Australian Broker Call

Morgans rates ACF as Add (1) -

Acrow Formwork and Construction Services has received a sales order of $3.7m for Clough Engineering and upgraded FY23 EBITDA by 5% and net profit by 8%.

Morgans believes the upgrade to guidance shows strong momentum in the business and as civil infrastructure activity remains elevated and there are a number of opportunities in the pipeline the growth trajectory remains solid for the longer term.

The broker retains an Add rating and raises the target to $1.03 from $1.00.

Target price is $1.03 Current Price is $0.83 Difference: $0.2
If ACF meets the Morgans target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $1.04, suggesting upside of 24.9% (ex-dividends)

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

Ord Minnett rates ACF as Buy (1) -

Acrow Formwork and Construction Services’ operating momentum has continued into the second half, Ord Minnett notes, resulting in its 12th earnings upgrade since the onset of the pandemic.

The upgrade was driven by a combination of a new equipment sales order, contributions from the recently acquired Heinrich screen assets and general trading.

Acrow retains significant organic growth potential, the broker believes, particularly within its Formwork and Industrial Services divisions. In addition, continued growth in its nascent Industrial Services business should provide more stable earnings and may act as a catalyst for a stronger re-rating towards peers.

Buy retained, target rises to 98c from 88c.

Target price is $0.98 Current Price is $0.83 Difference: $0.15
If ACF meets the Ord Minnett target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $1.04, suggesting upside of 24.9% (ex-dividends)

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

Shaw and Partners rates ACF as Buy (1) -

Acrow Formwork and Construction Services has upgraded FY23 sales estimates by 13% to $165-175m and EBITDA by 41% to $50.5-51.5m.

Clough Engineering has generated a sales order of $3.7m for PNG's Manus Island and the upgrade was also underpinned by organic growth.

Shaw and Partners remains attracted to the quality of the stock and the strong macro outlook for the sectors in which it operates. Significant progress is being made on several fronts. Buy rating retained. Target  is raised to $1.10 from $1.05.

Target price is $1.10 Current Price is $0.83 Difference: $0.27
If ACF meets the Shaw and Partners target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $1.04, suggesting upside of 24.9% (ex-dividends)

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

Ord Minnett rates AIA as Lighten (4) -

Passenger numbers for Auckland International Airport continued to recover over the March quarter. Despite Cyclone Gabrielle and the Auckland flooding interrupting travel, total passenger numbers were 72% of pre-pandemic levels in February.

Ord Minnett expects overall passenger numbers will recover to pre-pandemic levels by around 2024, with domestic passenger numbers recovering sooner and international taking longer.

The broker maintains a Lighten rating with a target of $7.05.

Target price is $7.05 Current Price is $7.93 Difference: minus $0.88 (current price is over target).
If AIA meets the Ord Minnett target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.05, suggesting downside of -11.8% (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: -0.4

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

Bell Potter rates ALK as Buy (1) -

Gold production from Tomingley was16,600 ounces in the March quarter, bringing production in FY23 to date to 54,431 ounces.

Bell Potter hails the result and believes Alkane Resources' expansion of the project will elevate its earnings to a prominent level and provide an enhanced platform for growth.

The broker envisages a staged mining and plant expansion over FY24 and FY25. Buy rating maintained. Target rises to $1.10 from $1.00.

Target price is $1.10 Current Price is $0.88 Difference: $0.225
If ALK meets the Bell Potter target it will return approximately 26% (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

Ord Minnett rates ALK as Buy (1) -

Alkane Resources released a solid March quarter result as Ord Minnett expected given the pre-release. Importantly, given
performance to date at Tomingley, the company has upgraded FY23 production guidance and lowered costs.

Ord Minnett incorporates the result and amends forecasts in line with guidance and the broker's updated commodity price forecasts.

Buy and $1.00 target retained.

