Australian Broker Call

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

Morgan Stanley points out FY23 results for 3P Learning were largely pre-guided though profit of $14.1m was well ahead of the broker's forecast for $8m on a net tax benefit versus an expected expense.

The broker will seek more clarity around Mathletics, which appears to be a weak spot, as annual recurring revenue (ARR) declined by -$2.3m in the period.

FY24 revenue guidance of $112-115m is in line with the analyst's $114.3m forecast while earnings (EBITDA) guidance of $15-17m compares to an $18.1m estimate.

Target $1.20. Equal-weight. Industry view: In-Line.

Target price is $1.20 Current Price is $1.10 Difference: $0.1
If 3PL meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Citi rates A2M as Neutral (3) -

The FY23 results from a2 Milk Co, at first glance, beat Citi's estimates, largely because of lower-than-expected tax.

While the business execution has been impressive, Citi notes the run rate slowed over the year and there are downside risks to FY24 earnings which could mean the share price softens in the wake.

FY24 guidance implies low double-digit EBITDA consensus downgrades. Neutral rating and $5.30 target.

Target price is $5.30 Current Price is $4.94 Difference: $0.36
If A2M meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $5.78, suggesting upside of 35.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

This company reports in NZD. 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

Citi rates ABG as Buy (1) -

FY23 funds from operations (FFO) and DPS for Abacus Group were in line with consensus forecasts. 

Citi expects the share price will perform relatively well in the short-term against the sector given the current -51% discount to pro forma net tangible assets (NTA).

FY24 distribution guidance is for 8.5cpu following the spin-off of Abacus Storage King ((ASK)).

Target price is $1.59 Current Price is $1.19 Difference: $0.4
If ABG meets the Citi target it will return approximately 34% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

UBS rates AMA as Neutral (3) -

AMA Group has revised guidance for FY24 to $86-96m, -$39m below previous retracted guidance at the mid point although still representing a $27m uplift year on year.

UBS adjusts estimates for a slower recovery and reduces FY23 EBITDA forecasts by -1% and FY24 by -3%.

Pricing negotiations for the Capital SMART contract have been completed and while the outcome was "more modest" compared to expectations, the broker points out a major uncertainty has been removed.

The valuation does not appear overly demanding to UBS, while the main concerns centre on the balance sheet. Neutral maintained. Target is reduced to 14c from 17c.

Target price is $0.14 Current Price is $0.13 Difference: $0.01
If AMA meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Citi rates BSL as Neutral (3) -

BlueScope Steel's FY23 EBIT was in line with expectations while net profit was marginally weaker. Citi observes, at first glance, the first half FY24 EBIT guidance at the mid point of $735m should be taken as a modest positive, noting it reflects a constructive view on Australia's market.

In the Americas, North Star was weaker on lower HRC pricing and lower spreads which was offset by strong performance across buildings and coated products. A return to profitability in the ASEAN business occurred in the second half of FY23. Neutral rating and $23.50 target.

Target price is $23.50 Current Price is $20.56 Difference: $2.94
If BSL meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $21.63, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Macquarie rates CNI as Neutral (3) -

Centuria Capital's FY23 results were in line. Macquarie notes the business is attracting capital interest in industrial, agricultural and credit although the macro environment is likely to limit the upside in the short term.

FY24 guidance for operating earnings per security is 11.5-12.0c with the midpoint of the range being -15% below the broker's prior forecast. The main drivers of this include lower performance fees, development profits and transaction volumes.

Rising interest expenses are also likely to provide a headwind. While remaining cautious Macquarie points out the guidance does de-risk the outlook for FY24. Neutral retained. Target is reduced to $1.45 from $1.60.

Target price is $1.45 Current Price is $1.43 Difference: $0.02
If CNI meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $1.69, suggesting upside of 17.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Morgan Stanley rates CNI as Overweight (1) -

After reporting in-line FY23 EPS of 14.5cps, management of Centuria Capital issued FY24 guidance of 11.5-12cps for FY24 compared to Morgan Stanley's forecast for 13.1cps. Property assets under management (AUM) were considered stable at $20.2bn.

The broker explains guidance assumes lower performance fees, a softer transactions market and lower development profits.

While its a difficult market for property fund managers, Morgan Stanley believes the group should bounce back when capital flows return, helped by a wider relative diversification into agriculture and healthcare.

