Australian Broker Call

June 16, 2017

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COMPANIES DISCUSSED IN THIS ISSUE

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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)

THIS REPORT WILL BE UPDATED SHORTLY

Last Updated: 12:18 PM

Your daily news report on the latest recommendation, valuation, forecast and opinion changes.

This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.

For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE

Today's Upgrades and Downgrades
CSL - CSL Downgrade to Hold from Add Morgans
GTY - GATEWAY LIFESTYLE Downgrade to Neutral from Outperform Macquarie
GXY - GALAXY RESOURCES Upgrade to Buy from Neutral Citi
MGR - MIRVAC Downgrade to Hold from Buy Deutsche Bank
RWC - RELIANCE WORLDWIDE Downgrade to Sell from Hold Deutsche Bank
ALQ  ALS LIMITED

Mining Sector Contracting

Overnight Price: $6.94

Macquarie rates ALQ as Outperform (1) -

The company is evaluating the options for its asset care business. This reflects some interest in the business which may lead to divestments. Macquarie notes the asset care business earned $140m in revenue and $18m in operating earnings in FY17, around 7% of group EBITDA.

The broker believes the stock has had a good run and has closed up the gap to its global peers. Macquarie suspects ALS is moving to an earnings upgrade phase, which is likely to support elevated multiples and options on the balance sheet as asset sales are achieved.

Outperform maintained. Target rises to $7.28 from $6.62.

Target price is $7.28 Current Price is $6.94 Difference: $0.34
If ALQ meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $6.48, suggesting downside of -8.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 17.50 cents and EPS of 29.10 cents.
At the last closing share price the estimated dividend yield is 2.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.1, implying annual growth of N/A.

Current consensus DPS estimate is 16.3, implying a prospective dividend yield of 2.3%.

Current consensus EPS estimate suggests the PER is 25.1.

Forecast for FY19:

Macquarie forecasts a full year FY19 dividend of 17.30 cents and EPS of 34.70 cents.
At the last closing share price the estimated dividend yield is 2.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 35.0, implying annual growth of 24.6%.

Current consensus DPS estimate is 19.9, implying a prospective dividend yield of 2.8%.

Current consensus EPS estimate suggests the PER is 20.1.

Market Sentiment: 0.3

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

ANZ  AUSTRALIA & NEW ZEALAND BANKING GROUP

Banks

Overnight Price: $28.00

ADDED

Citi rates ANZ as Neutral (3) -

Citi analysts have updated their modeling and this has led to a reduction in EPS estimates by -2.3% and -3.5% in FY17 and FY18/19. The analysts explain the move is to reflect normalising markets revenues on top of continued revenue headwinds. Neutral rating and $31 target retained.

Target price is $31.00 Current Price is $28.00 Difference: $3
If ANZ meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $30.56, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Citi forecasts a full year FY17 dividend of 165.00 cents and EPS of 226.30 cents.
At the last closing share price the estimated dividend yield is 5.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.37.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 229.0, implying annual growth of 13.0%.

Current consensus DPS estimate is 161.1, implying a prospective dividend yield of 5.7%.

Current consensus EPS estimate suggests the PER is 12.4.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 170.00 cents and EPS of 233.60 cents.
At the last closing share price the estimated dividend yield is 6.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.99.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 234.6, implying annual growth of 2.4%.

Current consensus DPS estimate is 163.6, implying a prospective dividend yield of 5.8%.

Current consensus EPS estimate suggests the PER is 12.1.

Market Sentiment: 0.2

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

BAL  BELLAMY'S AUSTRALIA LIMITED

Dairy

Overnight Price: $6.50

Morgans rates BAL as Hold (3) -

The company will acquire its own canning facility, Camperdown Powder, in Victoria for $28.5m and a 90% interest. Morgans believes the acquisition provides several strategic benefits, with the most important being a path to CFDA registration of its Chinese labelled products.

The company will raise $60.4m from a fully underwritten entitlement offer and $27.5m of the funds will be used to make a one-off payment to Fonterra to re-set the supply agreement.

