Australian Broker Call

Shaw and Partners rates AUT as Buy (1) -

Auteco Minerals has acquired the Green Bay copper/gold project in Newfoundland Canada for $65m. Shaw and Partners suggests this is a notable switch to copper as the company has been busy re-establishing gold production at the Pickle Crow project in Ontario.

The focus for Green Bay will be to grow the resource, potentially coming into production later in the decade. The acquisition will be funded by $50m placement and share purchase plan.

The broker considers the acquisition attractively priced and an outstanding opportunity, retaining a Buy rating. Target is reduced to $0.08 from $0.13 to account for the dilution.

Target price is $0.08 Current Price is $0.03 Difference: $0.05
If AUT meets the Shaw and Partners target it will return approximately 167% (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 BXB as Buy (1) -

In FY24 UBS expects price-led growth for CHEP but with less contrast between price and volume as US prices slow and Brambles pursues new business for the product. More destocking is also expected.

Global FMCG (fast-moving consumer goods) supply stocks remain elevated although the broker envisages this is less of a concern for CHEP given its relative downstream exposure.

UBS assesses the strength of the stock has mostly been driven by earnings, yet at an 18x PE Brambles still trades around -10% below the ASX Industrials and the high FMCG mix, pricing power and free cash flow recovery warrant a premium. Buy rating and $16.95 target.

Target price is $16.95 Current Price is $15.09 Difference: $1.86
If BXB meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $15.52, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

This company reports in USD. 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

Morgan Stanley rates CNI as Overweight (1) -

Centuria Capital has confirmed a new $500m mandate from a US group for last-mile logistics with a focus on traditional warehouses. Given this is a mandate, Morgan Stanley finds it positive in that there is no requirement for co-investment by the company.

The broker is also pleased with the news because unlisted institutional capital has not been a traditional area of strength for the company.

The future remains challenging with further devaluation across the platform likely, the broker assesses, as 35-40% of its assets under management reside in office.

Overweight rating. Target is $1.89. Industry View: In-Line.

Target price is $1.89 Current Price is $1.46 Difference: $0.43
If CNI meets the Morgan Stanley target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $1.62, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates IPL as Buy (1) -

The trading update from Incitec Pivot has revealed the Dyno Nobel business is performing ahead of expectations amid a strong outlook for ammonium nitrate demand, contract re-pricing and improved passing through of costs, although UBS observes these features appear to have been offset by lower-than-expected chemical prices.

The broker downgrades FY23/24 estimates for EBIT by -11/8% to reflect lower fertiliser earnings on reduced Phosphate Hill production, marking-to-market diammonium phosphate prices, along with weaker WALA earnings from lower realised ammonia prices and higher gas costs. UBS retains a Buy rating on valuation grounds and raises the target to $3.50 from $3.40.

Target price is $3.50 Current Price is $3.07 Difference: $0.43
If IPL meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $3.32, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Bell Potter rates NUF as Buy (1) -

Bell Potter highlights the inventory unwinding in agricultural chemicals that has occurred over recent months amid strong price growth in competing products for Nufarm's Omega-3 product.

Late harvest rainfall in the EU could be beneficial for late-season insecticide demand, the broker points out, while Australia winter crop production is forecast to fall -34% and the area planted to summer crops to fall -15%.

Looking further ahead, the late-season in North America and inventory de-stocking appear to be industry-wide headwinds in the second quarter but a reversal in FY24 is expected to mean a reasonable rebound, in the broker's view, and lay the platform for growth in FY25-26.

Buy rating and $7 target maintained.

Target price is $7.00 Current Price is $5.14 Difference: $1.86
If NUF meets the Bell Potter target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $7.07, suggesting upside of 40.2% (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 PMV as Overweight (1) -

Morgan Stanley observes cyclical headwinds have skewed the earnings risk for Premier Investments to the downside over the last 6-12 months although the stock has done much better than previously expected.

The broker now envisages there are upside risks to FY24 earnings expectations. The company has started a strategic review to consider a range of options including a demerger, which Morgan Stanley believes makes strategic sense, although its base case assumes no break up of the business.

The target is raised to $32.25 from $31.00. Overweight rating retained. Industry view: In line.

Target price is $32.25 Current Price is $25.45 Difference: $6.8
If PMV meets the Morgan Stanley target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $24.82, suggesting downside of -3.5% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

UBS rates PTM as Upgrade to Neutral from Sell (3) -

After the "worst FUM print in 11 years" Platinum Asset Management declined -14% as flow expectations were re-based and, while this outcome is considered fair, UBS believes the market has overlooked some key factors.

