Australian Broker Call

Macquarie rates ALX as Neutral (3) -

The government of Virginia is yet to pass its budget within which be a decision on Greenway restructuring. Macquarie considers the outcome with regard Atlas Arteria's interest to be a 50:50 bet.

But irrespective of the outcome, net cash from Greenway is not likely before 2028, the broker notes.

Neutral and $6.44 target retained.

Target price is $6.44 Current Price is $6.65 Difference: minus $0.21 (current price is over target).
If ALX meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.48, suggesting downside of -3.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

Citi rates ASB as Neutral (3) -

As Austal appears to be the sole party tendering for the award of an around US$900m contract for three expeditionary medical ships (EMS), Citi sees potential for share price upside in the next 30 days.

The broker suggests the medium to long-term earnings opportunity is around $130m, which represents 60% of Citi's forecasts for FY23-27.

The Neutral rating and $2.00 target are unchanged.

Target price is $2.00 Current Price is $1.88 Difference: $0.125
If ASB meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Macquarie rates CAR as Outperform (1) -

Carsales has acquired another 40% of Brazil's WebMotors to take its stake to 70%, funded by a $500m hybrid capital raising, the excess of which will be used to reduce debt.

The total addressable market in Brazil is large, Macquarie notes, and to date players have had limited success of monetisation. The WebMotors business offers similar cyclical resilience that the Australian business enjoys albeit in a larger market, allowing for dynamic pricing and additional finance penetration.

Debt reduction is also an incremental positive. Outperform retained, target rises to $25.10 from $24.50.

Target price is $25.10 Current Price is $22.64 Difference: $2.46
If CAR meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $25.05, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Ord Minnett rates CAR as Hold (3) -

Carsales retail entitlement offer opens on March 15 and Ord Minnett suggests shareholders consider subscribing for one new share for every 14.01 held at March 13.

The $19.95/share subscription price represents an -11% discount to the broker's new target of $23, which has been raised from $22.80.

The analyst anticipates synergy benefits from the company's acquisitions, and part of the $500m equity raise is to increase its holding to 70% of WebMotors, the leading automotive digital marketplace in Brazil.

The Hold rating is maintained.

Target price is $23.00 Current Price is $22.64 Difference: $0.36
If CAR meets the Ord Minnett target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $25.05, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

UBS rates CAR as Buy (1) -

Carsales has announced it will buy another 40% of Brazilian automotive digital marketplace Webmotors for $353m, taking its stake to 70%.

Banco Santander holds the remaining 30% and retains exclusivity as the sole provider of finance and insurance transactions conducted on the platform.

Carsales plans to fund the purchase through a $500m capital raising (1 for 14.01 pro rata accelerated renounceable entitlement offer) and expects the acquisition will be neutral EPS in the first year of ownership, after which it  will become accretive.

Buy rating and $26 target price retained. Carsales has engaged UBS as adviser for the equity raising.

Target price is $26.00 Current Price is $22.64 Difference: $3.36
If CAR meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $25.05, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

UBS rates HSN as Buy (1) -

Hansen Technologies December-half result broadly met UBS's forecasts despite being sharply lower year on year, due to the non-repeat of the previous year's one-off licences, and tardiness in passing through cost inflation.

But strong organic recurring cost inflation clinched the deal for the broker, who believes the earnings retreat will be contained to the December half.

UBS adds employee churn has stabilised, prices have risen, the balance sheet is strong and free cash flow generation is pumping. UBS considers earnings to be recurring, resilient and sticky. Buy rating retained. Target price eases to $6.20 from $6.30.

The broker includes Hansen as one of its small cap top picks.

Target price is $6.20 Current Price is $4.56 Difference: $1.64
If HSN meets the UBS target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $5.98, suggesting upside of 29.2% (ex-dividends)

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

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

Ord Minnett downgrades its rating for Inghams Group to Hold from Accumulate after a recent share price rally.

Forecasts are unchanged and the $3.50 target retained.

Target price is $3.50 Current Price is $3.26 Difference: $0.24
If ING meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.10, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

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

The takeover offer by TPG Global confirms Morgan Stanley's view of the positive drivers for InvoCare including pricing growth and the opportunity for further consolidation in an industry that offers defensive demand.

The offer price is $12.65/share and TPG Global had already acquired a 17.8% stake in InvoCare. While the takeover premium is significant compared to the last share price traded, it is considered small relative to the past 12-18 months of share trading.

Equal-weight rating and $10.25 target price retained. Industry view: In-line.

Target price is $10.25 Current Price is $12.07 Difference: minus $1.82 (current price is over target).
If IVC meets the Morgan Stanley target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.80, suggesting downside of -3.0% (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

Macquarie rates JRV as Outperform (1) -

Jervois Global reported a 4% greater loss than Macquarie had expected due to higher than expected corporate costs. Cobalt prices have fallen -34% year to date to create a headwind for Jervois so far in 2023.

Upcoming catalysts are first concentrate from Idaho Cobalt Operations, expected at the end of this quarter, and a Mineral Reserve
and Resource update expected during the June quarter, the broker notes.

Outperform and 40c target retained.

Target price is $0.40 Current Price is $0.17 Difference: $0.235
If JRV meets the Macquarie target it will return approximately 142% (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

Ord Minnett rates LYC as Sell (5) -

Japan Australia Rare Earths (“JARE”) is a Japanese consortium that has long supported Lynas Rare Earths, explains Ord Minnett. The trend continues with JARE subscribing to a $200m capital raising at $7.65/share in exchange for future offtake.

