Australian Broker Call
March 17, 2017
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COMPANIES DISCUSSED IN THIS ISSUE
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Last Updated: 11:57 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
| BHP - | BHP BILLITON | Upgrade to Add from Hold | Morgans |
| FBU - | FLETCHER BUILDING | Upgrade to Buy from Neutral | UBS |
| MYR - | MYER | Upgrade to Outperform from Neutral | Macquarie |
| RIO - | RIO TINTO | Upgrade to Add from Hold | Morgans |
Morgan Stanley rates AGL as Equal-weight (3) -
The Australian government's announcement to expand The Snowy Mountains hydro scheme is likely to have limited near-term earnings impact on AGL, in the broker's view.
Morgan Stanley believes, in the longer term, the entrance of a new generation business, government or private, would be negative for the company and favour's Origin Energy's ((ORG)) positioning as a short energy flexible generator.
Equal-weight and $24.44 target. Industry view: Cautious.
Target price is $24.44 Current Price is $25.60 Difference: minus $1.16 (current price is over target).
If AGL meets the Morgan Stanley target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $25.41, 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 90.00 cents and EPS of 120.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 118.2, implying annual growth of N/A. Current consensus DPS estimate is 88.9, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 21.7. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 112.00 cents and EPS of 150.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 143.1, implying annual growth of 21.1%. Current consensus DPS estimate is 107.6, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 17.9. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates BHP as Upgrade to Add from Hold (1) -
Morgans believes the recent volatility in oil and iron ore is primarily driven by the US dollar swinging around, rather than any fundamental factors. Indeed, the broker believes the fundamentals are stronger than the market is accounting for.
The upgrade cycle for resources has a way to go, although miners are expected to remain disciplined in the short term after years of austerity. The broker does acknowledge there is room for some moderation in the iron ore price rally that may mean some additional short-term downside for share prices.
Morgans upgrades to Add from Hold, believing the share price is now back at attractive levels. Target is raised to $28.19 from $27.82.
Target price is $28.19 Current Price is $25.12 Difference: $3.07
If BHP meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $27.84, suggesting upside of 11.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 135.53 cents and EPS of 219.24 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 199.9, implying annual growth of N/A. Current consensus DPS estimate is 116.8, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 12.5. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 116.93 cents and EPS of 195.32 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 163.1, implying annual growth of -18.4%. Current consensus DPS estimate is 90.1, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 15.3. |
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 CTX as Outperform (1) -
In the wake of the ACCC statement of issues on the Milemaker acquisition, Credit Suisse is baffled by the appearance of concerns about earnings being potentially at risk from not bringing the acquisition to conclusion.
These seems to centre on the idea that if the ACCC were to block Caltex buying Milemaker it would be hard for it to allow BP to acquire Woolworths' ((WOW)) petrol operations. On the balance of probabilities, the broker believes both transactions will go ahead.
Outperform rating and $39.70 target maintained.
Target price is $39.70 Current Price is $28.32 Difference: $11.38
If CTX meets the Credit Suisse target it will return approximately 40% (excluding dividends, fees and charges).
Current consensus price target is $33.78, suggesting upside of 19.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 115.00 cents and EPS of 231.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 220.7, implying annual growth of N/A. Current consensus DPS estimate is 114.0, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 12.8. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 106.00 cents and EPS of 213.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 224.7, implying annual growth of 1.8%. Current consensus DPS estimate is 117.9, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 12.6. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates CTX as Buy (1) -
The ACCC has announced a preliminary view that the proposed acquisition of Milemaker may substantially lessen competition for the retail supply of petrol in Melbourne.
Caltex has indicated it is working with the ACCC to address the issues raised. At this point, Deutsche Bank has limited visibility as to whether these issues can be addressed to the regulator's satisfaction.
If the final decision is unchanged, Deutsche Bank believes such a scenario could ultimately end up being a net positive for Caltex.
If the ACCC were to prevent an increase in its market share in Melbourne to 11% from 7%, it raises the risk that the BP acquisition of Woolworths ((WOW)) sites, which would raise its national market share to 12% from 5%, could be blocked.
Under such a scenario the loss of Milemaker earnings would be more than offset by the retention of Caltex earnings from wholesale fuel sales to Woolworths sites, in the broker's opinion.
