price is $3.40 Difference: $0
If BWP meets the Citi target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $3.52, suggesting upside of 1.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.8

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

Morgan Stanley rates BWP as Underweight (5) -

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for BWP Trust falls to $3.45 from $3.80. Underweight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $3.45 Current Price is $3.40 Difference: $0.05
If BWP meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.52, suggesting upside of 1.6% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.8

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

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

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for Charter Hall falls to $11.10 from $13.95. Equal-weight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $11.10 Current Price is $9.62 Difference: $1.48
If CHC meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $13.28, suggesting upside of 36.5% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

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

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for Centuria Industrial REIT falls to $3.30 from $3.55. Equal-weight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $3.30 Current Price is $2.95 Difference: $0.35
If CIP meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $3.38, suggesting upside of 14.1% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

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

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for Charter Hall Long WALE REIT falls to $3.70 from $4.40. Equal-weight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $3.70 Current Price is $3.19 Difference: $0.51
If CLW meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $3.90, suggesting upside of 21.2% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Morgan Stanley rates CNI as Overweight (1) -

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for Centuria Capital falls to $1.60 from $1.89. Overweight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $1.60 Current Price is $1.37 Difference: $0.23
If CNI meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $1.58, suggesting upside of 16.4% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Morgan Stanley rates COF as Underweight (5) -

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for Centuria Office REIT falls to $1.30 from $1.55. Underweight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $1.30 Current Price is $1.14 Difference: $0.16
If COF meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $1.54, suggesting upside of 35.1% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

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

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for Charter Hall Retail REIT falls to $3.55 from $4.10. Equal-weight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $3.55 Current Price is $3.14 Difference: $0.41
If CQR meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.78, suggesting upside of 19.0% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

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

Encouraged by the company's strategies over the six months past, Citi has decided it's time to upgrade Domino's Pizza Enterprises to Buy from Neutral.

While there remains a longer road to be traveled, the broker acknowledges, the view taken is that an inflection point has been crossed, and ongoing improvement in key financial metrics should follow.

Short term, Citi believes current gearing is limiting M&A, but management is working on resolving this. An upgrade to multiples pushes up the price target to $58.60 (was $57.95).

Target price is $58.60 Current Price is $51.44 Difference: $7.16
If DMP meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $57.43, suggesting upside of 8.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Morgan Stanley rates DXS as Underweight (5) -

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for Charter Hall Retail REIT falls to $8.10 from $8.50. Underweight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $8.10 Current Price is $7.23 Difference: $0.87
If DXS meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $8.87, suggesting upside of 22.3% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

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

Morgan Stanley rates GMG as Overweight (1) -

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for Goodman Group falls to $25.50 from $25.59. Overweight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $25.50 Current Price is $22.06 Difference: $3.44
If GMG meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $23.74, suggesting upside of 7.1% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Bell Potter rates GNC as Buy (1) -

GrainCorp has announced it is evaluating the case for new crush capacity, following news that Cargill will invest $70-75m to add 100,000 tonnes of capacity across three sites. Bell Potter expects any investment to be reasonably attractive from an earnings perspective. 

Recent movements in grain basis and oilseed crush margins results in earnings per share forecast adjustments from the broker of -3% for FY24 and 4% for FY25. 

The Buy rating and target price of $9.45 are retained.

Target price is $9.45 Current Price is $6.92 Difference: $2.53
If GNC meets the Bell Potter target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $8.83, suggesting upside of 28.1% (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

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

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for GPT Group alls to $4.25 from $4.70. Equal-weight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $4.25 Current Price is $3.84 Difference: $0.41
If GPT meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $4.90, suggesting upside of 26.0% (ex-dividends)

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

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

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for HomeCo Daily Needs REIT falls to $1.35 from $1.40. Equal-weight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $1.35 Current Price is $1.15 Difference: $0.2
If HDN meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $1.33, suggesting upside of 13.5% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

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

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for HMC Capital falls to $5.20 from $5.75. Equal-weight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $5.20 Current Price is $4.67 Difference: $0.53
If HMC meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $5.31, suggesting upside of 12.4% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Citi rates JHG as Neutral (3) -

Previewing Janus Henderson's Q3 market update, scheduled for November 1st, Citi analysts think it unlikely there will be a lot of good news in the release.

