Australian Broker Call

Morgan Stanley rates AD8 as Overweight (1) -

Audiovisual industry revenues are down -25-30% but the industry expects a rebound in the September quarter.

Morgan Stanley observes Audinate is not immune to the cycle and growth is likely to be subdued.

Still, the recent de-rating is an opportunity to revisit a long-term structural growth story, in the broker's view.

Morgan Stanley reiterates an Overweight rating. Target is reduced to $7.50 from $9.20. Industry view is In-Line.

Target price is $7.50 Current Price is $4.80 Difference: $2.7
If AD8 meets the Morgan Stanley target it will return approximately 56% (excluding dividends, fees and charges).

Current consensus price target is $6.90, suggesting upside of 43.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.7

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

Morgans rates BPT as Add (1) -

Beach Energy has cancelled its contract for the Ocean Onyx rig, which was due to drill production wells in the offshore Otway Basin.

Capital expenditure outlook for FY21 has not been revised, which means the company is targeting the deferral of up to 30% of planned expenditure.

Morgans assesses the business is well-positioned to rebound when oil prices recover. Add maintained. Target is reduced to $1.71 from $1.85.

Target price is $1.71 Current Price is $1.30 Difference: $0.41
If BPT meets the Morgans target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $1.75, suggesting upside of 34.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

UBS rates COF as Upgrade to Buy from Neutral (1) -

UBS expects the pandemic will affect Centuria Office less than the broader sector. While earnings guidance has been withdrawn the distribution guidance is maintained.

The broker upgrades to Buy from Neutral, assessing the reaction is overdone and given a -10% underperformance compared with the sector. Target is reduced to $2.50 from $3.02.

Target price is $2.50 Current Price is $1.81 Difference: $0.69
If COF meets the UBS target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $2.80, suggesting upside of 54.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Credit Suisse rates CTX as Neutral (3) -

Couche-Tard will not proceed with the proposed acquisition of Caltex Australia as a result of the current uncertainty. Hence, Credit Suisse suggests there is the certainty about the capital initiatives, such as property divestment and hybrid capital securities.

In the absence of property divestment, a capital raising cannot be ruled out but to the broker this appears unlikely. A Neutral rating is maintained because of the near-term uncertainty over earnings. Target is reduced to $21.88 from $24.29.

Target price is $21.88 Current Price is $21.99 Difference: minus $0.11 (current price is over target).
If CTX 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 $27.72, suggesting upside of 26.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

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

Caltex Australia reports retail margins have been strong and have offset weakness from refining and commercial jet fuel sales.

While conditions may worsen in the short term, Morgan Stanley expects there will be a recovery, and incorporates higher retail margins over the next 12 months.

The business is also reviewing its cost structure on top of the -$100m in cost reductions that were previously announced.

Couche-Tard has withdrawn its bid and Morgan Stanley suspects the cash losses from Lytton during 2020 may have been an obstacle, particularly given that company's experience is not in refining.

Target is reduced to $26.70 from $27.00. Industry view is In-Line. Equal-weight.

Target price is $26.70 Current Price is $21.99 Difference: $4.71
If CTX meets the Morgan Stanley target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $27.72, suggesting upside of 26.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Ord Minnett rates CTX as Accumulate (2) -

Couche-Tard has decided not to proceed with its proposal to acquire Caltex Australia. Meanwhile, the first quarter 2020 trading update revealed strength in retail fuel margins. Lytton Refinery was loss-making, as expected.

Ord Minnett was not surprised by the withdrawal of the Couche-Tard proposal, yet notes Caltex Australia remains attractive, given its unique position in Asia-Pacific.

Accumulate retained. Target is $26.00.

Target price is $26.00 Current Price is $21.99 Difference: $4.01
If CTX meets the Ord Minnett target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $27.72, suggesting upside of 26.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

UBS rates CTX as Resume coverage with Neutral (3) -

First quarter earnings were up 3%. While the market remains rational, UBS assesses this does not include declines in volume from the pandemic, which the company has flagged as closer to -30% in diesel and -50% in petrol.

Discussions with Couche-Tard have ended until sufficient clarity on the global outlook emerges. UBS resumes coverage with a Neutral rating and $22.50 target.

