Australian Broker Call
September 02, 2016
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)
Last Updated: 11:13 AM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
| CYB - | CYBG | Downgrade to Neutral from Outperform | Macquarie |
Morgans rates AHZ as Add (1) -
The FY16 net loss was in line with guidance and slightly ahead of expectations. The company has completed a $10m placement and $8.3m renounceable one-for-nine rights issue.
The funds will be used to scale up manufacturing capacity, new product development and further investment in immunotherapy. Add rating retained. Target is reduced to 93c from $1.13.
Target price is $0.93 Current Price is $0.33 Difference: $0.6
If AHZ meets the Morgans target it will return approximately 182% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 4.00 cents. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 0.00 cents and EPS of 2.00 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates APO as Neutral (3) -
Industry data signals outdoor media revenue increased 20% year on year in August, taking the year-to-date revenue growth to 18.2%. UBS observes this strength was well flagged by APN Outdoor at its results but what remains important is the subsequent September-November market.
The company has indicated there is a significant reduction in market activity flagged for this period, attributing the dip to an extended federal election period and the Olympics.
If fourth quarter market bookings remain robust then UBS believes this would signal that it is company-specific factors that are the more likely drivers of the recent downgrade.
Neutral and $5.50 maintained.
Target price is $5.50 Current Price is $5.28 Difference: $0.22
If APO meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $6.17, suggesting upside of 16.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY16:
UBS forecasts a full year FY16 dividend of 18.00 cents and EPS of 30.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.1, implying annual growth of 15.8%. Current consensus DPS estimate is 17.1, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 17.6. |
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 20.00 cents and EPS of 34.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 35.8, implying annual growth of 18.9%. Current consensus DPS estimate is 20.4, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 14.8. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates AVH as Add (1) -
The FY16 loss was above expectations. Morgans observes, importantly, management is growing its distribution network and team amid further clinical work and has also strengthened the balance sheet.
The company is on track with its multi-centre FDA approval study for burns with possible approval expected in the second half of FY17.
Morgans retains an Add rating and the target is lowered to 53c from 57c.
Target price is $0.53 Current Price is $0.09 Difference: $0.438
If AVH meets the Morgans target it will return approximately 476% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY16:
Morgans forecasts a full year FY16 dividend of 0.00 cents and EPS of minus 2.20 cents. |
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 2.30 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates CGF as Outperform (1) -
Based on an expanded product range and broader distribution footprint, as well as demographic trends and government regulation, Macquarie suspects volumes will exceed expectations.
The broker notes the credit mix has improved, with reduced risk and increased capital efficiency. Investment grade assets have increased to 81% in FY16 from 76% in FY15.
Outperform rating and $10.34 target retained.
Target price is $10.34 Current Price is $8.98 Difference: $1.36
If CGF meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $9.33, suggesting upside of 4.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 35.00 cents and EPS of 65.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 64.6, implying annual growth of N/A. Current consensus DPS estimate is 34.2, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 13.8. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 38.00 cents and EPS of 71.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 69.3, implying annual growth of 7.3%. Current consensus DPS estimate is 36.9, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 12.9. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates CYB as Downgrade to Neutral from Outperform (3) -
Macquarie remains positive on UK banks and believes the fears over Brexit are overdone but considers the CYBG valuation stretched and positive surprises limited.
Hence, the rating is downgraded to Neutral from Outperform. Target is steady at $4.66.
The broker expects to receive more details on where the bank can deliver value when it hosts the investor briefing later this month.
Target price is $4.66 Current Price is $4.66 Difference: $0
If CYB meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).
Current consensus price target is $4.26, suggesting downside of -7.7% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY16:
Macquarie forecasts a full year FY16 dividend of 0.00 cents and EPS of 15.69 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.6, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 20.4. |
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 9.81 cents and EPS of 27.46 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 33.8, implying annual growth of 49.6%. Current consensus DPS estimate is 6.7, implying a prospective dividend yield of 1.5%. Current consensus EPS estimate suggests the PER is 13.6. |
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates DCN as Outperform (1) -
Macquarie incorporates FY16 financials, not expecting meaningful earnings until at least FY19. Results from drilling at Cameron Well suggest a larger mineralised surface although deeper drilling is required to confirm the economic potential of the target.