Target price is $1.00 Current Price is $0.88 Difference: $0.125
If ALK meets the Ord Minnett target it will return approximately 14% (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

Ord Minnett rates AMI as Hold (3) -

Aurelia Metals produced a stronger than expected March quarter result than Ord Minnett expected, featuring materially improved production and costs at Peak and Hera. The result saw all assets generate cash flow, leading the cash balance to grow 66%.

The broker's focus is now on seeking sustained cash generation from Peak/Dargues and a Federation funding package and re-start of development due in the June quarter.

A change of analysts leads to a target price cut to 25c from 35c, Hold retained.

Target price is $0.25 Current Price is $0.15 Difference: $0.1
If AMI meets the Ord Minnett target it will return approximately 67% (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

Ord Minnett rates AWC as Lighten (4) -

Ord Minnett notes commodity prices have been less volatile so far in 2023. Generally, lower commodity prices are being offset by a weaker Australian dollar. For AWAC, operating issues are envisaged limiting the benefit of any improvement in alumina prices.

At current prices the broker considers Alumina Ltd shares are overvalued, yet with slightly higher short-term alumina price forecasts the target is raised by 8% to $1.30. Lighten rating maintained.

Target price is $1.30 Current Price is $1.53 Difference: minus $0.225 (current price is over target).
If AWC meets the Ord Minnett target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.41, suggesting downside of -8.3% (ex-dividends)

The company's fiscal year ends in December.

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: -0.3

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

Ord Minnett rates BAP as Buy (1) -

Ord Minnett has taken a read-through for Bapcor of Genuine Parts Company's (owner of Repco A&NZ) strong March quarter result, featuring an acceleration in the rate of sales growth in the Asia Pacific region.

Asia Pac sales increased 14% year on year. Both commercial and retail segments performed well. GPC confirmed its Asia Pac Automotive margins improved year on year, suggesting improved sales were not driven through promotional or discounting activity.

The broker expects Bapcor’s earnings growth will be driven by underlying growth in Burson Trade, continued expansion of the store network in A&NZ, improvement in operating margins through leverage and cost improvement, and growth from Asia.

Buy and $8.40 target retained.

Target price is $8.40 Current Price is $6.68 Difference: $1.72
If BAP meets the Ord Minnett target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $7.81, suggesting upside of 17.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Citi rates BHP as Resume Coverage with Neutral (3) -

Citi resumes coverage of BHP Group with a Neutral rating and $43 target. The broker considers the incorporation of OZ Minerals assets will be accretive to cash flow albeit dilutive to earnings.

Copper is now 29% of the brokers discounted cash flow valuation with iron ore 55%.

Citi expects China's steel production cuts will pressure iron ore prices in the second half of 2023. While incorporating the OZ Minerals assets the broker also raises costs for copper ex Escondida and for nickel.

Target price is $43.00 Current Price is $45.02 Difference: minus $2.02 (current price is over target).
If BHP 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 $44.63, suggesting upside of 1.1% (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: 0.3

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

Macquarie rates BHP as Outperform (1) -

BHP Group’s March quarter result was mixed, Macquarie notes, featuring in line iron ore and met coal performance and a beat in thermal coal output offset by weaker copper volumes and a cut to guidance at Escondida (copper) and Nickel West.

Yet most of BHP’s key guidance ranges are unchanged. The broker has made only minor changes to June quarter assumptions as estimates were within the guidance ranges after incorporating the March result.

The completion of the OZ Minerals acquisition presents the opportunity for BHP to redefine the production outlook for Olympic Dam and Nickel West, Macquarie suggests, and this presents upside risk to the broker's base case earnings forecasts and valuation.

Outperform retained, target falls to $52 from $53.

Target price is $52.00 Current Price is $45.02 Difference: $6.98
If BHP meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $44.63, suggesting upside of 1.1% (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: 0.3

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

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

Iron ore production was in line with Morgan Stanley's expectations in the March quarter and offset by soft copper and coal. Escondida was affected by geotechnical issues and Antamina continues to ramp down.

Nickel West production was in line although full year production guidance has been lowered to 75-85,000t, attributed to heavy rain at Mount Keith in early April.

