Australian Broker Call

Citi rates A2M as Upgrade to Buy from Neutral (1) -

Citi upgrades its rating for a2 Milk Co to Buy from Neutral following surprising reiteration of FY24 earnings guidance at the AGM. It's now felt the required 2H skew may not be as significant as previously thought.

The broker notes the company is trading on an undemanding price earnings multiple and reviews data suggesting birth rate declines may be approaching the end.

In an abbreviated research note by Citi, no mention is made of any change to the prior $4.74 target price.

Target price is $4.74 Current Price is $3.82 Difference: $0.92
If A2M meets the Citi target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $5.32, suggesting upside of 33.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. 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

Bell Potter rates AAC as Buy (1) -

Australian Agricultural Co's 1H results prompt Bell Potter to raise its operating earnings (EBITDA) forecasts across FY24-26 by 38%, 89% and 76%, respectively. Higher forecasts reflect higher meat volumes, higher live pricing assumptions and lower production costs.

The broker highlights growth in through-the-cycle returns as the revenue mix shifts to meat from cattle. Growth is expected to continue through FY25 due to the expansion of the Goonoo feedlots, which will add up to 12% in capacity.

No formal guidance was provided though management noted successful cropping trials over 6,000Ha of northern properties.

The target rises to $1.90 from $1.85. Buy.

Target price is $1.90 Current Price is $1.36 Difference: $0.545
If AAC meets the Bell Potter target it will return approximately 40% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

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

Macquarie rates AKE as Outperform (1) -

Allkem's merger has recieved the green light from the Australian Foreign Investment Review Board, and Macquarie points out Allkem and Livent Corp have now secured all neccessary competition and foreign investment approvals. 

The merger will result in the new entity, Arcadium Lithium, and Allkem is targeting completion of the transaction by January 4. 

The merger ratio has flutuated since the merger announcement, with Allkem's implied ratio drifting higher in recent weeks. Macquarien points out if Allkem's ration exceeds 56%, it should provide a better entry point for the merger. 

The Outperform rating and target price of $17.00 are retained.

Target price is $17.00 Current Price is $9.05 Difference: $7.95
If AKE meets the Macquarie target it will return approximately 88% (excluding dividends, fees and charges).

Current consensus price target is $15.76, suggesting upside of 81.0% (ex-dividends)

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

Morgan Stanley rates ALU as Overweight (1) -

Key takeaways for Morgan Stanley from Altium's "incrementally positive" investor day include reaffirmed FY24 revenue growth and earnings (EBITDA) guidance of 20-23% and 35-37%, respectively. FY26 guidance for both metrics was also confirmed.

While monetisation plans on Altium365 are still not 100% clear to the broker, management noted the opportunity is material and the scope extends beyond PCB designers.

Overweight and $50 target retained. Industry view: Attractive.

Target price is $50.00 Current Price is $44.15 Difference: $5.85
If ALU meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $44.64, suggesting upside of 0.4% (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: 0.2

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

UBS rates ALU as Neutral (3) -

Altium's AGM brought articulation of the strategy of evolving A365 cloud platform into a broader integrated Electronics life cycle management, collaboration and electronic components (supply chain) procurement platform, to cement Altium as a core component of the broader electronic design process.

The ability to share data, version control, life cycle management for electronic hardware, is likely to expand the number and type
of different users able to access A365 and the Altium ecosystem, UBS notes.

Neutral retained, target $40.60.

Target price is $40.60 Current Price is $44.15 Difference: minus $3.55 (current price is over target).
If ALU meets the UBS target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $44.64, suggesting upside of 0.4% (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: 0.2

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

Citi rates AMP as Neutral (3) -

An annoyed Citi analyst notes AMP lowered its net interest margin (NIM) guidance only one month ago, and yesterday it did so yet again. The implied NIM of 111bps is significantly lower than the 139bps in the prior half, the analyst highlights.

Citi had been on the cautious side anyway and notes AMP management has flagged pressure is likely to be ongoing into FY24.

Citi thinks the market is left to fear the worst given no specific reasons have been given for this rapid deterioration. Estimates culled by -4% for this year, and by -16% next year and -12% for FY25.

