Australian Broker Call

Macquarie rates AAD as Neutral (3) -

The company will divest its bowling & entertainment division for $160m. Macquarie likes the price and expects the balance sheet to be strengthened. This will accelerate the rolling out of Main Event and the reinvestment in theme parks.

In turn, growth in theme park visits should be supported, although the broker concedes it will take time. Neutral rating maintained. Target rises to $2.15 from $2.10.

Target price is $2.15 Current Price is $2.00 Difference: $0.15
If AAD meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $1.85, suggesting downside of -7.4% (ex-dividends)

The company's fiscal year ends in June.

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

Morgans rates AAD as Hold (3) -

The company has sold its bowling & entertainment business for $160m and proceeds will be re-directed towards higher yielding theme parks and Main Event divisions.

Morgans likes the divestment but struggles with the current valuation of the company, even after factoring in a reasonably strong earnings recovery in coming years.

To become more confident, the broker would like certainty regarding the sustainable earnings margins for Main Event and timing around the recovery of theme parks.

Hold rating retained. Target rises to $1.92 from $1.70.

Target price is $1.92 Current Price is $2.00 Difference: minus $0.08 (current price is over target).
If AAD meets the Morgans target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.85, suggesting downside of -7.4% (ex-dividends)

The company's fiscal year ends in June.

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 AWE as Sell (5) -

Mineral Resources ((MIN)) is now offering 41.5c per share cash and between 0.0198 and 0.0277 shares per AWE share. The implied consideration as of the last close is $0.83 a share.

Shareholders will be required to vote on the scheme of arrangement in April 2018. The company has entered into an exclusivity clause.

Citi concurs with the board that the revised offer is in the best interests of shareholders and suggests it has become harder for another party to counter offer. Sell rating maintained and the target is increased to $0.83 from $0.72.

Target price is $0.83 Current Price is $0.86 Difference: minus $0.03 (current price is over target).
If AWE 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 $0.64, suggesting downside of -25.2% (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

Deutsche Bank rates AWE as Hold (3) -

AWE has entered a binding scheme implementation deed with Mineral Resources ((MIN)). Each AWE shareholder is to receive a default consideration of $0.415 in cash and between 0.0198-0.0277 MIN shares per AWE share.

Deutsche Bank calculates if the MIN 10-day VWAP is trading between $15-21 this represents an implied value of $0.83 per share. Shareholders do not need to take action at the present time, the broker suggests, and awaits a response from counter bidder CERCG.

Hold rating retained. Target is $0.50.

Target price is $0.50 Current Price is $0.86 Difference: minus $0.36 (current price is over target).
If AWE meets the Deutsche Bank target it will return approximately minus 42% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.64, suggesting downside of -25.2% (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

UBS rates AWE as Neutral (3) -

The board has recommended a revised offer from Mineral Resources ((MIN)). Shareholders will receive $0.83 per share if MIN shares trade between $15-21 during the 10 days prior to the scheme vote, which is scheduled in mid April.

Shareholders will have the option to receive a mix of cash and scrip or 100% of either. UBS has a Neutral rating and target of $0.83 to reflect the offer price.

Target price is $0.83 Current Price is $0.86 Difference: minus $0.03 (current price is over target).
If AWE meets the UBS target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.64, suggesting downside of -25.2% (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 BSL as Buy (1) -

The company has guided to first half underlying operating earnings of $460m. Citi notes pollution controls in China have driven demand for quality blast furnace product and, should demand be maintained, Port Kembla coke exports have the opportunity to become a viable source of earnings for the company going forward.

The company has also had a reversal of the -$12m impairment that previously applied to the Indian joint venture. Citi expects a strong tailwind into the second half and maintains a Buy rating and $15.46 target.

Target price is $15.46 Current Price is $15.10 Difference: $0.36
If BSL meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $14.90, suggesting downside of -1.3% (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

Deutsche Bank rates BSL as Hold (3) -

The company has surprised with an upgrade to first half operating earnings guidance, because of stronger Australian steel prices and volumes, as well as a tax benefit from the Indian joint venture.

Moreover, Deutsche Bank notes North Star's US tax rate will fall to 21% from 32% in the second half. The broker upgrades FY18 and FY19 net profit estimates by 11% and 10% respectively.

A Hold rating is retained on valuation. Target is raised to $14.70 from $13.00.

Target price is $14.70 Current Price is $15.10 Difference: minus $0.4 (current price is over target).
If BSL meets the Deutsche Bank target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.90, suggesting downside of -1.3% (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

Macquarie rates BSL as Outperform (1) -

The company has upgraded first half guidance for operating earnings of $420-460m. The upgrade has been driven by Australian steel products and Macquarie envisages macro conditions will remain supportive of the investment case in the near-term.

The broker raises FY18 and FY19 estimates for earnings per share by 13.8% and 16.9% respectively. Target is raised to $17.06 from $13.65. Outperform maintained.

Target price is $17.06 Current Price is $15.10 Difference: $1.96
If BSL meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $14.90, suggesting downside of -1.3% (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 CPU as Hold (3) -

The company has indicated there will be some beneficial impact on earnings from the expected changes to the US corporate tax rate. Ord Minnett notes 48% of the operating earnings (EBITDA) were generated in the US in FY17.

The broker expects the company to further update the market with the first half result and maintains a Hold rating and $13.50 target.