The Equal-weight rating and $41.35 target are unchanged and the broker prefers Rio Tinto ((RIO)) amid the near-term risks around the Samarco provisions, given the potential impact on BHP Group's pay-outs. Sector view is Attractive.

Target price is $41.35 Current Price is $45.02 Difference: minus $3.67 (current price is over target).
If BHP meets the Morgan Stanley target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $44.63, suggesting upside of 1.1% (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: 0.3

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

Ord Minnett rates BHP as Hold (3) -

In the wake of BHP Group's quarterly report, Ord Minnett notes commodity prices have generally been less volatile so far in 2023. High thermal coal prices, albeit down from peak levels, are offset by a weaker Australian dollar rate.

The $39.50 target and Hold rating are unchanged.

Target price is $39.50 Current Price is $45.02 Difference: minus $5.52 (current price is over target).
If BHP meets the Ord Minnett target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $44.63, suggesting upside of 1.1% (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: 0.3

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

UBS rates BHP as Sell (5) -

UBS observes record nine-month production at BHP Group's Western Australian operations was overshadowed by a fatality as well as lost production to a cyclone. Meanwhile there are geotechnical challenges at Escondida copper.

The broker expects returns will be under pressure as capital expenditure should lift in the medium-term while commodity prices ease. The highlights of the quarter were Olympic Dam and Pampa Norte. Sell rating maintained. Target is reduced to $39 from $40.

Target price is $39.00 Current Price is $45.02 Difference: minus $6.02 (current price is over target).
If BHP meets the UBS target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $44.63, suggesting upside of 1.1% (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: 0.3

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

Morgans rates BKW as Add (1) -

Brickworks has signalled an improved outlook for the Australian residential housing market. Rental growth is expected to offset capitalisation rate expansion. Still, Morgans has softened expectations for property revaluations in FY24-25.

The broker sets its terminal capitalisation rate assumptions at 4.8% for the industrial property joint venture by the second half of FY25. This adversely affects forward earnings estimates.

At the current price the broker continues to believe the stock is cheap, given the current discount to inferred net tangible assets, and retains an Add rating. Target is reduced to $26.10 from $26.50.

Target price is $26.10 Current Price is $24.51 Difference: $1.59
If BKW meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $26.39, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Macquarie rates CGF as Neutral (3) -

Challenger's March quarter update reaffirmed FY profit guidance, Macquarie notes. Retail annuity sales were up 50.8% year on year, benefiting from higher interest rates.

Total life sales of $2.0bn were below the broker's $2.6bn expectations.

Macquarie continues to like the long-term growth thematic but remains cautious on the short-term macro thematic.

Neutral retained, target falls to $6.90 from $7.20.

Target price is $6.90 Current Price is $6.16 Difference: $0.74
If CGF meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $7.05, suggesting upside of 12.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Macquarie rates CNI as Initiation of coverage with Outperform (1) -

Macquarie initiates coverage of Centuria Capital with an Outperform rating and $1.79 target.

Centuria is an asset manager with some $20bn of real estate assets under management. The group has a strong track record of growth via both organic and inorganic means, the broker notes.

Since June 2017, Centuria has achieved sector-leading AUM growth of  around 40% per annum, or 29% excluding M&A activity. This is well ahead of property funds management peers at 15-25%, Macquarie points out.

Future upside will be driven by growth in alternative sub-sectors.

Target price is $1.79 Current Price is $1.68 Difference: $0.115
If CNI meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

UBS rates COL as Neutral (3) -

Ahead of the third quarter sales report, UBS forecasts total sales of $9.8bn, up 7.5%. The broker expects liquor sales to be up 4.0%. Going forward, food inflation is expected to moderate yet stay elevated in dry grocery because of ongoing supply chain pressures.

The broker retains a Neutral rating for Coles Group and raises the target to $18.50 from $18.00.

Target price is $18.50 Current Price is $18.21 Difference: $0.29
If COL meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $17.72, suggesting downside of -3.4% (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 DRR as Outperform (1) -

Deterra Royalties' production from Mining Area C in the March quarter was -8% softer than Macquarie's expectations and -4% lower quarter on quarter. However the broker forecasts stronger volumes in the June quarter.

