Australian Broker Call
May 09, 2017
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COMPANIES DISCUSSED IN THIS ISSUE
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THIS REPORT WILL BE UPDATED SHORTLY
Last Updated: 11:50 AM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
| HGG - | HENDERSON GROUP | Upgrade to Buy from Neutral | UBS |
| IOF - | INVESTA OFFICE | Upgrade to Hold from Lighten | Ord Minnett |
| WBC - | WESTPAC BANKING | Downgrade to Neutral from Buy | UBS |
Citi rates CBA as Sell (5) -
Citi analysts believe today's market update was below market consensus, though it met Citi's expectation. A major surprise came with yet another fall in bad and doubtful debts.
Offsetting the BDDs surprise is weakness revealing itself in other operating income. Outside of Cyclone Debbie impact, this has surprised Citi analysts.
As revenue weakness is consistent with other Major Banks, Citi analysts believe CBA looks poised to trend back to the pack in operational performance, as well as, ultimately, in share price. Sell rating retained, as well as $75 target.
Target price is $75.00 Current Price is $85.30 Difference: minus $10.3 (current price is over target).
If CBA meets the Citi target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $82.01, suggesting downside of -1.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 421.00 cents and EPS of 548.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 556.9, implying annual growth of 0.3%. Current consensus DPS estimate is 423.4, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 14.9. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 421.00 cents and EPS of 576.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 574.8, implying annual growth of 3.2%. Current consensus DPS estimate is 429.6, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 14.5. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates CSL as Equal-weight (3) -
Morgan Stanley envisages upside risk to FY17 guidance, given the strength in the plasma market demonstrated by competitor quarterly results. Nevertheless, the expectation is already reflected in the stock price, in the broker's opinion.
Equal-weight rating, In-Line industry view retained. Target is raised to $120 from $112.
Target price is $120.00 Current Price is $134.50 Difference: minus $14.5 (current price is over target).
If CSL meets the Morgan Stanley target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $132.91, suggesting downside of -0.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 195.56 cents and EPS of 396.44 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 408.0, implying annual growth of N/A. Current consensus DPS estimate is 185.5, implying a prospective dividend yield of 1.4%. Current consensus EPS estimate suggests the PER is 32.9. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 227.48 cents and EPS of 458.96 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 482.2, implying annual growth of 18.2%. Current consensus DPS estimate is 214.7, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 27.8. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates CSR as Neutral (3) -
Credit Suisse considers CSR is not a stock for the fainthearted, as earnings are highly sensitive to foreign exchange and the aluminium price. Yet the share price outperformance has followed strong earnings momentum, with potential for consensus upgrades for the outer years.
The broker increases forecasts to reflect a stronger-for-longer building cycle and margin expansion following real price growth across building products. Neutral rating retained. Target is raised to $5.25 from $3.75.
Target price is $5.25 Current Price is $5.13 Difference: $0.12
If CSR meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $4.48, suggesting downside of -13.5% (ex-dividends)
The company's fiscal year ends in March.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 28.00 cents and EPS of 38.89 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 37.2, implying annual growth of 31.9%. Current consensus DPS estimate is 26.7, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 13.9. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 29.00 cents and EPS of 43.47 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 40.8, implying annual growth of 9.7%. Current consensus DPS estimate is 27.0, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 12.7. |
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates FXJ as Sell (5) -
The company has received an indicative offer from the TPG consortium to buy certain assets for $0.95 per share. The bid is only for best assets, Citi notes, and there are concerns regarding the rest of the business.
The broker envisages only limited synergies in the two remaining newspaper assets. Also, the separated entity would be left with the majority of corporate costs and be supported by a much lower earnings base. This poses the greatest risk to the offer proceeding, in the broker's opinion.
Sell rating retained. Target is raised to $0.85 from $0.80.
Target price is $0.85 Current Price is $1.09 Difference: minus $0.235 (current price is over target).
