Australian Broker Call
June 02, 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
| AGL - | AGL ENERGY | Downgrade to Underperform from Neutral | Macquarie |
| AIZ - | AIR NEW ZEALAND | Downgrade to Underperform from Neutral | Credit Suisse |
| AVN - | AVENTUS RETAIL PROPERTY | Downgrade to Hold from Add | Morgans |
| EPW - | ERM POWER | Upgrade to Outperform from Neutral | Macquarie |
| VCX - | VICINITY CENTRES | Downgrade to Underperform from Neutral | Credit Suisse |
Macquarie rates AGL as Downgrade to Underperform from Neutral (5) -
Macquarie observes renewable investment continues to ramp up strongly. The stock is an attractive business but the fundamental commodity, electricity, appears to have peaked and incremental additions like the REC pricing are unwinding limited wholesale growth.
While the broker believes there is still a mild upgrade cycle for the company's earnings in the near term, technology threats continue to challenge the structure of the market and core volume growth. Rating is downgraded to Underperform from Neutral. Target is reduced to $24.30 from $25.00.
Target price is $24.30 Current Price is $26.97 Difference: minus $2.67 (current price is over target).
If AGL meets the Macquarie target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $27.06, suggesting upside of 3.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 92.00 cents and EPS of 121.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 118.1, implying annual growth of N/A. Current consensus DPS estimate is 89.5, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 22.2. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 117.00 cents and EPS of 155.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 150.7, implying annual growth of 27.6%. Current consensus DPS estimate is 113.0, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 17.4. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates AIZ as Downgrade to Underperform from Neutral (5) -
The airline has updated FY17 guidance for earnings to likely exceed NZ$525m. The increase is attributed to better-than-expected revenue from what was observed at the first half and lower-than-forecast fuel costs.
As a result of changes to forecasts, Credit Suisse increases its target to NZ$2.50 from NZ$2.10. Reflecting the updated valuation in the current share price the rating is downgraded to Underperform from Neutral.
Current Price is $2.88. Target price not assessed.
Current consensus price target is N/A
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 18.89 cents and EPS of 30.98 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.3, implying annual growth of N/A. Current consensus DPS estimate is 25.1, implying a prospective dividend yield of 8.9%. Current consensus EPS estimate suggests the PER is 9.3. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 18.89 cents and EPS of 29.75 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.8, implying annual growth of -1.7%. Current consensus DPS estimate is 19.1, implying a prospective dividend yield of 6.7%. Current consensus EPS estimate suggests the PER is 9.5. |
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
Deutsche Bank rates AIZ as Hold (3) -
FY17 profit guidance of NZ$475-525m has now been updated to "in excess of" NZ$525m.. Deutsche Bank increases its estimates by 6%.
The upgrade appears to be related to the benefit of a lower fuel price and improvement in the revenue environment. The airline expects capacity additions to moderate to growth of 6% in FY17 and 3-4% in FY18.
Deutsche Bank retains a Hold rating and raises the target to NZ$2.45 from NZ$2.31.
Current Price is $2.88. Target price not assessed.
Current consensus price target is N/A
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 18.89 cents and EPS of 25.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.3, implying annual growth of N/A. Current consensus DPS estimate is 25.1, implying a prospective dividend yield of 8.9%. Current consensus EPS estimate suggests the PER is 9.3. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 18.79 cents and EPS of 25.36 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.8, implying annual growth of -1.7%. Current consensus DPS estimate is 19.1, implying a prospective dividend yield of 6.7%. Current consensus EPS estimate suggests the PER is 9.5. |
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
Macquarie rates AIZ as Neutral (3) -
FY17 guidance has been upgraded by around 6% at the mid point, Macquarie observes. The airline expects capacity growth to reduce to 3-4% in FY18 before rising to 5-7% in FY19 and FY20.
The broker notes the stock's multiple has re-rated and closed the valuation gap to global peers. Macquarie remains positively biased towards the stock. Neutral retained. Target rises to NZ$3.09 from NZ$2.22.
Current Price is $2.88. Target price not assessed.
