Peter Switzer of the Switzer Super Report previews earnings season for Telstra, the big banks and big miners.
Macquarie rates OZL as Outperform
June quarter production was mixed, with softer copper offset by higher gold output and lower cash costs. Macquarie upgrades 2017 earnings forecasts by 13% after incorporating the result.
Nevertheless, changes to the grade profile assumptions drive a -10% reduction to 2018 estimates. Outperform and $9.50 target retained.
UBS rates VCX as Buy
The broker believes the threats from consumer weakness and online growth have been overplayed, and an announced 5% buyback and rise in net asset valuation from Vicinity supports this thesis. The broker upgraded to Buy last week.
That rating and $2.92 target remain intact, and the broker suggests other A-REITs may follow suit at their result releases, with GPT ((GPT)) and Charter Hall Retail ((CQR)) favoured.
Citi rates WSA as Neutral
Citi analysts seem pleased with the June quarter production report. They anticipate both higher grades and recoveries in H2. Neutral rating retained as the target price withstands lower nickel price forecasts plus a stronger AUD in forward modeling.
The analysts observe cash increased to $140.3m. They highlight Western Areas carries no debt, which should give it security from volatile nickel prices. Citi forecasts sufficient internal funding for all Odysseus capex. Target $2.20.