The company has turned a low-value marginal asset into a robust development with significant upside potential, Macquarie suggests, and exploration results from Callisto and other regional targets all have potential to deliver substantial upside.
Outperform rating and $4.90 target retained.
Target price is $4.90 Current Price is $3.37 Difference: $1.53
If DCN meets the Macquarie target it will return approximately 45% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 5.20 cents. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 6.60 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
GJT GALILEO JAPAN TRUST
Real Estate
Overnight Price: $2.71
Macquarie - Cessation of coverage
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 19.30 cents and EPS of 21.70 cents. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 20.90 cents and EPS of 23.60 cents. |
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates IDR as No Rating (-1) -
The company will raise $85m at $2.12 a share to partly fund the acquisition of the WesTrac industrial facility in Newcastle. Macquarie estimates the transaction will be 2% accretive to earnings in isolation.
The rationale for the transaction is primarily diversification and the broker notes, with the Brisbane exposure now falling to 26%, the impact of weaker leasing outcomes in Brisbane is diluted.
Macquarie is on research restriction and cannot offer a rating or target at present.
Current Price is $2.14. Target price not assessed.
Current consensus price target is $2.18, suggesting downside of -0.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 16.00 cents and EPS of 17.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.6, implying annual growth of N/A. Current consensus DPS estimate is 15.9, implying a prospective dividend yield of 7.3%. Current consensus EPS estimate suggests the PER is 12.4. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 16.60 cents and EPS of 17.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.9, implying annual growth of 1.7%. Current consensus DPS estimate is 16.2, implying a prospective dividend yield of 7.4%. Current consensus EPS estimate suggests the PER is 12.2. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates NST as Underperform (5) -
Northern Star will increase its board to six from four, adding more skills and depth with In't Veld and David Flanagan. Managing director Bill Beament has been appointed executive chairman and chief operating officer, Stuart Tonkin, has been appointed CEO.
Credit Suisse considers the expansion appropriate as the company matures but hopes it does not adversely affect its demonstrated ability to move quickly on strategic opportunities. Underperform rating and $4.20 target retained.
Target price is $4.20 Current Price is $4.01 Difference: $0.19
If NST meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $4.58, suggesting upside of 9.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 14.84 cents and EPS of 49.46 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 43.2, implying annual growth of N/A. Current consensus DPS estimate is 13.1, implying a prospective dividend yield of 3.1%. Current consensus EPS estimate suggests the PER is 9.7. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 18.40 cents and EPS of 61.34 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 52.3, implying annual growth of 21.1%. Current consensus DPS estimate is 13.4, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 8.0. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| AHZ - | ADMEDUS | Add - Morgans | Overnight Price $0.33 |
| APO - | APN OUTDOOR | Neutral - UBS | Overnight Price $5.28 |
| AVH - | AVITA MEDICAL | Add - Morgans | Overnight Price $0.09 |
| CGF - | CHALLENGER | Outperform - Macquarie | Overnight Price $8.98 |
| CYB - | CYBG | Downgrade to Neutral from Outperform - Macquarie | Overnight Price $4.66 |
| DCN - | DACIAN GOLD | Outperform - Macquarie | Overnight Price $3.37 |
| GJT - | GALILEO JAPAN | Cessation of coverage - Macquarie | Overnight Price $2.71 |
| IDR - | INDUSTRIA REIT | No Rating - Macquarie | Overnight Price $2.14 |
| NST - | NORTHERN STAR | Underperform - Credit Suisse | Overnight Price $4.01 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 4 |
| 3. Hold | 2 |
| 5. Sell | 1 |
Friday 02 September 2016
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