Current consensus price target is N/A
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 18.89 cents and EPS of 30.98 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.3, implying annual growth of N/A. Current consensus DPS estimate is 25.1, implying a prospective dividend yield of 8.9%. Current consensus EPS estimate suggests the PER is 9.3. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 18.89 cents and EPS of 29.56 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.8, implying annual growth of -1.7%. Current consensus DPS estimate is 19.1, implying a prospective dividend yield of 6.7%. Current consensus EPS estimate suggests the PER is 9.5. |
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
UBS rates AIZ as Neutral (3) -
The company has raised its FY17 pre-tax profit guidance to "above NZ$525m" because of strong passenger yields and lower fuel costs. UBS revises earnings estimates and notes the closing of the gap between valuation and share price.
Neutral rating retained and the broker's base case conservatively incorporates a material lift in jet fuel prices and no yield recovery in FY18. Target is raised to NZ$2.85 from NZ$2.25.
Current Price is $2.88. Target price not assessed.
Current consensus price target is N/A
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 42.50 cents and EPS of 32.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.3, implying annual growth of N/A. Current consensus DPS estimate is 25.1, implying a prospective dividend yield of 8.9%. Current consensus EPS estimate suggests the PER is 9.3. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 18.89 cents and EPS of 33.15 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.8, implying annual growth of -1.7%. Current consensus DPS estimate is 19.1, implying a prospective dividend yield of 6.7%. Current consensus EPS estimate suggests the PER is 9.5. |
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
Morgans rates AVN as Downgrade to Hold from Add (3) -
The company has announced the acquisition of two assets for $436m, to be funded via a $215m entitlement issue at $2.32 per security plus $250m in debt.
The company expects to pay a fourth quarter distribution of around 4c, bringing the total FY17 distribution to around 15.9c.
Morgans believes the company is well placed to navigate challenges in the broader retail sector and adjusts forecasts for the capital raising and acquisitions as well as updating on preliminary revaluations of the existing portfolio.
Rating is downgraded to Hold from Add. Target is reduced to $2.45 from $2.53.
Target price is $2.45 Current Price is $2.41 Difference: $0.04
If AVN meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $2.49, suggesting upside of 2.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 15.90 cents and EPS of 17.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.8, implying annual growth of -4.3%. Current consensus DPS estimate is 15.9, implying a prospective dividend yield of 6.5%. Current consensus EPS estimate suggests the PER is 13.7. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 16.30 cents and EPS of 18.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 18.4, implying annual growth of 3.4%. Current consensus DPS estimate is 16.4, implying a prospective dividend yield of 6.7%. Current consensus EPS estimate suggests the PER is 13.2. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates BKL as Neutral (3) -
Credit Suisse observes the company continues to progress its product development for the Chinese direct retail market. The Chinese vitamin and supplements market is a $20bn retail sales segment, growing at 20%.
Credit Suisse has a Neutral rating and $100 target. The broker's valuation incorporates $150m in wholesale sales from China direct retail during FY19.
Given the early stages of product development and the uncertainty surrounding successful implementation of global pricing, Credit Suisse believes there is a risk that this sales forecast is pushed out further.
Target price is $100.00 Current Price is $100.30 Difference: minus $0.3 (current price is over target).
If BKL meets the Credit Suisse target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 260.00 cents and EPS of 331.00 cents. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 320.00 cents and EPS of 406.00 cents. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates CAR as Outperform (1) -
The company shares have sold off on the back of concerns regarding new car sales, following recent trading updates from listed dealer groups. Credit Suisse believes the sell-off is overdone and has created a buying opportunity.
The broker notes the company has minimal direct exposure to new car sales, as enquiries for these make up for less than 10% of the total enquiry volume.
Target is $12.00. Outperform rating retained.
