Australian Broker Call

Macquarie rates A11 as Outperform (1) -

It is Macquarie's view that a recent strategic investment in Atlantic Lithium's Ewoyaa project could help align the interests of Atlantic Lithium and the Ghanian government, potentially erasing some uncertainty around mining leases and permitting processes. 

The company continues to have regular discussions with Ghana's Minerals Commission, with a mining license approval a key near-term catalyst for the project. 

The Outperform rating and target price of 70 cents are both retained. 

Target price is $0.70 Current Price is $0.47 Difference: $0.235
If A11 meets the Macquarie target it will return approximately 51% (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

Bell Potter rates AGE as Speculative Buy (1) -

Bell Potter raises its target for Alligator Energy to 8c from 5c after updating for FY23 results, a recent capital raise and new forecasts for both the uranium price and the Australian dollar.

The broker sees a favourable long-term demand scenario for sustained higher uranium prices and lifts its long-term spot price by US$10/lb to $70/lb and maintains its term contract premium of 10%.

A $25.5m placement has been completed and there's a planned $3m share purchase plan at 5.2cps.

The Speculative Buy rating is unchanged.

Target price is $0.08 Current Price is $0.06 Difference: $0.025
If AGE meets the Bell Potter target it will return approximately 45% (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

Morgans rates ALX as Downgrade to Hold from Add (3) -

In a draft budget, the French government has announced a new tax (commencing 2024) that will negatively impact large motorway and airport concessions in France. Following parliamentary debate, final legislation is due in December.

Atlas Arteria estimates the proposed tax on 4.6% of revenues exceeding EUR120m would have totaled EUR117m when applied to the APPR motorway in 2022, notes Morgans.

The broker lowers its target for Atlas Arteria to $5.67 from $6.44 and downgrades its rating to Hold from Add. It's thought the company's current DPS level is no longer sustainable beyond FY25 given the hit to cash flows.

The analyst sees valuation upside from either the (uncertain) legal process to extract compensation under the concession agreement and/or a takeover bid. The probability weighting applied to a takeover by IFM has now been reduced to 40% from 50%.

Target price is $5.67 Current Price is $5.55 Difference: $0.12
If ALX meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $6.13, suggesting upside of 12.8% (ex-dividends)

The company's fiscal year ends in December.

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

Shaw and Partners rates BCB as Buy (1) -

Bowen Coking Coal looks able to focus on the production ramp up at its Burton Complex project, says Shaw and Partners, having renegotiated the terms of its debt with Taurus and New Hope and deferring repayments to FY25. 

The negotiations leave Bowen Coking Coal with a combined drawn debt of $98.9 to the two companies. Terms of the negotiation will see Bowen Coking Coal issue $10m in share to New Hope. 

The company additionally reported record quarterly shipments, and Shaw and Partners expects it can achieve a similar result in the December quarter. 

The Buy rating is retained but the target price decreases to 29 cents from 32 cents. 

Target price is $0.29 Current Price is $0.15 Difference: $0.14
If BCB meets the Shaw and Partners target it will return approximately 93% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

UBS rates BXB as Buy (1) -

A UBS survey in UK/Europe suggests robust revenue conditions for Brambles in FY24, supported by volume, price, and increasing demand for pooled product as availability improves and focus shifts to pallet quality. 

CHEP's market-leading customer satisfaction should see it participate in the growth, the broker notes.

UBS believes Brambles' strength has mostly been earnings-driven, but the stock hasn't really re-rated yet. At around a 17x PE, the stock still trades some -13% below the ASX Industrials. Buy and $16.95 target retained.

Target price is $16.95 Current Price is $14.32 Difference: $2.63
If BXB meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $15.58, suggesting upside of 8.4% (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: 0.3

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

Macquarie rates CRN as Outperform (1) -

Issues at Buchanan and Curragh in the third quarter have seen Coronado Global Resources lower its full year production guidance by -5% and increase cost guidance by 15%. 

Macquarie has similarly lowered its production forecast to the bottom end of the company's 16.2-16.3m tonne guidance range. While a disappointing update following a strong first half, notes Macquarie, met coal prices remain buoyant. 

The Outperform rating is retained. The target price decreases to $2.20 from $2.40.

Target price is $2.20 Current Price is $1.86 Difference: $0.34
If CRN meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $1.98, suggesting upside of 11.2% (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: 0.9

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

Morgan Stanley rates CSL as Overweight (1) -

Morgan Stanley believes one reason for CSL's recent share price underperformance is approaching generic competition for Vifors' Injectafer in Europe.

However, the broker now sees around 16% EPS upside over time from the use of Injectafer as a tool within Patient Blood Management (PBM). The latter aims to reduce whole blood transfusions, which largely relies upon proactive management of iron-deficient anemia prior to surgery.

The Overweight rating and $334 target are unchanged. Industry View: In-Line.

