Australian Broker Call

Ord Minnett rates ALG as Hold (3) -

Ord Minnett incorporates the amortisation of right-of-use (ROU) lease assets in its forecasts.

While the sales and operating earnings forecasts remain unchanged, Ord Minnett's net profit forecast has increased with the add-back of lease asset amortisation and lease interest.

Hold rating is maintained with a $0.60 target price.

Target price is $0.60 Current Price is $0.60 Difference: $0
If ALG meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Morgan Stanley rates ALL as Overweight (1) -

Morgan Stanley is of the view Aristocrat Leisure's land-based business will emerge in a stronger position post covid and will return to FY19 profitability in FY23. The company's recent launches and market share trends remain positive.

Aristocrat is also better capitalised than competitors, highlights the broker, that helps maintain the gap on its industry-leading design and development investment ahead of key competitors.

According to the broker, Aristocrat Leisure is best placed to continue to outperform peers and gain market share in participation gaming.

The target price is $38 with an Overweight rating.

Target price is $38.00 Current Price is $31.45 Difference: $6.55
If ALL meets the Morgan Stanley target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $36.40, suggesting upside of 16.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Citi rates ARB as Buy (1) -

ARB Corp acquired Truckman for a net cash consideration of -$39m. Citi expects this will likely increase exposure to Europe, which is
currently not more than 4% of group sales, and will help expand relationships with OEMs.

The broker increases FY21-FY23 EPS forecasts by 2%-5% to reflect the acquisition and increases the target price to $45.15 from $43.50.

Target price is $45.15 Current Price is $34.69 Difference: $10.46
If ARB meets the Citi target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $38.69, suggesting upside of 16.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

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

Ord Minnett expects ARB Corp to benefit from an improvement in new vehicle sales along with strong demand in the Australian aftermarket sales and growth from the export markets. Also, favourable currency movements have led to better gross profit margins.

The broker believes these factors will drive above-average growth in the medium term.

Looking at the recent pull-back in the share price, Ord Minnett upgrades its rating to Accumulate from Hold with the target rising to $36.50 from $35.

Target price is $36.50 Current Price is $34.69 Difference: $1.81
If ARB meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $38.69, suggesting upside of 16.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

UBS rates ASX as Neutral (3) -

The ASX's February activity report shows cash equity turnover declined -13% versus last year yet was above the levels seen in the first half.

Capital raisings rose 248% versus last year, notes UBS, led by the Northern Star Resources' ((NST)) acquisition of Saracen Mineral Holdings.

The latest data illustrate a recovery in market velocity in February that was above last year levels but below the levels experienced during 2021, concludes the broker.

Neutral rating with a target of $68.

Target price is $68.00 Current Price is $67.20 Difference: $0.8
If ASX meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $69.68, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Macquarie rates AWC as Underperform (5) -

Macquarie highlights the near-term outlook for the iron-ore market has improved with positive indicators on both demand and supply. The broker points to iron-ore restocking post Chinese new year and improvements in steel margins.

In a spot price scenario, there is earnings upside for miners with iron ore exposure and iron ore miners remain Macquarie's key picks.

Macquarie remains cautious on Alumina Ltd with an Underperform rating due to the relatively subdued dividend outlook. The target of $1.50 is retained.

Target price is $1.50 Current Price is $1.75 Difference: minus $0.25 (current price is over target).
If AWC meets the Macquarie target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.88, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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 BGA as Accumulate (2) -

Bega Cheese reported a net profit in the first half of $29.7m, up 98% versus last year. The company's operating income rose 51% and beat Ord Minnett's forecast by 8.3%. The interim dividend of 5c was in line with last year.

In Ord Minnett's view, Bega Cheese has a number of key profit drivers in the medium term including better seasonal conditions, growth in FY21 from the grocery channel, cost-saving initiatives and accretive earnings from the acquisition of the Lion Dairy and Drinks business.

Accumulate rating retained with a target of $6.75.

Target price is $6.75 Current Price is $6.00 Difference: $0.75
If BGA meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $6.78, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Citi rates BLX as Buy (1) -

In reviewing ABS retail sales figures that rose 10% overall in January, Citi notes strong sales were most evident in housing-related categories and supermarkets.