These include the new CEO, who may consider resetting a failing strategy, and shareholder activism pushing for capital returns.

UBS expects further pressure will be applied with respect to capital management, noting the company has never executed on its "evergreen" buyback.

These potential positive catalysts inspire the broker to upgrade to Neutral from Sell. Target is reduced to $1.25 from $1.50.

Target price is $1.25 Current Price is $1.39 Difference: minus $0.14 (current price is over target).
If PTM meets the UBS target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.51, suggesting upside of 16.3% (ex-dividends)

The company's fiscal year ends in June.

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

Bell Potter rates RDG as Buy (1) -

Resource Development has updated the mineral resource for Lucky Bay, Western Australia, which includes results from drilling undertaken in November 2022. Tonnage has increased 18% and the total resource of heavy minerals 14%.

Bell Potter expects Lucky Bay will reach nameplate by early FY25 and be an important milestone as the company becomes an established miner.

A planned expansion to lift garnet and fine heavy mineral concentrate capacity should be a medium-term earnings catalyst. Buy rating and target of 6.4c maintained.

Target price is $0.06 Current Price is $0.05 Difference: $0.016
If RDG meets the Bell Potter target it will return approximately 33% (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

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

Citi was quick in responding to Sims' implicit profit warning yesterday, but one day later and the broker is now of the view that an upgrade to Neutral from Buy seems appropriate, given the sell-off that occurred yesterday.

Citi's FY24 EBIT forecast has been downgraded by no less than -41%. The broker's price target falls to $14.30 from $15.

The broker is of the view there should be slight improvement on the horizon come FY25. Also, the company is webcasting its USA Investor Day this week.

Citi analysts are hoping there might be greater clarity on market conditions following the webcast.

Target price is $14.30 Current Price is $13.79 Difference: $0.51
If SGM meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $14.63, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

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 SGM as Equal-weight (3) -

Morgan Stanley expects a negative reaction to the Sims announcement that it will just break even at the EBIT line in the first quarter.

The company has also indicated US domestic markets show signs of weakening while steel demand remains soft and the scrap price is not sufficient to stimulate robust supply.

The broker considers the favourable long-term fundamentals are intact, anticipating further details will be forthcoming at the investor briefing in the US on September 13 and 15. Equal-weight and $15 target. Industry view is In-Line.

Target price is $15.00 Current Price is $13.79 Difference: $1.21
If SGM meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $14.63, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates SGM as Sell (5) -

Sims has updated on the first quarter, noting increased competition for scrap has squeezed margins, meaning just breaking even at the EBIT line in the quarter.

Challenges exist across all regions yet UBS predominantly envisages this is an issue for the SAR business and now assumes this only contributes $43m in EBIT in FY24.

While still expecting $350m in EBIT as a mid-cycle target, softness in the near term is unlikely to be resolved without a recovery in US export scrap prices and UBS retains a Sell rating with a $13 target.

Target price is $13.00 Current Price is $13.79 Difference: minus $0.79 (current price is over target).
If SGM meets the UBS target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.63, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates SSR as Buy (1) -

UBS suspects a strong second half for SSR Mining should mean it can produce at the bottom end of guidance of 700-780,000 ounces of gold equivalent.

Aside from stronger second half production, the broker envisages upcoming catalysts are first production from Cakmaktepe and an updated technical report on Hod Maden.

The broker remains excited about the latter with its high grades suggesting there will be robust margins and the underground could produce around 200,000 ozpa from 2027 at low cost. Buy rating retained. Target is $26.60.

Target price is $26.60 Current Price is $22.46 Difference: $4.14
If SSR meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Shaw and Partners rates SYR as Buy (1) -

Syrah Resources had no production in May and June, instigating a loss after tax of -$38.6m for the half year.

The better news, Shaw and Partners suggests, was a receipt of a conditional US$150m loan from the US International Development Finance Corp for sustaining and working capital at Balama, vanadium feasibility studies and tailings storage lifts.

The broker points out the loan will sustain the business while Balama remains on hold. 

There were two positive announcements recently, which Shaw and Partners believes should have been better received, including multi-year offtake agreements to supply natural flake to US anode material facilities and a non-binding offtake with Samsung targeting up to 10,000tpa of active anode material from 2026.

Buy rating and $1.30 target maintained.

Target price is $1.30 Current Price is $0.61 Difference: $0.69
If SYR meets the Shaw and Partners target it will return approximately 113% (excluding dividends, fees and charges).

Current consensus price target is $1.15, suggesting upside of 101.8% (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: 0.7

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