Australian Broker Call

March 14, 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)

Last Updated: 12:47 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
FMG - FORTESCUE Upgrade to Equal-weight from Underweight Morgan Stanley
ORG - ORIGIN ENERGY Upgrade to Outperform from Underperform Credit Suisse
RSG - RESOLUTE MINING Upgrade to Overweight from Equal-weight Morgan Stanley
AGL  AGL ENERGY LIMITED

Infrastructure & Utilities

Overnight Price: $25.45

Credit Suisse rates AGL as Outperform (1) -

Since the first half results the market price of hedges against high pricing period of over $300/megawatt hour has almost doubled because of an increasing frequency of peak price events.

Credit Suisse calculates, assuming higher prices are passed through to consumers, that the company is positively leveraged to higher prices because of its substantial gas and hydro peak generation capacity.

The broker retains a Outperform rating and $26 target, noting there remains significant upside to valuation because of prevailing forward electricity prices of $70-80/megawatt hour.

The broker decreases FY17 net profit forecast by -3.5% because of NSW coal supply issues and a Queensland peak demand event.

Target price is $26.00 Current Price is $25.45 Difference: $0.55
If AGL meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $25.41, suggesting upside of 0.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Credit Suisse forecasts a full year FY17 dividend of 87.00 cents and EPS of 116.00 cents.
At the last closing share price the estimated dividend yield is 3.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.94.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 118.2, implying annual growth of N/A.

Current consensus DPS estimate is 88.9, implying a prospective dividend yield of 3.5%.

Current consensus EPS estimate suggests the PER is 21.4.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 105.00 cents and EPS of 140.00 cents.
At the last closing share price the estimated dividend yield is 4.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.18.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 143.1, implying annual growth of 21.1%.

Current consensus DPS estimate is 107.6, implying a prospective dividend yield of 4.3%.

Current consensus EPS estimate suggests the PER is 17.6.

Market Sentiment: 0.6

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: $124.74

UBS rates CSL as Buy (1) -

UBS analysis indicates a short supply cycle is emerging and this thesis will be tested with broad industry channel checks and a key PPTA conference on March 14.

Historically, the short cycle cannot be remedied in under three years and has been the catalyst for an earnings upgrade. Hence, the broker places its rating and price target under review pending confirmation of such.

Buy and $122 target retained.

Target price is $122.00 Current Price is $124.74 Difference: minus $2.74 (current price is over target).
If CSL meets the UBS target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $124.39, suggesting upside of 0.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 176.77 cents and EPS of 419.99 cents.
At the last closing share price the estimated dividend yield is 1.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 399.3, implying annual growth of N/A.

Current consensus DPS estimate is 181.0, implying a prospective dividend yield of 1.5%.

Current consensus EPS estimate suggests the PER is 31.1.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 188.73 cents and EPS of 459.86 cents.
At the last closing share price the estimated dividend yield is 1.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 468.6, implying annual growth of 17.4%.

Current consensus DPS estimate is 209.2, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 26.5.

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

Market Sentiment: 0.8

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

CTX  CALTEX AUSTRALIA LIMITED

Crude Oil

Overnight Price: $28.55

Citi rates CTX as Buy (1) -

Further refining of the modeling has triggered minor adjustments to forecasts.Target price falls to $35.66 from $35.72. Buy.

Target price is $35.66 Current Price is $28.55 Difference: $7.11
If CTX meets the Citi target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $33.78, suggesting upside of 18.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Citi forecasts a full year FY17 dividend of 126.00 cents and EPS of 220.40 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 12.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 220.2, implying annual growth of N/A.

Current consensus DPS estimate is 114.0, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 12.9.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 141.00 cents and EPS of 234.50 cents.
At the last closing share price the estimated dividend yield is 4.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.17.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 224.7, implying annual growth of 2.0%.

Current consensus DPS estimate is 117.9, implying a prospective dividend yield of 4.1%.

Current consensus EPS estimate suggests the PER is 12.6.

Market Sentiment: 0.6

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

FMG  FORTESCUE METALS GROUP LTD

Iron Ore

Overnight Price: $6.15

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

Throughout 2016, the company has benefited from stronger iron ore prices.This has allowed cash flow to facilitate early debt reduction. With the iron ore price falling back from recent highs, the equity has now moved back to fair value, in Morgan Stanley's view.