If FXJ meets the Citi target it will return approximately minus 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $0.99, suggesting downside of -9.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 4.00 cents and EPS of 6.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.1, implying annual growth of N/A. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 17.9. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 4.10 cents and EPS of 5.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.2, implying annual growth of 1.6%. Current consensus DPS estimate is 4.0, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 17.6. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates FXJ as Hold (3) -
The company has received a proposal from TPG group and the Ontario Teachers Pension Plan Board at $0.95 per share for specific assets while the remaining assets would be de-merged and bundled as a separate listed entity.
Deutsche Bank estimates the other assets in the proposal are valued at $0.17 per share. Added to the share offer price this implies a total valuation of $1.12 per share for the stock. Given the low implied premium, the broker is of the view that the proposal is unlikely to be successful and a higher cash component will be needed.
Deutsche Bank retains a Hold rating and 90c target.
Target price is $0.90 Current Price is $1.09 Difference: minus $0.185 (current price is over target).
If FXJ meets the Deutsche Bank target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $0.99, suggesting downside of -9.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 4.00 cents and EPS of 6.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.1, implying annual growth of N/A. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 17.9. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 4.00 cents and EPS of 6.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.2, implying annual growth of 1.6%. Current consensus DPS estimate is 4.0, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 17.6. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates FXJ as Neutral (3) -
Private equity has launched an unsolicited cash/scrip takeover bid for Fairfax which will split the company largely into Domain, the major mastheads and digital in one entity and radio and Stan in the other. Aside from requiring shareholder and FIRB approval, the broker does not think the board is likely to go for it.
It appears opportunistic ahead of the planned demerger of Domain. Not withstanding attempting to put a value on the "rump", the broker believes the offer for the good stuff undervalues Domain. Neutral and 90c target retained.
Target price is $0.90 Current Price is $1.09 Difference: minus $0.185 (current price is over target).
If FXJ meets the UBS target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $0.99, suggesting downside of -9.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 4.00 cents and EPS of 6.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.1, implying annual growth of N/A. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 17.9. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 4.00 cents and EPS of 6.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.2, implying annual growth of 1.6%. Current consensus DPS estimate is 4.0, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 17.6. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates HGG as Upgrade to Buy from Neutral (1) -
Post shareholder approval of Henderson's merger with Janus, UBS has swapped analysts and the rating has been upgraded to Buy on the basis it is a transformational deal, offering cost synergies and a performance fee rebound.
Funds flow targets appear ambitious but UBS does not think the market is pricing in any growth. Target rises to 275p from 240p.
Current Price is $4.00. Target price not assessed.
Current consensus price target is $4.02, suggesting downside of -3.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 19.01 cents and EPS of 26.88 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.4, implying annual growth of N/A. Current consensus DPS estimate is 20.1, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 14.6. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 11.70 cents and EPS of 16.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.3, implying annual growth of -0.4%. Current consensus DPS estimate is 18.4, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 14.7. |
This company reports in GBP. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates IOF as No Rating (-1) -
The company has announced updates and revaluations for the four months to April 30. Property revaluations are up 5.0% from 31 December 2016 with the bulk of the uplift because of cap rate compression across all four capital cities.
The company has also announced the unit holder meeting to approve the purchase of 50% of the office management platform for $45m. There has been no binding proposal from Cromwell ((CMW)) as yet, which has been provided with access to comprehensive due diligence.
Macquarie is restricted on rating and target at this point.
Current Price is $4.74. Target price not assessed.
Current consensus price target is $4.61, suggesting downside of -4.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 20.20 cents and EPS of 24.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.2, implying annual growth of -64.9%. Current consensus DPS estimate is 20.1, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 17.1. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 20.70 cents and EPS of 25.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.4, implying annual growth of 4.3%. Current consensus DPS estimate is 20.5, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 16.4. |
Market Sentiment: -0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates IOF as Upgrade to Hold from Lighten (3) -
The company has revalued its portfolio, booking a $0.30 uplift to net tangible assets to $4.80 a share. The board has also endorsed the potential joint-venture acquisition of the property group platform in the absence of a formal cash offer from Cromwell ((CMW)).
Ord Minnett observes the revised NTA cuts through the proposed indicative cash offer price of $4.75 a share. The broker suspects the board is holding out for $5 a share, reflecting more bullish investor sentiment in recent weeks.
Ord Minnett raises its recommendation to Hold from Lighten and the target to $5.00 from $4.75.