Buy rating and $35.35 target retained.
Target price is $35.35 Current Price is $28.32 Difference: $7.03
If CTX meets the Deutsche Bank target it will return approximately 25% (excluding dividends, fees and charges).
Current consensus price target is $33.78, suggesting upside of 19.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 117.00 cents and EPS of 236.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 220.7, implying annual growth of N/A. Current consensus DPS estimate is 114.0, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 12.8. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 127.00 cents and EPS of 266.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 224.7, implying annual growth of 1.8%. Current consensus DPS estimate is 117.9, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 12.6. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates CTX as Outperform (1) -
The ACCC has released a statement of issues on the proposed acquisition of Milemaker. The preliminary view is that the acquisition will substantially lessen competition for the retail supply of petrol in Melbourne.
While there is some risk associated with the transaction, Macquarie expects Caltex will be able to provide assurances to ensure the acquisition goes ahead. Outperform rating and $32.65 target retained
Target price is $32.65 Current Price is $28.32 Difference: $4.33
If CTX meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $33.78, suggesting upside of 19.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 116.00 cents and EPS of 229.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 220.7, implying annual growth of N/A. Current consensus DPS estimate is 114.0, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 12.8. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 112.50 cents and EPS of 222.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 224.7, implying annual growth of 1.8%. Current consensus DPS estimate is 117.9, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 12.6. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates CTX as Buy (1) -
The ACCC has released an initial statement of issues regarding the acquisition of Milemaker. The regulator is concerned about the acquisition of 46 service stations in Victoria as it may substantially lessen competition.
The announcement does highlight a potential challenge ahead for BP gaining approval for its proposed acquisition of Woolworths' ((WOW)) fuel operations, UBS asserts.
Buy rating and $33 target retained..
Target price is $33.00 Current Price is $28.32 Difference: $4.68
If CTX meets the UBS target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $33.78, suggesting upside of 19.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 107.00 cents and EPS of 214.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 220.7, implying annual growth of N/A. Current consensus DPS estimate is 114.0, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 12.8. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 101.00 cents and EPS of 201.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 224.7, implying annual growth of 1.8%. Current consensus DPS estimate is 117.9, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 12.6. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates FBU as Buy (1) -
Deutsche Bank makes changes to earnings forecasts following a quarterly currency review. In FY17, the broker expects net profit of NZ$485m and remains at the upper end of management's EBIT guidance range of NZ$720-760m in FY17.
Buy rating is retained, given the significant upside potential in the share price. Target Is reduced to NZ$11.67 from NZ$11.68.
Current Price is $8.34. Target price not assessed.
Current consensus price target is $10.70, suggesting upside of 28.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 39.50 cents and EPS of 65.83 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 60.4, implying annual growth of N/A. Current consensus DPS estimate is 38.2, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 13.8. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 42.32 cents and EPS of 70.54 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 64.3, implying annual growth of 6.5%. Current consensus DPS estimate is 40.0, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 13.0. |
This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates FBU as Upgrade to Buy from Neutral (1) -
UBS observes the stock is now trading at a larger discount to the market than historically has been the case, having been sold off by -11% since the interim result.
The broker continues to forecast peak earnings in FY18 but still expects the New Zealand construction cycle to remain elevated over the medium to longer term.
The stock is not aggressively priced, in the broker's view, and the rating is upgraded to Buy from Neutral. Target is raised to NZ$9.85 from NZ$10.05.
Current Price is $8.34. Target price not assessed.
Current consensus price target is $10.70, suggesting upside of 28.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 39.50 cents and EPS of 62.07 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 60.4, implying annual growth of N/A. Current consensus DPS estimate is 38.2, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 13.8. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 39.50 cents and EPS of 64.89 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 64.3, implying annual growth of 6.5%. Current consensus DPS estimate is 40.0, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 13.0. |
This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates JHX as Buy (1) -
Deutsche Bank updates currency forecasts in line with its quarterly review. Following the changes, FY17 and FY18 underlying net profit forecasts increase marginally.
The broker retains a Buy rating and raises the target to $22.55 from $22.35.