Outflows will likely be in the guided range of -US$3.5bn and -US$5.0bn, and fulcrum fees negative -US$16m-US$17m. FX impact is expected to be a net negative on top.

Citi has reduced forecasts by between -3%-7% for the years ahead. Neutral rating retained, while the price target has dropped to $39.85 for the ASX-listing and to US$25.30 (was US$27.70).

Target price is $39.85 Current Price is $38.76 Difference: $1.09
If JHG meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $40.89, suggesting upside of 6.5% (ex-dividends)

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

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

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for Lendlease Group falls to $7.95 from $9.20. Equal-weight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $7.95 Current Price is $7.05 Difference: $0.9
If LLC meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $9.94, suggesting upside of 43.8% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Morgans rates MAF as Initiation of coverage with Add (1) -

While MA Financial is facing a more difficult earnings environment in its FY23, as it cycles strong asset management performance fees and as investment banking remains subdued, Morgans sees a stock buying opportunity in the face of the tougher near-term outlook. 

The company's asset management franchise is differentiated from peers thanks to significant exposure to the fast-growing alternative assets space, with the franchise growing funds under management at a 37% compound annual growth rate between FY16-FY23. The broker expects structural tailwinds for these assets to support future growth. 

Morgans initiates coverage with an Add rating and a target price of $6.25.

Target price is $6.25 Current Price is $4.63 Difference: $1.62
If MAF meets the Morgans target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $6.82, suggesting upside of 48.5% (ex-dividends)

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

Bell Potter rates MEI as Buy (1) -

A recent visit to Meteoric Resources' Caldeira site has reaffirmed Bell Potter's positive outlook on the project, with the broker continuing to see upside for the business. 

Meteoric Resources continues to optimise metallurgical recoveries and progress environmental permitting, which remain key hurdles. 

Delivery of a scoping study and an updated resource estimate for Soberto are both expected in the third quarter.

Resource estimate updates for Figueira and Capeo do Mel are expected in the fourth quarter of FY24 and first quarter of FY25 respectively, before a maiden reserve in the second quarter of FY25. 

The Buy rating and target price of 40 cents are retained.

Target price is $0.40 Current Price is $0.22 Difference: $0.185
If MEI meets the Bell Potter target it will return approximately 86% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Macquarie rates MGR as Outperform (1) -

Macquarie attended a tour of Mirvac Group's assets in Melbourne, at which a plan was announced to target 5,000 build-to-rent apartments by 2030. The broker estimates this could add 0.4% per annum to earnings and become 5-15% of group earnings.

Mirvac is currently leveraging its existing land bank with one pilot project in Everleigh, Brisbane, with a further 6-8 sites across the portfolio that could be developed into land lease over time.

Macquarie makes no changes to forecasts at this stage. Outperform and $2.66 target retained.

Target price is $2.66 Current Price is $2.08 Difference: $0.58
If MGR meets the Macquarie target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $2.65, suggesting upside of 25.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Morgan Stanley rates MGR as Overweight (1) -

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for Mirvac Group falls to $2.55 from $2.80. Overweight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $2.55 Current Price is $2.08 Difference: $0.47
If MGR meets the Morgan Stanley target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $2.65, suggesting upside of 25.7% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Morgans rates MIN as Add (1) -

Despite still developing its lithium strategy, recent site visits to Mineral Resources' Mt Marion, Wodgina and Onslow projects have reaffirmed Morgans' positive medium- and long-term view on the company.

The broker expects Mineral Resources will grow the size and quality of its earnings, and increase diversification, although some near-term hurdles, including falling lithium prices, remain.

While the Mt Marion ramp up has been slow, the company is starting to see real improvement in the mine and plant and expects costs to fall materially, and is confident on growing the resource.

Wodgina, meanwhile, is ahead of budget and delivered reported shipments in August and September. The Add rating and target price of $83.00 are retained.