Target price is $5.00 Current Price is $4.74 Difference: $0.26
If IOF meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $4.61, suggesting downside of -4.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 20.00 cents and EPS of 27.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.2, implying annual growth of -64.9%. Current consensus DPS estimate is 20.1, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 17.1. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 20.00 cents and EPS of 30.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.4, implying annual growth of 4.3%. Current consensus DPS estimate is 20.5, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 16.4. |
Market Sentiment: -0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates IOF as Sell (5) -
Investa has revalued its net tangible assets to $4.79 from $4.49 as it continues to move forward with its proposal to acquire 50% of the management platform. This leaves Cromwell Property Group's ((CMW)) latest offer at a discount to NTA, the broker notes.
Given limited upside if Cromwell succeeds and plenty of downside if not, the broker retains Sell and a $4.48 target.
Target price is $4.48 Current Price is $4.74 Difference: minus $0.26 (current price is over target).
If IOF meets the UBS target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $4.61, suggesting downside of -4.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 20.20 cents and EPS of 29.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.2, implying annual growth of -64.9%. Current consensus DPS estimate is 20.1, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 17.1. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 20.70 cents and EPS of 30.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.4, implying annual growth of 4.3%. Current consensus DPS estimate is 20.5, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 16.4. |
Market Sentiment: -0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates MGR as Hold (3) -
The update on the residential business, which represents 29% of FY17 forecast operating profit, underscored for Deutsche Bank the quality and location of developments, which set the company apart.
Buy rating retained on valuation. Target is $2.39.
Target price is $2.39 Current Price is $2.29 Difference: $0.1
If MGR meets the Deutsche Bank target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $2.36, suggesting upside of 2.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 10.00 cents and EPS of 14.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.5, implying annual growth of -44.4%. Current consensus DPS estimate is 10.2, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 14.8. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 12.00 cents and EPS of 16.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.2, implying annual growth of -1.9%. Current consensus DPS estimate is 11.0, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 15.1. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates MGR as Outperform (1) -
The company has indicated that projects are no longer selling out in a single weekend. Factors underpinning this development include affordability and regulation changes around lending and stamp duty concessions.
Macquarie observes there is a limited need to re-stock yet and the company could sustain nine years of development production at current sales rates.
With earnings certainty and attractive growth relative to more passive A-REITs Macquarie retains an Outperform rating. Target is $2.45.
Target price is $2.45 Current Price is $2.29 Difference: $0.16
If MGR meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $2.36, suggesting upside of 2.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 10.30 cents and EPS of 14.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.5, implying annual growth of -44.4%. Current consensus DPS estimate is 10.2, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 14.8. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 10.60 cents and EPS of 15.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.2, implying annual growth of -1.9%. Current consensus DPS estimate is 11.0, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 15.1. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates NEC as Outperform (1) -
The government has announced media reforms which Macquarie believes are, overall, positive for broadcasters. The government has proposed the broadcast license fees be replaced by a new spectrum-based fee while gambling advertising will be restricted.
The broker incorporates the reforms into valuations and the target rises to $1.35 from $1.25. Outperform retained.
Target price is $1.35 Current Price is $1.38 Difference: minus $0.03 (current price is over target).
If NEC meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $1.13, suggesting downside of -17.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 8.80 cents and EPS of 11.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.9, implying annual growth of -67.8%. Current consensus DPS estimate is 10.3, implying a prospective dividend yield of 7.5%. Current consensus EPS estimate suggests the PER is 11.6. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 9.50 cents and EPS of 11.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.1, implying annual growth of -6.7%. Current consensus DPS estimate is 9.8, implying a prospective dividend yield of 7.1%. Current consensus EPS estimate suggests the PER is 12.4. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates ORG as Neutral (3) -
The company has sold the Stockyard Hill wind development site for $110m plus the taking of all output from 2019 to 2030. Citi observes the deal compares favourably to the recent disposal of Silverton wind farm by AGL ((AGL)).
Following the recent Darling Downs solar sale the broker now estimates the company has sold around $600m in assets, going a long way towards its $800m target.