Overweight rating. Target $2.10. Industry View: In-Line.

Target price is $2.10 Current Price is $1.43 Difference: $0.67
If CNI meets the Morgan Stanley target it will return approximately 47% (excluding dividends, fees and charges).

Current consensus price target is $1.69, suggesting upside of 17.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

UBS rates CNI as Neutral (3) -

Centuria Capital's FY23 results were in line with forecasts. On further analysis UBS notes the main drivers of lower FY24 guidance are performance fees and development profits amid restrained transaction volumes and increased financing costs.

While these drivers should not come as a surprise, the broker points out circumstances have clearly softened in the second half.

While the company is getting more traction in alternative subsectors of agriculture, logistics and real estate debt these only reflect around 38% of the platform.

The broker remains underweight fund managers in the A-REIT sector and retains a Neutral rating. Target is reduced to $1.53 from $1.68.

Target price is $1.53 Current Price is $1.43 Difference: $0.1
If CNI meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $1.69, suggesting upside of 17.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Morgan Stanley rates COL as Underweight (5) -

Coles Group is facing another major delay of one year in the commissioning of its Ocado pick-and-pack fulfilment centre in Victoria and Morgan Stanley notes the total capex budget is now $400m, up from $330m.

The broker points out the delay will impact the timing of expected sales benefits guided for FY24.

The Underweight rating and $14.75 target are unchanged. Industry View: In-Line.

Target price is $14.75 Current Price is $17.30 Difference: minus $2.55 (current price is over target).
If COL 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 $17.88, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Macquarie rates DHG as Downgrade to Underperform from Neutral (5) -

The FY23 EBITDA from Domain Holdings Australia was down -13% and below Macquarie's forecasts.

The company has guided to operating expenditure growth in the mid-to high single digits for FY24, higher than expected, while trading in the first six weeks reflects an early recovery in listings, the broker observes.

Domain Holdings has indicated it will sell the home loans business as it is not performing to expectations.

Macquarie observes the stock has had a "good run based on dwelling price movements" and screens expensive. Rating is downgraded to Underperform from Neutral. Target is reduced by -30% to $2.80.

Target price is $2.80 Current Price is $3.61 Difference: minus $0.81 (current price is over target).
If DHG meets the Macquarie target it will return approximately minus 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.41, suggesting downside of -6.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.4

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

Citi rates DXS as Neutral (3) -

Adding to the $1.8bn of divestments announced by Dexus in FY23, Citi notes the REIT has announced the sale of No 1 Margaret St for $293.1m.

The broker feels the sale is positive, based on the discount to net tangible assets, and provides a positive data point for cap rate evidence, given the slow transaction volumes for offices in Sydney. Neutral. Target 8.20.

Target price is $8.20 Current Price is $7.74 Difference: $0.46
If DXS meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $8.97, suggesting upside of 16.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

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

Morgans rates GMG as Add (1) -

FY23 operating EPS (OEPS) for Goodman Group was a slight beat compared to guidance and in line with the consensus expectation.

The group’s strategy of focusing on infill sites across gateway markets has helped to mitigate interest rate pain, with the portfolio benefiting from market rental growth, low vacancy and the continued demand for under-developed industrial sites.

The analyst expects the pipeline of development sites across Tier 1 cities should benefit from increased demand for densification and proximity to the end customer.

The target rises to $24.50 from $24 and an Add rating is retained for what Morgans considers a high-quality company with a robust balance sheet and real pricing power.

Target price is $24.50 Current Price is $22.40 Difference: $2.1
If GMG meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $23.62, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Ord Minnett rates GMG as Hold (3) -

In the wake of FY23 results for Goodman Group, Ord Minnett raises its target to $19.40 from $18.50. It's felt surprisingly robust conditions for industrial property increases the odds performance fee hurdles for its funds will be met over the next few years.

The broker is impressed by progress on the development front after the group completed $6.9bn in FY23 up from $6bn in FY22.

While 59% of work-in-progress had pre-committed leases at the end of FY23, it was a fall from 62% at the end of FY22, observes the analyst.

In time, Ord Minnett expects some of the same pressures in listed equities will appear in property funds management, including increased competition, falling fees and fund outflows. The Hold rating is maintained.