Target price is $83.00 Current Price is $60.85 Difference: $22.15
If MIN meets the Morgans target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $77.14, suggesting upside of 24.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

UBS rates MQG as Buy (1) -

With bank reporting season looming, UBS notes rising interest rates have been a tailwind for net interest margins (NIMs) and revenue, but these trends are expected to slow into FY24 and beyond.

In line with first half results, the analysts incorporate strong NIM expansion of 9.6bps into forecasts and 8% volume growth for the majors. The escalation in funding costs and greater chance of a 'higher for longer' rates story, are also allowed for in estimates.

Macquarie Group reports its 1H FY24 results on November 3. Both UBS and consensus expect group profit will fall by around -37% half-on-half. The Buy rating and $196 target are retained.

The broker's top picks in the sector are Buy-rated Macquarie Group and ANZ Bank, along with Neutral-rated Commbank.

This summary relates to research released yesterday by UBS.

Target price is $196.00 Current Price is $167.14 Difference: $28.86
If MQG meets the UBS target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $189.88, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

UBS rates NAB as Sell (5) -

With bank reporting season looming, UBS notes rising interest rates have been a tailwind for net interest margins (NIMs) and revenue, but these trends are expected to slow into FY24 and beyond.

In line with first half results, the analysts incorporate strong NIM expansion of 9.6bps into forecasts and 8% volume growth for the majors. The escalation in funding costs and greater chance of a 'higher for longer' rates story, are also allowed for in estimates.

National Australia Bank reports FY23 results on November 9. UBS  forecasts a 2H cash profit of circa $3.7bn a fall of -10% half-on-half  and diluted cash EPS of $1.06cps.The Sell rating and $26 target are retained.

The broker's top picks in the sector are Buy-rated Macquarie Group and ANZ Bank, along with Neutral-rated Commbank.

This summary relates to research released yesterday by UBS.

Target price is $26.00 Current Price is $29.15 Difference: minus $3.15 (current price is over target).
If NAB meets the UBS target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $27.56, suggesting downside of -5.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.3

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

Morgan Stanley rates NSR as Underweight (5) -

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for National Storage REIT falls to $2.30 from $2.40. Underweight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $2.30 Current Price is $2.23 Difference: $0.07
If NSR meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $2.32, suggesting upside of 3.9% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Citi rates NST as Neutral (3) -

After marking to market its gold and foreign-exchange forecasts, Citi raises Northern Star Resources' target price to $12.30 from $12.10 heading into the company's September-quarter result next week.

The broker shaves its September-quarter forecasts to match consensus, given the company has guided to a skewing to the second half, after a shutdown at all three production centres.

Citi has cut its FX forecast -6% in FY24 and -1% in FY25, which translates to an increase in the company's earnings. Neutral rating retained. The broker is tipping a nadir in bullion markets in October/November.

Target price is $12.30 Current Price is $11.40 Difference: $0.9
If NST meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $12.50, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Citi rates NWH as Buy (1) -

Citi believes NRW Holdings's FY24 guidance is likely to prove conservative given further contract wins (Lendlease and Defence among them), and as topline visibility strengthens.

The broker estimates the FY24 order book to be $2.85bn, ahead of consensus forecasts for $2.84bn, and that the FY25 order book could already be $2.54bn - based on secured work (93% of the broker's revenue estimate).

Citi says the company's strong bidding performance suggests it is attracting and retaining staff, and managing capacity well.  The broker observes 80% of recent wins relate to the subdued Civil division.

Buy rating and $3.15 target price retained, the company proving the broker's top pick among contractors.

Target price is $3.15 Current Price is $2.77 Difference: $0.38
If NWH meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $3.00, suggesting upside of 9.9% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Morgans rates ORG as Hold (3) -

Origin Energy continues to court an approximately $8.83 per share bid from EIG and Brookfield, with the takeover now having gained approval from the ACCC. 

Morgans expects the potential buyers will need to engage with shareholders, with major 13.7% shareholder Australian Super having already expressed that the offer is below its long-term estimate of Origin Energy's value.

The broker, however, is less optimistic for Origin Energy's future than Australian Super, and has calculated a discounted cash flow valuation lower than the current bid. 

The Hold rating is retained and the target price increases to $9.00 from $8.55.

