Australian Broker Call

Morgan Stanley rates BEN as Underweight (5) -

Morgan Stanley anticipates a solid result from the regional lender on February 12, including margin expansion and dividend growth. But valuation and the prospect of EPS growth plateauing are calling for caution, argue the analysts.

Underweight rating retained, alongside an In-Line sector view and a price target of $10.40. On the analysts current forecasts, the annual dividend will likely remain 70c for as far as the human eye can see.

Target price is $10.40 Current Price is $11.61 Difference: minus $1.21 (current price is over target).
If BEN meets the Morgan Stanley target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.29, suggesting downside of -2.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.4

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

Citi rates BPT as Sell (5) -

Citi analysts remain of the view that, overall, valuations remain too lofty for Aussie oil and gas stocks. A detailed analysis from the past has once again shown management teams in the sector are not good at creating shareholder value.

Citi argues exploration spending is mostly destroying value at most companies. This in particular has been the case for the largest in the sector locally, Woodside Petroleum.

Target price for Beach has fallen to 99c from $1.09. Sell rating retained (recommendation was downgraded to Sell only recently).

Target price is $0.99 Current Price is $1.36 Difference: minus $0.37 (current price is over target).
If BPT meets the Citi target it will return approximately minus 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.94, suggesting downside of -30.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Citi rates CHC as Buy (1) -

The property research team at Citi is moving ever further away from market consensus views. Key points to consider, point out the analysts, are the in-house positive view on office and fund managers versus a cautious consensus, and negative retail and residential exposure versus a positive consensus.

Price target for Charter Hall Group has moved to $6.81 from $6.23. Buy rating retained.

Target price is $6.81 Current Price is $5.91 Difference: $0.9
If CHC meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $6.29, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.7

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

Citi rates CQR as Neutral (3) -

The property research team at Citi is moving ever further away from market consensus views. Key points to consider, point out the analysts, are the in-house positive view on office and fund managers versus a cautious consensus, and negative retail and residential exposure versus a positive consensus.

Price target for Charter Hall Retail has shifted to $4 from $4.03 prior. Neutral rating retained.

Target price is $4.00 Current Price is $3.97 Difference: $0.03
If CQR meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $4.08, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.2

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

Macquarie rates CQR as Underperform (5) -

Moody’s Investors Service has changed the outlook for Charter Hall Retail's Baa1 issuer rating to negative from stable. Macquarie points out the move does not yet imply a downgrade, but the trust is now on watch.

Having said so, the analysts expect the trust to be a net seller of assets in order to achieve a more comfortable level of gearing. The Gordon Centre has been put up for sale and the analysts estimate it could fetch $165m.

No changes have been made to $4.01 price target or the Underperform rating. Estimates have been left untouched as well (with the knowledge any success with the Gordon Centre is not yet in the numbers).

Target price is $4.01 Current Price is $3.97 Difference: $0.04
If CQR meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $4.08, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.2

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

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

The property research team at Citi is moving ever further away from market consensus views. Key points to consider, point out the analysts, are the in-house positive view on office and fund managers versus a cautious consensus, and negative retail and residential exposure versus a positive consensus.

Hence why the rating for Dexus Property has been upgraded to Buy from Neutral. Price target lifts to $11 from $9.78.

Target price is $11.00 Current Price is $9.76 Difference: $1.24
If DXS meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $9.83, suggesting upside of 0.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.2

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

Citi rates IOF as Buy (1) -

The property research team at Citi is moving ever further away from market consensus views. Key points to consider, point out the analysts, are the in-house positive view on office and fund managers versus a cautious consensus, and negative retail and residential exposure versus a positive consensus.

Buy rating retained, while the price target falls to $5.16 from $5.30.

Target price is $5.16 Current Price is $4.45 Difference: $0.71
If IOF meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $4.78, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Citi rates IPL as Neutral (3) -

The company has announced the loss of a further WA iron ore contract with Roy Hill, effective February. Citi analysts do believe these are signals of an over-supplied ammonia nitrate market since the start up of Orica's ((ORI)) Burrup AN plant, but they also don't seem too fazed by it.

There's a $300m buyback underway, say the analysts. They retain a Neutral rating. Price target unchanged at $4.20.

Target price is $4.20 Current Price is $3.69 Difference: $0.51
If IPL meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $3.97, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Macquarie rates JBH as Outperform (1) -

JB Hi-Fi remains the broker's top pick within discretionary retail on the premise that Amazon represents a mid-term threat, but also that JB Hi-Fi management has self-help available on the back of a strong market positioning.

Outperform rating and $28.80 price target remain intact post the strong discretionary retail sales update for November.

Target price is $28.80 Current Price is $28.19 Difference: $0.61
If JBH meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $25.71, suggesting downside of -8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Credit Suisse rates MQG as Outperform (1) -

Credit Suisse seems to suggest that Macquarie's operational update, scheduled for February 6, can once again surprise to the upside and thus provide a positive catalyst for the share price.

Exposure to the Trump administration's proposed tax cuts will likely translate into a 7% benefit to net profits in outer years, on the analysts calculations. No changes made to $105 price target and Outperform rating.

Target price is $105.00 Current Price is $101.08 Difference: $3.92
If MQG meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $96.39, suggesting downside of -4.6% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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

Citi rates ORG as Neutral (3) -

Citi analysts remain of the view that, overall, valuations remain too lofty for Aussie oil and gas stocks. A detailed analysis from the past has once again shown management teams in the sector are not good at creating shareholder value.

Citi argues exploration spending is mostly destroying value at most companies. This in particular has been the case for the largest in the sector locally, Woodside Petroleum.

