Australian Broker Call

Citi rates ALL as Buy (1) -

On analysing the latest data, Citi continues to point out digital industry bookings appear to be re-basing and Aristocrat Leisure continues to outperform.

The latest observations do not differ from the ones expressed exactly one month ago.

It is the broker's view that Aristocrat’s Social Casino bookings grew well. RAID bookings were up 4% in December; this gain follows a period of decline. Citi analysts state they continue to look for more from Mech Arena, which to date continues to underperform on expectations.

The broker leaves its Buy rating and $41.20 target unchanged, arguing there remains potential for positive surprises from Social Casino as well as from land-based gaming and the opportunity in Real Money Gaming, aka RMG.

Target price is $41.20 Current Price is $32.24 Difference: $8.96
If ALL meets the Citi target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $41.26, suggesting upside of 28.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.9

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

Ord Minnett rates ANN as Downgrade to Accumulate from Buy (2) -

With whitelabeled research now derived from Morningstar, Ord Minnett's rating for Ansell has fallen to Accumulate from Buy.

The price target of $32 has remained unchanged.

Target price is $32.00 Current Price is $29.21 Difference: $2.79
If ANN meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $28.49, suggesting downside of -2.5% (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: 0.4

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

Macquarie rates AUB as Outperform (1) -

Following a market update in December, and following the observation that the premium rate environment remains supportive, Macquarie has lifted its FY23 forecast by 3.1% for AUB Group.

On its own assessment, Macquarie has positioned itself now near the top of management's guidance for the year. Macquarie sees premium rate increases in the order of 5% over the next twelve months, with potential for more beyond it.

Outperform rating and a target price of $24.82, up from $24.07 prior.

Target price is $24.82 Current Price is $22.80 Difference: $2.02
If AUB meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $26.16, suggesting upside of 14.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Ord Minnett rates AUB as Downgrade to Accumulate from Buy (2) -

The switch to Morningstar research continues to trigger changes in the coverage universe of Ord Minnett. There's no other reason behind the downgrade to Accumulate from Buy.

Target price of $28 compares with $26 previously.

Target price is $28.00 Current Price is $22.80 Difference: $5.2
If AUB meets the Ord Minnett target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $26.16, suggesting upside of 14.7% (ex-dividends)

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Ord Minnett rates AZJ as Upgrade to Accumulate from Lighten (2) -

Switching to Morningstar research has led Ord Minnett to upgrade its rating for Aurizon Holdings to Accumulate from Lighten.

Your typical value-oriented Morningstar has had this company on its most preferred ideas list for quite a while.

Target price jumps to $4.70 from $3.40.

Target price is $4.70 Current Price is $3.68 Difference: $1.02
If AZJ meets the Ord Minnett target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $4.12, suggesting upside of 11.9% (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

Ord Minnett rates BXB as Downgrade to Accumulate from Buy (2) -

Brambles' rating has been pulled back to Accumulate from Buy as a result of the switch to Morningstar research.

Ord Minnett's target price has improved to $14 from $13.40.

Target price is $14.00 Current Price is $11.56 Difference: $2.44
If BXB meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $13.31, suggesting upside of 15.1% (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: 0.4

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

Credit Suisse rates CGF as Neutral (3) -

Following a review of investment markets and annuity pricing, Credit Suisse has added 1% to its EPS forecasts for FY23-25. Higher earnings from Fund Management and the Life operations are anticipated.

Higher interest rates should be to Challenger's benefit, with return on equity (RoE) likely to recover to 10%, suggests the broker, while adding such prospect has already been priced in.

Neutral retained, target rises to $7.30 from $7.20.

Target price is $7.30 Current Price is $7.70 Difference: minus $0.4 (current price is over target).
If CGF meets the Credit Suisse target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.89, suggesting downside of -10.6% (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

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

Putting Morningstar in charge of whitelabeled research has led to a downgrade in Ord Minnett's rating for CSL shares; to Hold from Accumulate.

The price target has lost some potential too, now at $315 versus $330 previously.

Target price is $315.00 Current Price is $278.07 Difference: $36.93
If CSL meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $326.20, suggesting upside of 17.3% (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: 0.8

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

Macquarie rates IAG as Outperform (1) -

In a general update on the local insurance sector, Macquarie reports commercial lines repricing remains near all-time highs. The broker anticipates this to peak in the coming 6-9 months.

The latest data dig has revealed new business pricing for Home risks proved better-than-expected. Macquarie updates forecasts and retains a positive view on the sector.

The broker's Outperform rating is retained for Insurance Australia Group while the target price has lost -10c to $5.90.

Target price is $5.90 Current Price is $4.76 Difference: $1.14
If IAG meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $5.16, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Citi rates LFS as Initiation of coverage with Neutral (3) -

Citi has initiated coverage of Latitude Group but its maiden rating doesn't go beyond Neutral with a price target of $1.40. The broker points out the company has been battling headwinds recently stemming from the strong financial position of consumers post-covid.