Target price is $12.00 Current Price is $11.01 Difference: $0.99
If CAR meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $12.05, suggesting upside of 6.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 40.00 cents and EPS of 49.17 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 48.4, implying annual growth of 6.6%. Current consensus DPS estimate is 40.0, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 23.3. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 44.10 cents and EPS of 54.47 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 54.2, implying annual growth of 12.0%. Current consensus DPS estimate is 44.6, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 20.8. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates EPW as Upgrade to Outperform from Neutral (1) -
Macquarie suggests the option the company acquired by purchasing the penalty REC will pay off, with the recent collapse in the Cal 19 REC price.
In the last 18 months the broker notes 15.4TWh of renewable commitments have been made and, while it does not appear these have exceeded the REC target yet, with development times of solar dropping to 12 months and construction costs falling, the signal is to build renewables with limited REC support.
Macquarie upgrades FY20 earnings estimates to reflect the one-off benefit associated with falling REC forward prices. The broker upgrades to Outperform from Neutral and raises the target to $1.30 from $1.24.
Target price is $1.30 Current Price is $1.24 Difference: $0.06
If EPW meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $1.33, suggesting upside of 3.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 7.00 cents and EPS of minus 12.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -5.2, implying annual growth of N/A. Current consensus DPS estimate is 8.3, implying a prospective dividend yield of 6.4%. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 10.00 cents and EPS of 4.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.5, implying annual growth of N/A. Current consensus DPS estimate is 8.0, implying a prospective dividend yield of 6.2%. Current consensus EPS estimate suggests the PER is 19.9. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates FBU as Buy (1) -
Deutsche Bank observes construction demand is holding up in New Zealand. NZ housing demand is currently 39% above the historical average.
The broker notes, while it is possible additional restrictions for investors will slow the market, there is a significant backlog which should limit any near-term downside.
Buy rating retained. Target is reduced to NZ$9.83 from NZ$10.15.
Current Price is $7.15. Target price not assessed.
Current consensus price target is $9.00, suggesting upside of 21.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 39.66 cents and EPS of 52.89 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 51.0, implying annual growth of N/A. Current consensus DPS estimate is 38.2, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 14.5. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 42.50 cents and EPS of 58.55 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 61.4, implying annual growth of 20.4%. Current consensus DPS estimate is 40.8, implying a prospective dividend yield of 5.5%. Current consensus EPS estimate suggests the PER is 12.0. |
This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates MGR as Buy (1) -
The NSW government has moved to increased stamp duty to 8% for foreign buyers and add a land tax surcharge of 2%. UBS suspects this will slow activity, but does not expect a collapse in foreign purchases of Sydney real estate.
The broker also does not expect this to have a material impact on the likes of Mirvac, which remains its key pick in the sector. Nevertheless, the broker appreciates catalysts may be in short supply until the results.
Buy rating and $2.52 target retained.
Target price is $2.52 Current Price is $2.26 Difference: $0.26
If MGR meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $2.34, suggesting upside of 2.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 10.40 cents and EPS of 14.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.5, implying annual growth of -44.4%. Current consensus DPS estimate is 10.2, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 14.7. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 10.80 cents and EPS of 15.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.2, implying annual growth of -1.9%. Current consensus DPS estimate is 11.0, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 15.0. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates ORG as No Rating (-1) -
Macquarie observes renewable investment continues to ramp up strongly and the 2020 renewable energy target appears increasingly achievable. Since 2019 REC prices have fallen to around $50-55/Megawatt-hour.
The broker acknowledges Origin has been benefiting from a heightened REC price and, whilst the core renewable portfolio is likely to be profitable, believes the extent of the profitability is declining consistent with the expectation of a reduction in the REC price.
Macquarie is restricted on rating and target at this stage.
Current Price is $7.69. Target price not assessed.
Current consensus price target is $7.62, suggesting downside of -1.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 0.00 cents and EPS of 33.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.8, 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 48.7. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 20.00 cents and EPS of 57.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 57.0, implying annual growth of 260.8%. Current consensus DPS estimate is 9.3, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 13.5. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates REA as Buy (1) -
Citi analysts observe Premiere ad volume growth accelerated to +24% in May, carried by a continued mix shift which adds to overall depth ad volume growth. They note agents continue to shift up from the mid-price Highlight ad.