Target price declines to 90c from $1.15 as the broker incorporates an additional discount to account for unkown risk. Neutral rating retained.

Target price is $0.90 Current Price is $0.86 Difference: $0.045
If AMP meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $1.06, suggesting upside of 23.5% (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

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

AMP's new Bank net interest margin (NIM) guidance of 125bps for FY23 implies to Morgan Stanley -22-24% downside risk to Bank division earnings. 

This new guidance raises questions for the analysts concerning AMP’s bank strategy and competitive positioning.

Management guided to "nominal" Bank book growth in FY24 as it focuses on protecting the NIM and improving Bank profitability.

The Equal-weight rating. Target $1.23. Industry view: In-Line.

Target price is $1.23 Current Price is $0.86 Difference: $0.375
If AMP meets the Morgan Stanley target it will return approximately 44% (excluding dividends, fees and charges).

Current consensus price target is $1.06, suggesting upside of 23.5% (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

Ord Minnett rates AMP as Accumulate (2) -

While Ord Minnett feels the market is undervaluing the potential longer-term recovery for AMP's Bank division's margins, there was a lower FY23 net interest margin (NIM) than the the broker anticipated due to price competition.

Management's outlook for a NIM improvement beyond FY23 is also slower than Ord Minnett forecast.

The analyst anticipates margin improvement as the major banks pivot towards improving profits and industry pricing normalises.

The Accumulate rating is retained and the target eases to $1.30 from $1.35.

Target price is $1.30 Current Price is $0.86 Difference: $0.445
If AMP meets the Ord Minnett target it will return approximately 52% (excluding dividends, fees and charges).

Current consensus price target is $1.06, suggesting upside of 23.5% (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

UBS rates AMP as Sell (5) -

AMP has announced the launch of a new digital SME bank and provided updated Bank earnings guidance.

While the launch is not intended to have any impact on FY24-25 Group costs, investment spend or excess capital, UBS expects Bank volumes and net interest margins to fall before possibly improving from FY26 onwards.

NIM guidance has been reduced, reflecting the rising cost of funding as low-cost transaction accounts contribute less than 10% of deposits. The SME bank launch is targeted at addressing this funding gap.

Target falls to 82c from $1.00, Sell retained.

Target price is $0.82 Current Price is $0.86 Difference: minus $0.035 (current price is over target).
If AMP meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.06, suggesting upside of 23.5% (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

Bell Potter rates CTD as Buy (1) -

While Bell Potter retains a positive Buy-rated view on the outlook for Corporate Travel Management,  research coverage by a new analyst brings a fresh perspective and a $21 target, down from $24. 

The analyst highlights the company's shares appear cheap, trading on an around -5% discounted FY24 price earnings multiple compared to peers, despite being well capitalised and carrying zero debt.

Ord Minnett anticipates solid margin improvement from gains via utilisation of technology and automation.
 

Target price is $21.00 Current Price is $19.15 Difference: $1.85
If CTD meets the Bell Potter target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $22.85, suggesting upside of 20.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Morgan Stanley rates DTL as Overweight (1) -

Morgan Stanley came away for the Data#3 investor day believing mid-teens (potentially high-teens) EPS growth is achievable compared to the consensus forecast for low-teens.

The broker envisages gross margin expansion as the company continues to win contracts and gain scale. It's felt high speed data (HSD) revenue is underpinned by system outperformance and numerous tailwinds.

There has also been an acceleration in the Managed Services (MS) pipleline. Management built their MS capabilities over three years and evidence suggests to the broker margin expansion across older contracts.

The target rises to $8.20 from $7.10. Overweight.Industry view is In-Line.

Target price is $8.20 Current Price is $7.34 Difference: $0.86
If DTL meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $7.80, suggesting upside of 3.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Macquarie rates FLT as Outperform (1) -

Macquarie has outlined a "solid" trading update from Flight Centre Travel at its recent annual general, noting the company continues to execute strongly across both corporate and leisure. 

Flight Centre Travel is guiding to FY24 underlying earnings of $450-500m and profit before tax of $270-310m. While the company is targeting a 2% profit margin in FY25, it has iterated it will not temper growth aspirations or opportunities to achieve this. 