As JARE hold $188m of Lynas Rare Earths' debt around -$11.5m in interest owed will be forgiven as part of the transaction.

The broker retains its $6.70 target and Sell rating.

Target price is $6.70 Current Price is $7.33 Difference: minus $0.63 (current price is over target).
If LYC meets the Ord Minnett target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.93, suggesting upside of 6.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.3

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

Morgan Stanley rates MQG as Overweight (1) -

At the second of its investor days in the US, Macquarie Group noted principal equity investments by Macquarie Capital have delivered an average 24% lifetime internal rate of return (IRR). This highlights to Morgan Stanley upside optionality.

This return was boosted by 2-3x higher returns in FY21- 22 on strong outcomes in the Green Investment Group, explains the analyst. Principal income is expected to become larger as Macquarie Group grows its private credit book.

Overweight and $231 target retained. Industry view: In-Line

Target price is $231.00 Current Price is $190.84 Difference: $40.16
If MQG meets the Morgan Stanley target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $199.13, suggesting upside of 4.6% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Ord Minnett rates NAN as Downgrade to Lighten from Hold (4) -

Ord Minnett downgrades its rating for Nanosonics to Lighten from Hold on valuation post a share price rally.

Forecasts are unchanged and the $4.00 target retained.

Target price is $4.00 Current Price is $4.87 Difference: minus $0.87 (current price is over target).
If NAN meets the Ord Minnett target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.61, suggesting downside of -8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.3

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

Macquarie rates PLL as Outperform (1) -

Piedmont Lithium's first spodumene concentrate has been produced at North American Lithium, although the product quality is not yet at target levels, Macquarie notes. Lifting the product quality to target grades and impurities is a key focus for NAL with targets forecast to be achieved in the near-term.

Piedmont’s offtake agreement with NAL secures Piedmont 50% of spodumene production with a US$900/t price cap. The spodumene purchased under this offtake will be sold to Tesla and LG Chem at spot prices over the next three years.

Outperform and $2.10 target retained.

Target price is $2.10 Current Price is $0.88 Difference: $1.225
If PLL meets the Macquarie target it will return approximately 140% (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

Ord Minnett rates QBE as Downgrade to Lighten from Hold (4) -

Ord Minnett downgrades its rating for QBE Insurance to Lighten from Hold on valuation after a recent share price increase.

The $13.00 target is unchanged.

Target price is $13.00 Current Price is $15.35 Difference: minus $2.35 (current price is over target).
If QBE meets the Ord Minnett target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.49, suggesting upside of 7.7% (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: 0.7

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

Macquarie rates RSG as Outperform (1) -

Resolute Mining reported growth in its Resources and Reserves as at end-2022, Macquarie notes, driven by exploration success at Syama North, with Mako seeing mine depletion and Syama underground largely flat.

The pre-feasibility study for Syama North, now expected in mid-2023, is a near-term catalyst. Macquarie is yet to include upside potential in its valuation.

Outperform and 33c target retained.

Target price is $0.33 Current Price is $0.28 Difference: $0.055
If RSG meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

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

Macquarie rates SUL as Neutral (3) -

Spending in auto, fitness and outdoors categories relevant to Super Retail captured by Macquarie's High Frequency Consumer Data remains strong, the broker notes. Should this persist, upside risk exists to second half expectations.

Macquarie increases its target to $13.46 from $12.37 but retains Neutral on macro-risk concerns. Super Retail is also cycling tough comparables from last year's omicron and floods.

Target price is $13.46 Current Price is $12.97 Difference: $0.49
If SUL meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $13.34, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Macquarie rates SYA as Outperform (1) -

Sayona Mining's first spodumene concentrate has been produced at North American Lithium, although the product quality is not yet at target levels, Macquarie notes. Lifting the product quality to target grades and impurities is a key focus for NAL with targets forecast to be achieved in the near-term.

Ramping up production at NAL (Sayona 75%, Piedmont Lithium 25%) remains the key near term catalyst.

Outperform and 30c target retained.

Target price is $0.30 Current Price is $0.24 Difference: $0.06
If SYA meets the Macquarie target it will return approximately 25% (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

Citi rates TWE as Neutral (3) -

Citi feels investors may now look to become more positive, after the recent underperformance of 19 Crimes in Premium, after Treasury Wine Estates increased its disclosure for its American Luxury and Premium portfolio.

The Stags Leap franchise in Luxury has been very successful, observes the analyst. It's noted the Luxury portfolio is growing at circa 3x the rate of the Premium portfolio, consistent with industry premiumisation trends.

Management also set a target to double medium-term revenue and profits for Frank Family, and aims to be the number one luxury chardonnay in the US.

The $14.25 target and Neutral rating are unchanged.

Target price is $14.25 Current Price is $13.55 Difference: $0.7
If TWE meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $14.27, suggesting upside of 6.4% (ex-dividends)

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Morgan Stanley rates TWE as Overweight (1) -

Morgan Stanley highlights from the investor day presentation by Treasury Wine Estates a plan to double the volume at Frank Family Vineyards, which currently comprises 8% of net sales revenue in the Americas.

The company also plans to restore its return on equity metric (ROE), which was 11.2% in the 1H of FY23, but was up at 13.9% in FY19.

The Overweight rating and $15.40 target are maintained. Industry view: In-line.

Target price is $15.40 Current Price is $13.55 Difference: $1.85
If TWE meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $14.27, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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