Target price is $19.40 Current Price is $22.40 Difference: minus $3 (current price is over target).
If GMG meets the Ord Minnett target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $23.62, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Ord Minnett rates GOZ as Buy (1) -

While assisted by a pull-forward from future periods, the FY23 result for Growthpoint Properties Australia was a beat against Ord Minnett's forecasts.

FY24 guidance is for funds from operations (FFO) of 22.9cps, a -15% decline on FY23 due to interest rate rises, soft leasing conditions and a vacancy left by a departing tenant, explains the analyst.

In a bear case scenario only, the broker notes Growthpoint could approach its debt covenant levels though this would require substantial interest rate rises and/or a material lift in vacancy levels.

The target falls by -5% to $3.80. Buy.

Target price is $3.80 Current Price is $2.39 Difference: $1.41
If GOZ meets the Ord Minnett target it will return approximately 59% (excluding dividends, fees and charges).

Current consensus price target is $3.21, suggesting upside of 33.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Ord Minnett rates HPI as Hold (3) -

Ord Minnett maintains its $3.30 target for Hotel Property Investments after in-line FY23 results.

Adjusted funds from operations (FFO) fell by -8% to $36m as higher interest rates offset 3.6% like-for-like rental growth, explains the broker.

The current stock price is marginally undervalued, in the analyst's view, and a Hold rating is maintained.

Ord Minnett considers its sensible management has reduced acquisitions in the challenging macroeconomic backdrop.

Target price is $3.30 Current Price is $3.08 Difference: $0.22
If HPI meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Citi rates IAG as Buy (1) -

Insurance Australia Group's FY23 cash earnings were lower than Citi's estimates. At first glance the broker notes FY24 catastrophe allowance is rising by less than previously expected, moving up 26% to $1147m.

The broker currently forecasts a FY24 margin of 14.6%, around the midpoint of guidance.

Citi is a little disappointed with the results yet notes the outlook four strong top-line online growth remains in place.

The broker suspects the share price may slightly pull back in the wake of the results, depending on investor willingness to look beyond FY23 to the potential growth ahead. Buy rating and $5.85 target.

Target price is $5.85 Current Price is $5.84 Difference: $0.01
If IAG meets the Citi target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $5.54, suggesting downside of -4.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Macquarie rates IPH as Outperform (1) -

Macquarie observes, despite weak Australian filing volumes and the disruptions in Hong Kong/China, IPH produced another half year of earnings growth. Improved pricing has contributed to better Australasian numbers in the second half.

The company remains focused on acquisitions in Canada including Ridout and Maybee, its first, which should drive market share. Outperform retained. Target is reduced to $12.75 from $12.85.

Target price is $12.75 Current Price is $7.85 Difference: $4.9
If IPH meets the Macquarie target it will return approximately 62% (excluding dividends, fees and charges).

Current consensus price target is $10.49, suggesting upside of 35.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Macquarie rates LFS as Underperform (5) -

Latitude Group produced a first half result that was in line with expectations. Macquarie envisages "green shoots" with the prospect of rising volumes as origination momentum picks up and the benefits from repricing initiatives improve margins.

A trajectory to normalised margins of 11% is envisaged for FY26. The broker suspects the company's performance is likely to lag long-term averages as funding costs are yet to fully impact and consumer spending is likely to be subdued in the near term.

Underperform maintained. Target rises to $1.00 from $0.90.

Target price is $1.00 Current Price is $1.17 Difference: minus $0.165 (current price is over target).
If LFS meets the Macquarie target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.98, suggesting downside of -17.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -1.0

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

Morgan Stanley rates LFS as Underweight (5) -

Following a review of Latitude Group's 1H results, Morgan Stanley notes the impact of the cyber incident on volumes and delinquencies is reducing, but a larger statutory loss and capital below expectations could lead to a subdued share price reaction.

Cash earnings for the half fell by -93% year-on-year to $7m though was in line with guidance and the broker's estimate.

Management re-affirmed FY23 guidance for $15-25m of cash profit.

Target $1.00. Underweight. Industry View: In-line.

Target price is $1.00 Current Price is $1.17 Difference: minus $0.165 (current price is over target).
If LFS meets the Morgan Stanley target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.98, suggesting downside of -17.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -1.0

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

Morgans rates LGI as Hold (3) -

Electricity futures prices for this year have reduced significantly since last year’s October highs, notes Morgans, which lowers its FY24 forecasts and earnings multiple for LGI.

