Australian Broker Call

Macquarie rates AHG as Outperform (1) -

The company has divested refrigerated logistics for $400m, the price ahead of Macquarie's expectations. The deal provides financial capacity to pursue other acquisitions in the automotive segment and also the flexibility to pursue capital management initiatives.

Meanwhile, the four months trading to October have been marginally softer than expected and industry conditions continue to be challenging, in the broker's view. Outperform rating retained. Target is revised to $4.10 from $3.66.

Target price is $4.10 Current Price is $3.58 Difference: $0.52
If AHG meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $3.89, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.8

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

Ord Minnett rates AHG as Accumulate (2) -

The company has announced the long-awaited sale of its refrigerated logistics division, which has disappointed investors over the years.

Ord Minnett welcomes the sale as the remaining business will be simpler and management will no longer be distracted by a division with minimal synergies with the rest of the group.

Ord Minnett maintains an Accumulate recommendation and the target is raised to $3.80 from $3.50.

Target price is $3.80 Current Price is $3.58 Difference: $0.22
If AHG meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $3.89, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.8

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

Citi rates AMP as Neutral (3) -

Management has expressed the ambition to acquire revenue streams in Advice to offset margin pressure in the Australian Wealth Management business and Citi analysts, sceptical at first, now believe this strategy might have legs.

The analysts also believe it may require some time before AMP can report tangible evidence of the above occurring, and they therefore think it's wiser to stick with a wait and see approach.

Neutral rating and $5.60 target retained.

Target price is $5.60 Current Price is $5.14 Difference: $0.46
If AMP meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $5.54, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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) -

Morgan Stanley envisages an opportunity to unlock value. The broker reviews its numbers, noting the business is seeking to increase investment in higher-growth and less capital-intensive operations while releasing and recycling capital from lower-growth enterprises.

Growth assets appear well-positioned to benefit from favourable domestic and global themes such as mandated superannuation, growing demand for advice and the ageing demographics.

Equal-weight retained. Target is $5.60. Industry view: In-line.

Target price is $5.60 Current Price is $5.14 Difference: $0.46
If AMP meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $5.54, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Ord Minnett rates ASB as Accumulate (2) -

The Australian government has awarded the contract for the design of offshore patrol vessel to German-based Luerssen.

Luerssen was not partnered with Austal through the tender process, but the government has announced that Austal will be involved in the construction of 10 of the 12 vessels in Western Australia, which surprised Ord Minnett.

While the economics from the negotiations remain uncertain, the broker believes the government's announcement is a material positive, given the likely underwriting of base-line throughput at the company's shipyard for the next 15 years.

Accumulate rating and $2 target maintained.

Target price is $2.00 Current Price is $1.80 Difference: $0.2
If ASB meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.8

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

Morgans rates BUB as Initiation of coverage with Hold (3) -

Morgans observes the company has made significant progress on growth initiatives since listing in January, increasing its footprint and awareness both domestically and abroad. Bubs Australia is a vertically integrated producer of goats milk infant formula.

The broker likes the point of difference, future growth prospects, alliance partners and the management team. However, the strong share price appreciation since listing has meant the market has priced in very high expectations.

The broker considers the stock fully valued in the short term and initiates coverage with a Hold rating and $0.70 target.

Target price is $0.70 Current Price is $0.75 Difference: minus $0.05 (current price is over target).
If BUB meets the Morgans target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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 CCL as Upgrade to Buy from Neutral (1) -

Citi's upgrade to Buy, with a reduced price target of $8.80 (from $9.10) is supported by two key pillars. The shares look cheap, with the analysts observing a -12% discount versus Coca-Cola European partners, described as Amatil's "nearest rival".

The second pillar is an anticipation that revenues in Australia will stabilise in H1 and this should act as a catalyst for the stock to recover. Citi thinks 5% EPS growth is possible beyond FY19.

Target price is $8.80 Current Price is $7.73 Difference: $1.07
If CCL meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $8.46, suggesting upside of 9.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

UBS rates CCL as Neutral (3) -

UBS has become incrementally more negative about the re-positioning of Australian beverages, expecting this will take longer and cost more.

While the impact of the pulling forward of the $40m investment into FY18 will reverse in FY19/20, the broker envisages additional investment will be needed, given the implementation of the NSW container deposit scheme.

Indonesian conditions, meanwhile, remain challenging. The broker downgrades estimates by -6% and -4% in FY18 and FY19 respectively.

Neutral. Target is reduced to $7.90 from $8.60.

Target price is $7.90 Current Price is $7.73 Difference: $0.17
If CCL meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $8.46, suggesting upside of 9.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Morgans rates FND as Add (1) -

Morgans believes the unsolicited takeover bid by Eastern Field Developments at $0.23 a share is opportunistic and encourages holders of the stock to take no action.

The broker observes a small disruption in November reduces production in the quarter to 4-5000t of copper amid C1 costs of US$1.40-1.80/lb.

Target rises to $0.31 from $0.30. Add retained.

Target price is $0.31 Current Price is $0.24 Difference: $0.07
If FND meets the Morgans target it will return approximately 29% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Morgan Stanley rates MVF as Overweight (1) -

The company has guided to flat FY18 earnings growth and some market share has been lost. Industry growth has been largely driven by low-cost IVF in which the company chooses not to participate.