Incorporating the commodities team's latest forecasts Morgan Stanley upgrades to Equal-weight from Underweight, raising the target to $6.30 from $6.00.

The broker's thesis for the miners is supported by mark-to-market upside and ongoing efficiency gains. Industry view is Attractive.

Target price is $6.30 Current Price is $6.15 Difference: $0.15
If FMG meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $6.84, suggesting upside of 9.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgan Stanley forecasts a full year FY17 dividend of 26.58 cents and EPS of 132.91 cents.
At the last closing share price the estimated dividend yield is 4.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 119.5, implying annual growth of N/A.

Current consensus DPS estimate is 48.5, implying a prospective dividend yield of 7.8%.

Current consensus EPS estimate suggests the PER is 5.2.

Forecast for FY18:

Morgan Stanley forecasts a full year FY18 dividend of 23.92 cents and EPS of 83.73 cents.
At the last closing share price the estimated dividend yield is 3.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.34.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 68.7, implying annual growth of -42.5%.

Current consensus DPS estimate is 30.4, implying a prospective dividend yield of 4.9%.

Current consensus EPS estimate suggests the PER is 9.1.

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

Market Sentiment: 0.3

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

GMA  GENWORTH MORTGAGE INSURANCE AUSTRALIA LIMITED

Banks

Overnight Price: $2.86

Macquarie rates GMA as Outperform (1) -

The company has confirmed its second largest customer is terminating its exclusivity agreement for the provision of lenders mortgage insurance. Macquarie had incorporated the termination in its forecasts following the 2016 result.

The broker notes earning support, 10% dividend yield for FY17-19 and forecast capital requirements support a capital return of around $2.05 per share over the same period.

The broker believes the volatility in the stock has been affected by the housing market/earnings outlook, expectations of a major shareholder's position and customer re-contracting risk, all of which remain factors in FY17. Outperform and $3.56 target retained.

Target price is $3.56 Current Price is $2.86 Difference: $0.7
If GMA meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 24.00 cents and EPS of 28.70 cents.
At the last closing share price the estimated dividend yield is 8.39%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.97.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 23.10 cents and EPS of 28.90 cents.
At the last closing share price the estimated dividend yield is 8.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.90.

Market Sentiment: 0.5

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

MPL  MEDIBANK PRIVATE LIMITED

Insurance

Overnight Price: $2.82

Macquarie rates MPL as Neutral (3) -

Competitor BUPA has advised that rules have been tightened around admission of policy holders to public hospitals as private patients.

Medibank Private does not appear to have made material changes to its fund rules, including the definition and admission of private patients to public hospitals. While any reduction in claims costs could ultimately flow through to slower premium growth, such a change could boost short-term net margins, Macquarie estimates.

The broker retains a Neutral rating and raises the target to $3.00 from $2.95.

Target price is $3.00 Current Price is $2.82 Difference: $0.18
If MPL meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $2.72, suggesting downside of -3.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 11.50 cents and EPS of 15.70 cents.
At the last closing share price the estimated dividend yield is 4.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.96.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.7, implying annual growth of 3.3%.

Current consensus DPS estimate is 11.7, implying a prospective dividend yield of 4.2%.

Current consensus EPS estimate suggests the PER is 17.9.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 11.50 cents and EPS of 14.60 cents.
At the last closing share price the estimated dividend yield is 4.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.32.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.0, implying annual growth of -4.5%.

Current consensus DPS estimate is 11.7, implying a prospective dividend yield of 4.2%.

Current consensus EPS estimate suggests the PER is 18.8.

Market Sentiment: -0.3

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

MYR  MYER HOLDINGS LIMITED

Household & Personal Products

Overnight Price: $1.16

Citi rates MYR as Buy (1) -

Myer is scheduled to release interim financials on Thursday this week (16th March). Citi's forecast is for core profit of $68m, up 14% on the pcp. LFL sales growth is expected to be 2.2%, boosted by strong Christmas trading.

Gross margin is expected to have decreased by -21bp. Citi's analysis indicates sales activity was broadly in-line with prior years, as was discounting. Buy. Target $1.40.