As a result of these changes, the broker reduces its target to $2.28 from $2.47.

While the company remains one of the best ways to get exposure to carbon on the ASX, the broker’s Hold rating is retained given the sizeable share price rally post IPO. Also, Morgans longer-term electricity price forecasts are already factored into the current valuation.

Target price is $2.28 Current Price is $2.33 Difference: minus $0.05 (current price is over target).
If LGI meets the Morgans target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Macquarie rates MFG as Underperform (5) -

Magellan Financial's FY23 results were in line with expectations. While delivering a beat to expenses guidance, Macquarie notes the result also contained $15.4m in one-off expenses, resulting in funds management expense guidance of $95-100m and materially below expectations.

A further $5.7m in staff retention costs are expected to be incurred in the next two years, the bulk of this in FY24, which should result in more subdued cost growth in FY25.

Macquarie still believes the funds management business is expensive relative to peers and retains an Underperform rating. Target is raised to $9.00 from $7.25 to incorporate earnings changes and a recent sector re-rating.

Target price is $9.00 Current Price is $10.42 Difference: minus $1.42 (current price is over target).
If MFG meets the Macquarie target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.75, suggesting downside of -5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Morgan Stanley rates MFG as Underweight (5) -

Morgan Stanley believes the Magellan Financial share price will be supported in the near-term after FY23 earnings met consensus and a 30cps special dividend was declared along with lower FY24 cost guidance.

Funds management opex of -$121m for FY23 was below guidance for $125-130m, while FY24 opex guidance of $95-100m was below the $124m expected by both the broker and consensus.

The analysts, however, still see substantial challenges around outflows and a shrinking revenue base.

Target $6.50. Underweight. Industry view: Attractive.

Target price is $6.50 Current Price is $10.42 Difference: minus $3.92 (current price is over target).
If MFG meets the Morgan Stanley target it will return approximately minus 38% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.75, suggesting downside of -5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Morgans rates MFG as Hold (3) -

In the wake of FY23 results for Magellan Financial, upgrades FY24/25 profit forecasts by 7.9% and 6.5%, respectively, driven primarily by lower opex assumptions.

The company reported FY23 underlying NPAT (pre associate losses) down -53% to $185.8m but declared a special dividend of 30cps. The broker suggests further specials could be paid with meaningful surplus capital on hand.

Funds Management opex guidance of $95-100m for FY24, down from from $121.3m reflects a focus on aligning costs with the reduced funds under management (FUM) base, explains Morgans.

The target rises to $10.75 from $9.85. Hold.

Target price is $10.75 Current Price is $10.42 Difference: $0.33
If MFG meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $9.75, suggesting downside of -5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Ord Minnett rates MFG as Hold (3) -

After further contemplation following last week's first impression of Magellan Financial's FY23 result Ord Minnett raises its target to $11 from $10.70, while the Hold rating is maintained.

Guidance for FY24 funds management operating expenses was -18-22% below FY23, which, according to the broker, surprised the market. Such pragmatism is welcome and considered essential, given shrinking revenue.

Last week's first impression was: a miss against expectations with the board making up for it through a much higher-than-anticipated dividend of $1.167 when Ord Minnett was only expecting 76.9c.

Ord Minnett does point out today's "miss" is smaller against consensus forecasts. The dividend includes a special dividend of 30c.

Target price is $11.00 Current Price is $10.42 Difference: $0.58
If MFG meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $9.75, suggesting downside of -5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

UBS rates MFG as Buy (1) -

On further analysis UBS notes Magellan Financial's results, while beating on lower costs, were all about funds under management, flows and fees.

Strategic news flow dominates and the broker welcomes the governance changes including new board members with funds experience.

There is also a path to resolving staff SPP loans, lowering costs and extending the buyback. The broker lifts estimates for FY24 by 14% and FY25 by 3% and retains a Buy rating.

UBS is optimistic around further capital returns, raising the target to $11.50 from $10.00.

Target price is $11.50 Current Price is $10.42 Difference: $1.08
If MFG meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $9.75, suggesting downside of -5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Ord Minnett rates MYS as Accumulate (2) -

FY23 cash net profit increased 20% yet Mystate's result missed Ord Minnett's expectations. The funding cost disadvantage to major banks was more pronounced than anticipated.