Target price is $22.50 Current Price is $21.99 Difference: $0.51
If CTX meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $27.72, suggesting upside of 26.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Macquarie rates CVN as Outperform (1) -

Carnarvon Petroleum reported March quarter numbers in line with the broker's expectation. The Dorado project is transformative for the company, the broker notes.

Front end engineering design (FEED) is expected in the second half of 2020 but a final investment decision (FID) may be delayed given Santos ((STO)) has recently cut growth capex guidance.

Carnarvon should be well funded through to FEED, the broker suggests, and is looking at capex funding options thereafter. Outperform and 25c target retained.

Target price is $0.25 Current Price is $0.16 Difference: $0.09
If CVN meets the Macquarie target it will return approximately 56% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

UBS rates DXS as Buy (1) -

UBS retains a Buy rating, despite downgrading earnings estimates, as the company's income and valuation appear resilient in 2020 relative to the rest of the sector.

Sydney and Melbourne markets remain attractive to global investors and this should provide a floor on valuations, suggests UBS.

The broker reduces demand estimates for office space by -25% and -33% in Sydney and Melbourne, respectively, over the next four years to reflects lower jobs growth. Target is reduced to $10.77 from $13.60.

Target price is $10.77 Current Price is $8.82 Difference: $1.95
If DXS meets the UBS target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $11.63, suggesting upside of 31.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Macquarie rates ECX as Neutral (3) -

The broker has remodelled its EclipX valuation due to virus impact and associated economic downturn. The broker assumes a -10% decline in new fleet business, lower novated lease volumes, lower operating costs, and an ongoing drag from non-core businesses.

The company had $70m in cash at end-March and $225m in debt at end-February, with a goal of reducing that to $175m, but the broker assumes debt reduction will stall for the next six months. Liquidity becomes the critical issue, but EclipX may get support from government policy. The broker has slashed earnings forecasts.

The broker had previously applied a virus discount to its target price ahead of valuation remodelling. Removing that discount, with earnings now re-based, leads to a target increase to 74c from 49c. Neutral retained.

Target price is $0.74 Current Price is $0.60 Difference: $0.14
If ECX meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $1.45, suggesting upside of 141.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Macquarie rates EHL as Outperform (1) -

The latest updates from the Australian mining services sector indicate production-related activities domestically have seen little virus impact while internationally is mixed, the broker notes.

Exploration and non-essential activities are nonetheless more likely to be curtailed.  But in particular, iron ore and gold operations in WA are noted as being very strong. Guidance is being withdrawn in the sector because of virus risk, not impact, the broker notes.

Emeco Holdings' rental equipment is more than 95% linked to production activities and more than 75% to gold, iron ore and coking coal. The company's financing is hedged and the lower A$ is providing a benefit. Outperform retained, target rises to $1.50 from $1.25.

Emeco is the broker's preferred stock in the sector, along with Mineral Resources and Seven Group Holdings.

Target price is $1.50 Current Price is $1.06 Difference: $0.44
If EHL meets the Macquarie target it will return approximately 42% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Ord Minnett rates EVN as Downgrade to Sell from Hold (5) -

Ord Minnett notes ASX-listed gold stocks have continued to rally, with some outperforming the Australian dollar gold price by a further 25% since the beginning of April.

Margins remain elevated, although some valuations are becoming stretched. Evolution Mining's rating is downgraded to Sell from Hold. Target is steady at $3.70.

Target price is $3.70 Current Price is $4.99 Difference: minus $1.29 (current price is over target).
If EVN meets the Ord Minnett target it will return approximately minus 26% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.24, suggesting downside of -15.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Ord Minnett rates FCL as Downgrade to Hold from Buy (3) -

Ord Minnett assesses, since the market peak on February 21, the company has outperformed the ASX 200 by 25%.

The main issue for the broker is whether the fall-out from the pandemic causes a short delay in revenue growth or a more protracted slowdown.

Rating is downgraded to Hold from Buy and the target lowered to $3.59 from $3.85.