Target price is $1.40 Current Price is $1.16 Difference: $0.24
If MYR meets the Citi target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $1.29, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Citi forecasts a full year FY17 dividend of 6.00 cents and EPS of 9.60 cents.
At the last closing share price the estimated dividend yield is 5.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.08.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.9, implying annual growth of 15.6%.

Current consensus DPS estimate is 5.5, implying a prospective dividend yield of 4.7%.

Current consensus EPS estimate suggests the PER is 13.0.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 7.50 cents and EPS of 11.00 cents.
At the last closing share price the estimated dividend yield is 6.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.55.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 10.1, implying annual growth of 13.5%.

Current consensus DPS estimate is 6.3, implying a prospective dividend yield of 5.4%.

Current consensus EPS estimate suggests the PER is 11.5.

Market Sentiment: 0.3

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

NUF  NUFARM LIMITED

Agriculture

Overnight Price: $9.16

Macquarie rates NUF as Outperform (1) -

Macquarie believes, over the next 6-9 months, Nufarm is well placed to take part in any industry consolidation. Five out of the six major global agricultural chemical players are in merger talks and potential divestments provide Nufarm with M&A opportunities.

The broker also notes, outside of acquisition opportunities, the company offers good growth via the $20m in strategic benefits that are planned in FY17 as well as other initiatives.

Outperform rating and $9.50 target retained.

Target price is $9.50 Current Price is $9.16 Difference: $0.34
If NUF meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $9.07, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 15.00 cents and EPS of 50.10 cents.
At the last closing share price the estimated dividend yield is 1.64%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.28.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 49.6, implying annual growth of 713.1%.

Current consensus DPS estimate is 13.8, implying a prospective dividend yield of 1.5%.

Current consensus EPS estimate suggests the PER is 18.8.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 18.20 cents and EPS of 60.60 cents.
At the last closing share price the estimated dividend yield is 1.99%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.12.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 60.7, implying annual growth of 22.4%.

Current consensus DPS estimate is 16.1, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 15.4.

Market Sentiment: 0.4

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

ORG  ORIGIN ENERGY LIMITED

NatGas

Overnight Price: $6.36

Credit Suisse rates ORG as Upgrade to Outperform from Underperform (1) -

Credit Suisse finds some value at current levels despite a disappointing balance sheet. Rating is upgraded to Outperform from Underperform. Target is raised to $7.00 from $6.30.

The broker is mindful of the magnified risks on any downside in oil prices, caused by the company's excessive leverage, and acknowledges it would be considerably easier owning the stock if this balance sheet issue did not exist.

The broker believes Ironbark should be separated out of the planned divestments. Credit Suisse calculates it could ultimately contribute 40-50% in debt reduction as the entirety of a new business that is spun out. The broker believes Origin does not have the capital to develop Ironbark for some time.

Credit Suisse also struggles with the question of why the company has not raised equity as it is currently spending $60-120m on hedging.

Target price is $7.00 Current Price is $6.36 Difference: $0.64
If ORG meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $7.23, suggesting upside of 9.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Credit Suisse forecasts a full year FY17 dividend of 0.00 cents and EPS of 33.76 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.6, 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 37.4.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 0.00 cents and EPS of 63.39 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.03.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 56.2, implying annual growth of 219.3%.

Current consensus DPS estimate is 9.6, implying a prospective dividend yield of 1.5%.

Current consensus EPS estimate suggests the PER is 11.7.

Market Sentiment: 0.3

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

PRU  PERSEUS MINING LIMITED

Gold & Silver

Overnight Price: $0.35

Citi rates PRU as Neutral (3) -

As the company has managed to acquire US$60m in debt financing to fund its growth strategy, Citi analysts have updated their modeling. Estimates have largely remained unchanged, while the analysts consider it a positive (larger funding than they had anticipated). Neutral. Target 39c.

Target price is $0.39 Current Price is $0.35 Difference: $0.045
If PRU meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $0.45, suggesting upside of 26.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Citi forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 2.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 14.37.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -3.3, 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:

Citi forecasts a full year FY18 dividend of 0.00 cents and EPS of 1.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.54.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 3.0, 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 12.0.