The Outperform rating is retained and the target price decreases to $22.15 from $24.85. 

Target price is $22.15 Current Price is $18.75 Difference: $3.4
If FLT meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $24.38, suggesting upside of 27.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Macquarie rates GL1 as Outperform (1) -

Global Lithium Resources has provided an update on its definitive feasibility study and metallurigcal testing at its Manna project. In a notable deviation from the scope study, says Macquarie, the company has selected a full flotation circuit flowsheet. 

The company is expecting to release the definitive feasibility study in the first half of 2024, but Macquarie already believes there is upside risk to cash costs, noting the flotation process is more expensive than the original flowhseet. 

The Outperform rating and target price of $2.40 are retained.

Target price is $2.40 Current Price is $1.26 Difference: $1.14
If GL1 meets the Macquarie target it will return approximately 90% (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

Shaw and Partners rates GL1 as Buy, High Risk (1) -

Metallurgical test work at the Manna Litium project, 100%-owned by Global Lithium Resources, has shown excellent recoveries and spodumene concentrate grades, according to Shaw and Partners. A definitive feasibilty study (DFS) is expected by mid-2024.

The broker remains positive on the lithium price despite the recent sell-off, and suggests spot prices should now find cost support.

The Buy, High Risk rating and $3.20 target are unchanged.

Target price is $3.20 Current Price is $1.26 Difference: $1.94
If GL1 meets the Shaw and Partners target it will return approximately 154% (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

Macquarie rates GLN as Outperform (1) -

Galan Lithium has secured an offtake agreement for its Hombre Muerto West project with Glencore, covering 100% of commercial production over the first five years. Macquarie points out this is forecast to total of 5,400 tonnes lithium carbonate equivalent. 

The broker finds the announcement of the offtake agreement a key positive for Galan Lithium, de-risking the marketability of its lithium chloride. 

The Outperform rating and target price of $1.40.

Target price is $1.40 Current Price is $0.75 Difference: $0.65
If GLN meets the Macquarie target it will return approximately 87% (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

Bell Potter rates GNC as Buy (1) -

A lower contribution from agribusiness was only partly mitigated by a stronger crush result in oils, leading to a -20% fall in FY23 earnings (EBITDA) for GrainCorp, explains Bell Potter. Underlying profit was in line with expectation.

Typically, formal earnings guidance is provided at the post-harvest AGM, though the broker highlights management commentary on the ABARES September forecast of 20.8mt, regarding dry northern conditions offsetting favourable southern conditions.

Processing volumes should remain strong, according to management, but margins will moderate. The company is assessing a potential 750-1,000kt oilseed crush facility in WA.

The broker's target rises to $9.55 from $9.45. Buy.

Target price is $9.55 Current Price is $7.55 Difference: $2
If GNC meets the Bell Potter target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $8.75, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Macquarie rates GNC as Outperform (1) -

Macquarie expects a strong balance sheet will support capital management from GrainCorp. Following the sale of the company's United Malt Group stake, Macquarie estimates GrainCorp could hold $600m, or more, in core net cash.

It expects this to not only support a $50m buyback, but also fund growth options such as an oil seed crush plant in West Australia. The broker feels the oil seed crush plant would be a logical step forward for GrainCorp, and anticipates further detail in the first half of 2024.

The Outperform rating is retained and the target price decreases to $9.70 from $10.13.

Target price is $9.70 Current Price is $7.55 Difference: $2.15
If GNC meets the Macquarie target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $8.75, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Morgans rates GNC as Hold (3) -

Morgans describes a "commendable" FY23 result for GrainCorp showing strong operating cash flow and a large core cash position, allowing a fully franked final dividend of 30cps and a $50m on-market buyback.

Earnings beat guidance due to a larger fair value gain than the analysts expected on the united Malt Group ((UMG)) shareholding, explains the broker. 

Earnings (EBITDA) declined by -18.3% on last year's record as the revaluation and a record Processing result failed to counter lower earnings from a smaller crop and lower processing margins.

The broker's Hold rating is maintained as there is potential for most of the core cash to be deployed for a new oilseed crush facility and FY24 earnings are expected to decline. The target rises to $8.08 from $7.85. No earnings guidance was provided.