After extrapolating the January trends for calendar 2021, the broker expects consensus figures will have to be adjusted upwards.

The analyst believes Beacon Lighting is well placed to benefit from the areas of retail that are likely to have the strongest sustained growth on a two-year basis. The Buy rating and target of $2.15 are retained.

Target price is $2.15 Current Price is $1.74 Difference: $0.41
If BLX meets the Citi target it will return approximately 24% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Ord Minnett rates BSL as Accumulate (2) -

According to BlueScope Steel's latest update, East Asia hot-rolled coil (HRC) prices are the highest since 2008 with US HRC also at all-time highs.

The North Star spot spread sits comfortably above the US$610/t used in BlueScope Steel’s second-half FY21 guidance, as does the spot ASP spread of US$360/t versus guidance at US$300/t.

Ord Minnett believes with the 10-year high volumes in ASP and the US volumes remaining strong, BlueScope Steel is in a good position to upgrade its guidance later this period.

Accumulate rating is retained with a target of $24.

Target price is $24.00 Current Price is $18.41 Difference: $5.59
If BSL meets the Ord Minnett target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $20.45, suggesting upside of 12.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Macquarie rates CIA as Outperform (1) -

After incorporating the development of the Kami Project into forecasts (which underpins tripling of production by 2026), Macquarie raises the price target to $6.80 from $6. The analyst believes the company should be able to fund its organic growth.

The broker's FY21-24 earnings (EPS) estimates are unchanged, while FY25 forecasts increase by 6% on initial production and shipments from Kami. FY26 EPS estimates and beyond increase by 30-45% on a ramp-up in Kami production. The Outperform rating is retained.

Separately, Macquarie highlights the near-term outlook for the iron-ore market has improved with positive indicators on both demand and supply. The broker points to iron-ore restocking post Chinese new year and improvements in steel margins.

In a spot price scenario, there is earnings upside for miners with iron ore exposure and iron ore miners remain Macquarie's key picks.

Target price is $6.80 Current Price is $5.81 Difference: $0.99
If CIA meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

This company reports in CAD. 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

Macquarie rates COL as Neutral (3) -

Macquarie updates Consumer sector stocks under coverage after reviewing ABS January retail sales figures. These showed the household goods category still has the strongest annual growth of over 20% year-on-year.

Online sales as a percentage of total retail turnover remained at 9.1%, the same as for December. With record levels of household savings, the broker thinks elevated levels of retail spending should sustain in the medium term. 

The analyst lowers the price target for Coles Group to $17.30 from $18.20, driven by changes in peer multiples as a result of a shift
in the yield curve. The Neutral rating is retained.

Target price is $17.30 Current Price is $15.40 Difference: $1.9
If COL meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $18.65

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Credit Suisse rates CWY as Neutral (3) -

Cleanaway Waste Management has expressed interest in a potential acquisition of Suez's Australian waste management assets.

According to a press report, Suez earns $150-200m of operating income on revenue of circa $1.5bn and a deal could be worth more than $2bn. Credit Suisse notes this indicates a surprisingly low operating income margin of 10-13% and is less than half the level of Cleanaway.

Neutral rating and a $2.30 target retained.

Target price is $2.30 Current Price is $2.33 Difference: minus $0.03 (current price is over target).
If CWY meets the Credit Suisse target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.45, suggesting upside of 6.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Macquarie rates DMP as Outperform (1) -

Macquarie updates Consumer sector stocks under coverage after reviewing ABS January retail sales figures. These showed the household goods category still has the strongest annual growth of over 20% year-on-year.

Online sales as a percentage of total retail turnover remained at 9.1%, the same as for December. With record levels of household savings, the broker thinks elevated levels of retail spending should sustain in the medium term. 

The analyst lowers forecasts for Domino's Pizza to reflect FX changes and a more conservative outlook for Japan over the next twelve months. The target price is reduced to $108.50 from $120.20 and the Outperform rating is retained.