Target price is $3.59 Current Price is $3.30 Difference: $0.29
If FCL meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

This company reports in EUR. 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 FXL as Neutral (3) -

The broker has remodelled its FlexiGroup valuation due to virus impact and associated economic downturn.

Having already reset FY20-21 expectations in mid-March, the broker makes no change to those, but now expects a more modest recovery.

Hence earnings forecasts beyond FY21 are cut by -10%. Neutral retained on low visibility. Target falls to 91c from $1.00.

Target price is $0.91 Current Price is $0.72 Difference: $0.19
If FXL meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $1.28, suggesting upside of 78.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Morgans rates GDG as Add (1) -

Generation Development Group funds under management fell -6% in the March quarter because of the large decline in markets.

Low outflows reflect the defensive nature of investment bonds, although Morgans expects a weaker sales pipeline to emerge over the next few quarters.

Estimates are downgraded for FY20 and FY21 by -7% and -14%, respectively. Add maintained. Target is reduced to $0.82 from $0.97.

Target price is $0.82 Current Price is $0.72 Difference: $0.1
If GDG meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Macquarie rates GEM as Downgrade to Underperform from Neutral (5) -

The institutional placement portion (182m shares) of G8 Education's $301m raising begins trading tomorrow. The raising shores up the company's balance sheet, while the government assistance package should lead to a break-even of revenues and costs, management suggests.

Macquarie nevertheless sees excess supply to continue until 2022 as development projects complete and ramp up post-virus. On the demand side, the broker sees a drop when government assistance ends due to higher unemployment. Ahead of the new shares coming on, the broker downgrades to Underperform from Neutral. Target unchanged at 78c.

Target price is $0.78 Current Price is $0.79 Difference: minus $0.01 (current price is over target).
If GEM meets the Macquarie target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.21, suggesting upside of 53.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Morgans rates GNC as Hold (3) -

Morgans removes United Malt Group ((UMG)) from estimates, now that it has listed on the ASX in its own right. GrainCorp now consists of storage & logistics, grain marketing and oils.

The business will be loss-making in FY20 but with improved seasonal conditions Morgans expects it to be profitable in FY21. The broker retains a Hold rating. Target is reduced to $3.52 from $8.00.

Target price is $3.52 Current Price is $3.40 Difference: $0.12
If GNC meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $6.46, suggesting upside of 90.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

UBS rates GPT as Upgrade to Buy from Neutral (1) -

UBS upgrades GPT to Buy from Neutral on valuation grounds. The broker expects the east coast office and logistics market should remain attractive to global investors.

The broker allows for short-term abatements for relevant tenants and has also revised longer-term assumptions. Funds management earnings are also revised down. Target is reduced to $4.70 from $6.35.

Target price is $4.70 Current Price is $3.74 Difference: $0.96
If GPT meets the UBS target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $5.09, suggesting upside of 36.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

UBS rates KGN as Neutral (3) -

UBS expects Kogan.com will have a positive impact over the longer term as the pandemic accelerates the structural shift to online purchasing. Furthermore, the business is net cash and has a large and growing customer base.

March quarter operating earnings (EBITDA) were up more than 4% and in line with expectations. The broker considers this strong outlook is priced into the stock and a Neutral rating and $6.30 target are maintained.

Target price is $6.30 Current Price is $6.61 Difference: minus $0.31 (current price is over target).
If KGN meets the UBS target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Macquarie rates MIN as Outperform (1) -

The latest updates from the Australian mining services sector indicate production-related activities domestically have seen little virus impact while internationally is mixed, the broker notes. Exploration and non-essential activities are nonetheless more likely to be curtailed.  But in particular, iron ore and gold operations in WA are noted as being very strong.

Guidance is being withdrawn in the sector because of virus risk, not impact, the broker notes. Mineral Resources has not, however, withdrawn guidance, and the broker expects FY20 guidance to be beaten given the company's business is underpinned by long-term relationships with blue chip clients and life of mine contracts with its own mining operations and joint ventures. Outperform and $20.50 target retained.

Mineral Resources is the broker's preferred stock in the sector, along with Emeco Holdings and Seven Group Holdings.