Morgans believes the turnaround will take time and there are still risks but, as the near-term multiples appear fair, a Hold rating is maintained. Target rises to $6.00 from $4.75.

Target price is $6.00 Current Price is $6.50 Difference: minus $0.5 (current price is over target).
If BAL meets the Morgans target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.16, suggesting downside of -19.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgans forecasts a full year FY17 dividend of 0.00 cents and EPS of 27.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.07.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 22.2, implying annual growth of -44.2%.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 28.8.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 7.00 cents and EPS of 24.00 cents.
At the last closing share price the estimated dividend yield is 1.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.08.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.7, implying annual growth of -6.8%.

Current consensus DPS estimate is 4.0, implying a prospective dividend yield of 0.6%.

Current consensus EPS estimate suggests the PER is 30.9.

Market Sentiment: -0.3

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

CBA  COMMONWEALTH BANK OF AUSTRALIA

Banks

Overnight Price: $81.70

ADDED

Citi rates CBA as Sell (5) -

Citi analysts have updated their modeling. As it is their belief mortgage competition will not abate alongside weak lending growth, for CBA the likely prospect remains for weaker revenue growth in FY18/19.

Today's update has triggered only marginal changes to estimates. Sell rating and $75 price target have been retained.

Target price is $75.00 Current Price is $81.70 Difference: minus $6.7 (current price is over target).
If CBA meets the Citi target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $80.35, suggesting downside of -2.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Citi forecasts a full year FY17 dividend of 421.00 cents and EPS of 548.70 cents.
At the last closing share price the estimated dividend yield is 5.15%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.89.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 556.9, implying annual growth of 0.3%.

Current consensus DPS estimate is 423.5, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 14.7.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 421.00 cents and EPS of 565.40 cents.
At the last closing share price the estimated dividend yield is 5.15%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.45.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 572.1, implying annual growth of 2.7%.

Current consensus DPS estimate is 428.3, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 14.3.

Market Sentiment: -0.3

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

CSL  CSL LIMITED

Pharmaceuticals & Biotech/Lifesciences

Overnight Price: $139.45

Morgans rates CSL as Downgrade to Hold from Add (3) -

The company has acquired an 80% equity stake in a Chinese plasma fractionator for US$352m. The market is significant, Morgans observes, with demand for immunoglobulin estimated to outstrip supply over the next 10 years.

Expanding its market-leading footprint in China should allow CSL to better exploit the projected growth in demand, the broker adds. While confident in the future growth trajectory the broker believes consensus expectations are high for FY18 and valuation is stretched.

The broker downgrades to Hold from Add. Target is raised to $140.20 from $133.30.

Target price is $140.20 Current Price is $139.45 Difference: $0.75
If CSL meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $138.70, suggesting downside of -0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgans forecasts a full year FY17 dividend of 183.17 cents and EPS of 395.54 cents.
At the last closing share price the estimated dividend yield is 1.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 35.26.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 396.5, implying annual growth of N/A.

Current consensus DPS estimate is 180.0, implying a prospective dividend yield of 1.3%.

Current consensus EPS estimate suggests the PER is 35.3.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 212.37 cents and EPS of 456.60 cents.
At the last closing share price the estimated dividend yield is 1.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.54.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 471.4, implying annual growth of 18.9%.

Current consensus DPS estimate is 210.3, implying a prospective dividend yield of 1.5%.

Current consensus EPS estimate suggests the PER is 29.7.

This company reports in USD. 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

CTD  CORPORATE TRAVEL MANAGEMENT LIMITED

Travel, Leisure & Tourism

Overnight Price: $23.72

Morgan Stanley rates CTD as Overweight (1) -

The company has reiterated FY17 guidance of $97m in EBITDA and provided a more constructive commentary regarding Australasia, Europe and Asia.

The company was more measured in its comments in on the US, highlighting that near-term political uncertainty has put a break on current activity despite bullish sentiment amongst clients.