Citi expects the target will be exceeded, after the flagged sale of the Darling Downs gas pipeline. Neutral rating maintained. Target is $7.53.
Target price is $7.53 Current Price is $7.58 Difference: minus $0.05 (current price is over target).
If ORG meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $7.42, suggesting downside of -3.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 0.00 cents and EPS of 32.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.6, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 43.8. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 0.00 cents and EPS of 62.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 57.2, implying annual growth of 225.0%. Current consensus DPS estimate is 9.3, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 13.5. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates ORG as Buy (1) -
Origin has sold Stockyard Hill wind farm site to the Chinese at a better price than the broker expected, but more notably, the 12-year power purchase agreement (PPA) price, at which Origin will buy all of the wind power, is below US$60MWh when recent deals have been above US$65/MWh.
The broker suspects it's because the buyer will itself manufacture the turbines. Origin is now on track to lock in 1500MW of renewable PPAs, meaning mass market renewable energy certificates are covered to 2030. The broker retains Buy and an $8.20 target.
Target price is $8.20 Current Price is $7.58 Difference: $0.62
If ORG meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $7.42, suggesting downside of -3.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 0.00 cents and EPS of 29.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.6, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 43.8. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 10.00 cents and EPS of 62.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 57.2, implying annual growth of 225.0%. Current consensus DPS estimate is 9.3, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 13.5. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates PTM as Neutral (3) -
April funds under management, flows and performance were affected by more than -$100m in net outflows and higher key benchmarks, Macquarie observes.
Outflows and performance continue to affect the outlook, the broker asserts. Target is $4.40 target. Neutral maintained.
Target price is $4.40 Current Price is $4.42 Difference: minus $0.02 (current price is over target).
If PTM meets the Macquarie target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $4.32, suggesting downside of -2.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 29.00 cents and EPS of 30.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.4, implying annual growth of -11.2%. Current consensus DPS estimate is 28.8, implying a prospective dividend yield of 6.5%. Current consensus EPS estimate suggests the PER is 14.6. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 26.00 cents and EPS of 27.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 27.8, implying annual growth of -8.6%. Current consensus DPS estimate is 26.0, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 16.0. |
Market Sentiment: -0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates QAN as Outperform (1) -
Credit Suisse finds management's targets are tough but potentially achievable. The broker calculates, if targets for airline returns on investment capital are over 10% through to 2020, the shares could hit $7.00.
Higher domestic share and higher exposure to Asia may allow structurally higher capital efficiency. Nevertheless, at present, the broker is more cautious and raises the target to $5.00 from $4.80. Outperform rating.
Target price is $5.00 Current Price is $4.66 Difference: $0.34
If QAN meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $4.69, suggesting downside of -0.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 15.00 cents and EPS of 48.48 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 55.5, implying annual growth of 12.3%. Current consensus DPS estimate is 18.1, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 8.5. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 16.00 cents and EPS of 57.15 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 55.4, implying annual growth of -0.2%. Current consensus DPS estimate is 19.9, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 8.5. |
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates QBE as Lighten (4) -
Ord Minnett believes the balance sheet strength from reserving adequacy improvements was evident in 2016 but some vigilance is required now, given uncertainties around the remediated lines.
The broker's biggest concern is that premium rates in the US and Europe have been under pressure, which limits the scope for the margin rectification that the company assumes.
Lighten rating retained. Target is $11.32.
Target price is $11.32 Current Price is $12.92 Difference: minus $1.6 (current price is over target).
If QBE meets the Ord Minnett target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $13.21, suggesting upside of 2.3% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 37.25 cents and EPS of 59.86 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 82.9, implying annual growth of N/A. Current consensus DPS estimate is 59.7, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 15.6. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 53.21 cents and EPS of 87.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 101.5, implying annual growth of 22.4%. Current consensus DPS estimate is 68.4, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 12.7. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates TLS as Underperform (5) -
Credit Suisse reduces dividend forecasts to $0.25 per share from FY18. The broker assumes $1.8bn of share buy-backs across FY18/19 to maintain the overall dollar value of returns to shareholders in those years and help ease the transition to the lower dividend.
The broker expects the company to announce a dividend reduction when it concludes its current capital management strategy review, likely at the full year result.