Competition for customer deposits is expected to remain high as banks replace the term funding facility, but the broker expects a reprieve on home lending rates as the industry looks to improve returns.

Ord Minnett moves FY24 forecasts down in line with guidance for flat earnings. The main driver is margin weakness and the broker lowers net interest margin forecasts to 1.55% although expects a gradual improvement by FY26, to 1.65%. Accumulate rating and $5 target.

Target price is $5.00 Current Price is $3.51 Difference: $1.49
If MYS meets the Ord Minnett target it will return approximately 42% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

UBS rates NAB as Sell (5) -

Following the third quarter trading update from National Australia Bank, UBS raises expectations for earnings by 2-5% over FY23-25 but remains cautious about possible higher credit provision charges, given the focus on business banking.

The bank has announced an intention to engage in an on-market buyback of up to $1.5bn and the broker notes, since FY20, the bank has bought an additional 12% uplift to earnings on a per share basis from buyback programs.

The Sell rating is underpinned by a richer valuation compared with peers and overall business mix at this point in the cycle, UBS explains, raising the target to $26 from $25.

Target price is $26.00 Current Price is $27.68 Difference: minus $1.68 (current price is over target).
If NAB meets the UBS target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $27.40, suggesting downside of -0.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.3

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

Bell Potter rates NXD as Buy (1) -

As a result of  the Australian government's update to the temporary 408 visa provisions, NextEd Group has experienced reduced student conversion rates, from pre-pandemic levels of 30% to 10%.

The company still expects increased volumes of ELICOS students are trying to get into Australia to get access to the visa. FY24 guidance of first half revenue is $59-63m.

Bell Potter revises down revenue forecasts slightly for FY23 and by -12% for FY24, in line with guidance. Buy rating retained. Target is reduced to $1.15 from $1.70.

Target price is $1.15 Current Price is $0.78 Difference: $0.375
If NXD meets the Bell Potter target it will return approximately 48% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

UBS rates ORA as Neutral (3) -

Orora's FY23 earnings growth of 12% was delivered on better-than-expected margins from the North American business and beat UBS estimates. Australasian EBIT growth was more modest.

The broker's forecasts are underpinned by ongoing margin expansion in North America and volume growth in cans in the Australasian segment. Glass is expected to continue to drag on Australasian earnings because of soft wine exports into FY24.

UBS retains a Neutral ratting and raises the target to $3.75 from $3.50.

Target price is $3.75 Current Price is $3.63 Difference: $0.12
If ORA meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $3.83, suggesting upside of 7.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Citi rates PME as Neutral (3) -

Citi raises its target for Pro Medicus to $72 from $61 after last week's FY23 result showed stronger-than-expected 2H revenue and profit.

Management noted the company has not lost any contract in the pipeline to competition in the last six months and suggested no one, in terms of major competition, are fully cloud-capable at this point.

While the business model is attractive, with a real competitive advantage in the picture archiving and communications (PACS) space, the current valuation keeps the broker Neutral-rated.

Target price is $72.00 Current Price is $70.10 Difference: $1.9
If PME meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $59.75, suggesting downside of -16.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

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

Bell Potter rates PWH as Downgrade to Hold from Buy (3) -

PWR Holdings delivered a FY23 result that was mixed with revenue and EBITDA slightly beating forecasts while net profit was below. No guidance was provided, in keeping with company policy.

Bell Potter points out the company did signal extensive organic growth opportunities across regions and divisions. OEM remains strong while aerospace & defence has expanded significantly.

The broker modestly upgrades estimates and now forecasts FY24 revenue and net profit growth of 16% and 21%, respectively. Rating is downgraded to Hold from Buy, given the valuation. Target is steady at $10.50.

Target price is $10.50 Current Price is $9.77 Difference: $0.73
If PWH meets the Bell Potter target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $11.04, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Citi rates PWH as Buy (1) -

Following FY23 results for PWR Holdings, Citi forecasts a return to 20% revenue growth in FY24 driven by more Aerospace & Defence (A&D) programs moving into production phase. More negatively, profit margins should remain below 20% due to cost pressures.

While the results were relatively in line with expectations, the analysts like both increased visibility in the accounts and the securing of more Auto OEM and A&D programs.

The broker retains its Buy rating after increasing its profit forecasts on increased revenue assumptions from motorsports and A&D, partially offset by continued investment in staff. The target rises to $11.75 from $11.55.