Target price is $108.50 Current Price is $88.00 Difference: $20.5
If DMP meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $92.00, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Macquarie rates DRR as Outperform (1) -

Macquarie highlights the near-term outlook for the iron-ore market has improved with positive indicators on both demand and supply. The broker points to iron-ore restocking post Chinese new year and improvements in steel margins.

In a spot price scenario, there is earnings upside for miners with iron ore exposure and iron ore miners remain Macquarie's key picks.

Deterra Royalties is among Macquarie's preferred small cap exposures and the Outperform rating and $5.30 target are retained.

Target price is $5.30 Current Price is $4.23 Difference: $1.07
If DRR meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $4.91, suggesting upside of 17.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Macquarie rates FLT as Outperform (1) -

Macquarie updates Consumer sector stocks under coverage after reviewing ABS January retail sales figures. These showed the household goods category still has the strongest annual growth of over 20% year-on-year.

Online sales as a percentage of total retail turnover remained at 9.1%, the same as for December. With record levels of household savings, the broker thinks elevated levels of retail spending should sustain in the medium term. 

Given optimism surrounding a travel recovery the analyst retains the Outperform rating and target of $20 for Flight Centre.

Target price is $20.00 Current Price is $16.75 Difference: $3.25
If FLT meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $17.57, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Macquarie rates FMG as Outperform (1) -

Macquarie highlights the near-term outlook for the iron-ore market has improved with positive indicators on both demand and supply. The broker points to iron-ore restocking post Chinese new year and improvements in steel margins.

In a spot price scenario, there is earnings upside for miners with iron ore exposure and iron ore miners remain Macquarie's key picks..

The buoyant iron ore prices have positioned Fortescue Metals Group well to break earnings and dividends records in 2H21, notes the analyst. It's estimated 2H earnings could exceed US$6bn at current spot prices, delivering a final dividend in excess of $2.

The Outperform rating and target price of $25.50 are retained.

Target price is $25.50 Current Price is $22.25 Difference: $3.25
If FMG meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $23.24, suggesting upside of 5.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

This company reports in USD. 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

UBS rates GXY as Buy (1) -

Galaxy Resources intends to ramp up Mt Cattlin to full production rates by the second quarter of 2021. The return to normal operating conditions has allowed Galaxy Resources to guide to spodumene production of 162-175kt.

UBS expects circa 10-50% higher lithium prices in 2021 for all products including spodumene, lithium carbonate and lithium hydroxide.

UBS maintains its Buy rating and raises the target to $3.90 from $3.60.

Target price is $3.90 Current Price is $2.44 Difference: $1.46
If GXY meets the UBS target it will return approximately 60% (excluding dividends, fees and charges).

Current consensus price target is $2.45, suggesting upside of 10.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Citi rates HVN as Buy (1) -

In reviewing ABS retail sales figures that rose 10% overall in January, Citi notes strong sales were most evident in housing-related categories and supermarkets.

After extrapolating the January trends for calendar 2021, the broker expects consensus figures will have to be adjusted upwards.

The analyst believes Harvey Norman is well placed to benefit from the areas of retail that are likely to have the strongest sustained growth on a two-year basis. The Buy rating and target of $6 are retained.

Target price is $6.00 Current Price is $5.31 Difference: $0.69
If HVN meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $5.79, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Macquarie rates HVN as Outperform (1) -

Macquarie updates Consumer sector stocks under coverage after reviewing ABS January retail sales figures. These showed the household goods category still has the strongest annual growth of over 20% year-on-year.

Online sales as a percentage of total retail turnover remained at 9.1%, the same as for December. With record levels of household savings, the broker thinks elevated levels of retail spending should sustain in the medium term.

In Staples the analyst prefers Harvey Norman given the around 65% regional store exposure, which should benefit from improving drought conditions. Outperform and $6.00 target retained.

Target price is $6.00 Current Price is $5.31 Difference: $0.69
If HVN meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $5.79, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

UBS rates IGO as Buy (1) -

UBS thinks IGO has made a "shrewd" acquisition of an interest in Tianqi’s lithium assets.

The broker is impressed with the tier-1 asset Greenbushes mine and believes that the opportunity to buy tier 1 assets is rare in any commodity. 