Target price is $20.50 Current Price is $16.31 Difference: $4.19
If MIN meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $17.83, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Citi rates MTS as Neutral (3) -

Metcash will raise $330m in equity to provide a liquidity buffer. The company has noted very strong supermarket sales, up 40% in March, ex tobacco and Drakes.

Liquor has been more negatively affected by the on-premises and NZ closures.

Citi retains a Neutral rating, noting the underlying performance has stabilised although the capital raising dilutes growth and there is a weak growth profile. Target is reduced to $2.95 from $3.00.

Target price is $2.95 Current Price is $2.64 Difference: $0.31
If MTS meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $2.91, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Credit Suisse rates MTS as Neutral (3) -

Credit Suisse is not surprised, in hindsight, by the capital raising. While shareholders incur a -8% dilution, there is funding certainty and growth opportunities. The capital raising and additional debt provide a total funding position of $1bn.

Part of the increase to working capital is meant to extend payment terms to retailers exposed to on-premises and New Zealand liquor, temporarily higher receivables and inventory. Neutral maintained. Target is reduced to $2.89 from $2.95.

Target price is $2.89 Current Price is $2.64 Difference: $0.25
If MTS meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.91, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

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

Morgan Stanley was surprised by the equity raising but believes this is prudent. The balance sheet appears in reasonable shape but there was a risk that existing debt facilities may have proved inadequate.

Food trading, meanwhile, is broadly in line with expectations. Morgan Stanley includes an incremental earnings (EBIT) margin of 4% stemming from the pandemic-related sales bump and assumes 80% is unwound in FY21.

Off-premises liquor trading was also broadly in line with expectations. Equal-weight rating and $2.90 target maintained. Cautious industry view.

Target price is $2.90 Current Price is $2.64 Difference: $0.26
If MTS meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $2.91, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Ord Minnett rates MTS as Downgrade to Hold from Accumulate (3) -

Ord Minnett downgrades to Hold from Accumulate. This is based on valuation and a mixed outlook. The company has announced an equity raising of up to $330m to strengthen the balance sheet.

There was a significant uplift in food sales in March and early April and this division is considered well-positioned. There is some trade risk in hardware, the broker assesses, nevertheless. Target is $3.

Target price is $3.00 Current Price is $2.64 Difference: $0.36
If MTS meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $2.91, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Credit Suisse rates NAB as Outperform (1) -

Credit Suisse expects a further -$200m remediation charge in the second half, in addition to the -$418m just announced for the first half.

The latter is predominantly associated with wealth matters.

FY20 earnings estimates are reduced by -27%. Outperform rating and $19.50 target maintained.

Target price is $19.50 Current Price is $15.73 Difference: $3.77
If NAB meets the Credit Suisse target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $19.53, suggesting upside of 24.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Macquarie rates NAB as Outperform (1) -

The ghosts of the Royal Commission linger, as National Bank announces a -$1.25bn earnings hit in the first half related to remediation costs, software capitalisation and a write-down of the value of MLC Life. It's big, the broker notes, but not unexpected, and brings NAB's capital balances closer to peers. The broker forecasts interim dividend capacity of 40-45c with a fully underwritten DRP.

NAB has the weakest capital position of the majors, the broker notes, but given the share price more than reflects this, the broker retains Outperform and a preference for NAB among The Four. Target unchanged at $17.

Target price is $17.00 Current Price is $15.73 Difference: $1.27
If NAB meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $19.53, suggesting upside of 24.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Morgan Stanley rates NAB as Overweight (1) -

The first half result will include provisions and asset write-downs of -$1.14bn. This implies Morgan Stanley's cash profit forecast would be reduced by around -41% and CET1 capital by -6 basis points.

The bank will disclose the impact of the pandemic on provisions, and capital and dividend implications, in the first half result on May 7.

Overweight. Target is $18.70. Industry view: In-line.

Target price is $18.70 Current Price is $15.73 Difference: $2.97
If NAB meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $19.53, suggesting upside of 24.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Ord Minnett rates NAB as Accumulate (2) -

National Bank has announced one-off charges which will lower first-half earnings by -$1.14bn. The impact on capital is expected to be modest, at around -6 basis points, as the majority of the charges are non-cash.