Target price is $9.00 Current Price is $9.21 Difference: minus $0.21 (current price is over target).
If ORG meets the Morgans target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.92, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Ord Minnett rates ORG as Hold (3) -

With the Brookfield-EIG consortium takeover of Origin Energy cleared by the ACCC, Origin Energy intends to release a scheme booklet in coming weeks. The ACCC did concede that the acquisition could drive anticompetitive behaviour and higher prices for consumers. 

At current exchange rates Ord Minnett estimates the bid at $8.80 a share, but notes a 4% share price increase leaves the share price 3% ahead of the bid and suggests the market may expect an increased bid from the consortium. 

Ord Minnett feels a better offer is needed, finding the bid a "paltry premium" to its own valuation. The Hold rating and target price of $8.80 are retained.

Target price is $8.80 Current Price is $9.21 Difference: minus $0.41 (current price is over target).
If ORG meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.92, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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 Buy (1) -

Paradigm Biopharmaceuticals has released results of a twelve month efficacy study exploring the durable effect of injectable pentosan polysulfate sodium for the treatment of osteoarthritis, demonstrating significant reductions in pain and improvements in function twelve months after dosing. 

Bell Potter finds the results highly supportive of treatment development. The company expects to continue dosing patients within its phase 3 study, and having ruled out the efficacy of lower doses will now focus on a twice weekly 2 milligrams per kilogram dose regimen. 

The Buy rating is retained and the target price decreases to $1.40 from $2.20.

Target price is $1.40 Current Price is $0.60 Difference: $0.8
If PAR meets the Bell Potter target it will return approximately 133% (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 PLS as Neutral (3) -

UBS suggests there is potential for the Pilbara Minerals' realised lithium price to disappoint in the September quarter.

Chinese lithium carbonate future prices continue to fall and spodumene prices via the various price reporting agencies (PRA's) are also retreating, notes the analyst.

The broker feels the market consensus forecasts for Pilbara Minerals are too high and the stock could be cum a -30% earnings downgrade.

The Neutral rating and $4.15 target are maintained.

Target price is $4.15 Current Price is $3.96 Difference: $0.19
If PLS meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $5.00, suggesting upside of 24.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Citi rates PRN as Buy (1) -

Citi expects Perenti will provide conservative guidance at the upcoming AGM.

The broker says more transparency is needed about possible idoba offerings to trigger a reversal in market perception, but believes the company's upside is underestimated.

The broker says the company's buyback announced this week offers flexibility around return of capital given its focus is on commercialising idob and integrating DDH, but that it could signal a delay in dividend reinstatement (the broker forecasts a 9c dividend in 2025).

Buy rating and $1.25 target price retained.

Target price is $1.25 Current Price is $1.03 Difference: $0.215
If PRN meets the Citi target it will return approximately 21% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Ord Minnett rates REG as Upgrade to Accumulate from Hold (2) -

Regis Healthcare's outlook continues to improve according to Ord Minnett, with merger and acquisition opportunites increasing and higher resident contributions on the table for FY25 and beyond. 

The rating is upgraded to Accumulate from Hold, with Ord Minnett believing occupancy rates are likely to continue to surprise to the upside and that reduced agency utilisation and improved accommodation income could partially offset the 200-care-minutes transition.

The broker also feels bolt-on acquisitions could be materially accretive for the company. The target price increases to $2.80 from $2.25.

Target price is $2.80 Current Price is $2.58 Difference: $0.22
If REG meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

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

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for Region Group falls to $2.25 from $2.57. Equal-weight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $2.25 Current Price is $2.08 Difference: $0.17
If RGN meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $2.41, suggesting upside of 14.4% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Macquarie rates SBM as Outperform (1) -

St. Barbara has released a Pre-Feasibility Study for the 15 Mile project, with many key metrics broadly in line with Macquarie, including pre-production capex.

The PFS, as expected, envisages moving the Touquoy plant to 15 Mile and the study does not include ore from the nearby Beaver Dam
deposit, but the broker does include that in its valuation.

Delaying first gold from 15 Mile by around six months is the primary driver behind a target price reduction to 28c from 31c. Outperform retained.