Morgan Stanley retains an Overweight rating, In-Line industry view and $23.50 target.

Target price is $23.50 Current Price is $23.72 Difference: minus $0.22 (current price is over target).
If CTD meets the Morgan Stanley target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.45, suggesting downside of -14.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgan Stanley forecasts a full year FY17 dividend of 31.00 cents and EPS of 68.00 cents.
At the last closing share price the estimated dividend yield is 1.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 34.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 63.6, implying annual growth of 47.2%.

Current consensus DPS estimate is 31.4, implying a prospective dividend yield of 1.3%.

Current consensus EPS estimate suggests the PER is 37.6.

Forecast for FY18:

Morgan Stanley forecasts a full year FY18 dividend of 46.00 cents and EPS of 87.00 cents.
At the last closing share price the estimated dividend yield is 1.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.26.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 80.3, implying annual growth of 26.3%.

Current consensus DPS estimate is 42.1, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 29.8.

Market Sentiment: 0.8

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

GTY  GATEWAY LIFESTYLE GROUP

Aged Care & Seniors

Overnight Price: $2.04

Macquarie rates GTY as Downgrade to Neutral from Outperform (3) -

The company has provided an update on FY17 guidance, which implies better pricing but delays with higher margin sales. Macquarie reduces FY17 forecasts for earnings per share by -10.4% and FY18 by -0.4%.

Macquarie envisages long-term growth in the sector on the back of positive trends such as an ageing population, financial pressure on retirees and housing affordability.

Nevertheless, the broker does not believe the share price will outperform until the market is confident that earnings have found a bottom. Rating is downgraded to Neutral from Outperform. Target is $2.19.

Target price is $2.19 Current Price is $2.04 Difference: $0.15
If GTY meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 9.50 cents and EPS of 13.40 cents.
At the last closing share price the estimated dividend yield is 4.66%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.22.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 11.40 cents and EPS of 15.20 cents.
At the last closing share price the estimated dividend yield is 5.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.42.

Market Sentiment: 0.5

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


UBS rates GTY as Buy (1) -

UBS notes the company's guidance suggests home settlements will now come in around 240 in FY17 versus prior estimates of  260-290.  The main feature has been slower construction because of weather-related delays at key projects.

The broker believes the volatility in settlements will affect near-term earnings but the one-off nature of home sales means little impact on the valuation of the development business.

The broker remains positive on the affordable retirement theme and maintains a Buy rating on the stock. Target is reduced to $2.18 from $2.25.

Target price is $2.18 Current Price is $2.04 Difference: $0.14
If GTY meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 9.00 cents and EPS of 13.00 cents.
At the last closing share price the estimated dividend yield is 4.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.69.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 9.00 cents and EPS of 14.00 cents.
At the last closing share price the estimated dividend yield is 4.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.57.

Market Sentiment: 0.5

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

GXY  GALAXY RESOURCES LIMITED

Rare Earth & Minerals

Overnight Price: $1.55

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

A previously cautious Citi has upgraded to Buy/High Risk from Neutral/High Risk. The analysts believe the -30% decline in the share price doesn't seem justified, despite market concerns about lithium over-supply next year.

It is Citi's view that the current build up in direct shipping ore (DSO, unprocessed product) will prove unsustainable, hence so too will be current market concerns. In addition, Galaxy is going to miss its own production guidance for the year, on the analysts' calculations.

Price target has been reduced by 5c to $2.70. Given Galaxy's current cash flow profile and solid project pipeline, namely James Bay/Sal de Vida, Citi analysts see an attractive entry point post share market sell-off.

Target price is $2.70 Current Price is $1.55 Difference: $1.15
If GXY meets the Citi target it will return approximately 74% (excluding dividends, fees and charges).

Current consensus price target is $2.27, suggesting upside of 33.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Citi forecasts a full year FY17 dividend of 0.00 cents and EPS of 12.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.0, implying annual growth of -78.3%.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 18.9.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 0.00 cents and EPS of 27.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.56.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.5, implying annual growth of 172.2%.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 6.9.