Target price is $13.50 Current Price is $16.89 Difference: minus $3.39 (current price is over target).
If CPU meets the Ord Minnett target it will return approximately minus 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.28, suggesting downside of -15.5% (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

UBS rates CTX as Buy (1) -

The company has formed a strategic partnership and will acquire 20% of Philippines-based fuel company SEAOIL Philippines for $115m. Caltex will supply fuel from its Ampol Singapore division and supports plans to accelerate the market reach of SEAOIL.

This represents the company's third acquisition in the past 14 months and, UBS notes, provides an opportunity to increase volumes via Ampol Singapore, an increasingly important growth driver. Buy rating and $39 target maintained.

Target price is $39.00 Current Price is $33.96 Difference: $5.04
If CTX meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $35.99, suggesting upside of 6.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.4

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

Morgans rates CWY as Hold (1) -

Morgans does not consider the acquisition of peer Tox Free Solutions ((TOX)) to be compelling, believing investors could gain exposure at a fraction of the transaction costs paid by Cleanaway.

The broker believes the company has paid away to Tox Free shareholders a large portion of the value of cost synergies.

Cleanaway is funding the deal with a $590m entitlement offer. The broker recommends investors take up the entitlement offer at $1.35 a share.

A Hold rating is predicated on the limited potential total return at the current share price. Target is $1.61.

Target price is $1.61 Current Price is $1.55 Difference: $0.06
If CWY meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $1.57, suggesting upside of 1.2% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates DLX as Sell (5) -

The company's AGM update has confirmed market conditions remain positive in Australasia and FY18 net profit is expected to be higher than FY17.

Notwithstanding the positive outlook, Citi maintains forecasts and considers the shares overbought.

Sell rating and $7.50 target.

Target price is $7.50 Current Price is $7.78 Difference: minus $0.28 (current price is over target).
If DLX meets the Citi target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.98, suggesting downside of -10.3% (ex-dividends)

The company's fiscal year ends in September.

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

Deutsche Bank rates DLX as Sell (5) -

The company has affirmed its outlook for FY18. Net profit is expected to be higher than the FY17 equivalent of $142.9m.

The company will focus on defending its local business and offshore growth in Asia and the UK. Deutsche Bank believes the positives are factored into the share price and retains a Sell rating and $5.70 target.

Target price is $5.70 Current Price is $7.78 Difference: minus $2.08 (current price is over target).
If DLX meets the Deutsche Bank target it will return approximately minus 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.98, suggesting downside of -10.3% (ex-dividends)

The company's fiscal year ends in September.

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

Citi rates IPL as Neutral (3) -

The company has indicated that the Waggaman plant has been running above nameplate since the start of FY18 while US construction activity continues apace.

The broker believes securing a viable gas contracts for Gibson Island remains a critical issue for the near term. The broker retains a Neutral rating but highlights significant upside risks. Target is $4.20.

Target price is $4.20 Current Price is $3.88 Difference: $0.32
If IPL meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.97, suggesting upside of 2.3% (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

Deutsche Bank rates IPL as Buy (1) -

The company is prioritising safety and operations and has noted that Western Australia is now oversupplied post the start-up of competitor Orica's ((ORI)) Burrup facility.

The company has also noted the Americas are expected to continue recovering. The Waggaman ammonia plant has been operating above nameplate since the start of FY18 and the agricultural sector is set for a good year.

Deutsche Bank maintains a Buy rating and $4.40 target.

Target price is $4.40 Current Price is $3.88 Difference: $0.52
If IPL meets the Deutsche Bank target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.97, suggesting upside of 2.3% (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 SIV as Neutral (3) -

The company has finalised arrangements for a $200m warehouse facility to be used to fund domestic asset growth in both the GoGetta and Silver Chef books.

Macquarie expects the GoGetta back book will be an issue for the company and a drag on FY18 profitability. Nevertheless, diversification of funding provides a path to fund rental assets on a limited recourse basis over the medium term.

The broker retains a Neutral rating and $7.17 target.

Target price is $7.17 Current Price is $7.12 Difference: $0.05
If SIV meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

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

UBS rates TLS as Neutral (3) -

A number of key indicators suggest to UBS that the company's mobile operating earnings have peaked and EBITDA is set to decline.

The broker suspects the market is aware of the operating outlook but content with a 6% net distribution yield, which is supported by the near-term NBN payments. UBS maintains a Neutral rating and reduces the target to $3.60 from $3.90.

Target price is $3.60 Current Price is $3.65 Difference: minus $0.05 (current price is over target).
If TLS meets the UBS target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.74, suggesting upside of 2.6% (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

UBS rates TPM as Neutral (3) -

UBS estimates the market is valuing the company's mobile business as slightly positive for value vs its negative reading.

The broker believes a $600m initial roll-out cost is realistic and future maintenance capital could be in the range of $150-180m a year.

UBS retains a Neutral rating and $5.50 target.

Target price is $5.50 Current Price is $6.48 Difference: minus $0.98 (current price is over target).
If TPM meets the UBS target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.74, suggesting downside of -11.5% (ex-dividends)

The company's fiscal year ends in July.

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

Morgans rates VLW as Add (1) -

The company has a joint venture for the development of its Wallert site and will retain 51% of the project, receiving fees for development management, sales & marketing and potential performance fees.

The deal is expected to contribute $5.2m to first half net profit. The company has also announced the conditional sale of its 51%-owned Donnybrook for around $100m,

Morgans believes guidance for FY18 net profit of at least $41.6m is readily achievable.

Add rating maintained. Target rises to $2.96 from $2.60.

Target price is $2.96 Current Price is $2.72 Difference: $0.24
If VLW meets the Morgans target it will return approximately 9% (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