Target price is $0.28 Current Price is $0.19 Difference: $0.09
If SBM meets the Macquarie target it will return approximately 47% (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

Morgan Stanley rates SCG as Overweight (1) -

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for Scentre Group falls to $3.10 from $3.52. Overweight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $3.10 Current Price is $2.50 Difference: $0.6
If SCG meets the Morgan Stanley target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $2.96, suggesting upside of 17.5% (ex-dividends)

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

Morgan Stanley rates SGP as Overweight (1) -

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for Stockland falls to $4.45 from $4.60. Overweight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $4.45 Current Price is $3.80 Difference: $0.65
If SGP meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $4.53, suggesting upside of 17.0% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

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

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for Vicinity Centres falls to $1.95 from $2.18. Equal-weight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $1.95 Current Price is $1.77 Difference: $0.185
If VCX meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $1.94, suggesting upside of 10.1% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Morgans rates VEE as Add (1) -

Morgans is excited by the opportunity in the exclusive Sharrow by Veem collaboration, which will see Veem and Sharrow Engineering jointly design inboard motor propellors for Veem to exclusively manufacture and sell.

While noting the products are likely to be more costly to produce than Veem's current range, they are expected to demand higher prices and better margins. 

Morgans sees potential for this to accelerate propeller sales for Veem over the long term, and expects the Sharrow by Veem products to prove popular in the commercial retrofit market. First sales are due in early 2024. 

The Add rating and target price of 84 cents are retained.

Target price is $0.84 Current Price is $0.61 Difference: $0.23
If VEE meets the Morgans target it will return approximately 38% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

UBS rates WBC as Sell (5) -

With bank reporting season looming, UBS notes rising interest rates have been a tailwind for net interest margins (NIMs) and revenue, but these trends are expected to slow into FY24 and beyond.

In line with first half results, the analysts incorporate strong NIM expansion of 9.6bps into forecasts and 8% volume growth for the majors. The escalation in funding costs and greater chance of a 'higher for longer' rates story, are also allowed for in estimates.

Westpac reports FY23 results on November 6. The UBS profit forecast is around -3% below the consensus estimate.The broker anticipates a 2H profit (PBT) of around $4.5bn. The Sell rating and $22 target are retained.

The broker's top picks in the sector are Buy-rated Macquarie Group and ANZ Bank, along with Neutral-rated Commbank.

This summary relates to research released yesterday by UBS.

Target price is $22.00 Current Price is $21.48 Difference: $0.52
If WBC meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $22.61, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in September.

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

Macquarie rates WDS as Neutral (3) -

Woodside Energy's agreement with US company Heliogen in October 2021 was one of the first future energy technologies highlighted as part of the company's US$5bn new energies target by 2030 unveiled at the 2021 Investor Day.

A key early step was to build a commercial-scale demonstration solar facility in California. However, despite further agreements in March 2022, construction does not appear to have commenced yet, Macquarie notes.

Heliogen has a US$75m backlog; the majority of this is the Woodside project, which is still pre-final investment decision and taking longer than expected. Neutral and $36 target retained.

Target price is $36.00 Current Price is $35.69 Difference: $0.31
If WDS meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $37.15, suggesting upside of 3.6% (ex-dividends)

The company's fiscal year ends in December.

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: 0.3

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

Morgan Stanley rates WPR as Underweight (5) -

While Morgans Stanley makes no fundamental adjustments (such as rent growth, and therefore EPS/FFO) to its 22 Australian Property stocks under coverage, all target prices/valuations are reduced.

Assuming bond yields stay where they are and spreads revert to the long-term average, the analysts believe there is material downside of -17-33% to asset valuations for stocks under Morgan Stanley's coverage.

At current book values, explains the broker, the spread between each REIT's cap rate and the Australian 10-year bond yield is much tighter now than the typical spread over the last 15-20 years. A higher risk-free rate assumption of 5% is adopted, up from 4%.

The target for Waypoint REIT falls to $2.35 from $2.60. Underweight. Industry view: In-Line. 

This summary relates to research released yesterday by Morgan Stanley.

Target price is $2.35 Current Price is $2.27 Difference: $0.08
If WPR meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $2.64, suggesting upside of 15.8% (ex-dividends)

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