Market Sentiment: 0.3

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


UBS rates GXY as Initiation of coverage with Neutral (3) -

UBS initiates coverage on lithium stocks, noting Galaxy operates hard rock lithium assets, Mount Cattlin, and has a development option in the Sal de Vida brine project.

Mount Cattlin is one of the few producing hard rock lithium mines globally and, although this presents a near-term opportunity, UBS anticipates prices will normalise over the next three years as new entrants add supply to the market.

The broker takes up coverage with a Neutral rating and $1.80 target.

Target price is $1.80 Current Price is $1.55 Difference: $0.25
If GXY meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $2.27, suggesting upside of 33.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 0.00 cents and EPS of 5.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.0, implying annual growth of -78.3%.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 18.9.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 0.00 cents and EPS of 17.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.12.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.5, implying annual growth of 172.2%.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 6.9.

Market Sentiment: 0.3

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

IDR  INDUSTRIA REIT

REITs

Overnight Price: $2.35

Morgans rates IDR as Hold (3) -

The company has declared an 8c second half distribution, bringing the full year distribution to 16c and in line with guidance. The company will move to paying distributions quarterly from FY18.

The company has also flagged draft valuations for five properties which indicate a $30m increase, largely from leasing transactions being executed at the two assets at Rhodes.

Morgans retains a Hold rating as the total shareholder return is forecast to be below 10%. Target is raised to $2.28 from $2.16.

Target price is $2.28 Current Price is $2.35 Difference: minus $0.07 (current price is over target).
If IDR meets the Morgans target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.17, suggesting downside of -7.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgans forecasts a full year FY17 dividend of 16.00 cents and EPS of 18.10 cents.
At the last closing share price the estimated dividend yield is 6.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.98.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.4, implying annual growth of -31.5%.

Current consensus DPS estimate is 15.8, implying a prospective dividend yield of 6.7%.

Current consensus EPS estimate suggests the PER is 13.6.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 16.30 cents and EPS of 18.20 cents.
At the last closing share price the estimated dividend yield is 6.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.91.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.2, implying annual growth of -1.1%.

Current consensus DPS estimate is 16.3, implying a prospective dividend yield of 6.9%.

Current consensus EPS estimate suggests the PER is 13.7.

Market Sentiment: 0.0

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

MGR  MIRVAC GROUP

Infra & Property Developers

Overnight Price: $2.30

Deutsche Bank rates MGR as Downgrade to Hold from Buy (3) -

Deutsche Bank has adopted a more grim outlook for housing starts in Australia in the coming years, now forecasting a drop in the order of -20% by 2019. The analysts point out, multi-family housing starts represent circa 50% of Mirvac's Residential portfolio.

In addition, the share price is close to the broker's price target. Price target drops to $2.32 from $2.39.

Target price is $2.32 Current Price is $2.30 Difference: $0.02
If MGR meets the Deutsche Bank target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $2.33, suggesting upside of 0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Deutsche Bank forecasts a full year FY17 dividend of 10.00 cents and EPS of 14.00 cents.
At the last closing share price the estimated dividend yield is 4.35%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.43.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.5, implying annual growth of -44.4%.

Current consensus DPS estimate is 10.2, implying a prospective dividend yield of 4.4%.

Current consensus EPS estimate suggests the PER is 15.0.

Forecast for FY18:

Deutsche Bank forecasts a full year FY18 dividend of 12.00 cents and EPS of 16.00 cents.
At the last closing share price the estimated dividend yield is 5.22%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.37.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.2, implying annual growth of -1.9%.

Current consensus DPS estimate is 11.0, implying a prospective dividend yield of 4.7%.

Current consensus EPS estimate suggests the PER is 15.3.

Market Sentiment: 0.4

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

NAB  NATIONAL AUSTRALIA BANK LIMITED

Banks

Overnight Price: $29.68

ADDED

Citi rates NAB as Sell (5) -

Further updating the modeling has triggered small upgrades to EPS estimates. Citi analysts report they added 1% and 3% to estimates for FY17/18 and FY19 respectively.