Target price is $8.08 Current Price is $7.55 Difference: $0.53
If GNC meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $8.75, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Ord Minnett rates GNC as Hold (3) -

As GrainCorp's FY23 result was broadly in line with Ord Minnett's expectations, the target price rises to $7.40 from $7.20 largely due to the time value of money. Profitability is expected to normalise as cropping also normalises.

Management is assessing the feasibility of a new oilseed crush facility in WA, which the broker believes could carry a price tag of around -$500m (the company provided sparse detail).

The Hold rating is unchanged. 

Target price is $7.40 Current Price is $7.55 Difference: minus $0.15 (current price is over target).
If GNC meets the Ord Minnett target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.75, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

UBS rates GNC as Buy (1) -

GrainCorp delivered another strong result as UBS expected, underpinned by a third consecutive bumper crop and strong demand across key end markets. The key incremental positive was the working capital unwind through the second half, driving up net core cash.

The broker expects further working capital to be released through FY24 as the crop normalises, plus receipt of $104m from the sale of United Malt Group. The key use of cash will likely be towards new crushing capacity in WA, which to UBS makes strategic sense.

Investors fear a step-down in earnings from FY24 as drier conditions emerge. UBS argues this is factored in and the stock should be assessed on its mid-term cash flows and scope for capital returns and/or reinvestment.

Target falls to $9.00 from $9.50, Buy retained.

Target price is $9.00 Current Price is $7.55 Difference: $1.45
If GNC meets the UBS target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $8.75, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Ord Minnett rates GQG as Buy (1) -

As GQG Partners has failed to garner support from River Capital, which owns 20% of Pacific Current Group ((PAC)), the $11 all cash bid has been withdrawn.

Separately, GQG Partners did not support River Capital’s counter proposal for $10.50/share.

GQG Partners remains open to continuing to engage with Pacific Current Group.

The Buy rating and target price of $2.15 are retained.

Target price is $2.15 Current Price is $1.38 Difference: $0.77
If GQG meets the Ord Minnett target it will return approximately 56% (excluding dividends, fees and charges).

Current consensus price target is $2.09, suggesting upside of 40.1% (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: 1.0

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

Citi rates INA as Buy (1) -

Citi remains of the view Ingenia Communities has a positive future ahead, a view based on exposure to the attractive land lease business, but news of the CEO stepping aside might leave the share price in limbo for the time being, the broker acknowledges.

Buy rating and $4.80 price target retained.

Target price is $4.80 Current Price is $4.29 Difference: $0.51
If INA meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $4.54, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Citi rates IPL as Neutral (3) -

Regulatory approvals for the Waggaman sale have been received and management at Incitec Pivot expects the transaction to complete on 1 December for net proceeds of circa US$850m.

Citi reminds investors the company intends to return up to $1bn to shareholders and will ask for approval at the AGM, scheduled for December 20th.

Neutral. Target $2.90.

Target price is $2.90 Current Price is $2.99 Difference: minus $0.09 (current price is over target).
If IPL meets the Citi target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.19, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in September.

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 JHG as Equal-weight (3) -

A new analyst covering Janus Henderson at Morgan Stanley can sees a turnaround story developing under new leadership. Flows/EPS improvement, however, are expected take time in the face of secular pressures around fees, flows, and margins.

The Equal-Weight rating is maintained on a fair valuation, according to the analyst, and the target rises to $40 from $39.70. Industry view: In-Line.

Target price is $40.00 Current Price is $39.85 Difference: $0.15
If JHG meets the Morgan Stanley target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $40.83, suggesting upside of 2.7% (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: 0.3

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

Citi rates MIN as Buy (1) -

Citi has updated its modeling for the purchase of Bald Hill (from administrators) and reports the operation is slated to add $188m to EBITDA on a full financial year basis.

The broker believes ultra-busy management is now attracting attention to Mineral Resources' balance sheet. No dividend payout is expected for FY24.

Buy rating retained while the price target shifts to $78 from $77.