Target price is $11.75 Current Price is $9.77 Difference: $1.98
If PWH meets the Citi target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $11.04, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Morgans rates PWH as Add (1) -

The FY23 result for PWR Holdings was largely in line with Morgans expectations with revenue for key divisions of Motorsports, Aftermarket, and OEM rising by 22%, 16% and 15%, respectively.

A positive highlight for the broker was the 48% revenue jump for the Aerospace & Defence division, while a negative was the fall in overall earnings (EBITDA) margin by -160bp to 33.8%, due mainly to higher labour costs.

The analyst notes the company secured a manufacturing facility in the UK last December which will be the centre of its European operations, while a new facility in North America became operational last October.

Discussions continue for a new facility in Australia by mid-2025, observes Morgans.

The Add rating is maintained and the target eases to $11.90 from $12.05.

Target price is $11.90 Current Price is $9.77 Difference: $2.13
If PWH meets the Morgans target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $11.04, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

UBS rates PWH as Neutral (3) -

FY23 results from PWR Holdings were in line with UBS estimates and underpinned by a strong result from motorsports. The broker notes the market was cautious going into the results around the potential for a miss on margins but these met expectations and the stock rallied.

The project outlook remains bullish and continues to grow yet the broker believes FY24 is the time when these emerging technology opportunities need to materialise to support the share price, given the segment delivered only 6% growth in the second half.

Given the timing uncertainty around some of the lumpy contracts a Neutral rating is maintained. Target is reduced to $10.00 from $10.75.

Target price is $10.00 Current Price is $9.77 Difference: $0.23
If PWH meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $11.04, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Citi rates RWC as Neutral (3) -

In a first take Reliance Worldwide's FY23 numbers were in line with Citi's estimates. Conditions were challenging with America and Asia-Pacific ahead and EMEA soft.

Implied guidance is a -4-6% miss to prior expectations and the broker observes the outlook appears to be getting worse before it gets better. It appears from Big Box results that destocking is just beginning as the numbers imply US fourth-quarter sales were already -2% lower.

Guidance appears to rely on a material weighting to the second half. Neutral rating and $4.05 target.

Target price is $4.05 Current Price is $4.24 Difference: minus $0.19 (current price is over target).
If RWC 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 $4.17, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.5

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

Morgan Stanley rates SHL as Overweight (1) -

After further reflection upon last week's FY23 result, Morgan Stanley lowers its target for Sonic Healthcare to $34.80 from $37.75.

As cost pressures are now better understood and absorbed in the share price, and given balance sheet strength, the broker maintains its Overweight rating. Industry view In-Line.

While covid PCR testing is declining, the base pathology business is accelerating with a favourable mix, explain the analysts.

Target price is $34.80 Current Price is $32.57 Difference: $2.23
If SHL meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $35.31, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Morgans rates SHL as Add (1) -

Morgans describes FY23 results for Sonic Healthcare as "mixed" with weaker-than-expected profits and broadly in line revenue.

Management is accelerating the reduction in legacy pandemic costs, observes the broker, as reflected by FY24 guidance for earnings (EBITDA) of between $1.7-1.8bn, although full improvement for profits will take a bit longer.

Management also outlined several near-to-medium-term drivers to improve margins and profitability including acquisition synergies, fee indexation and contracts, point out the analysts.

The target falls to $36.55 from $38.96. Add.

Target price is $36.55 Current Price is $32.57 Difference: $3.98
If SHL meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $35.31, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Macquarie rates SPK as Neutral (3) -

Spark New Zealand reported FY23 earnings at the lower end of guidance although Macquarie notes the second half was "solid". The improvement reflected second half seasonality and accelerated mobile revenue growth.

Guidance for FY24 is for EBITDA of NZ$1215-1260m with a dividend of NZ27.5c.

The broker assesses the stock continues to offer dependable, modest earnings growth and retains a Neutral rating. Target is lifted to NZ$5.29 from NZ$4.83.

Current Price is $4.71. Target price not assessed.

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. 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

Morgan Stanley rates SPK as Overweight (1) -

Spark New Zealand's FY23 adjusted earnings (EBITDA) were in line with guidance, while Morgan Stanley highlights FY24 dividend guidance was introduced at 27.5cps, up from 27cps in FY23.