Target price remains unchanged at $30.50, as well as the Sell rating. Noted: on updated projections, NAB shareholders should expect a minor upgrade to their FY18 dividends; 200c instead of 198c.

Target price is $30.50 Current Price is $29.68 Difference: $0.82
If NAB meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $31.56, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Citi forecasts a full year FY17 dividend of 198.00 cents and EPS of 240.70 cents.
At the last closing share price the estimated dividend yield is 6.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 243.0, implying annual growth of -0.9%.

Current consensus DPS estimate is 195.6, implying a prospective dividend yield of 6.5%.

Current consensus EPS estimate suggests the PER is 12.3.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 200.00 cents and EPS of 244.40 cents.
At the last closing share price the estimated dividend yield is 6.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 243.3, implying annual growth of 0.1%.

Current consensus DPS estimate is 194.0, implying a prospective dividend yield of 6.5%.

Current consensus EPS estimate suggests the PER is 12.3.

Market Sentiment: -0.1

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

ORE  OROCOBRE LIMITED

Rare Earth & Minerals

Overnight Price: $3.50

UBS rates ORE as Initiation of coverage with Buy (1) -

The company offers operating exposure to the brine lithium carbonate market, demand for which is expected to expand significantly.

The broker notes execution on Olaroz has not been without incident yet, despite the operating risks, the company is one of the few new entrants to the market with a producing asset.

UBS initiates coverage with a Buy rating and $5.00 target.

Target price is $5.00 Current Price is $3.50 Difference: $1.5
If ORE meets the UBS target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $4.35, suggesting upside of 21.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 0.00 cents and EPS of 8.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 43.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.7, implying annual growth of N/A.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 41.3.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 0.00 cents and EPS of 16.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.5, implying annual growth of 89.7%.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 21.8.

Market Sentiment: 0.8

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

RHC  RAMSAY HEALTH CARE LIMITED

Healthcare services

Overnight Price: $70.94

Ord Minnett rates RHC as Accumulate (2) -

Ord Minnett reviews the incoming French president's health policy statements and concludes that there is reason to be encouraged by the reformist agenda. The broker notes positive statements with regard to the role of private hospitals and apparent criticism of past tariff reductions.

Overall, Ord Minnett believes reimbursement should at least stabilise in France, allowing the company's operations to return to growth by FY19.

In Australia, hospitals and pharmacies support the growth outlook, despite the somewhat quiet domestic conditions. Double-digit growth in operating earnings is expected in FY18. Accumulate rating retained. Target is $80.

Target price is $80.00 Current Price is $70.94 Difference: $9.06
If RHC meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $75.37, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Ord Minnett forecasts a full year FY17 dividend of 133.00 cents and EPS of 261.00 cents.
At the last closing share price the estimated dividend yield is 1.87%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.18.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 262.1, implying annual growth of 20.5%.

Current consensus DPS estimate is 135.3, implying a prospective dividend yield of 1.9%.

Current consensus EPS estimate suggests the PER is 27.3.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 145.00 cents and EPS of 290.00 cents.
At the last closing share price the estimated dividend yield is 2.04%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.46.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 293.4, implying annual growth of 11.9%.

Current consensus DPS estimate is 153.3, implying a prospective dividend yield of 2.1%.

Current consensus EPS estimate suggests the PER is 24.4.

Market Sentiment: 0.3

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

RWC  RELIANCE WORLDWIDE CORPORATION LIMITED

Building Products & Services

Overnight Price: $3.63

UPDATED

Deutsche Bank rates RWC as Downgrade to Sell from Hold (5) -

Deutsche Bank has adopted a more grim outlook for housing starts in Australia in the coming years, now forecasting a drop in the order of -20% by 2019. Reliance Worldwide has been downgraded to Sell from Hold, but the move is inspired by what looks like a lofty valuation supported by elevated market expectations.

Target price has increased to $3.06 from $3.00.