The dividend yield remains attractive at 6-7% fully franked from FY23 onward on the broker's forecasts.

The ramp-up of South Flank remains on track for the end of FY24, and the recent rebound in iron ore prices has been positive for the outlook.

Outperform and $5.00 target retained.

Target price is $5.00 Current Price is $4.66 Difference: $0.34
If DRR meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $4.67, suggesting upside of 0.4% (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

Ord Minnett rates DRR as Lighten (4) -

Ord Minnett notes commodity prices have been less volatile so far in 2023. Generally lower commodity prices are being offset by a weaker Australian dollar.

In the longer term, the broker expects the iron ore price will decline and offset much of the benefit of higher production for Deterra Royalties. Lighten rating maintained. Target is $3.90.

Target price is $3.90 Current Price is $4.66 Difference: minus $0.76 (current price is over target).
If DRR meets the Ord Minnett target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.67, suggesting upside of 0.4% (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

Ord Minnett rates ECF as Accumulate (2) -

Elanor Commercial Property Fund has announced it has successfully negotiated a lease extension with a government tenant at Garema Court, de-risking its short term lease expiry profile, Ord Minnett suggests. While the announcement is positive, it does increase the fund's FY26 lease expiries.

The broker nevertheless expects to see some valuation upside on Garema Court, which should alleviate some of the pressure from expanding cap rates in the office sector.

Accumulate retained, target rises to $1.04 from $1.03.

Target price is $1.04 Current Price is $0.90 Difference: $0.14
If ECF meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Shaw and Partners rates EM2 as Buy (1) -

The highlight of the March quarter report from Eagle Mountain Mining was diamond drilling results that intersected multiple narrow high-great veins including 25.5% copper, 1935g/t silver and 15.2g/t gold over 0.6m from a resource upgrade hole in the north-east of Oracle.

Shaw and Partners believes the results bode well for another substantial resource upgrade ahead of a scoping study in the second half of the year. Buy rating maintained. Target is steady at $0.47.

Target price is $0.47 Current Price is $0.14 Difference: $0.335
If EM2 meets the Shaw and Partners target it will return approximately 248% (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

Ord Minnett rates FMG as Lighten (4) -

Ord Minnett notes commodity prices have generally been less volatile so far in 2023. A weaker Australian dollar rate offsets lower iron ore prices, the broker assesses, and as a result a $15 target is maintained for Fortescue Metals. Lighten retained.

Target price is $15.00 Current Price is $21.49 Difference: minus $6.49 (current price is over target).
If FMG meets the Ord Minnett target it will return approximately minus 30% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.76, suggesting downside of -19.3% (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: -0.9

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

UBS rates GEM as Neutral (3) -

G8 Education provided a trading update for the first quarter that was marginally softer than UBS expected. The most positive news was the acceleration in early childhood teacher placements, a further 16% improvement.

Job vacancies data for the industry remains elevated yet the broker notes this appears to be improving from peak levels. UBS considers management's strategic priorities sound amid a focus on cost control and improving those underperforming centres.

Neutral retained. Target is reduced to $1.28 from $1.30.

Target price is $1.28 Current Price is $1.25 Difference: $0.03
If GEM meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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

Bell Potter rates GT1 as Speculative Buy (1) -

Green Technology Metals has an initial (McCombe) resource for its Root project in Canada. The resource estimate of 4.5mt at 1.01% lithium adds further scale to the 10mt Seymour resource that was announced back in June 2022 and is around 200km to the east.

Bell Potter notes the company is pushing ahead with appraisal activities and studies in partnership with mineral investment and processing groups established in North America. Speculative Buy rating maintained. Target is reduced to $1.38 from $1.42.

Target price is $1.38 Current Price is $0.63 Difference: $0.75
If GT1 meets the Bell Potter target it will return approximately 119% (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

Ord Minnett rates ILU as Hold (3) -

Ord Minnett notes commodity prices have generally been less volatile so far in 2023. A weaker Australian dollar exchange rate means a modest increase in the target for Iluka Resources, to $11.00 from $10.50. Hold rating maintained.