Target price is $78.00 Current Price is $62.60 Difference: $15.4
If MIN meets the Citi target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $73.86, suggesting upside of 16.0% (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

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

Morgan Stanley assesses a "solid" in-line FY23 result for Nufarm that displayed strong Seeds growth of 93% and improved cash flow. It's felt the composition of the result was favourable given the growing Seeds contribution.

FY23 operating cash outflow of -$125m was better than expectations by the broker and consensus for -$354m and -$323m, respectively.

Outlook commentary was broadly in line with consensus expectations, notes the broker.

The target falls to $4.90 from $5.50 and the Equal-weight rating is unchanged. Industry view: In-Line.

Target price is $4.90 Current Price is $4.62 Difference: $0.28
If NUF meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $6.10, suggesting upside of 28.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Ord Minnett rates NUF as Buy (1) -

Nufarm's share price experienced a more than 10% jump following the release of its FY23 result. Despite an -8% revenue decline, Ord Minnett believes the market was encouraged by earnings resilience in the face of El Nino weather. 

In Ord Minnett's opinion, the shares are well below fair value. The broker expects ongoing earnings growth from the seed technologies segment could prove a key catalyst for share price appreciation. 

The Buy rating and target price of $7.70 are retained.

Target price is $7.70 Current Price is $4.62 Difference: $3.08
If NUF meets the Ord Minnett target it will return approximately 67% (excluding dividends, fees and charges).

Current consensus price target is $6.10, suggesting upside of 28.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Ord Minnett rates PAC as Buy (1) -

An impasse has ended buyout talks for Pacific Current Group, with the company's substantial shareholder, River Capital, unwilling to accept GQG Partners' ((GQG)) bid of $11.00 per share, and GQG Partners not supportive of River Capital's $10.50 per share counter. 

Ord Minnett believes Pacific Current Group can generate strong earnings momentum over the coming two years, and expects the company to deliver 28% two-year earnings per share compound annual growth. It considers the current valuation attractive. 

The Buy rating and target price of $12.20 are retained.

Target price is $12.20 Current Price is $8.18 Difference: $4.02
If PAC meets the Ord Minnett target it will return approximately 49% (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 PBP as Add (1) -

At Probiotec's AGM, management provided 1H guidance for revenue of between $110-115m and earnings (EBITDA) in the range of $16.5-17.5m, along with expectations for solid organic growth. 

This growth will be attained from leveraging onshoring trends of its large multinational customer base, explains Morgans.

Guidance implied softer margins than the analysts anticipated, and the broker lowers earnings forecasts across FY24-26 by -7%, -4% and -3%, respectively. The target falls to $3.15 from $3.35. Add.

Target price is $3.15 Current Price is $2.46 Difference: $0.69
If PBP meets the Morgans target it will return approximately 28% (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

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

Steadfast Group expects EPS accretion, and upgrades FY24 guidance, after announcing the acquisition of 70% of Queensland-based underwriting agency Sure Insurance for -$149m.

The broker's underlying FY24 diluted EPS growth was upgraded by only 1 percentage point to 11-16%, given dilution from a $280m institutional placement.

The transaction highlights to Morgan Stanley structural growth on offer in underwriting agencies, given domestic insurers don't have the appetite or technology to write a broad range of risks profitably.

Equal-Weight rating. Target price $6.30. Industry view: In-Line. 

Target price is $6.30 Current Price is $5.41 Difference: $0.89
If SDF meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $6.38, suggesting upside of 22.4% (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 SHL as Overweight (1) -

Sonic Healthcare reaffirmed FY24 earnings (EBITDA) guidance at its AGM, but Morgan Stanley's new earnings forecast is around -3% below the bottom end of the guidance range due to an unusually high 1H:2H split.

Management noted ongoing cost pressures and also announced the acquisition of dermatopathology specialist Pathology Watch for -US$30m, to be funded from existing cash and debt facilities.

The broker's target falls to $35.55 from $36.60. Overweight. Industry view is In-Line.

Target price is $35.55 Current Price is $29.23 Difference: $6.32
If SHL meets the Morgan Stanley target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $35.43, suggesting upside of 20.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Macquarie rates SKO as Outperform (1) -

Having delivered first half revenue of NZ$36.3m, Serko is now guiding to full year revenue of $67-74m. While the upgrade reflects a 6% upgrade at the midpoint, it does suggest a half-on-half decline in the second half of the year. 