Buy retained. Target rises to $8 from $7.50.

Target price is $8.00 Current Price is $6.52 Difference: $1.48
If IGO meets the UBS target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $6.25, suggesting downside of -1.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Macquarie rates JBH as Neutral (3) -

Macquarie updates Consumer sector stocks under coverage after reviewing ABS January retail sales figures. These showed the household goods category still has the strongest annual growth of over 20% year-on-year.

Online sales as a percentage of total retail turnover remained at 9.1%, the same as for December. With record levels of household savings, the broker thinks elevated levels of retail spending should sustain in the medium term. 

The analyst lowers the price target for JB Hi-Fi to $50.40 from $55.10 to reflect changes in peer multiples as a result of a shift in the yield curve.

Target price is $50.40 Current Price is $46.40 Difference: $4
If JBH meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $52.70, suggesting upside of 16.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Macquarie rates KLL as Outperform (1) -

Macquarie highlights the near-term outlook for the iron-ore market has improved with positive indicators on both demand and supply. The broker points to iron-ore restocking post Chinese new year and improvements in steel margins.

In a spot price scenario, there is earnings upside for miners with iron ore exposure and iron ore miners remain Macquarie's key picks.

The buoyant iron ore prices have enabled Champion Iron to grow to beyond 22mtpa. The Outperform rating and $0.40 target are retained.

As noted yesterday, after a recent site visit to the Beyondie sulphate of potash (SOP) development project, Macquarie came away impressed with the progress made. The project is considered to remain on budget and on schedule for first SOP production in mid-first quarter FY22.

No changes to forecasts.Target $0.40. Rating Outperform.

Target price is $0.40 Current Price is $0.21 Difference: $0.19
If KLL meets the Macquarie target it will return approximately 90% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgan Stanley rates LNK as No Rating (-1) -

Link Administration Holdings' first half result broadly met consensus and showed resilience in superannuation administration, observes Morgan Stanley.

Retirement and super solutions operating income beat the broker on better revenues and good cost control although revenues were still down -1% versus last year. Member growth was 5.4% in the first half.

The company wants to simplify its portfolio and financials by focusing on core assets and cash preservation through the termination of the PES acquisition. While Link seems to be progressing on cost-outs, the broker thinks investors will also focus on growth. 

Morgan Stanley does not have a rating or target. Industry view: In-Line.

Current Price is $4.72. Target price not assessed.

Current consensus price target is $5.30, suggesting upside of 12.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Macquarie rates MIN as Outperform (1) -

Macquarie highlights the near-term outlook for the iron-ore market has improved with positive indicators on both demand and supply. The broker points to iron-ore restocking post Chinese new year and improvements in steel margins.

In a spot price scenario, there is earnings upside for miners with iron ore exposure and iron ore miners remain Macquarie's key picks.

Mineral Resources is among Macquarie's preferred small cap exposures and the Outperform rating and $47.50 target are retained.

Target price is $47.50 Current Price is $38.66 Difference: $8.84
If MIN meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $40.35, suggesting upside of 4.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

UBS rates MIN as Buy (1) -

UBS expects the Mineral Resources' mining services business to grow to circa 860mt contract tonnes by end of 2022 from 429mt in 2019 led by growth in internal and external business.

On the flip side, the broker believes Mineral Resources is unlikely to deliver lower operating expense in FY21 versus FY20 due to lower than expected production and operational cost increases in the first half. The broker doesn't expect any material improvements until FY22.

The broker retains a Buy rating with the target rising to $44.50 from $44.

Target price is $44.50 Current Price is $38.66 Difference: $5.84
If MIN meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $40.35, suggesting upside of 4.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Citi rates MTS as Buy (1) -

In reviewing ABS retail sales figures that rose 10% overall in January, Citi notes strong sales were most evident in housing-related categories and supermarkets.

After extrapolating the January trends for calendar 2021, the broker expects consensus figures will have to be adjusted upwards.

The analyst believes Metcash is well placed to benefit from the areas of retail that are likely to have the strongest sustained growth on a two-year basis. The Buy rating and target of $4 are retained.