Target price is $11.00 Current Price is $11.12 Difference: minus $0.12 (current price is over target).
If ILU meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.36, suggesting upside of 3.2% (ex-dividends)

The company's fiscal year ends in December.

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

Bell Potter rates LYC as Buy (1) -

Bell Potter revises FY24 production estimates -19% lower following the quarterly report from Linus Rare Earths. The company has guided to, at worst, a three-month shutdown of operations.

In a best case scenario, the broker assesses Kalgoorlie will enter feed in the next two months and a mixed rare earth carbonate concentrate should arrive in Malaysia in August, which would mean production in September.

Bell Potter maintains a Buy rating, noting this is a high-quality business and key supplier of separated rare earths to Western economies. Target is reduced to $8.00 from $8.06.

Target price is $8.00 Current Price is $6.84 Difference: $1.16
If LYC meets the Bell Potter target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $7.54, suggesting upside of 11.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Citi rates LYC as Buy (1) -

Lynas Rare Earths' March quarter sales revenue slightly missed expectations. The company has appealed the Malaysian government's C&L ban, with a hearing scheduled for April 28, yet Citi's base case still has the July 1 ban taking place.

Ramp up of Kalgoorlie, with feed expected to come on line in the June quarter, remains unpredictable, so the company is preparing for minimal production over the July-September period when the Malaysian ban comes into play.

Citi reduces price estimates by -8-10% for 2023-24 but expects prices will recover throughout FY24. The broker reiterates a Buy rating and reduces the target to $8.10 from $8.20.

Target price is $8.10 Current Price is $6.84 Difference: $1.26
If LYC meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $7.54, suggesting upside of 11.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Macquarie rates LYC as Neutral (3) -

Lynas Rare Earths' March quarter result was mixed, Macquarie notes, with in-line NdPr production offset by soft total rare earth oxides output. Realised prices were -19% lower due to product mix.

The broker now believes a production suspension at the Malaysian refining plant in the September quarter is likely, but sales can be supported by inventory drawdown.

In Macquarie's view the uncertainties of Kalgoorlie’s ramp-up and operations at the Malaysia plant present headwinds for the company’s near-term earnings outlook.

Neutral retained, target falls to $6.50 from $6.80.

Target price is $6.50 Current Price is $6.84 Difference: minus $0.34 (current price is over target).
If LYC meets the Macquarie target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.54, suggesting upside of 11.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

UBS rates LYC as Buy (1) -

Lynas Rare Earths' March quarter production was well ahead of UBS estimates and a strong finish to FY23 is expected before a more complicated FY24.

Significantly, the company has given initial guidance that Malaysia would shut in mid July for three months and be followed by a period of reduced production as Kalgoorlie ramps up.

This is not as bad as some had expected yet UBS reduces FY24 production estimates by -2000t amid significantly reduced earnings. by rating maintained. Target is reduced to $8.40 from $8.50.

Target price is $8.40 Current Price is $6.84 Difference: $1.56
If LYC meets the UBS target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $7.54, suggesting upside of 11.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Bell Potter rates MCR as Hold (3) -

Nickel production in the March quarter was below Bell Potter's forecast as a result of the previously flagged off-specification ore production and lower metallurgical recoveries.

The board of Mincor Resources shareholders accept the offer from Wyloo Metals ((WYL)) in response to risks from ongoing ramp-up issues. The broker suggests a competing offer is unlikely given Wyloo has a controlling interest.

Hold rating retained. Target price unchanged at $1.40.

Target price is $1.40 Current Price is $1.40 Difference: $0
If MCR meets the Bell Potter target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $1.40, suggesting downside of -1.6% (ex-dividends)

The company's fiscal year ends in June.

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

Macquarie rates MCR as Neutral (3) -

Mincor Resources reported March quarter production results featuring nickel in concentrate -47% lower than Macquarie had forecast.