Target price is $3.06 Current Price is $3.63 Difference: minus $0.57 (current price is over target).
If RWC meets the Deutsche Bank target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.46, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Deutsche Bank forecasts a full year FY17 dividend of 6.00 cents and EPS of 12.00 cents.
At the last closing share price the estimated dividend yield is 1.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.25.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.0, implying annual growth of N/A.

Current consensus DPS estimate is 6.0, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 28.9.

Forecast for FY18:

Deutsche Bank forecasts a full year FY18 dividend of 7.00 cents and EPS of 13.00 cents.
At the last closing share price the estimated dividend yield is 1.93%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.92.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.0, implying annual growth of 16.7%.

Current consensus DPS estimate is 7.1, implying a prospective dividend yield of 2.0%.

Current consensus EPS estimate suggests the PER is 24.8.

Market Sentiment: 0.1

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

SDF  STEADFAST GROUP LIMITED

Insurance

Overnight Price: $2.81

Credit Suisse rates SDF as Outperform (1) -

The company hosted an investor briefing focused on its technology strategy. Credit Suisse cannot fault the continuously expanding strategy but does not have the confidence to forecasts bankable earnings from growth opportunities.

At this point premium rates are working in the company's favour and an Outperform rating is maintained. The earnings growth opportunity is in FY19/20, in the broker's opinion.

A recovery in commercial lines premium rates in recent months will assist to offset some of the pressure from expenses. Target is $3.10.

Target price is $3.10 Current Price is $2.81 Difference: $0.29
If SDF meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $2.77, suggesting downside of -1.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Credit Suisse forecasts a full year FY17 dividend of 7.00 cents and EPS of 12.00 cents.
At the last closing share price the estimated dividend yield is 2.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.42.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 10.8, implying annual growth of 9.5%.

Current consensus DPS estimate is 6.5, implying a prospective dividend yield of 2.3%.

Current consensus EPS estimate suggests the PER is 26.1.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 7.00 cents and EPS of 13.00 cents.
At the last closing share price the estimated dividend yield is 2.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.62.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.8, implying annual growth of 9.3%.

Current consensus DPS estimate is 7.0, implying a prospective dividend yield of 2.5%.

Current consensus EPS estimate suggests the PER is 23.9.

Market Sentiment: 0.8

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

SGP  STOCKLAND

Infra & Property Developers

Overnight Price: $4.81

Macquarie rates SGP as Neutral (3) -

The company's investor briefing underpinned Macquarie's belief that the company is being conservative in its recognition of better-than-expected price gains or cost performance in residential projects.

The company has indicated its specialty tenant lease book has been re-mixed to include a greater share of retail services and food retailing.

The theme of the briefing, which was in Queensland, was expected improvements in the Queensland economy and further price growth for residential property, driven by interstate migration from New South Wales and Victoria.

Neutral rating retained. Target is $4.53.

Target price is $4.53 Current Price is $4.81 Difference: minus $0.28 (current price is over target).
If SGP meets the Macquarie target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.82, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 25.50 cents and EPS of 29.40 cents.
At the last closing share price the estimated dividend yield is 5.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.36.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 35.2, implying annual growth of -5.9%.

Current consensus DPS estimate is 25.7, implying a prospective dividend yield of 5.3%.

Current consensus EPS estimate suggests the PER is 13.8.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 26.30 cents and EPS of 31.10 cents.
At the last closing share price the estimated dividend yield is 5.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.47.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 34.4, implying annual growth of -2.3%.

Current consensus DPS estimate is 26.6, implying a prospective dividend yield of 5.5%.

Current consensus EPS estimate suggests the PER is 14.1.

Market Sentiment: 0.1

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

SYR  SYRAH RESOURCES LIMITED

Rare Earth & Minerals

Overnight Price: $2.67

UBS rates SYR as Initiation of coverage with Buy (1) -

The company offers exposure to the graphite market through its Balama natural flake graphite project in Mozambique. The project represents the largest and most advanced new supply to enter the graphite sector globally.

