Australian Broker Call

Macquarie rates AMC as Outperform (1) -

War in the Ukraine and Amcor has decided to scale down its operations in Russia while operations in Kharkiv, Ukraine have been closed proactively.

Macquarie points out the three operations in Russia represent around 2-3% of annual sales and there's no mention of a full exit, only of scaling down, for the time being.

The broker notes some of Amcor's customers in Russia, including PepsiCo and Phillip Morris, have announced similar steps. Small adjustments have been made to forecasts.

The Outperform rating is maintained, while the target price slips to $18.14 from $18.24. Macquarie maintains the shares are undervalued.

Target price is $18.14 Current Price is $15.36 Difference: $2.78
If AMC meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $18.07, suggesting upside of 18.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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 ANZ as Overweight (1) -

Morgan Stanley expects ANZ Bank to announce a new buyback of $1bn at 1H results in May, given proforma excess capital relative
to current common equity tier one targets.The bank is close to finishing its current $1.5bn buyback.

The broker assumes the major banks will undertake $22bn of buybacks in the 4 years from FY21 to FY24, which will contribute to an average -4.5% reduction in shares on issue. The Overweight rating and $30.30 target are retained. Industry view: Attractive.

Target price is $30.30 Current Price is $27.67 Difference: $2.63
If ANZ meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $30.05, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Ord Minnett rates APE as Buy (1) -

In what Ord Minnett considers the next step in company strategy, Eagers Automotive has announced the sale of the Bill Buckle Auto Group, which comprises of the Sydney Northern Beaches Toyota, Land Rover, Subaru and Volkswagen franchises, for $92m.

In line with its evolving preference for larger dealership sites offering improved efficiencies, the broker expects Eagers Automotive will reinvest sale capital into purchases that align with its new vehicle dealership model outlook.

The Buy rating and target price of $17.50 are retained.

Target price is $17.50 Current Price is $13.12 Difference: $4.38
If APE meets the Ord Minnett target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $17.86, suggesting upside of 30.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Citi rates AX1 as Neutral (3) -

As Nike prepares to move to the next phase of its marketplace strategy, Citi warns Accent Group may face increased competition from Foot Locker given it was identified as an important strategic partner to the Nike brand.

Having narrowed its pool of wholesale partners, Nike aims to drive growth by offering consumers the benefits of a Nike membership in remaining partner stores. The broker notes Accent Group has already reduced exposure to Nike which should mitigate impact.

The Neutral rating and target price of $2.11 are retained.

Target price is $2.11 Current Price is $1.69 Difference: $0.42
If AX1 meets the Citi target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $2.47, suggesting upside of 44.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Macquarie rates BLD as Outperform (1) -

Following an FY22 guidance downgrade by Boral, Macquarie lowers its FY22-25 EPS estimates by -12%, -6% and -4%, respectively, and lowers its expectation for debt repayment. As a result, the target falls to $4.30 from $4.35. The Outperform rating is unchanged.

Management cited recent rain and flood disruptions, but also negative coal and fuel impacts. The broker notes diesel hedging expires in April 2022 and coal costs are unhedged, which implies ongoing risks should prices remain high.

Target price is $4.30 Current Price is $3.33 Difference: $0.97
If BLD meets the Macquarie target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $3.64, suggesting upside of 7.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

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

Boral's new earnings guidance for FY22 was around -23% shy of Morgan Stanley estimate, with 2H earnings (EBIT) circa -34% below expectations. Management cited the -$23m impact of wet weather, as well as coal and diesel price pressures.

These price pressures have not been offset by price increases announced across January/February, points out the analyst. Energy costs are expected to stay elevated in FY23 and the target price falls to $3.20 from $3.50. Equal-weight. Industry view: In-Line.

Target price is $3.20 Current Price is $3.33 Difference: minus $0.13 (current price is over target).
If BLD meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.64, suggesting upside of 7.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Ord Minnett rates BLD as Hold (3) -

In a trading update Boral has confirmed it has suffered volume losses from recent east coast flood events, but the company expects this can be offset by flood recovery work. Ord Minnett notes updates to full year earnings from the company suggest a -$23m impact.

The broker also highlighted that delivery of the federal budget next week is likely to see federal infrastructure funding increased, but commented that a large existing body of work continues to be delayed.

The Hold rating is retained and the target price decreases to $3.50 from $4.00.

Target price is $3.50 Current Price is $3.33 Difference: $0.17
If BLD meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $3.64, suggesting upside of 7.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

UBS rates BLD as Neutral (3) -

UBS cuts its FY22 and FY23 profit forecasts for Boral following a negative trading update and lowered FY22 earnings (EBIT) guidance. Management cited the impacts of wet weather and energy cost inflation (coal and diesel).

After allowing for these impacts and marking-to-market its sum-of-the-parts valuation, the broker lowers its target price to $3.45 from $3.65.

The broker sees cost headwinds continuing in FY23 with diesel making up the the bulk of a $30m increase in forecast costs. The Neutral rating is unchanged.

Target price is $3.45 Current Price is $3.33 Difference: $0.12
If BLD meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $3.64, suggesting upside of 7.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Morgan Stanley rates CBA as Underweight (5) -

Morgan Stanley believes CommBank's proposed sale of a stake in Bank of Hangzhou could support another buyback after the current $2bn on-market buyback is completed.

The broker assumes the major banks will undertake $22bn of buybacks in the four years from FY21 to FY24, which will contribute to an average -4.5% reduction in shares on issue. The Underweight rating and $92 target are retained. Industry view: Attractive.