Market Sentiment: 0.2

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


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

Spot commodities may be moving lower, but Morgan Stanley believes many are still priced above its forecasts. Mark-to-market upside and efficiencies still drive cash flow potential.

The broker believes  the pull back in the first quarter renews the opportunity for upside. The industry may have outperformed and is now giving up some gains but the broker believes this largely reflects momentum-style investment re-positioning.

The broker incorporates the revised Edikan mine plan for extra waste movements. Equal -weighted rating retained. Target falls to $0.33 from $0.39.  Industry view is Attractive.

Target price is $0.33 Current Price is $0.35 Difference: minus $0.015 (current price is over target).
If PRU meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.45, suggesting upside of 26.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgan Stanley forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 3.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 11.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -3.3, 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:

Morgan Stanley forecasts a full year FY18 dividend of 0.00 cents and EPS of 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 3.0, 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 12.0.

Market Sentiment: 0.2

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

RSG  RESOLUTE MINING LIMITED

Gold & Silver

Overnight Price: $1.34

Morgan Stanley rates RSG as Upgrade to Overweight from Equal-weight (1) -

Resolute Mining was the best performer in the ASX 200 throughout the first three quarters of 2016, Morgan Stanley observes, but gave up half the gains as gold miners moved lower in the wake of the US election.

Morgan Stanley believes the stock is undervalued, as the equity continues to perform like a highly leveraged stock, even though it is now net cash and has lowered its all-in sustaining costs.

Rating is upgraded to Overweight from Equal-weight. Target is reduced to $2.30 from $2.40.  Industry view is Attractive.

Target price is $2.30 Current Price is $1.34 Difference: $0.96
If RSG meets the Morgan Stanley target it will return approximately 72% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Morgan Stanley forecasts a full year FY17 dividend of 2.00 cents and EPS of 26.00 cents.
At the last closing share price the estimated dividend yield is 1.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.15.

Forecast for FY18:

Morgan Stanley forecasts a full year FY18 dividend of 2.00 cents and EPS of 31.00 cents.
At the last closing share price the estimated dividend yield is 1.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.32.

Market Sentiment: 1.0

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: $2.49

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

Spot commodities may be moving lower, but Morgan Stanley believes many are still priced above its forecasts. Mark-to-market upside and efficiencies still drive cash flow potential.

The broker believes the pull back in the first quarter renews the opportunity for upside. The industry may have outperformed and is now giving up some gains but the broker believes this largely reflects momentum-style investment re-positioning.

Equal-weight retained. Target falls to $2.75 from $3.15. Industry view is Attractive.

Target price is $2.75 Current Price is $2.49 Difference: $0.26
If SYR meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $5.29, suggesting upside of 113.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgan Stanley forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 11.96 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 20.82.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -3.4, 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:

Morgan Stanley forecasts a full year FY18 EPS of 15.95 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.61.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.6, 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 12.7.

Market Sentiment: 0.8

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

TPM  TPG TELECOM LIMITED

Telecommunication

Overnight Price: $6.32

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

UBS initiates coverage with a Neutral rating and $6.20 target, with the shares trading close to valuation.

The broker believes the company is well placed to capitalise on the opportunity to take market share on the NBN, although this will be at the expense of margins.

A risk to the recommendation lies with forecasts for EBITDA to grow to $882m in FY19 from $775m in FY16, Which UBS admits are around 5% below  consensus.

The broker highlights NBN migration costs are likely to grow and it has a soft outlook for organic growth in corporate. UBS also incorporates Singapore losses.

Target price is $6.20 Current Price is $6.32 Difference: minus $0.12 (current price is over target).
If TPM meets the UBS target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.49, suggesting upside of 28.2% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 15.00 cents and EPS of 50.00 cents.
At the last closing share price the estimated dividend yield is 2.37%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.64.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 45.3, implying annual growth of 15.3%.

Current consensus DPS estimate is 15.9, implying a prospective dividend yield of 2.4%.

Current consensus EPS estimate suggests the PER is 14.6.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 15.00 cents and EPS of 50.00 cents.
At the last closing share price the estimated dividend yield is 2.37%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.64.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 47.4, implying annual growth of 4.6%.