Because of the counter-cyclical nature of personal credit, and with rates still on the rise, Citi anticipates Latitude will be enjoying higher volumes in the not-too distant future.

H2 of FY22 should mark the low point in terms of profit and cash profit, predicts the broker. Even with the shares offering an implied yield of circa 7%, Citi still maintains the shares look fairly valued.

Target price is $1.40 Current Price is $1.41 Difference: minus $0.007 (current price is over target).
If LFS meets the Citi target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.35, suggesting downside of -4.1% (ex-dividends)

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Macquarie rates LM8 as Outperform (1) -

Lunnon Metals' core sampling has led to an increase in its mineral resource at Foster Central. Macquarie has made no changes, sticking with its Outperform rating and target price of $1.30.

The broker highlights upcoming catalysts in the form of an update on the Warren mineral resource and the maiden reserve for the Baker asset, as well as further drilling results.

Target price is $1.30 Current Price is $0.91 Difference: $0.39
If LM8 meets the Macquarie target it will return approximately 43% (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 MQG as Overweight (1) -

Today's update by Morgan Stanley explains group revenues at Macquarie Group stem some 35% from commodities with 25-30% of that coming from the EMEA region, where gas prices have been very volatile of late.

Morgan Stanley is currently forecasting a decline in commodities revenues in H2 FY23, but ongoing volatility could well play to the advantage of Macquarie, which historically tends to benefit from it.

In a separate update on US gas prices, the broker suggests the market is currently giving Macquarie little credit for growth in commodities, while, on its own assessment, volatile commodities are supporting EPS and dividends, while also generating capital for growth.

Overweight rating and $215 target are retained. Industry View: Attractive. No changes have been made to forecasts.

Target price is $215.00 Current Price is $174.17 Difference: $40.83
If MQG meets the Morgan Stanley target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $189.88, suggesting upside of 7.3% (ex-dividends)

The company's fiscal year ends in March.

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

Macquarie rates ORA as Outperform (1) -

Macquarie suggests the Orora share price has been hit hard over the year past and a similar punishment for US peers could be held responsible, even though Orora's share price has declined even more.

The outcome is that the share price is now trading -20% lower than its historical correlation with EPS suggests. Macquarie suggests this discount provides a margin for safety against further concerns about Orora's earnings.

The broker reminds investors the company reiterated its guidance at the AGM in October. Slightly reduced forecasts have pulled back the price target to $3.48 from $3.60.

The Outperform rating is retained.

Target price is $3.48 Current Price is $2.95 Difference: $0.53
If ORA meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $3.63, suggesting upside of 23.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Ord Minnett rates PPT as Downgrade to Accumulate from Buy (2) -

The switch to Morningstar research has triggered a downgrade in rating for Perpetual with Ord Minnett now rating the fund manager as Accumulate; a downgrade from the previous Buy rating.

There's positive news for the price target which has lifted to $35 from $30.

Target price is $35.00 Current Price is $24.84 Difference: $10.16
If PPT meets the Ord Minnett target it will return approximately 41% (excluding dividends, fees and charges).

Current consensus price target is $29.60, suggesting upside of 16.0% (ex-dividends)

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

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

Ord Minnett has switched to Morningstar research and this has led to an upgrade in rating for ResMed to Accumulate from Hold.

The price target has slightly improved to $38 from $37.50.

Target price is $38.00 Current Price is $30.99 Difference: $7.01
If RMD meets the Ord Minnett target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $36.71, suggesting upside of 18.5% (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: 0.6

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

Macquarie rates SUN as Outperform (1) -

In a general update on the local insurance sector, Macquarie reports commercial lines repricing remains near all-time highs. The broker anticipates this to peak in the coming 6-9 months.

The latest data dig has revealed new business pricing for Home risks proved better-than-expected. Macquarie updates forecasts and retains a positive view on the sector.

Macquarie rates Suncorp Group Outperform with a price target of $15.80.

Target price is $15.80 Current Price is $11.65 Difference: $4.15
If SUN meets the Macquarie target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $13.71, suggesting upside of 17.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.9

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

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

Ord Minnett's switch to Morningstar research has shifted preference to the cheapest of the major banks, Westpac, which is hereby upgraded to Accumulate.

Target price is $29.

Target price is $29.00 Current Price is $23.30 Difference: $5.7
If WBC meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $26.31, suggesting upside of 12.0% (ex-dividends)

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Macquarie rates WGX as Downgrade to Neutral from Outperform (3) -

Macquarie has downgraded Westgold Resources to Neutral from Outperform following strength in the share price. The broker does acknowledge the positive news from recent drilling and continues to see more positive catalysts on the horizon.

Westgold's upcoming quarterly report may prove one such catalyst, suggests the broker, as cost cutting and progress on strategy may please investors.

Earnings forecasts have been lifted, with the price target lifting to $1.10 from 90c.

Target price is $1.10 Current Price is $1.14 Difference: minus $0.04 (current price is over target).
If WGX meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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