In addition, Domain’s lead over REA in the key areas of Stonnington & Boroondara has extended slightly, but the lead overall has become less than was the case throughout 2016, note the analysts.
Furthermore, in Bayside & Port Phillip last year's trend has reversed with Domain’s Premium Plus volumes now -24% below REA’s Premiere, note the analysts. No changes to Buy rating or $72.50 price target.
Target price is $72.50 Current Price is $63.98 Difference: $8.52
If REA meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $63.18, suggesting downside of -2.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 81.80 cents and EPS of 181.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 180.7, implying annual growth of -5.9%. Current consensus DPS estimate is 92.6, implying a prospective dividend yield of 1.4%. Current consensus EPS estimate suggests the PER is 35.8. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 103.80 cents and EPS of 230.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 223.4, implying annual growth of 23.6%. Current consensus DPS estimate is 117.6, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 29.0. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates S32 as Outperform (1) -
Macquarie observes, after the company's briefing, a lack of opportunities to deploy capital. The company has completed US$100m of its US$500m share buy-back scheme.
With the Metropolitan acquisition now cancelled, a doubling of the buy-back to US$1bn or a similar special dividend is becoming increasingly more likely, in the broker's opinion.
Outperform retained. Target is $3.50.
Target price is $3.50 Current Price is $2.59 Difference: $0.91
If S32 meets the Macquarie target it will return approximately 35% (excluding dividends, fees and charges).
Current consensus price target is $3.01, suggesting upside of 14.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 11.29 cents and EPS of 28.03 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.0, implying annual growth of N/A. Current consensus DPS estimate is 12.1, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 9.0. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 11.95 cents and EPS of 30.15 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 26.3, implying annual growth of -9.3%. Current consensus DPS estimate is 12.6, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 10.0. |
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
Ord Minnett rates S32 as Buy (1) -
Ord Minnett observes, with the Metropolitan deal now not proceeding, there are no obvious M&A transactions for the company.
At a briefing the CEO said the company would not hold excess cash and at the next results further capital management will be considered, although push back from investors in regards to unfranked dividends has been noted.
Buy rating and $3.40 target.
Target price is $3.40 Current Price is $2.59 Difference: $0.81
If S32 meets the Ord Minnett target it will return approximately 31% (excluding dividends, fees and charges).
Current consensus price target is $3.01, suggesting upside of 14.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 14.61 cents and EPS of 31.88 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.0, implying annual growth of N/A. Current consensus DPS estimate is 12.1, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 9.0. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 17.27 cents and EPS of 27.89 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 26.3, implying annual growth of -9.3%. Current consensus DPS estimate is 12.6, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 10.0. |
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 SUN as Neutral (3) -
Suncorp's Investor Day was meant to convince analysts about its transformation program, but Citi analysts remain sceptical and prefer to await tangible evidence of success trickling through.
The analysts suggest headwinds such as adverse trends in Queensland CTP profitability and the need to increase Suncorp's hazard allowance, look set to weigh upon margin momentum in FY18, hence the more cautious approach.
Target price lifts to $13.50 (from $13.35). Neutral rating retained.
Target price is $13.50 Current Price is $14.06 Difference: minus $0.56 (current price is over target).
If SUN 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 $13.79, suggesting downside of -3.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 74.00 cents and EPS of 92.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 88.8, implying annual growth of 9.1%. Current consensus DPS estimate is 72.7, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 16.1. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 80.00 cents and EPS of 97.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.0, implying annual growth of 8.1%. Current consensus DPS estimate is 76.9, implying a prospective dividend yield of 5.4%. Current consensus EPS estimate suggests the PER is 14.9. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates SUN as Neutral (3) -
The company's investor briefing provided no further guidelines around the anticipated timeframe for its strategy but management remains upbeat, Credit Suisse observes.
The broker is also confident the general insurance will benefit from gross written premium growth and margin improvement going forward, and supports a preference for the domestic insurers. Neutral rating and $14.50 target maintained.