Today's sector update has triggered no changes for Origin Energy.

Target price is $8.97 Current Price is $9.44 Difference: minus $0.47 (current price is over target).
If ORG meets the Citi target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.09, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Citi rates OSH as Sell (5) -

Citi analysts remain of the view that, overall, valuations remain too lofty for Aussie oil and gas stocks. A detailed analysis from the past has once again shown management teams in the sector are not good at creating shareholder value.

Citi argues exploration spending is mostly destroying value at most companies. This in particular has been the case for the largest in the sector locally, Woodside Petroleum.

Price target for Oil Search has shifted to $5.95 from $6.28. Sell rating retained.

Target price is $5.95 Current Price is $7.86 Difference: minus $1.91 (current price is over target).
If OSH meets the Citi target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.03, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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 RIO as Buy (1) -

Rio Tinto has found a buyer for its aluminium smelter in Dunkerque and Citi analysts see yet more funds flowing into management's coffers destined for capital management.

They note the present US$1.925bn share buyback will be completed in 2018. Target price remains $82. Rating is Buy.

Target price is $82.00 Current Price is $81.67 Difference: $0.33
If RIO meets the Citi target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $79.10, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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

Market Sentiment: 0.8

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

Macquarie rates RIO as Outperform (1) -

Rio Tinto is selling a French aluminium smelter to Liberty House for US$500m and Macquarie analysts grab the opportunity to highlight there seems to be considerable upside potential to earnings forecasts if current spot prices persist for longer.

That said, it is quite ironic that Macquarie's current forecasts imply a steadfast negative EPS trajectory for the years ahead. Price target $85. Outperform.

Target price is $85.00 Current Price is $81.67 Difference: $3.33
If RIO meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $79.10, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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

Citi rates SCG as Neutral (3) -

The property research team at Citi is moving ever further away from market consensus views. Key points to consider, point out the analysts, are the in-house positive view on office and fund managers versus a cautious consensus, and negative retail and residential exposure versus a positive consensus.

New price target for Scentre Group is $4.24 (was $4.17). Neutral rating retained.

Target price is $4.24 Current Price is $4.07 Difference: $0.17
If SCG meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.47, suggesting upside of 9.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.5

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

Citi rates SGP as Downgrade to Neutral from Buy (3) -

The property research team at Citi is moving ever further away from market consensus views. Key points to consider, point out the analysts, are the in-house positive view on office and fund managers versus a cautious consensus, and negative retail and residential exposure versus a positive consensus.

Stockland's rating has been downgraded to Neutral from Buy. Price target drops to $4.70 from $5.05.

Target price is $4.70 Current Price is $4.30 Difference: $0.4
If SGP meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $4.74, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.2

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

Citi rates STO as Downgrade to Sell from Neutral (5) -

Citi analysts remain of the view that, overall, valuations remain too lofty for Aussie oil and gas stocks. A detailed analysis from the past has once again shown management teams in the sector are not good at creating shareholder value.

Citi argues exploration spending is mostly destroying value at most companies. This in particular has been the case for the largest in the sector locally, Woodside Petroleum.

Price target for Santos has declined to $5.08. Rating has been downgraded to Sell from Neutral.

Target price is $5.08 Current Price is $5.45 Difference: minus $0.37 (current price is over target).
If STO meets the Citi target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.21, suggesting downside of -4.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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

Market Sentiment: 0.0

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

Citi rates SXY as Downgrade to Sell from Neutral (5) -

Citi analysts remain of the view that, overall, valuations remain too lofty for Aussie oil and gas stocks. A detailed analysis from the past has once again shown management teams in the sector are not good at creating shareholder value.

Citi argues exploration spending is mostly destroying value at most companies. This in particular has been the case for the largest in the sector locally, Woodside Petroleum.

Today's sector update has triggered a downgrade for Senex Energy; to Sell/High Risk from Neutral/High Risk. Price target falls to 34c.

Target price is $0.34 Current Price is $0.38 Difference: minus $0.04 (current price is over target).
If SXY meets the Citi target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.37, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Citi rates VCX as Downgrade to Neutral from Buy (3) -

The property research team at Citi is moving ever further away from market consensus views. Key points to consider, point out the analysts, are the in-house positive view on office and fund managers versus a cautious consensus, and negative retail and residential exposure versus a positive consensus.

Vicinity Centres has now been downgraded to Neutral from Buy. Price target drops to $2.88 from $3.09.

Target price is $2.88 Current Price is $2.63 Difference: $0.25
If VCX meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $2.89, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Citi rates WFD as Neutral (3) -

The property research team at Citi is moving ever further away from market consensus views. Key points to consider, point out the analysts, are the in-house positive view on office and fund managers versus a cautious consensus, and negative retail and residential exposure versus a positive consensus.

New price target for Westfield of $9.37 compares with $8.32 prior. Neutral rating (though it was No Rating in December).

Current Price is $9.23. Target price not assessed.

Current consensus price target is $9.64, suggesting upside of 4.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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 WPL as Sell (5) -

Citi analysts remain of the view that, overall, valuations remain too lofty for Aussie oil and gas stocks. A detailed analysis from the past has once again shown management teams in the sector are not good at creating shareholder value.

Citi argues exploration spending is mostly destroying value at most companies. This in particular has been the case for the largest in the sector locally, Woodside Petroleum.

Sell rating retained. Price target drops to $26.25.

Target price is $26.25 Current Price is $34.50 Difference: minus $8.25 (current price is over target).
If WPL meets the Citi target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $31.21, suggesting downside of -9.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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