Current consensus DPS estimate is 16.3, implying a prospective dividend yield of 2.5%.

Current consensus EPS estimate suggests the PER is 14.0.

Market Sentiment: 0.1

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

TWE  TREASURY WINE ESTATES LIMITED

Food, Beverages & Tobacco

Overnight Price: $12.31

ADDED

Deutsche Bank rates TWE as Hold (3) -

Deutsche Bank analysts have returned from company presentation and site tour with increased confidence this company remains on high growth path. Valuation is high, hence why the rating remains Hold. Target unchanged at $12.

Also, it is the analysts' view that improvement seen thus far is a credit to the management team given the low industry returns.

Target price is $12.00 Current Price is $12.31 Difference: minus $0.31 (current price is over target).
If TWE meets the Deutsche Bank target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.83, suggesting downside of -3.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Deutsche Bank forecasts a full year FY17 dividend of 26.00 cents and EPS of 40.00 cents.
At the last closing share price the estimated dividend yield is 2.11%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.78.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 40.1, implying annual growth of 59.8%.

Current consensus DPS estimate is 26.4, implying a prospective dividend yield of 2.2%.

Current consensus EPS estimate suggests the PER is 30.5.

Forecast for FY18:

Deutsche Bank forecasts a full year FY18 dividend of 31.00 cents and EPS of 48.00 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 25.65.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 48.1, implying annual growth of 20.0%.

Current consensus DPS estimate is 31.8, implying a prospective dividend yield of 2.6%.

Current consensus EPS estimate suggests the PER is 25.4.

Market Sentiment: 0.1

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


Macquarie rates TWE as Neutral (3) -

Macquarie observes the investor briefing has explained the future growth strategy but believes the risk to growth is increasing, as the company is relying on new regions and products to deliver upside.

Neutral and $10.98 target retained.

Target price is $10.98 Current Price is $12.31 Difference: minus $1.33 (current price is over target).
If TWE meets the Macquarie target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.83, suggesting downside of -3.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 25.20 cents and EPS of 38.80 cents.
At the last closing share price the estimated dividend yield is 2.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.73.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 40.1, implying annual growth of 59.8%.

Current consensus DPS estimate is 26.4, implying a prospective dividend yield of 2.2%.

Current consensus EPS estimate suggests the PER is 30.5.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 27.80 cents and EPS of 43.00 cents.
At the last closing share price the estimated dividend yield is 2.26%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 48.1, implying annual growth of 20.0%.

Current consensus DPS estimate is 31.8, implying a prospective dividend yield of 2.6%.

Current consensus EPS estimate suggests the PER is 25.4.

Market Sentiment: 0.1

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

Summaries
AGL - AGL ENERGY Outperform - Credit Suisse Overnight Price $25.45
CSL - CSL Buy - UBS Overnight Price $124.74
CTX - CALTEX AUSTRALIA Buy - Citi Overnight Price $28.55
FMG - FORTESCUE Upgrade to Equal-weight from Underweight - Morgan Stanley Overnight Price $6.15
GMA - GENWORTH MORTGAGE INSUR Outperform - Macquarie Overnight Price $2.86
MPL - MEDIBANK PRIVATE Neutral - Macquarie Overnight Price $2.82
MYR - MYER Buy - Citi Overnight Price $1.16
NUF - NUFARM Outperform - Macquarie Overnight Price $9.16
ORG - ORIGIN ENERGY Upgrade to Outperform from Underperform - Credit Suisse Overnight Price $6.36
PRU - PERSEUS MINING Neutral - Citi Overnight Price $0.35
Equal-weight - Morgan Stanley Overnight Price $0.35
RSG - RESOLUTE MINING Upgrade to Overweight from Equal-weight - Morgan Stanley Overnight Price $1.34
SYR - SYRAH RESOURCES Equal-weight - Morgan Stanley Overnight Price $2.49
TPM - TPG TELECOM Initiation of coverage with Neutral - UBS Overnight Price $6.32
TWE - TREASURY WINE ESTATES Hold - Deutsche Bank Overnight Price $12.31
Neutral - Macquarie Overnight Price $12.31
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

8

3. Hold

8

Tuesday 14 March 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.