Management expects net debt will increase to more normalised levels while remaining within the credit rating as the buyback (NZ$204m remaining) and investment program complete.

FY24 earnings guidance of NZ$1,215-1,260m implies to the analysts 3-4% growth on the previous corresponding period, in
line with consensus expectations.

Price target is NZ$5.40. Overweight rating retained. Industry view: In-line.

Current Price is $4.71. Target price not assessed.

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. 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

Ord Minnett rates SPK as Hold (3) -

FY23 results from Spark New Zealand were in line with expectations. Mobile service revenue was up 9% as management signalled a further 5% lift for FY24. Ord Minnett observes the strength was such that mobile more than offset the earnings declines in other units.

The broker notes management is keen to introduce a "growth angle" to the investment case, with the prior announcement of investment in data centres but does not yet incorporate any significant upside from this venture, anticipating the NZ$250-300m investment will be staggered over at least 2-3 years. Hold. Target is $4.50.

Target price is $4.50 Current Price is $4.71 Difference: minus $0.21 (current price is over target).
If SPK meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. 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

Ord Minnett rates SUL as Lighten (4) -

Super Retail's FY23 results beat Ord Minnett's estimates as the broker had expected intensifying competition would weigh more on gross profit margins.

The broker remains bearish on the medium-term earnings outlook, anticipating sales momentum will continue to weaken as shoppers curtail discretionary expenditure.

At current prices the shares are screening significantly overvalued and Ord Minnett asserts the market is underestimating the risk that soft like-for-like sales and rising costs will diminish operating profit margins. Lighten maintained. Target is raised to $10.00 from $9.50.

Target price is $10.00 Current Price is $12.78 Difference: minus $2.78 (current price is over target).
If SUL meets the Ord Minnett target it will return approximately minus 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.44, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Macquarie rates SXL as Neutral (3) -

Southern Cross Media's FY23 earnings were in line with expectations. Macquarie welcomes the new initiative, with the company announcing a cost reduction strategy worth $12-15m over a likely period of two years and $5-7m to be realised in FY24.

The stock presents an attractive yield play yet Macquarie suspects that concerns about structural risks will weigh on the share price.

The broker understands the company is seeking to review the Ten affiliate agreement which expires in December. This could be a key source of upside if a new agreement can be negotiated. Neutral maintained. Target is reduced to $0.81 from $0.98.

Target price is $0.81 Current Price is $0.80 Difference: $0.01
If SXL meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $1.29, suggesting upside of 65.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Ord Minnett rates SXL as Buy (1) -

Despite decreasing -10%, FY23 EBITDA from Southern Cross Media was slightly ahead of Ord Minnett's expectations. Advertising conditions appear particularly challenging for regional markets where more than half the company's revenue is generated.

There are no signs of improvement in "erratic" advertiser demand and the broker suspects management's anticipated recovery in the second half is largely based on softer comparables.

Ord Minnett cuts EBITDA forecasts going forward by around -6%. Buy rating. Target is reduced by -6% to $1.70.

Target price is $1.70 Current Price is $0.80 Difference: $0.9
If SXL meets the Ord Minnett target it will return approximately 112% (excluding dividends, fees and charges).

Current consensus price target is $1.29, suggesting upside of 65.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Morgan Stanley rates TLS as Overweight (1) -

Morgan Stanley further reflects on FY23 results by Telstra Group noting they were supportive of the broker's positive thesis, led by
a 15% lift in Mobile earnings (EBITDA), 4% ahead of expectations. It's noted Mobile comprises around 60% of earnings.

The results confirmed a turnaround in growth, in the analysts' view, with earnings climbing by 9.6% on the previous corresponding period, the highest for a decade.

While disappointing some market participants, the broker feels the decision to keep ownership of InfraCo makes strategic sense.

Overweight rating, $4.75 target and In-Line industry view maintained.

Target price is $4.75 Current Price is $4.00 Difference: $0.75
If TLS meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $4.50, suggesting upside of 13.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Citi rates WOR as Buy (1) -

Ahead of FY23 results for Worley, Citi rolls forward its financial model resulting in a new target of $20, up from $17.50.

The broker anticipates management will reiterate a double digit margin compound annual growth rate (CAGR) on a pro-forma basis. Buy.

Target price is $20.00 Current Price is $17.12 Difference: $2.88
If WOR meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $17.83, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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