Ord Minnett reduces FY20 cash earnings estimates by -20%. Accumulate maintained. Target is reduced to $20.00 from $20.30.

Target price is $20.00 Current Price is $15.73 Difference: $4.27
If NAB meets the Ord Minnett target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $19.53, suggesting upside of 24.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Ord Minnett rates NST as Downgrade to Lighten from Hold (4) -

Ord Minnett notes ASX-listed gold stocks have continued to rally, with some outperforming the Australian dollar gold price by a further 25% since the beginning of April.

Margins remain elevated, although some valuations are becoming stretched. Forecasts are largely unchanged, although Northern Star has experienced some pandemic-related productivity losses.

Rating is downgraded to Lighten from Hold. Target is $11.20.

Target price is $11.20 Current Price is $12.99 Difference: minus $1.79 (current price is over target).
If NST meets the Ord Minnett target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.01, suggesting downside of -7.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.2

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

Ord Minnett rates OGC as Downgrade to Hold from Accumulate (3) -

Ord Minnett notes ASX-listed gold stocks have continued to rally, with some outperforming the Australian dollar gold price by a further 25% since the beginning of April.

Forecasts for OceanaGold are tweaked to allow for the closures in New Zealand. Margins remain elevated, although some valuations are becoming stretched.

Rating is downgraded to Hold from Accumulate. Target is reduced to $2.20 from $2.80.

Target price is $2.20 Current Price is $2.16 Difference: $0.04
If OGC meets the Ord Minnett target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $2.86, suggesting upside of 32.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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

Citi rates PPT as Sell (5) -

Although March quarter flows were better than they could have been, Citi envisages challenges in the future for flows as well as costs and dividends. Estimates are lowered for FY20 earnings per share by -12%.

The broker notes some resilience in Perpetual Investments, partly because of the absence of large institutional mandate losses causing fund outflows to ease. Citi retains a Sell rating and reduces the target to $26.10 from $42.30.

Target price is $26.10 Current Price is $27.21 Difference: minus $1.11 (current price is over target).
If PPT 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 $32.49, suggesting upside of 19.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Credit Suisse rates PPT as Neutral (3) -

The March quarter business update was below expectations. Although performance fees were running modestly ahead of Credit Suisse's forecasts, Perpetual Private had a larger negative impact from equity/credit markets.

The broker reduces forecast by -3% for FY20 and -7% for FY21-22. While the valuation is becoming stretched, the broker assesses there are options available from markets and growth initiatives.

Neutral maintained. Target is raised to $26.00 from $24.25.

Target price is $26.00 Current Price is $27.21 Difference: minus $1.21 (current price is over target).
If PPT meets the Credit Suisse target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $32.49, suggesting upside of 19.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Morgan Stanley rates PPT as Overweight (1) -

Morgan Stanley believes the stock offers compelling value, as it adds critical ESG capabilities and offers extra diversity via its wealth and corporate trust business.

While flows to investments have been subdued, Perpetual is taking the opportunity to transform the business.

Morgan Stanley retains an Overweight rating, believing the transformation will generate stronger flows and diversify earnings growth. Target is reduced to $42 from $55. Industry view: In-line.

Target price is $42.00 Current Price is $27.21 Difference: $14.79
If PPT meets the Morgan Stanley target it will return approximately 54% (excluding dividends, fees and charges).

Current consensus price target is $32.49, suggesting upside of 19.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Ord Minnett rates PPT as Hold (3) -

Perpetual's March quarter funds under management shows negative flows, with a decline in markets the larger driver of movements in the quarter.

However, Ord Minnett notes a meaningful increase in advisers joining the Perpetual Private business.

While the stock has de-rated, the broker retains a Hold rating relative to other asset managers under coverage. Target is reduced to $32.50 from $43.50.

Target price is $32.50 Current Price is $27.21 Difference: $5.29
If PPT meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $32.49, suggesting upside of 19.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

UBS rates PPT as Neutral (3) -

The Investment division reported a -19% decline in funds under management in the March quarter, to the lowest level since 2003. UBS expects earnings per share to decline -9% in FY21.