Target price is $22.55 Current Price is $20.41 Difference: $2.14
If JHX meets the Deutsche Bank target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $21.15, suggesting upside of 2.6% (ex-dividends)
The company's fiscal year ends in March.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 51.82 cents and EPS of 74.41 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 76.5, implying annual growth of N/A. Current consensus DPS estimate is 50.4, implying a prospective dividend yield of 2.4%. Current consensus EPS estimate suggests the PER is 27.0. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 62.45 cents and EPS of 100.98 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 91.8, implying annual growth of 20.0%. Current consensus DPS estimate is 58.8, implying a prospective dividend yield of 2.9%. Current consensus EPS estimate suggests the PER is 22.5. |
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 KAR as Outperform (1) -
Petrobras has announced that the Brazilian court has allowed it to conclude the sale process for two of its projects, one of which are the assets being sold to Karoon Gas.
While the announcement is a positive, Macquarie emphasises there are still many hurdles before the deal closes. The broker does not currently attribute value to the assets.
Outperform and $2.40 target retained.
Target price is $2.40 Current Price is $1.78 Difference: $0.625
If KAR meets the Macquarie target it will return approximately 35% (excluding dividends, fees and charges).
Current consensus price target is $2.01, suggesting upside of 7.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 9.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -13.2, 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 N/A. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 11.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -8.5, 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 N/A. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates MYR as Buy (1) -
Myer's financial release failed to meet expectations, in particular when it comes to like-for-like sales growth. Citi analysts see some positives as well and expect market forecasts to fall by between -2% and -5%.
The analysts note FY17 guidance has been maintained, with the caveat that weak sales in Jan-Feb won't be repeated. Buy rating retained. Price target falls by 10c to $1.30.
Citi keeps the faith in the "New Myer" strategy, but acknowledges there is zero visible growth in sales as yet. Until this happens, the share price is likely to remain range-bound, the analysts predict.
Target price is $1.30 Current Price is $1.08 Difference: $0.22
If MYR meets the Citi target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $1.25, suggesting upside of 9.6% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 6.00 cents and EPS of 9.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.8, implying annual growth of 14.3%. Current consensus DPS estimate is 5.8, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 13.0. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 7.00 cents and EPS of 9.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 9.9, implying annual growth of 12.5%. Current consensus DPS estimate is 6.7, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 11.5. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates MYR as Outperform (1) -
First half sales revenue was below expectations, negatively affected by poor consumer spending and a decision to reduce promotional expenses in January.
Credit Suisse does observe a more robust company, built around less reliance on private label, with an improvement to inventory management. January appears to have been the worst month while February trading improved, although still below expectations.
Credit Suisse retains an Outperform rating and raises a target to $1.44 from $1.40.
Target price is $1.44 Current Price is $1.08 Difference: $0.36
If MYR meets the Credit Suisse target it will return approximately 33% (excluding dividends, fees and charges).
Current consensus price target is $1.25, suggesting upside of 9.6% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 7.00 cents and EPS of 9.58 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.8, implying annual growth of 14.3%. Current consensus DPS estimate is 5.8, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 13.0. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 7.65 cents and EPS of 11.43 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 9.9, implying annual growth of 12.5%. Current consensus DPS estimate is 6.7, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 11.5. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates MYR as Hold (3) -
The sales decline in the first half disappointed Deutsche Bank although net profit was above forecasts, driven by gross margins being higher than expected.
The broker observes, although a focus on reducing costs should result in earnings growth, the savings are finite and sales growth remains subject to a competitive retail environment.
Hold rating retained. Target rises to $1.30 from $1.25.
Target price is $1.30 Current Price is $1.08 Difference: $0.22
If MYR meets the Deutsche Bank target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $1.25, suggesting upside of 9.6% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 6.00 cents and EPS of 9.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.8, implying annual growth of 14.3%. Current consensus DPS estimate is 5.8, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 13.0. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 7.00 cents and EPS of 10.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 9.9, implying annual growth of 12.5%. Current consensus DPS estimate is 6.7, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 11.5. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates MYR as Upgrade to Outperform from Neutral (1) -
The first half result was commendable, in Macquarie's view, although sales were a disappointing aspect. A reduced store footprint will exacerbate the sales decline over the next year. Cost reductions were a clear positive and more is envisaged.