Despite this, points out Macquarie, the company continues to see a pathway to achieving its FY25 revenue aspiration of $100m.  

Macquarie points out the company's Booking.com partnership accounted for 90% of revenue growth in the first half. A renewal update on this partnership is due in May, and Macquarie expects this to be key to the outlook. 

The Outperform rating is retained and the target price increases to NZ$5.00 from NZ$3.51.

Current Price is $4.04. Target price not assessed.

Current consensus price target is $5.10, suggesting upside of 27.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 1.0

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

Morgan Stanley rates SLC as Overweight (1) -

As part of a trading update at Superloop's AGM, management provided first time FY24 earnings (EBITDA)/capex guidance which aligned with consensus expectations, notes Morgan Stanley.

The broker highlights outsized NBN share gains continue and notes Consumer was the strongest segment with record net subscriber additions.

Overweight. Target 90c. Industry view: In-line.

Target price is $0.90 Current Price is $0.65 Difference: $0.25
If SLC meets the Morgan Stanley target it will return approximately 38% (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

Ord Minnett rates SPK as Hold (3) -

Ord Minnett considers the medium-term outlook for Spark New Zealand to be steady. Mobile service revenue market share is improving, up 8% in the six months to June, and was a notable driver of 12% group earnings growth in the half. 

Alongside results from peers, Ord Minnett believes Spark New Zealand's results show the stable structure of the New Zealand mobile industry. The broker feels Spark New Zealand has breathing room to consolidate its market position and seek earnings growth opportunities.

The Hold rating and target price of $4.50 are retained.

Target price is $4.50 Current Price is $4.69 Difference: minus $0.19 (current price is over target).
If SPK meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.50, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Macquarie rates SVW as Outperform (1) -

Seven Group has upgraded both group and industrial services guidance at its recent annual general, with group earnings guidance upgraded to high single-digit to low-teen growth. 

Guidance for the industrial services segment, which includes WesTrac, Coates and Boral ((BLD)), was upgraded to low to mid-teen earning growth, amid a strong start to the financial year from both WesTrac and Boral and solid trading conditions for all three businesses. 

The Outperform rating is retained and the target price increases to $33.60 from $32.65.

Target price is $33.60 Current Price is $30.33 Difference: $3.27
If SVW meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $32.15, suggesting upside of 2.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

UBS rates SVW as Buy (1) -

Seven Group has upgraded its FY24 earnings guidance due to strong momentum in its Industrial Services division. The upgrade leads UBS to increase FY24 forecast earnings by 4%, reflecting stronger first quarter trading conditions for WesTrac, Coates and Boral ((BLD)).

Seven Group is positively leveraged to increasing mining production, UBS notes, a resilient construction/infrastructure pipeline, and transitional energy. For WesTrac, the broker sees earnings supported by an ageing mining fleet and increasing machine rebuild demand.

FY24 will see an earnings drag from Beach Energy ((BPT)), but UBS sees production normalising.

Buy retained, target rises to $34.50 from $31.50.

Target price is $34.50 Current Price is $30.33 Difference: $4.17
If SVW meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $32.15, suggesting upside of 2.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Citi rates WDS as Sell (5) -

As reported late in yesterday's Report, Citi analysts have taken a chainsaw to their forecasts for earnings and cashflow for Woodside Energy, resulting in material downgrades, which pulls back the broker's price target by -16% to $26.50.

Given this is substantially lower than today's share price, Citi has downgraded its rating to Sell from Neutral. Updated forecasts imply a near halving of EPS and DPS next year.

Adding more weight to their decision: Citi believes market consensus will follow in its footsteps as the downgrades in forecasts are based upon the company's own projections for the next five years.

Citi believes Woodside's earnings power is deteriorating. The decline of legacy LNG and acquired assets mean Woodside is increasingly capex intensive, evidenced by circa US$20bn of committed capex merely keeping production flat, the broker concludes.

Target price is $26.50 Current Price is $32.13 Difference: minus $5.63 (current price is over target).
If WDS meets the Citi target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $35.57, suggesting upside of 13.1% (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: 0.1

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