The broker envisages limited upside to valuation and retains a Neutral rating. Target is reduced to $28.90 from $31.60.

Target price is $28.90 Current Price is $27.21 Difference: $1.69
If PPT meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $32.49, suggesting upside of 19.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Citi rates RSG as Buy (1) -

March quarter costs were -9% lower than Citi estimated, supported by another strong performance at Mako. Syama oxide also beat estimates.

Citi reduces 2020 operating earnings (EBITDA) estimates by -11% as higher gold sales had been expected. Buy/High Risk rating maintained. Target is reduced to $1.50 from $1.60.

Target price is $1.50 Current Price is $0.87 Difference: $0.63
If RSG meets the Citi target it will return approximately 72% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Macquarie rates RSG as Neutral (3) -

Resolute Mining's March quarter production and costs were in line with the broker, on a balance of Mako and Syama oxides comparing well to expectations while Syama sulphides were soft.

As sulphide production ramps up, the processing plant needs to catch up, the broker notes, in order to drive deleveraging of the balance sheet.

Oxides are performing well nonetheless, which will support deleveraging across 2020, the broker adds. Neutral retained, target falls to $1.00 from $1.05.

Target price is $1.00 Current Price is $0.87 Difference: $0.13
If RSG meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Citi rates S32 as Buy (1) -

Citi found March quarter production mixed, with nickel ahead of estimates and metallurgical coal below. South 32 has also lowered guidance for its Australian manganese operations by -5%.

Limited activity is now being undertaken in South Africa at the manganese and export coal operations. Buy retained. Target is $2.60.

Target price is $2.60 Current Price is $1.88 Difference: $0.72
If S32 meets the Citi target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $2.65, suggesting upside of 41.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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

Credit Suisse rates S32 as Outperform (1) -

The March quarter update revealed little that was surprising for Credit Suisse. All measures being undertaken are designed to preserve the balance sheet, which remains strong.

Reflecting updated guidance, the broker pulls back earnings for the next two years. The broker acknowledges there is no short-term catalyst and the company's commodity exposures are, with the exception of manganese, under pressure.

Still, the price appears attractive enough to maintain an Outperform rating. Target is reduced to $2.90 from $3.10.

Target price is $2.90 Current Price is $1.88 Difference: $1.02
If S32 meets the Credit Suisse target it will return approximately 54% (excluding dividends, fees and charges).

Current consensus price target is $2.65, suggesting upside of 41.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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

Macquarie rates S32 as Downgrade to Neutral from Outperform (3) -

South32's quarterly update revealed production of most key commodities falling short of Macquarie's expectations. Headwinds are increasing, with current spot prices suggesting -35% lower earnings than the broker's FY21-22 forecasts.

Free cash flow becomes marginal at current spot prices, the broker warns. Downgrade to Neutral from Outperform, target falls to $2.10 from $2.40.

Target price is $2.10 Current Price is $1.88 Difference: $0.22
If S32 meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $2.65, suggesting upside of 41.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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

Morgan Stanley rates S32 as Overweight (1) -

Production and sales were weaker than Morgan Stanley anticipated in the March quarter, offset somewhat by lower capital expenditure.

The broker finds strong increases in production are required at Illawarra and Worsley to meet guidance.

The broker retains an Overweight rating. Target is $2.85. Industry view: In Line.

Target price is $2.85 Current Price is $1.88 Difference: $0.97
If S32 meets the Morgan Stanley target it will return approximately 52% (excluding dividends, fees and charges).

Current consensus price target is $2.65, suggesting upside of 41.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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

Morgans rates S32 as Add (1) -

Production in the March quarter was close to expectations. However, the company has removed guidance for several assets. South32 appears in strong shape financially, with a strong balance sheet and ability to cut costs.

However, Morgans notes its geographical spread has meant a larger impact from the pandemic compared with some of its peers that are more focused on Australia. Add rating maintained. Target is raised to $2.82 from $2.60.

Target price is $2.82 Current Price is $1.88 Difference: $0.94
If S32 meets the Morgans target it will return approximately 50% (excluding dividends, fees and charges).