However Wyloo continues to accumulate Mincor through its on-market $1.40 cash offer and had increased its ownership past 51% as of Friday morning.

The upcoming catalyst is the close of Wyloo’s offer on 8th May.

Neutral and $1.40 target retained.

Target price is $1.40 Current Price is $1.40 Difference: $0
If MCR meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $1.40, suggesting downside of -1.6% (ex-dividends)

The company's fiscal year ends in June.

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

Macquarie rates MGX as Neutral (3) -

Mount Gibson Iron's March quarter result was stronger than Macquarie expected, with sales 11% above forecasts, however the outlook was downgraded previously in the quarter.

Volumes are guided to increase in the June quarter and costs materially decrease.

Consistent improvements at Koolan Island are a key near term catalyst, the broker suggests, and use of funds is a key consideration given the short mine life.

Neutral and 50c target retained.

Target price is $0.50 Current Price is $0.51 Difference: minus $0.01 (current price is over target).
If MGX meets the Macquarie 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

Ord Minnett rates NCM as Upgrade to Accumulate from Hold (2) -

Ord Minnett notes commodity prices have generally been less volatile so far in 2023. In line with a higher indicative offer for Newcrest Mining from Newmont, the broker raises its target price to $33 and as a result upgrades to Accumulate from Hold.

Target price is $33.00 Current Price is $28.90 Difference: $4.1
If NCM meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $29.89, suggesting upside of 4.3% (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

Ord Minnett rates NHC as Hold (3) -

Ord Minnett notes commodity prices have generally been less volatile so far in 2023. Thermal coal prices have fallen yet remain high compared with historical levels amid supply concerns and the emphasis on energy security as the war in Ukraine drags on.

Given these are offset by a weaker Australian dollar rate the Hold rating and target price of $6.30 are retained for New Hope.

Target price is $6.30 Current Price is $5.33 Difference: $0.97
If NHC meets the Ord Minnett target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $5.74, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in July.

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

Shaw and Partners rates RFG as Buy (1) -

Shaw and Partners highlights all Retail Foods brands are now profitable, which demonstrates the positive outcome from executing successfully on its turnaround strategy.

The first few weeks trading in the second half was very strong with same-store sales growth of 11.8%. The business is now fully funded and can pursue strong organic opportunities.

The broker notes underlying EBITDA guidance of $26-29m and retains a forecast at the top of this range.

Shaw and Partners believes the stock has been significantly oversold and reiterates its Buy rating and 15c target.

Target price is $0.15 Current Price is $0.06 Difference: $0.087
If RFG meets the Shaw and Partners target it will return approximately 138% (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

Ord Minnett rates RIO as Lighten (4) -

Ord Minnett notes commodity prices have generally been less volatile so far in 2023.

For Rio Tinto, higher near-term copper prices and a weaker Australian dollar exchange rate have offset lower iron ore and aluminium prices.

The broker retains a Lighten rating with a $107 target.

Target price is $107.00 Current Price is $117.00 Difference: minus $10 (current price is over target).
If RIO meets the Ord Minnett target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $113.07, suggesting downside of -0.1% (ex-dividends)

The company's fiscal year ends in December.

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: -0.1

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

Ord Minnett rates S32 as Hold (3) -

Ord Minnett notes commodity prices have generally been less volatile so far in 2023.

Yet, with the exception of silver, all South32's commodity exposures are tied to China's investment boom which faces, in the broker's view, meaningful headwinds in the future.

Hold maintained. Target is $4.40.

Target price is $4.40 Current Price is $4.45 Difference: minus $0.05 (current price is over target).
If S32 meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.12, suggesting upside of 23.9% (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: 0.8

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

Citi rates WDS as Sell (5) -

Citi found few surprises in the March quarter report. Going forward the broker continues to envisage the greatest risks centre on Scarborough and potentially onerous changes to the petroleum resource rent tax affecting Woodside Energy's dividends.

The broker believes the market is yet to price in the risks to the cost of equity and retains a Sell rating.