Target price is $4.00 Current Price is $3.43 Difference: $0.57
If MTS meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $3.89

The company's fiscal year ends in April.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Citi rates MYR as Buy (1) -

Citi's initial assessment of first half results highlights a strong net cash position and a well placed balance sheet, well inside covenants. Capex is expected to increase in 2H21 before returning to normalised levels from FY22. No guidance was provided.

The broker notes an underperformance relative to peers on the degree of sales transfer to online from closed stores, with online sales growth moderating to 71%.

Despite a sharp reduction in promotional activity across the industry, the analyst notes the company saw gross margins decline by -55 basis points. Citi retains the $0.40 target and Buy rating.

Target price is $0.40 Current Price is $0.30 Difference: $0.1
If MYR meets the Citi target it will return approximately 33% (excluding dividends, fees and charges).

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Citi rates NCK as Buy (1) -

In reviewing ABS retail sales figures that rose 10% overall in January, Citi notes strong sales were most evident in housing-related categories and supermarkets.

After extrapolating the January trends for calendar 2021, the broker expects consensus figures will have to be adjusted upwards.

The analyst believes Nick Scali is well placed to benefit from the areas of retail that are likely to have the strongest sustained growth on a two-year basis. The Buy rating and target of $12.05 are retained.

Target price is $12.05 Current Price is $10.19 Difference: $1.86
If NCK meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Credit Suisse rates NIC as Outperform (1) -

Tsingshan, Nickel Mines' largest shareholder and a partner in its nickel pig iron production facilities, agreed to provide 100ktpa of nickel matte to offtake partners in the battery supply chain commencing in October 2021.

Further, Tsingshan wants to expand nickel production to circa 850kt in 2022 from circa 600kt in 2021. Credit Suisse notes the global nickel production is expected to grow to circa 2.7-2.8mt in 2023, of which Tsingshan is expected to contribute 15%.

Credit Suisse considers Tsingshan’s expansion plans as a positive for Nickel Mines, offering the opportunity for further production capacity expansion at an attractive capital cost.

Outperform with a target of $1.50.

Target price is $1.50 Current Price is $1.31 Difference: $0.19
If NIC meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $1.60, suggesting upside of 27.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

This company reports in USD. 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 ORE as Buy (1) -

UBS expects lithium prices to recover and has revised its lithium price deck by circa 10-50% for all products including spodumene, lithium carbonate and lithium hydroxide. 

Orocobre's cost base has improved over 12 months to US$3,623/t in this December quarter from US$4,266/t last year. UBS believes the lower cost is proof Orocobre has been able to tackle the operational challenges experienced in the second half of 2019.

Buy rating retained. Target rises to $6.70 from $6.20.

Target price is $6.70 Current Price is $4.54 Difference: $2.16
If ORE meets the UBS target it will return approximately 48% (excluding dividends, fees and charges).

Current consensus price target is $5.14, suggesting upside of 21.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Morgans rates PAN as Upgrade to Add from Hold (1) -

In the wake of half year results, Morgans increases the rating to Add from Hold after updating commodity and FX assumptions and taking into account sale proceeds from the Panton PGM project. The target price is increased to $0.16 from $0.15

Based on strong commodity prices, the broker believes the board will approve a production re-start mid-year. There’s also considered upside from more efficient, lower cost mining and processing than previously estimated.

Target price is $0.16 Current Price is $0.13 Difference: $0.03
If PAN meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Macquarie rates S32 as Neutral (3) -

Macquarie highlights the near-term outlook for the iron-ore market has improved with positive indicators on both demand and supply. The broker points to iron-ore restocking post Chinese new year and improvements in steel margins.

In a spot price scenario, there is earnings upside for miners with iron ore exposure and iron ore miners remain Macquarie's key picks. 

With recent upside risk across South32's portfolio of assets though subdued free cash flow, Macquarie maintains the Neutral rating and $2.90 target.