Target price is $14.50 Current Price is $14.06 Difference: $0.44
If SUN meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $13.79, suggesting downside of -3.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 68.00 cents and EPS of 89.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 88.8, implying annual growth of 9.1%. Current consensus DPS estimate is 72.7, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 16.1. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 71.00 cents and EPS of 94.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.0, implying annual growth of 8.1%. Current consensus DPS estimate is 76.9, implying a prospective dividend yield of 5.4%. Current consensus EPS estimate suggests the PER is 14.9. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates SUN as Hold (3) -
The company has flagged improvement in loss ratios in short tail personal lines. The company has flagged uncertainty around regulation in NSW and Queensland CTP which will probably be a drag in FY18.
Although the trends appear encouraging, Ord Minnett believes the business is unlikely to reach underlying margin levels of 12% in the second half.
Hold rating and $14.11 target retained.
Target price is $14.11 Current Price is $14.06 Difference: $0.05
If SUN meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).
Current consensus price target is $13.79, suggesting downside of -3.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 73.00 cents and EPS of 79.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 88.8, implying annual growth of 9.1%. Current consensus DPS estimate is 72.7, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 16.1. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 71.00 cents and EPS of 90.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.0, implying annual growth of 8.1%. Current consensus DPS estimate is 76.9, implying a prospective dividend yield of 5.4%. Current consensus EPS estimate suggests the PER is 14.9. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates SUN as Buy (1) -
At its investor briefing, despite acknowledging continued claims inflation in motor and home, the company indicated it is hopeful that general insurance underlying ITR margins will approach 12% in the second half.
This suggests to UBS the heightened focus on claims, since issues first emerged in the first half, may have enabled the company to better manage inflation pressures.
A Buy rating is maintained. Target is $14.45.
Target price is $14.45 Current Price is $14.06 Difference: $0.39
If SUN meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $13.79, suggesting downside of -3.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 73.00 cents and EPS of 88.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 88.8, implying annual growth of 9.1%. Current consensus DPS estimate is 72.7, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 16.1. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 82.00 cents and EPS of 102.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.0, implying annual growth of 8.1%. Current consensus DPS estimate is 76.9, implying a prospective dividend yield of 5.4%. Current consensus EPS estimate suggests the PER is 14.9. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates TTS as Buy (1) -
The company has successfully renewed the Victorian lotteries licence, with payment of $120m, well below Deutsche Bank's estimates of $250m.
Deutsche Bank increases earnings forecasts in FY18 by 1%. The broker retains a Buy rating and a $4.67 target.
Target price is $4.67 Current Price is $4.25 Difference: $0.42
If TTS meets the Deutsche Bank target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $4.28, suggesting upside of 1.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 17.00 cents and EPS of 16.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 16.7, implying annual growth of 4.4%. Current consensus DPS estimate is 20.0, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 25.3. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 17.00 cents and EPS of 17.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.5, implying annual growth of 4.8%. Current consensus DPS estimate is 17.6, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 24.2. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates TTS as Hold (3) -
The company has extended its Victorian public lottery licence for a further 10 years at an upfront cost of $120m.
Following the decision that it will not engage with Pacific Consortium, Morgans does not anticipate any further corporate interest in the stock and expects the merger with Tabcorp ((TAH)) will ultimately be successful.
The end of a competitive bid reduces the target to $4.16 from $4.53. Hold rating retained.
Target price is $4.16 Current Price is $4.25 Difference: minus $0.09 (current price is over target).
If TTS meets the Morgans target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $4.28, suggesting upside of 1.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 17.00 cents and EPS of 16.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 16.7, implying annual growth of 4.4%. Current consensus DPS estimate is 20.0, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 25.3. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 17.00 cents and EPS of 17.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.5, implying annual growth of 4.8%. Current consensus DPS estimate is 17.6, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 24.2. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates TTS as No Rating (-1) -
The company has successfully renewed its Victorian lottery licence for an additional 10 years at a cost of $120m.
UBS estimates the Victorian lottery business contributes around 36% of the company's lottery revenue but, given it operates on a significantly lower margin than other state lottery licenses, the profit contribution is only around 15%.