2023 net profit is upgraded by 8% to reflect a stronger first quarter result, partially offset by an easing back on the ramping up profile for Mad Dog production. Target is steady at $30.

Target price is $30.00 Current Price is $33.69 Difference: minus $3.69 (current price is over target).
If WDS meets the Citi target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $36.18, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in December.

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: 0.1

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

Macquarie rates WDS as Neutral (3) -

Woodside Energy's March quarter revenues were stronger than Macquarie expected, mainly due to better LNG price realisations given 32% spot gas exposure was higher than 20-25% 2023 guidance.             

Macquarie's forecasts are well below consensus as the broker expects the downgrade cycle to continue through the June quarter.

But Woodside's growing emerging basin portfolio (Egypt, Namibia, Congo, Barbados) will expose investors to more significant oil & gas exploration upside than has been the case in recent years, and Macquarie believes this is positive.

Target falls to $33 from $35, Neutral retained.                                                                                                                                                                                                                                                                                                                                                                                                                                   

Target price is $33.00 Current Price is $33.69 Difference: minus $0.69 (current price is over target).
If WDS meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $36.18, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in December.

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: 0.1

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

Morgan Stanley rates WDS as Overweight (1) -

Morgan Stanley expects a neutral reaction to the March quarter production update. Production was down -9% quarter on quarter but up 122% compared with the prior corresponding quarter.

Sales revenue was down -16% quarter on quarter yet up 81% on the prior corresponding quarter. The broker notes Scarborough and Sangomar developments are progressing and first oil from Sangomar is targeted for the end of 2023.

Overweight rating. Target is $40. Industry View is Attractive. 

Target price is $40.00 Current Price is $33.69 Difference: $6.31
If WDS meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $36.18, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in December.

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: 0.1

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

Ord Minnett rates WDS as Accumulate (2) -

March quarter revenue was better than Ord Minnett expected. Yet the broker is cautious, given potential moves by the Commonwealth Government to increase the petroleum resources rent tax.

Woodside Energy has maintained 2023 production guidance and has confirmed progress on all major growth projects. The broker increases 2023 estimates for earnings per share by 8%.

Ord Minnett retains a $44.50 target with an Accumulate rating.

Target price is $44.50 Current Price is $33.69 Difference: $10.81
If WDS meets the Ord Minnett target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $36.18, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in December.

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: 0.1

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

UBS rates WDS as Neutral (3) -

Woodside Energy's March quarter production was in line with UBS expectations. Amid depressed Henry Hub prices the LNG supply contract with Corpus Christi is "heavily in the money", the broker points out, and that enables the view on margin can be delivered in 2023.

Growth projects are on track although UBS is cautious about scheduling delays at Scarborough. Neutral maintained. Target is reduced to $36.00 from $36.10.

Target price is $36.00 Current Price is $33.69 Difference: $2.31
If WDS meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $36.18, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in December.

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: 0.1

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

Bell Potter rates WHC as Hold (3) -

Whitehaven Coal has improved a $150m "early mining" investment for Vickery. The development will use latent coal processing capacity and draw labour and equipment from the Werris Creek operations which demobilise next year.

Bell Potter notes thermal coal prices have moderated but continue to underpin free cash flow, which will support dividends and the buyback. Still, the broker envisages challenges to production growth as well as the prospect of earnings declining over the forecast period.

Hold maintained. Target is reduced to $7.00 from $7.05.

Target price is $7.00 Current Price is $7.38 Difference: minus $0.38 (current price is over target).
If WHC meets the Bell Potter target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.33, suggesting upside of 29.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Citi rates WHC as Buy (1) -

The weaker March quarter had already been flagged by Whitehaven Coal, Citi notes. The broker expects Japanese power utilities, having settled annual contracts at US$200/t, will look to replace lost Russian tonnage.

This should provide support for Newcastle coal at what is still a higher Australian dollar price.

The broker raises estimates for FY23-24 EBITDA by 1-2% with FY25 up 5% as the Vickery starter mine comes on line. Buy rating and $8.80 target unchanged.