The weak earnings profile is not expected to support the current dividend, as a result of the $2-3bn impact of the transition to NBN. Underperform retained. Target is lowered to $4.00 from $4.60.
Target price is $4.00 Current Price is $4.35 Difference: minus $0.35 (current price is over target).
If TLS meets the Credit Suisse target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $4.41, suggesting upside of 1.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 31.00 cents and EPS of 32.93 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.6, implying annual growth of -33.3%. Current consensus DPS estimate is 31.1, implying a prospective dividend yield of 7.1%. Current consensus EPS estimate suggests the PER is 13.8. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 25.00 cents and EPS of 34.82 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 33.7, implying annual growth of 6.6%. Current consensus DPS estimate is 30.3, implying a prospective dividend yield of 6.9%. Current consensus EPS estimate suggests the PER is 12.9. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates WBC as Neutral (3) -
Following the first half result Credit Suisse downgrades earnings estimates by -1-2% throughout the forecast period. Neutral rating and $34 target retained.
The broker applauds the cost focus but remains unimpressed by the soft lending balance growth and sizeable margin compression.
Target price is $34.00 Current Price is $34.08 Difference: minus $0.08 (current price is over target).
If WBC meets the Credit Suisse target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $33.76, suggesting upside of 1.6% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 188.00 cents and EPS of 242.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 238.7, implying annual growth of 1.4%. Current consensus DPS estimate is 188.0, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.9. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 188.00 cents and EPS of 248.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 245.9, implying annual growth of 3.0%. Current consensus DPS estimate is 188.9, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.5. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates WBC as Buy (1) -
The first half result revealed themes that are consistent with other banks, weaker underlying revenue trends partly offset by strength in lower quality trading income and lower bad debts, Deutsche Bank observes.
Cost controls pleased the broker. Buy rating retained. Target falls to $35.60 from $36.40.
The broker believes revenue growth is likely to improve from this point and the bank is well-positioned for the medium term.
Target price is $35.60 Current Price is $34.08 Difference: $1.52
If WBC meets the Deutsche Bank target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $33.76, suggesting upside of 1.6% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 188.00 cents and EPS of 235.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 238.7, implying annual growth of 1.4%. Current consensus DPS estimate is 188.0, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.9. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 192.00 cents and EPS of 245.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 245.9, implying annual growth of 3.0%. Current consensus DPS estimate is 188.9, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.5. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates WBC as Outperform (1) -
First half results were broadly in line with Macquarie's expectations. Cost management was better than expected and the bank has upgraded guidance for expenses growth to be below 2-3% in FY17.
Macquarie expects the bank to benefit from mortgage re-pricing initiatives and better funding trends in the second half and finds scope to partially unwind the relative underperformance in the share price over the last 12 months.
The broker retains a Outperform rating. Target is reduced to $35.50 from $36.00.
Target price is $35.50 Current Price is $34.08 Difference: $1.42
If WBC meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $33.76, suggesting upside of 1.6% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 188.00 cents and EPS of 237.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 238.7, implying annual growth of 1.4%. Current consensus DPS estimate is 188.0, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.9. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 188.00 cents and EPS of 246.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 245.9, implying annual growth of 3.0%. Current consensus DPS estimate is 188.9, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.5. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates WBC as Add (1) -
First half cash earnings missed Morgans forecasts.The bank now expects growth in expenses in FY17 to be less than previously expected, which Morgans believes is the result of revenue growth turning out to be less than anticipated.
The main area of disappointment for the broker was the net interest margin of 207 basis points in the half, three basis points less than expected.
Morgans reduces forecasts for cash earnings per share by -1.5% and -2.7% for FY17 and FY18 estimates respectively. Target is reduced to $38 from $39. Add rating retained.
Target price is $38.00 Current Price is $34.08 Difference: $3.92
If WBC meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $33.76, suggesting upside of 1.6% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 188.00 cents and EPS of 248.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 238.7, implying annual growth of 1.4%. Current consensus DPS estimate is 188.0, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.9. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 190.00 cents and EPS of 261.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 245.9, implying annual growth of 3.0%. Current consensus DPS estimate is 188.9, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.5. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates WBC as Hold (3) -
First half cash earnings were in line with Ord Minnett's expectations. The broker highlights the absence of growth in core domestic consumer and business banking franchises while margins also did not live up to expectations.