The broker reduces normalised forecasts for earnings per share by -2% in FY18-19 to take account of the higher amortisation of the licence versus prior forecasts.
UBS is restricted on providing a rating and a target.
Current Price is $4.25. Target price not assessed.
Current consensus price target is $4.28, suggesting upside of 1.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 18.00 cents and EPS of 17.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 16.7, implying annual growth of 4.4%. Current consensus DPS estimate is 20.0, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 25.3. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 17.00 cents and EPS of 18.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.5, implying annual growth of 4.8%. Current consensus DPS estimate is 17.6, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 24.2. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates VCX as Downgrade to Underperform from Neutral (5) -
A new analyst assumes coverage of the stock and, having undertaken a thorough assessment of the company's regional and sub- regional assets, includes a more subdued view on the long-term viability and downside risks of the tier 3 centres.
The broker no longer envisages valuation support for the stock at current levels and downgrades to Underperform from Neutral. Target is reduced to $2.65 from $3.03.
Target price is $2.65 Current Price is $2.78 Difference: minus $0.13 (current price is over target).
If VCX meets the Credit Suisse target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $3.00, suggesting upside of 7.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 18.00 cents and EPS of 18.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 20.6, implying annual growth of -15.1%. Current consensus DPS estimate is 17.6, implying a prospective dividend yield of 6.3%. Current consensus EPS estimate suggests the PER is 13.6. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 18.00 cents and EPS of 19.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 18.9, implying annual growth of -8.3%. Current consensus DPS estimate is 17.9, implying a prospective dividend yield of 6.4%. Current consensus EPS estimate suggests the PER is 14.8. |
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 | Downgrade to Underperform from Neutral - Macquarie | Overnight Price $26.97 |
| AIZ - | AIR NEW ZEALAND | Downgrade to Underperform from Neutral - Credit Suisse | Overnight Price $2.88 |
| Hold - Deutsche Bank | Overnight Price $2.88 | ||
| Neutral - Macquarie | Overnight Price $2.88 | ||
| Neutral - UBS | Overnight Price $2.88 | ||
| AVN - | AVENTUS RETAIL PROPERTY | Downgrade to Hold from Add - Morgans | Overnight Price $2.41 |
| BKL - | BLACKMORES | Neutral - Credit Suisse | Overnight Price $100.30 |
| CAR - | CARSALES.COM | Outperform - Credit Suisse | Overnight Price $11.01 |
| EPW - | ERM POWER | Upgrade to Outperform from Neutral - Macquarie | Overnight Price $1.24 |
| FBU - | FLETCHER BUILDING | Buy - Deutsche Bank | Overnight Price $7.15 |
| MGR - | MIRVAC | Buy - UBS | Overnight Price $2.26 |
| ORG - | ORIGIN ENERGY | No Rating - Macquarie | Overnight Price $7.69 |
| REA - | REA GROUP | Buy - Citi | Overnight Price $63.98 |
| S32 - | SOUTH32 | Outperform - Macquarie | Overnight Price $2.59 |
| Buy - Ord Minnett | Overnight Price $2.59 | ||
| SUN - | SUNCORP | Neutral - Citi | Overnight Price $14.06 |
| Neutral - Credit Suisse | Overnight Price $14.06 | ||
| Hold - Ord Minnett | Overnight Price $14.06 | ||
| Buy - UBS | Overnight Price $14.06 | ||
| TTS - | TATTS GROUP | Buy - Deutsche Bank | Overnight Price $4.25 |
| Hold - Morgans | Overnight Price $4.25 | ||
| No Rating - UBS | Overnight Price $4.25 | ||
| VCX - | VICINITY CENTRES | Downgrade to Underperform from Neutral - Credit Suisse | Overnight Price $2.78 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 9 |
| 3. Hold | 9 |
| 5. Sell | 3 |
Friday 02 June 2017
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This document is provided for informational purposes only. It does not
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base their work on information believed to be reliable and accurate, though
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