UBS believes the market is yet to fully appreciate the value that can be derived from the asset and initiates coverage on the stock with a Buy rating and $3.80 target.

Target price is $3.80 Current Price is $2.67 Difference: $1.13
If SYR meets the UBS target it will return approximately 42% (excluding dividends, fees and charges).

Current consensus price target is $4.70, suggesting upside of 73.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 267.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -5.3, implying annual growth of N/A.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 0.00 cents and EPS of 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 133.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.9, implying annual growth of N/A.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 22.8.

Market Sentiment: 0.8

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

WBC  WESTPAC BANKING CORPORATION

Banks

Overnight Price: $30.49

ADDED

Citi rates WBC as Sell (5) -

A revision of Citi's expectations for the years ahead has led to weaker revenue projections, but slightly increased EPS estimates. Helping the Westpac bottom line is the fact BDD expenses are expected to be lower as, the analysts believe, asset quality remains good.

Target price remains unchanged at $30.50, alongside a Sell rating (also unchanged). DPS estimates have remained unchanged too.

Target price is $30.50 Current Price is $30.49 Difference: $0.01
If WBC meets the Citi target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $33.08, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Citi forecasts a full year FY17 dividend of 188.00 cents and EPS of 234.70 cents.
At the last closing share price the estimated dividend yield is 6.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.99.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 237.5, implying annual growth of 5.7%.

Current consensus DPS estimate is 188.0, implying a prospective dividend yield of 6.1%.

Current consensus EPS estimate suggests the PER is 13.0.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 188.00 cents and EPS of 241.70 cents.
At the last closing share price the estimated dividend yield is 6.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.61.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 243.7, implying annual growth of 2.6%.

Current consensus DPS estimate is 188.9, implying a prospective dividend yield of 6.1%.

Current consensus EPS estimate suggests the PER is 12.6.

Market Sentiment: 0.1

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

Summaries
ALQ - ALS LIMITED Outperform - Macquarie Overnight Price $6.94
ANZ - ANZ BANKING GROUP Neutral - Citi Overnight Price $28.00
BAL - BELLAMY'S AUSTRALIA Hold - Morgans Overnight Price $6.50
CBA - COMMBANK Sell - Citi Overnight Price $81.70
CSL - CSL Downgrade to Hold from Add - Morgans Overnight Price $139.45
CTD - CORPORATE TRAVEL Overweight - Morgan Stanley Overnight Price $23.72
GTY - GATEWAY LIFESTYLE Downgrade to Neutral from Outperform - Macquarie Overnight Price $2.04
Buy - UBS Overnight Price $2.04
GXY - GALAXY RESOURCES Upgrade to Buy from Neutral - Citi Overnight Price $1.55
Initiation of coverage with Neutral - UBS Overnight Price $1.55
IDR - INDUSTRIA REIT Hold - Morgans Overnight Price $2.35
MGR - MIRVAC Downgrade to Hold from Buy - Deutsche Bank Overnight Price $2.30
NAB - NATIONAL AUSTRALIA BANK Sell - Citi Overnight Price $29.68
ORE - OROCOBRE Initiation of coverage with Buy - UBS Overnight Price $3.50
RHC - RAMSAY HEALTH CARE Accumulate - Ord Minnett Overnight Price $70.94
RWC - RELIANCE WORLDWIDE Downgrade to Sell from Hold - Deutsche Bank Overnight Price $3.63
SDF - STEADFAST GROUP Outperform - Credit Suisse Overnight Price $2.81
SGP - STOCKLAND Neutral - Macquarie Overnight Price $4.81
SYR - SYRAH RESOURCES Initiation of coverage with Buy - UBS Overnight Price $2.67
WBC - WESTPAC BANKING Sell - Citi Overnight Price $30.49
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

7

2. Accumulate

1

3. Hold

8

5. Sell

4

Friday 16 June 2017

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Disclaimer:
The content of this information does in no way reflect the opinions of FNArena, or of its journalists. In fact we don't have any opinion about the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface. This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FNArena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.