Macquarie upgrades to Outperform from Neutral, as valuation support has materialised and a short term trading opportunity is apparent. Target is reduced to $1.21 from $1.29.
Target price is $1.21 Current Price is $1.08 Difference: $0.13
If MYR meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $1.25, suggesting upside of 9.6% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 5.00 cents and EPS of 8.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.8, implying annual growth of 14.3%. Current consensus DPS estimate is 5.8, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 13.0. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 5.00 cents and EPS of 9.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 9.9, implying annual growth of 12.5%. Current consensus DPS estimate is 6.7, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 11.5. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates MYR as Equal-weight (3) -
The interim result was low quality with disappointing sales in the second quarter. Morgan Stanley believes top-line growth will be challenged going forward and the company will continue to rely on cost reductions, for which there is obviously a limit.
While a less favourable Christmas for apparel retailers was partly a driver of the results, the broker believes the disappointing sales also came at the expense of less marking down, as the company tries to move away from the discount model.
Equal -weighted rating retained. Target is raised to $1.10 from $1.00. Industry view: In-Line.
Target price is $1.10 Current Price is $1.08 Difference: $0.02
If MYR meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $1.25, suggesting upside of 9.6% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 5.90 cents and EPS of 8.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.8, implying annual growth of 14.3%. Current consensus DPS estimate is 5.8, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 13.0. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 7.00 cents and EPS of 9.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 9.9, implying annual growth of 12.5%. Current consensus DPS estimate is 6.7, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 11.5. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates MYR as Hold (3) -
First half net profit was in line with Ord Minnett's forecasts. Compositionally, sales growth was weaker than expected. Given concerns regarding the result and guidance, the broker believes the outcome was a positive although it is not enough to change its view on the stock.
Ord Minnett maintains a Hold rating and reduces the target to $1.30 from $1.50. The broker believes the retailer still faces a challenging outlook, as it lacks focus on discount value customers, which make up around 40% of sales, but also faces tougher competition in the high-value customers segment.
Target price is $1.30 Current Price is $1.08 Difference: $0.22
If MYR meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $1.25, suggesting upside of 9.6% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 6.00 cents and EPS of 8.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.8, implying annual growth of 14.3%. Current consensus DPS estimate is 5.8, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 13.0. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 7.00 cents and EPS of 8.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 9.9, implying annual growth of 12.5%. Current consensus DPS estimate is 6.7, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 11.5. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates MYR as Neutral (3) -
First half net profit was ahead of expectations but sales were -5% below UBS estimates. Management signalled aggressive industry discounting over December/January, consistent with industry feedback, while Myer did not discount aggressively.
Of concern, trading in February, while better than January, remains below expectations. Achieving FY17 guidance for net profit growth is now dependent on the March-July trading being ahead of the January business.
UBS believes that management is doing the right things but the risk to the turnaround has increased. Neutral retained and target drops to $1.10 from $1.20.
Target price is $1.10 Current Price is $1.08 Difference: $0.02
If MYR meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $1.25, suggesting upside of 9.6% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 5.00 cents and EPS of 9.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.8, implying annual growth of 14.3%. Current consensus DPS estimate is 5.8, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 13.0. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 6.00 cents and EPS of 11.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 9.9, implying annual growth of 12.5%. Current consensus DPS estimate is 6.7, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 11.5. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates NAB as Outperform (1) -
The bank has raised its interest rates on investor mortgages by 25 basis points and on owner occupier rates by seven basis points.
While expecting the bank would continue to re-price investor lending, Macquarie was surprised with the decision to raise the politically sensitive owner occupier category.
Peers are expected to follow suit on investor loans, as volumes in that space are likely to remain elevated. While there is an earnings benefit for now, Macquarie notes that the move is not without risk. Outperform rating and $35 target retained.
Target price is $35.00 Current Price is $31.95 Difference: $3.05
If NAB meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $31.16, suggesting downside of -3.1% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 186.00 cents and EPS of 235.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 237.4, implying annual growth of -3.1%. Current consensus DPS estimate is 193.7, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 13.5. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 177.00 cents and EPS of 239.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 239.1, implying annual growth of 0.7%. Current consensus DPS estimate is 186.9, implying a prospective dividend yield of 5.8%. 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
Morgan Stanley rates NAB as Underweight (5) -
The bank is re-pricing standard variable rates by seven basis points on owner occupier loans and by 25 basis points on investment property loans.