Target price is $334.00 Current Price is $246.36 Difference: $87.64
If CSL meets the Morgan Stanley target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $330.53, suggesting upside of 33.3% (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: 0.9

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

Citi rates CXO as Sell (5) -

Core Lithium's FY23 release revealed revenues below forecasts with Citi analysts pointing out some prepayment revenue had not yet settled.

Management has left FY24 guidance unchanged. First shipments under long-term offtake agreements with Chinese customers commenced in September.

Citi suspects the price ceiling included in the contract with Yahua might spill into 2026 given the softer production outlook. Tallks with Tesla are continuing to settle the legal dispute.

Forecast for FY24 benefits from the shift in prepayments, but Net Asset Value decreases by -3c to $0.35.

Target price is $0.35 Current Price is $0.43 Difference: minus $0.08 (current price is over target).
If CXO meets the Citi target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.57, suggesting upside of 36.5% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Macquarie rates CXO as Outperform (1) -

A maiden profit from Core Lithium was an unexpected result for Macquarie, which had anticipated the company reporting a -$13.4m loss. Instead, Core Lithium advised of a net profit result of $10.8m, largely thanks to cost deferrals from capitalised waste stripping. 

The company has experienced a 19% share price increase since announcing its result. Core Lithium has maintained its spodumene concentrate sales guidance for the coming year.

The Outperform rating and target price of 65 cents are retained.

Target price is $0.65 Current Price is $0.43 Difference: $0.22
If CXO meets the Macquarie target it will return approximately 51% (excluding dividends, fees and charges).

Current consensus price target is $0.57, suggesting upside of 36.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Bell Potter rates CYC as Speculative Buy (1) -

After a 10-year process, Cyclopharm may now begin commercialisation activities in the US after securing FDA approval for the New Drug Application for Technegas.

Technegas is indicated for pulmonary ventilation, which covers a very broad range of indications.

The US approval should facilitate broader use of the system for indications other than pulmonary embolism (PE), explains the analyst, and the company is sponsoring ongoing trials across a range of expanded indications.

The broker's target rises to $4.25 from $3.25. Speculative Buy.

Target price is $4.25 Current Price is $2.87 Difference: $1.38
If CYC meets the Bell Potter target it will return approximately 48% (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

Morgan Stanley rates DDR as Overweight (1) -

Dicker Data is one of Morgan Stanley's key small/mid cap ideas. Despite recent share price weakness, the broker's conviction has grown largely due to working capital stabilisation. The target is raised to $11 from $10.

The 1H of 2023 indicates improving supply chains, according to the analysts, with more improvement to come. There has also been resilient 1H growth from a category mix shift and it's thought current PC headwinds will be a future tailwind.

Overweight. Industry View: In-Line.

Target price is $11.00 Current Price is $9.57 Difference: $1.43
If DDR meets the Morgan Stanley target it will return approximately 15% (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

Macquarie rates DEG as Outperform (1) -

Having released a definitive feasibility study for its Hemi project, De Grey Mining has announced a two-tranche $300m equity raise, with the second tranche of $54m subject to shareholder approval notes Macquarie.

Equity raised is intended to be used for the ordering of long-lead items, exploration drilling and early works. 

The results of the definitive feasibility study were largely in line with the pre-feasibility study delivered in September 2022, albeit with pre-production capital up 28%. Macquarie sees a focus on Hemi as reducing delivery risk. 

The Outperform rating is retained and the target price decreases to $1.80 from $2.00.

Target price is $1.80 Current Price is $1.12 Difference: $0.68
If DEG meets the Macquarie target it will return approximately 61% (excluding dividends, fees and charges).

Current consensus price target is $1.74, suggesting upside of 62.9% (ex-dividends)

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 DEG as Buy (1) -

De Grey Mining has released the Hemi project definitive feasibility study and announced a fully underwritten $300m placement.

Key DFS metrics were largely in line with UBS, suggesting a large, long life and low cost project, however the interim equity raise at depressed levels is more dilutive.

Short term, the broker is slightly more conservative on the gold outlook and notes the full funding solution and final investment decision will take a while to play out.

Target falls to $1.50 from $1.75 on dilution, Buy retained.

Target price is $1.50 Current Price is $1.12 Difference: $0.38
If DEG meets the UBS target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $1.74, suggesting upside of 62.9% (ex-dividends)

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

Macquarie rates LTR as Neutral (3) -

Updated capital and operating costs of the Kathleen Valley project from Liontown Resources have come in 6% higher than Macquarie had anticipated, with the broker shifting its expectations in line with company guidance. 

With Albemarle's offer still standing, Macquarie expects the update from Liontown Resources only reduces the risk of a binding offer not emerging.

Further, despite Gina Rinehart and Hancock Prospecting continuing to acquire Liontown Resources shares, Macquarie expects it is unlikely a competing bid will be forthcoming. 

The Neutral rating and target price of $3.00 are retained.