Nevertheless, following the run of downgrades last year it was a relief to get an in-line result, albeit not compelling, in the broker's opinion. Hold rating and $33 target retained.
Target price is $33.00 Current Price is $34.08 Difference: minus $1.08 (current price is over target).
If WBC meets the Ord Minnett target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $33.76, suggesting upside of 1.6% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 188.00 cents and EPS of 238.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 238.7, implying annual growth of 1.4%. Current consensus DPS estimate is 188.0, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.9. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 EPS of 242.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 245.9, implying annual growth of 3.0%. Current consensus DPS estimate is 188.9, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.5. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates WBC as Downgrade to Neutral from Buy (3) -
Westpac's result was slightly ahead of UBS but subdued. As has been the case with the other banks, trading income provided a boost when revenue growth was flat. Capital was strong at 9.97% but the broker questions whether it's wise to offer a discounted DRP when "unquestionably strong" is yet to be defined.
The main feature of the release was the revelation 50% of the bank's mortgage book represents interest only loans. This implies a lot of work to get below APRA's new 30% cap. UBS has thus cut its target to $32.50 from $33.50 and downgraded to Neutral.
Target price is $32.50 Current Price is $34.08 Difference: minus $1.58 (current price is over target).
If WBC meets the UBS target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $33.76, suggesting upside of 1.6% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 188.00 cents and EPS of 236.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 238.7, implying annual growth of 1.4%. Current consensus DPS estimate is 188.0, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.9. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 188.00 cents and EPS of 241.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 245.9, implying annual growth of 3.0%. Current consensus DPS estimate is 188.9, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.5. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| CBA - | COMMBANK | Sell - Citi | Overnight Price $85.30 |
| CSL - | CSL | Equal-weight - Morgan Stanley | Overnight Price $134.50 |
| CSR - | CSR | Neutral - Credit Suisse | Overnight Price $5.13 |
| FXJ - | FAIRFAX MEDIA | Sell - Citi | Overnight Price $1.09 |
| Hold - Deutsche Bank | Overnight Price $1.09 | ||
| Neutral - UBS | Overnight Price $1.09 | ||
| HGG - | HENDERSON GROUP | Upgrade to Buy from Neutral - UBS | Overnight Price $4.00 |
| IOF - | INVESTA OFFICE | No Rating - Macquarie | Overnight Price $4.74 |
| Upgrade to Hold from Lighten - Ord Minnett | Overnight Price $4.74 | ||
| Sell - UBS | Overnight Price $4.74 | ||
| MGR - | MIRVAC | Hold - Deutsche Bank | Overnight Price $2.29 |
| Outperform - Macquarie | Overnight Price $2.29 | ||
| NEC - | NINE ENTERTAINMENT | Outperform - Macquarie | Overnight Price $1.38 |
| ORG - | ORIGIN ENERGY | Neutral - Citi | Overnight Price $7.58 |
| Buy - UBS | Overnight Price $7.58 | ||
| PTM - | PLATINUM | Neutral - Macquarie | Overnight Price $4.42 |
| QAN - | QANTAS AIRWAYS | Outperform - Credit Suisse | Overnight Price $4.66 |
| QBE - | QBE INSURANCE | Lighten - Ord Minnett | Overnight Price $12.92 |
| TLS - | TELSTRA CORP | Underperform - Credit Suisse | Overnight Price $4.35 |
| WBC - | WESTPAC BANKING | Neutral - Credit Suisse | Overnight Price $34.08 |
| Buy - Deutsche Bank | Overnight Price $34.08 | ||
| Outperform - Macquarie | Overnight Price $34.08 | ||
| Add - Morgans | Overnight Price $34.08 | ||
| Hold - Ord Minnett | Overnight Price $34.08 | ||
| Downgrade to Neutral from Buy - UBS | Overnight Price $34.08 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 8 |
| 3. Hold | 11 |
| 4. Reduce | 1 |
| 5. Sell | 4 |
Tuesday 09 May 2017
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