Morgan Stanley believes the re-pricing is necessary to offset margin pressure that was evident in the latest reporting season and this is likely to push the bank's Australian loan growth below system.
Underweight rating and $28.50 target retained. Industry view is: In-Line.
Target price is $28.50 Current Price is $31.95 Difference: minus $3.45 (current price is over target).
If NAB 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 $31.16, suggesting downside of -3.1% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 198.00 cents and EPS of 233.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 237.4, implying annual growth of -3.1%. Current consensus DPS estimate is 193.7, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 13.5. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 178.00 cents and EPS of 230.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 239.1, implying annual growth of 0.7%. Current consensus DPS estimate is 186.9, implying a prospective dividend yield of 5.8%. 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 QBE as Hold (3) -
The company's interest-rate leverage has changed. Morgans believes, with the impact of the balance sheet mismatch largely eliminated, the benefit from rising interest rates will now emanate from a higher running yield.
The stock still provides significant leverage to rising interest rates but the broker believes the immediate, one-off benefits are much lower than in the past. Hold rating and $13.06 target retained.
Target price is $13.06 Current Price is $12.89 Difference: $0.17
If QBE meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $13.17, suggesting upside of 1.6% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 71.22 cents and EPS of 68.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 79.9, implying annual growth of N/A. Current consensus DPS estimate is 55.2, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 16.2. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 86.88 cents and EPS of 99.65 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 100.4, implying annual growth of 25.7%. Current consensus DPS estimate is 68.0, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 12.9. |
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
Morgans rates RIO as Upgrade to Add from Hold (1) -
Morgans believes recent share price weakness, based on volatility in the US dollar, has created an opportunity to add the stock at lower levels.
The broker upgrades to Add from Hold following a further upward revision to its final forecasts. Strength in the iron ore and aluminium markets, and potential upside for copper, has provided exceptional earning strength for Rio Tinto at a time of low capital expenditure.
Target is raised to $65.57 from $62.85.
Target price is $65.57 Current Price is $62.23 Difference: $3.34
If RIO meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $71.88, suggesting upside of 14.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 397.29 cents and EPS of 661.71 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 667.6, implying annual growth of N/A. Current consensus DPS estimate is 359.6, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 9.4. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 297.64 cents and EPS of 593.94 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 439.1, implying annual growth of -34.2%. Current consensus DPS estimate is 247.2, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 14.3. |
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
Deutsche Bank rates RWC as Hold (3) -
Deutsche Bank updates currency forecasts in line with its quarterly review. Following the changes, the broker's estimates for underlying net profit in FY17 decline by -1.3%. FY18 underlying net profit forecasts decline by -3.1%.
Hold rating retained. Target falls to $2.88 from $2.89.
Target price is $2.88 Current Price is $2.92 Difference: minus $0.04 (current price is over target).
If RWC meets the Deutsche Bank target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $3.19, suggesting upside of 10.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 6.00 cents and EPS of 12.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 12.0, implying annual growth of N/A. Current consensus DPS estimate is 6.0, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 24.0. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 7.00 cents and EPS of 13.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 13.4, implying annual growth of 11.7%. Current consensus DPS estimate is 7.0, implying a prospective dividend yield of 2.4%. Current consensus EPS estimate suggests the PER is 21.5. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates SXL as Underweight (5) -
If the company's radio audience/revenue share has peaked, as Morgan Stanley suspects, then upside to earnings per share is hard to envisage. The question is what multiple investors will pay for a radio stock in three years time. The broker suspects it will be lower.
The broker investigates what the company's TV assets might be worth. Without regional TV assets there would be lower debt and a more structurally sound asset mix, with capital to explore more radio bolt-ons.
Underweight maintained. Target is reduced to $1.00 from $1.10. Industry view: Attractive.
Target price is $1.00 Current Price is $1.34 Difference: minus $0.335 (current price is over target).