Target price is $3.00 Current Price is $2.96 Difference: $0.04
If LTR meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.03, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

UBS rates PMV as Sell (5) -

Looking at Premier Investments' FY23 result, UBS notes Premier Retail's underlying earnings came in at the the upper end of guidance and above the broker's forecast, driven by cost of doing business and sales management despite lower gross margins.

The company has seen a slow start to FY24, with management noting a challenging discretionary retail environment. The outcome of the announced strategic review is expected next year, with a break-up of the businesses possible.

UBS has lifted its target to $23.50 from $23.00, retaining Sell on the assumption of slowing sales and falling margins.

Target price is $23.50 Current Price is $24.21 Difference: minus $0.71 (current price is over target).
If PMV meets the UBS target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $25.27, suggesting upside of 6.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

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

Morgan Stanley raises its earnings margin assumptions for Ramsay Health Care's French and Australian operations, which increases the broker's target to $53.60 from $49.60.

Margins should improve due to reduced labour supply constraints and benefits derived from cost-saving initiatives, explains the broker.

The Equal-weight rating is unchanged as the analysts see limited upside to the current share price. It's felt the current valuation understates growth challenges and execution risks. Industry view: In-Line.

Target price is $53.60 Current Price is $51.18 Difference: $2.42
If RHC meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $58.20, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Morgan Stanley rates SCG as Overweight (1) -

Morgan Stanley believes large Retail shopping centres could be a good idea for investors seeking exposure to robust revenues. It's felt the post-covid recovery in rent has further to run, despite consumer spending concerns.

Consequently, the broker's Overweight rating and $3.52 target are retained for Scentre Group. Rental income for the REIT's last 12 months has been in line with 2019 numbers, after adjusting for asset sales.

Target price is $3.52 Current Price is $2.47 Difference: $1.05
If SCG meets the Morgan Stanley target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $3.05, suggesting upside of 25.9% (ex-dividends)

The company's fiscal year ends in December.

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

Morgans rates SOL as Add (1) -

After reviewing WH Soul Pattinson's FY23 result, Morgans assesses a broadly resilient performance from the portfolio of assets. The result was driven by higher dividends and trading profits from both core strategic investments and structured yield portfolios.

The interim dividend of 51cps (fully franked) was a key highlight for the broker. Following some listed equity sales, it's thought the $911m cash and equivalents balance will allow management to take advantage of any upcoming volatility in the listed and unlisted space.

Morgans likes WH Soul Pattinson's organic and inorganic growth over the long term and retains its Add rating. The target is increased to $34.75 from $30.65.

Target price is $34.75 Current Price is $32.72 Difference: $2.03
If SOL meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in July.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Macquarie rates STO as Outperform (1) -

Macquarie was left pleased by progress made by Santos at its Alaskan Pikka oil project in a recent tour, with the company reiterating its intention to produce first oil by 2026.

It's Macquarie's expectation that Santos will divest a 51% interest of Pikka, but that Alaska will become a long-term core producing region for the company.

Given ongoing delays in progressing financial investment decisions related to its Australian portfolio, the broker considers investment in Alaska to offer a better risk profile. 

The Outperform rating is retained and the target price increases to $9.90 from $9.85.

Target price is $9.90 Current Price is $7.87 Difference: $2.03
If STO meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $9.50, suggesting upside of 26.1% (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: 0.8

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

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

Morgan Stanley believes large Retail shopping centres could be a good idea for investors seeking exposure to robust revenues. It's felt the post-covid recovery in rent has further to run, despite consumer spending concerns.

The broker's Equal-weight rating and $2.26 target are retained for Vicinity Centres. Rental income for the REIT's last 12 months has recovered to 2019 levels. Industry view: In-line.

Target price is $2.26 Current Price is $1.71 Difference: $0.55
If VCX meets the Morgan Stanley target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $2.00, suggesting upside of 17.6% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Macquarie rates WES as Outperform (1) -

Describing Bunnings as the jewel in the Wesfarmers crown, Macquarie sees potential for the retailer to improve mid-week productivity through better engaging with trade customers.

The broker estimates any 10% mid-week trading improvement could equate to a $1.2bn lift in sales.

The broker considers Bunnings one of the best retail assets in Australia, and sees room for further potential upside given sales productivity continues to lag US peers. 

The Outperform rating is retained and the target price increases to $57.00 from $54.00. 

Target price is $57.00 Current Price is $52.55 Difference: $4.45
If WES meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $50.44, suggesting downside of -4.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Citi rates WTC as Neutral (3) -

Near term concerns around the soft macro conditions and risk to revenue growth in the second half of the financial year underpin Citi's retained Neutral rating on WiseTech Global. 

The broker considers a step up in research and development and a new product release as a positive for the company. Citi anticipates a near-term margin impact but expects earnings margins can return to 50% by the second half of FY25. 

The Neutral rating is retained and the target price decreases to $73.80 from $85.95.

Target price is $73.80 Current Price is $64.58 Difference: $9.22
If WTC meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $77.51, suggesting upside of 23.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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