Target price is $2.90 Current Price is $2.89 Difference: $0.01
If S32 meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $3.01, suggesting upside of 6.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

This company reports in USD. 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

Morgans rates SM1 as Downgrade to Reduce from Hold (5) -

In the wake of the recent downgrade from The A2 Milk Co ((A2M)), Synlait Milk has flagged significant uncertainty and volatility is impacting its business. The company has now withdrawn FY21 guidance.

Morgans makes material forecast downgrades, lowers the rating to Reduce from Hold and the target price is decreased to $2.78 from $4.18. Balance sheet risk is considered to be heightened and an equity raising not ruled out.

The broker highlights a slide in infant formula sales volumes will reduce overhead recovery and increase production of lower-margin ingredient products.

Target price is $2.78 Current Price is $3.24 Difference: minus $0.46 (current price is over target).
If SM1 meets the Morgans target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.78, suggesting downside of -13.7% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

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 SYR as Buy (1) -

Syrah Resources suspended the production of its Balama operations in early 2020 due to weak demand and pricing. The company intends to re-restart the Balama operations in the March quarter to meet an anticipated strong rise in natural flake graphite demand.

UBS believes the restart will enable Syrah Resources to generate positive free cash flow which in turn would see the cost of capital assigned to the company by the market reduce.

The target price is increased to $1.70 from $1.60. Buy rating retained.

Target price is $1.70 Current Price is $1.14 Difference: $0.56
If SYR meets the UBS target it will return approximately 49% (excluding dividends, fees and charges).

Current consensus price target is $1.18, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.0

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

Citi rates WBC as Buy (1) -

Citi recently met with the divisional CEO of Westpac Bank's Institutional Bank (WIB). Though core profitability remains pressured by stubborn costs and moderating volumes, the broker believes a conservative approach to asset quality will hold the division in good stead.

The analyst highlights net interest margins (NIMs) in the division have held up relatively well in the short term with assets performing well. 

The Buy rating for the bank as a whole and the $26 target are retained. Balance sheet normalisation, like what is expected in the WIB division, is expected to be a more powerful driver of returns in the near term.

Target price is $26.00 Current Price is $24.84 Difference: $1.16
If WBC meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $25.69, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Macquarie rates WES as Outperform (1) -

Macquarie updates Consumer sector stocks under coverage after reviewing ABS January retail sales figures. These showed the household goods category still has the strongest annual growth of over 20% year-on-year.

Online sales as a percentage of total retail turnover remained at 9.1%, the same as for December. With record levels of household savings, the broker thinks elevated levels of retail spending should sustain in the medium term. 

Given the positive housing outlook, the analyst retains the Outperform rating though lowers the price target to $56.60 from $59.30, driven by changes in peer multiples as a result of shift in the yield curve.

Target price is $56.60 Current Price is $49.92 Difference: $6.68
If WES meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $52.63, suggesting upside of 6.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Ord Minnett rates XRO as Lighten (4) -

Xero announced the acquisition of Planday, a workforce management platform based in Europe, for a total consideration of up to EUR183.5m.

Ord Minnett notes the acquisition will increase the breadth of Xero’s software offering to small to medium-sized businesses (SMBs) and allow for cross-selling opportunities. The broker expects the acquisition will provide an additional platform for Xero’s push into Europe.

No meaningful positive earnings contribution from the acquisition is expected in the medium term. 

Lighten rating retained with a target of $88.

Target price is $88.00 Current Price is $115.90 Difference: minus $27.9 (current price is over target).
If XRO meets the Ord Minnett target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $108.17, suggesting downside of -3.9% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: -0.2

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

Macquarie rates Z1P as Underperform (5) -

Macquarie raises the price target for Zip Co to $5.70 from $5.35 upon more detailed analysis of Quadpay. It's considered Quadpay has “sector leading” net transaction margins (NTMs) of around 2.7% though it may be competed away via lower-cost BNPL alternatives.

The broker highlights a marketing expense uplift is driving the increased customer acquisition costs and cautions on the market only focussing on customer growth and the risk of elevated sector multiples. The Underperform rating is retained.

Target price is $5.70 Current Price is $10.09 Difference: minus $4.39 (current price is over target).
If Z1P meets the Macquarie target it will return approximately minus 44% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.17, suggesting downside of -4.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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