Current consensus price target is $2.65, suggesting upside of 41.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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

Ord Minnett rates S32 as Accumulate (2) -

Quarterly volumes were in line with Ord Minnett's expectations and changes to FY20 guidance are considered immaterial.

The sale of South Africa Energy Coal is on track for the December half year and Ord Minnett now removes it from forecasts.

The broker believes the stock screens cheaply and maintains an Accumulate rating.

The business is expected to ride through the downturn, even a strong balance sheet and low expenditure profile. Target is raised to $2.40 from $2.36.

Target price is $2.40 Current Price is $1.88 Difference: $0.52
If S32 meets the Ord Minnett target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $2.65, suggesting upside of 41.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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

UBS rates S32 as Neutral (3) -

The March quarter was below expectations. After the initial shutdowns in South Africa, restrictions have eased and the company has re-commenced coal and manganese operations at a reduced rate.

However, UBS notes, ultimately, sales and capacity appear to hinge on the performance of the rail provider. The company has withdrawn guidance for South African assets and cut its Australian manganese guidance by -5%.

A group-wide review is expected to deliver a reduction in controllable costs by FY21. Neutral rating and $2.90 target maintained.

Target price is $2.90 Current Price is $1.88 Difference: $1.02
If S32 meets the UBS target it will return approximately 54% (excluding dividends, fees and charges).

Current consensus price target is $2.65, suggesting upside of 41.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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

Macquarie rates SCG as Upgrade to Neutral from Underperform (3) -

A review of the discretionary mall outlook in Australia suggests to Macquarie rents need to decline by -15%, leading to an earnings decline for Scentre Group of -27%, increasing gearing to 38%. To reduce gearing to 35%, Scentre would need to sell $2bn of assets or raise $1.2bn of new capital, the broker calculates.

However were either to occur, the stock would still be offering a 7.6-7.9% dividend yield and a price to net asset value discount of -32%. Given the value on offer, Macquarie upgrades to Neutral from Underperform. Target falls to $2.18 from $2.34.

Target price is $2.18 Current Price is $2.11 Difference: $0.07
If SCG meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $2.46, suggesting upside of 16.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Credit Suisse rates SUN as Neutral (3) -

Credit Suisse assesses Suncorp is in a strong capital position to navigate the current volatility. The broker is increasingly comfortable around the ability to achieve FY21 reinsurance renewal with no significant impact on group capital.

While there remains an argument for Suncorp to re-base provisions and its capital position, Credit Suisse does not envisage an imminent need for an equity raising. Neutral rating and $9.15 target maintained.

Target price is $9.15 Current Price is $9.01 Difference: $0.14
If SUN meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $10.97, suggesting upside of 21.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Macquarie rates SVW as Outperform (1) -

The latest updates from the Australian mining services sector indicate production-related activities domestically have seen little virus impact while internationally is mixed, the broker notes. Exploration and non-essential activities are nonetheless more likely to be curtailed. But in particular, iron ore and gold operations in WA are noted as being very strong.

Guidance is being withdrawn in the sector because of virus risk, not impact, the broker notes. Seven Group's WesTrac and Coates Hire businesses are leveraged to end markets with good revenue visibility underpinned by long-term relationships with blue chip clients, the broker points out.

Outperform and $16 target retained. Seven Group is the broker's preferred stock in the sector, along with Mineral Resources and Emeco Holdings.

Target price is $16.00 Current Price is $12.83 Difference: $3.17
If SVW meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $15.45, suggesting upside of 20.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Citi rates SYD as Sell (5) -

Sydney Airport has an additional $850m facility, increasing available liquidity to $2.8bn. A range of measures have been announced to preserve cash. Still, Citi remains concerned about cash flow.

The broker forecasts a -52% decline in passenger numbers in 2020. While domestic passengers may start to recover over the next 2-3 months, international is likely to be slower.

The broker expects a dividend to resume in the second half of 2021. Sell rating reiterated. Target is reduced to $5.87 from $6.83.