If SXL meets the Morgan Stanley target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $1.28, suggesting upside of 1.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 8.00 cents and EPS of 11.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.5, implying annual growth of 13.6%. Current consensus DPS estimate is 7.7, implying a prospective dividend yield of 6.1%. Current consensus EPS estimate suggests the PER is 11.0. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 8.00 cents and EPS of 12.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 12.1, implying annual growth of 5.2%. Current consensus DPS estimate is 8.5, implying a prospective dividend yield of 6.7%. Current consensus EPS estimate suggests the PER is 10.5. |
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates TPM as Underperform (5) -
The company is scheduled to release interim financials on March 21. Credit Suisse forecasts underlying growth of around 4% in the first half. Guidance for FY17 EBITDA of $820-830m is expected to be reiterated.
The main factor is seen weighing on the share price is a possibility the company may acquire mobile spectrum in next month's 700 MHz auction.
The broker retains a Neutral rating and reduces the target to $6.80 from $7.20, to reflect possible mobile investment risk.
Target price is $6.80 Current Price is $6.56 Difference: $0.24
If TPM meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $8.34, suggesting upside of 26.4% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 16.57 cents and EPS of 44.78 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 45.3, implying annual growth of 15.3%. Current consensus DPS estimate is 15.9, implying a prospective dividend yield of 2.4%. Current consensus EPS estimate suggests the PER is 14.6. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 16.65 cents and EPS of 43.81 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 47.2, implying annual growth of 4.2%. Current consensus DPS estimate is 16.2, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 14.0. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| AGL - | AGL ENERGY | Equal-weight - Morgan Stanley | Overnight Price $25.60 |
| BHP - | BHP BILLITON | Upgrade to Add from Hold - Morgans | Overnight Price $25.12 |
| CTX - | CALTEX AUSTRALIA | Outperform - Credit Suisse | Overnight Price $28.32 |
| Buy - Deutsche Bank | Overnight Price $28.32 | ||
| Outperform - Macquarie | Overnight Price $28.32 | ||
| Buy - UBS | Overnight Price $28.32 | ||
| FBU - | FLETCHER BUILDING | Buy - Deutsche Bank | Overnight Price $8.34 |
| Upgrade to Buy from Neutral - UBS | Overnight Price $8.34 | ||
| JHX - | JAMES HARDIE | Buy - Deutsche Bank | Overnight Price $20.41 |
| KAR - | KAROON GAS | Outperform - Macquarie | Overnight Price $1.78 |
| MYR - | MYER | Buy - Citi | Overnight Price $1.08 |
| Outperform - Credit Suisse | Overnight Price $1.08 | ||
| Hold - Deutsche Bank | Overnight Price $1.08 | ||
| Upgrade to Outperform from Neutral - Macquarie | Overnight Price $1.08 | ||
| Equal-weight - Morgan Stanley | Overnight Price $1.08 | ||
| Hold - Ord Minnett | Overnight Price $1.08 | ||
| Neutral - UBS | Overnight Price $1.08 | ||
| NAB - | NATIONAL AUSTRALIA BANK | Outperform - Macquarie | Overnight Price $31.95 |
| Underweight - Morgan Stanley | Overnight Price $31.95 | ||
| QBE - | QBE INSURANCE | Hold - Morgans | Overnight Price $12.89 |
| RIO - | RIO TINTO | Upgrade to Add from Hold - Morgans | Overnight Price $62.23 |
| RWC - | RELIANCE WORLDWIDE | Hold - Deutsche Bank | Overnight Price $2.92 |
| SXL - | SOUTHERN CROSS MEDIA | Underweight - Morgan Stanley | Overnight Price $1.34 |
| TPM - | TPG TELECOM | Underperform - Credit Suisse | Overnight Price $6.56 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 14 |
| 3. Hold | 7 |
| 5. Sell | 3 |
Friday 17 March 2017
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Disclaimer:
The content of this information does in no way reflect the opinions of
FNArena, or of its journalists. In fact we don't have any opinion about
the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe
and comment on. By doing so we believe we provide intelligent investors
with a valuable tool that helps them in making up their own minds, reading
market trends and getting a feel for what is happening beneath the surface.
This document is provided for informational purposes only. It does not
constitute an offer to sell or a solicitation to buy any security or other
financial instrument. FNArena employs very experienced journalists who
base their work on information believed to be reliable and accurate, though
no guarantee is given that the daily report is accurate or complete. Investors
should contact their personal adviser before making any investment decision.
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