Morgan Stanley observes market share declined by -2.5%. Market disruption at the low-cost end and specialist retention issues are expected to weigh on the stock until these are resolved.

Overweight rating retained. Target is reduced to $2.20 from $2.50. In-Line industry view.

Target price is $2.20 Current Price is $1.27 Difference: $0.93
If MVF meets the Morgan Stanley target it will return approximately 73% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

Deutsche Bank rates MYR as Hold (3) -

Management has not witnessed any improvement in trading so far in the second quarter versus the first. Sales decline of -2.1% was reported in the first quarter.

Christmas trading is still ahead, but this is the most important contributor to full year net profit and the company does not envisage any underlying change to the tough conditions.

No change to the broker's Hold rating and 75c target.

Target price is $0.75 Current Price is $0.71 Difference: $0.04
If MYR meets the Deutsche Bank target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $0.68, suggesting downside of -4.2% (ex-dividends)

The company's fiscal year ends in July.

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

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

The trading update at the AGM signalled no improvement so far in the second quarter. Morgan Stanley is concerned about the soft start but notes December and January remain the key trading months.

No FY18 profit guidance has been provided and the broker forecasts a -12% decline in FY18 net profit. Equal-weight rating retained. Target is $0.60.  Industry view is Cautious.

Target price is $0.60 Current Price is $0.71 Difference: minus $0.11 (current price is over target).
If MYR 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 $0.68, suggesting downside of -4.2% (ex-dividends)

The company's fiscal year ends in July.

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

Morgan Stanley rates ORI as Upgrade to Equal-weight from Underweight (3) -

Disappointing FY18 guidance has triggered a material de-rating of the stock, Morgan Stanley observes. Since November 6 the share price has declined -18% and this is set against the backdrop of an -8% downgrade to Morgan Stanley's FY18 net profit forecasts.

Rating is upgraded to Equal-weight from Underweight. While becoming more positive, the broker concedes its move to upgrade may prove premature and acknowledges scope for things to get worse before they can get better.

Target is $16.50. Industry view is Cautious.

Target price is $16.50 Current Price is $17.55 Difference: minus $1.05 (current price is over target).
If ORI meets the Morgan Stanley target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.08, suggesting upside of 3.0% (ex-dividends)

The company's fiscal year ends in September.

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

Ord Minnett rates S32 as Downgrade to Hold from Buy (3) -

Ord Minnett believes the local market is now overweight the mining sector and share prices may be vulnerable to rotation heading into the next calendar year. While not being outright negative, the broker recommends reduced exposure.

South32 is downgraded to Hold from Buy following recent gains in the share price.  $3.40 target maintained.

Target price is $3.40 Current Price is $3.34 Difference: $0.06
If S32 meets the Ord Minnett target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.23, suggesting downside of -3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Morgans rates SDG as Add (1) -

The company has guided to FY18 net profit of $27-30m. This is lower than Morgans assumed, with the difference largely because of the timing of project delivery and settlements.

The broker believes the quality of the portfolio and product offering should continue to underpin future sales as the company focuses on specific geographic areas. There is also the potential for profits in the longer term from several multi-storey projects.

Add retained. Target is reduced to $1.93 from $2.08.

Target price is $1.93 Current Price is $1.72 Difference: $0.21
If SDG meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Credit Suisse rates SYR as Outperform (1) -

Bagged saleable flake graphite is being produced from Balama, meeting September quarter guidance. Credit Suisse expects the demonstration of reliable on-spec production may be a trigger for more offtake commitments.

Construction and sequential commissioning is essentially complete across all stages of the circuit. Outperform rating and $6.60 target maintained.

Target price is $6.60 Current Price is $4.34 Difference: $2.26
If SYR meets the Credit Suisse target it will return approximately 52% (excluding dividends, fees and charges).

Current consensus price target is $4.46, suggesting upside of 2.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.6

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

Deutsche Bank rates TAH as Buy (1) -

The Queensland government will introduce a wagering point of consumption tax from July 1, 2018, which will be levied at 15% of the net wagering revenue of betting companies offering services to Queensland residents.

Deutsche Bank believes this is a positive development for Tabcorp and Tatts ((TTS)) as it is likely to pressure Victoria and New South Wales into introducing a tax at the same rate within the same timeframe.

The broker also notes press reports that William Hill is in discussions with CrownBet ((CWN)) concerning its 62% interest. These industry changes are also considered positive for the former two businesses.

Deutsche Bank maintains a Buy rating and $5.20 target.

Target price is $5.20 Current Price is $4.85 Difference: $0.35
If TAH meets the Deutsche Bank target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $4.84, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

Ord Minnett rates WSA as Downgrade to Sell from Hold (5) -

Ord Minnett believes the local market is now overweight the mining sector and share prices may be vulnerable to rotation heading into the next calendar year. While not being outright negative, the broker recommends reduced exposure.

Western Areas  is downgraded to Sell from Hold. Target is $2.50.

Target price is $2.50 Current Price is $3.31 Difference: minus $0.81 (current price is over target).
If WSA meets the Ord Minnett target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.60, suggesting downside of -21.5% (ex-dividends)

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.6

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