Target price is $8.80 Current Price is $7.38 Difference: $1.42
If WHC meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $9.33, suggesting upside of 29.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Macquarie rates WHC as Outperform (1) -

Whitehaven Coal released March quarter results highlighting softer saleable coal production and coal sales. Guidance has recently been cut, Macquarie notes, particularly for the near-term outlook at Maules Creek.

However realised thermal coal pricing of US$280/t remains strong and Whitehaven currently boasts an impressive cash position of $2.7bn.

The resumption of the share buy-back, improvements in operational run-rate at Maules and Narrabri and construction of Vickery are key near-term catalysts, the broker suggests.

Outperform and $8.50 target retained.

Target price is $8.50 Current Price is $7.38 Difference: $1.12
If WHC meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $9.33, suggesting upside of 29.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Morgan Stanley rates WHC as Overweight (1) -

Morgan Stanley believes the basis for a "good" FY24 are in place as Narrabri moves to shallower ground, which should provide cost benefits, while Maules Creek historically outperforms in the fourth quarter.

A decision around full-scale operations at Vickery, with early mining now approved, should be forthcoming later in the year. The broker expects thermal coal markets will be well supported in FY24.

Morgan Stanley retains an Overweight rating, $9.75 target and Attractive industry view.

Target price is $9.75 Current Price is $7.38 Difference: $2.37
If WHC meets the Morgan Stanley target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $9.33, suggesting upside of 29.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Morgans rates WHC as Add (1) -

Morgans believes recent production concerns and external uncertainties are more than priced into Whitehaven Coal.

The broker suspects the market has recently discounted the stock for its potential to compete, and maybe buy, Queensland metallurgical coal assets that are for sale.

While current cash flows could support a Queensland acquisition, the broker suspects the company's commitment to fulfilling FY23 distributions as well as a full-scale Vickery development mean it is unlikely to pursue assets such as Daunia aggressively.

Morgans retains an Add rating and reduces the target to $9.60 from $9.85.

Target price is $9.60 Current Price is $7.38 Difference: $2.22
If WHC meets the Morgans target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $9.33, suggesting upside of 29.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Ord Minnett rates WHC as Buy (1) -

Strong cash flow in the March quarter was marred by disappointing production results and downgrades, Ord Minnett observes. A poor performance at Maules Creek resulted in downgraded guidance for equity production to 12.3-12.9mt at higher cash costs.

Longer term the outlook has improved with plans to progress a small-scale development at Vickery. The business appears set to generate significant returns over the next 12 months.

The broker transfers coverage to another analyst following the departure of the former and retains a Buy rating. Target is reduced to $8.60 from $10.40.

Target price is $8.60 Current Price is $7.38 Difference: $1.22
If WHC meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $9.33, suggesting upside of 29.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

UBS rates WHC as Neutral (3) -

Whitehaven Coal has approved the early mining of Vickery with a final investment decision for the full-scale project due in the first half of FY24. March quarter ROM production was 4.3mt with 3.4mt in sales at an average thermal price of US$280/t.

The company has reported underlying demand in the market remains attractive although coal and gas inventory is a high at present, capping the near-term price upside.

UBS retains a Neutral rating, updating for buyback assumptions and lifting its risk weighting of Vickery to 95%. Target is raised to $7.40 from $7.00.

Target price is $7.40 Current Price is $7.38 Difference: $0.02
If WHC meets the UBS target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $9.33, suggesting upside of 29.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

UBS rates WOW as Neutral (3) -

Ahead of Woolworths Group's report, UBS expects total sales of $16.4bn, up 8.5% in the March quarter. Total Australian food sales are expected to be up 8.1%.

Food inflation remains significant, the broker observes. Woolworths is forecast to slightly outperform Coles Group in supermarkets. Neutral maintained. Target rises to $38.25 from $37.00.

Target price is $38.25 Current Price is $38.69 Difference: minus $0.44 (current price is over target).
If WOW meets the UBS target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $35.87, suggesting downside of -8.0% (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