Target price is $5.87 Current Price is $5.80 Difference: $0.07
If SYD meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $6.48, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Macquarie rates SYD as Outperform (1) -

March traffic unsurprisingly collapsed to near zero, and Sydney Airport has responded with a cost-out program that has exceeded the broker's expectation. Capex has been brought back to core maintenance only. Liquidity has improved and covenants should be met, the broker notes, although the question will remain as to whether 6-7x leverage is appropriate.

The broker retains Outperform, looking ahead to the resumption of travel, followed by the re-engagement with airlines regarding aeronautical fees. A restructure of Virgin Australia ((VAH)) may mean an earnings hit but could also provide the opportunity to reorganise the airport, the broker suggests. Target rises to $7.03 from $6.78.

Target price is $7.03 Current Price is $5.80 Difference: $1.23
If SYD meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $6.48, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

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

Morgan Stanley assesses the operating environment remains extremely challenging. March passenger numbers were down -45%.

Sydney Airport is negotiating commercial and aeronautical rent reductions under the Australian government's code of conduct.

The company has raised an additional $850m in bank debt and remains in compliance with debt covenants. No interim distribution will be declared.

Equal-weight. Target is $7.47. Industry view is Cautious.

Target price is $7.47 Current Price is $5.80 Difference: $1.67
If SYD meets the Morgan Stanley target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $6.48, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Morgans rates SYD as Add (1) -

While the business is suffering from the severe impact of the pandemic over the short term and Morgans no longer assumes any distribution in 2020, this is expected to provide investors with an attractive buying opportunity.

The broker downgrades forecasts for passenger numbers in 2020 to reflect the virtual closure of the airport currently. A recovery to 2019 passenger levels is assumed by 2022.

Add rating maintained. Target is reduced to $7.79 from $7.82.

Target price is $7.79 Current Price is $5.80 Difference: $1.99
If SYD meets the Morgans target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $6.48, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Ord Minnett rates SYD as Downgrade to Hold from Accumulate (3) -

Sydney Airport is taking a range of measures to mitigate the loss of traffic, which declined -96% in the first 16 days of April. The interim distribution has been cancelled and liquidity is increased via new bank facilities.

Ord Minnett believes this is a great infrastructure asset which will recover, although the extent of the headwinds and duration is likely to be greater than previously assumed, particularly for international travel.

Rating is downgraded to Hold from Accumulate and the target lowered to $5.60 from $5.80.

Target price is $5.60 Current Price is $5.80 Difference: minus $0.2 (current price is over target).
If SYD meets the Ord Minnett target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.48, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

UBS rates SYD as Buy (1) -

The traffic update was broadly in line with expectations. Traffic is currently down around -95%. A further $850m in bank debt brings total liquidity to $2.8bn, which UBS expects should comfortably cover the debt burden for the next 12 months.

UBS continues to assume government restrictions will delay the scalable introduction of domestic flights until October and international flights until January 2021, yet acknowledges the extent of revenue disruption remains difficult to predict.

Buy rating and $7.10 target retained. Buy retained.

Target price is $7.10 Current Price is $5.80 Difference: $1.3
If SYD meets the UBS target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $6.48, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Macquarie rates VCX as Upgrade to Outperform from Underperform (1) -

Macquarie has reviewed the discretionary retail REIT sector and assessed the implications for Vicinity Centres. The broker believes the balance sheet can sustain a -15% fall in asset values, but capital may need to be raised if value falls further. The broker is assuming a -25% fall in values in its $1.70 target price, plus an additional -5% risk discount.

However, this still suggests value is on offer, hence despite cyclical and structural headwinds and a share price bounce from the bottom, while noting Vicinity has a strong balance sheet, Macquarie double-upgrades to Outperform from Underperform.

Target price is $1.70 Current Price is $1.35 Difference: $0.35
If VCX meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $1.76, suggesting upside of 30.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Ord Minnett rates WSP as Buy (1) -

The March quarter was strong, with growth in new and existing customers. Ord Minnett assesses the company's cloud communications solution is well suited to address current needs while channel partners are actively promoting it.

The broker forecasts 28% revenue growth in FY21. Buy rating reiterated. Target is $2.15.

Target price is $2.15 Current Price is $1.65 Difference: $0.5
If WSP meets the Ord Minnett target it will return approximately 30% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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