Target price is $92.00 Current Price is $106.07 Difference: minus $14.07 (current price is over target).
If CBA meets the Morgan Stanley target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $92.45, suggesting downside of -14.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.6

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

Macquarie rates COL as Outperform (1) -

As Coles Group is building some customer fulfillment centres as part of its future partnership with the online-only Ocado business, Macquarie reviews 1Q results for Ocado.

Sales for Ocado were weaker than the broker expected and the sales growth outlook was cut, as consumers appear to be returning to physical stores.

For Coles Group, Macquarie expects to see improved online margins and increased numbers of higher-spending omni-channel consumers, when the fulfillment centres are operating by early FY24. Outperform and $19.70 target retained.

Target price is $19.70 Current Price is $17.67 Difference: $2.03
If COL meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $18.81, suggesting upside of 6.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Citi rates CSL as Buy (1) -

Ahead of the expected close of CSL's Vifor Pharma deal, Citi has taken a closer look at the consensus outlook for the company. The broker observes the market has implied a 10% revenue compound annual growth rate and an 18% earnings growth rate through to FY25.

Despite a strong outlook on Vifor Citi notes the impact on CSL's earnings would be minimal. Citi expects closure of the Vifor deal will be positive for CSL's share price, but considers plasma collection normalisation more likely to impact earnings.

The Buy rating and target price of $335.00 are retained.

Target price is $335.00 Current Price is $265.36 Difference: $69.64
If CSL meets the Citi target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $317.42, suggesting upside of 18.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.9

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

Morgan Stanley rates DXS as Overweight (1) -

Morgan Stanley reviews the impact of historical interest rate rises upon shares within the Australian Real Estate sector and finds a rather loose relationship.

The broker notes the market generally trades off in anticipation of the RBA lifting rates, though the impact is more moderate once the rate rises commence. When bond yields stop increasing, the REIT sector price earnings ratio generally expands.

Dexus remains one of Morgan Stanley's top picks on the return to work theme and in anticipation of a nadir for the office market. The Overweight rating and $12.57 target are retained. Industry View: In Line.

Target price is $12.57 Current Price is $10.66 Difference: $1.91
If DXS meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $12.02, suggesting upside of 12.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Credit Suisse rates ECX as Outperform (1) -

Credit Suisse has observed that used car prices appear to be staying stronger for longer, with the market predicating new car supply will not normalise before year end. Eclipx Group continues to benefit from elevated end-of-lease income in the interim.

The company recorded a record high end-of-lease income average of $7,564 per unit in the quarter. Further, the order pipeline remains at an all-time high, with new business writings up 10% on the previous comparable period in the first quarter.

The Outperform rating is retained and the target price increases to $2.95 from $2.90.

Target price is $2.95 Current Price is $2.23 Difference: $0.72
If ECX meets the Credit Suisse target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $2.89, suggesting upside of 20.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Morgan Stanley rates GMG as Overweight (1) -

Morgan Stanley reviews the impact of historical interest rate rises upon shares within the Australian Real Estate sector and finds a rather loose relationship.

The broker notes the market generally trades off in anticipation of the RBA lifting rates, though the impact is more moderate once the rate rises commence. When bond yields stop increasing, the REIT sector price earnings ratio generally expands.

Goodman Group remains one of Morgan Stanley's top picks due to diversified growth and leverage to global industrials. The Overweight rating and target price of $27.88 are retained. Industry View: In Line.

Target price is $27.88 Current Price is $22.38 Difference: $5.5
If GMG meets the Morgan Stanley target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $27.17, suggesting upside of 19.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

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

Morgan Stanley expects National Australia Bank to announce a new buyback of $2bn at 1H results in May, given proforma excess capital relative to current common equity tier one targets.The bank is close to finishing its current $2.5bn buyback.

The broker assumes the major banks will undertake $22bn of buybacks in the four years from FY21 to FY24, which will contribute to an average -4.5% reduction in shares on issue. The Equal-weight rating and $31.50 target are retained. Industry view: Attractive.

Target price is $31.50 Current Price is $31.23 Difference: $0.27
If NAB meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $31.91, suggesting upside of 0.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Citi rates NHC as Buy (1) -

A special 13 cents per share dividend in addition to a 17 cent interim dividend from New Hope was a pleasant surprise to close out the first half according to Citi.

The broker expects strong coal pricing to support continued high dividend payouts over FY22 and FY23, guiding to an 80% payout in FY22 and 72% payout in FY23.

The company achieved an average selling price of $193 per tonne in the half, up from $78 per tonne in the previous comparable period. The Bengalla project delivered 5.0m tonnes of saleable production, with a modest production increase expected in the second half.

The Buy rating and target price of $2.90 are retained.

Target price is $2.90 Current Price is $3.18 Difference: minus $0.28 (current price is over target).
If NHC meets the Citi target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.58, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Credit Suisse rates NHC as Outperform (1) -

While New Hope's half year result was largely pre-announced the company did surprise Credit Suisse with the announcement of a 30 cents per share interim dividend.

Given the announced intention to issue special dividends more regularly, the broker noted company commentary suggested dividend returns may be prioritised over acquisition activity in the short-term, and adds a 15% special earnings payout to its model.

Credit Suisse also notes continuing tightness in the coal industry may see New Hope coal command a premium price above US$200 per tonne for a number of years, and increases its pricing forecast to US$230 per tonne in the second half.

The Outperform rating is retained and the target price increases to $3.50 from $3.00.

Target price is $3.50 Current Price is $3.18 Difference: $0.32
If NHC meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $3.58, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates NHC as Outperform (1) -

Macquarie retains its Outperform rating following 1H results for New Hope which revealed strong cash generation. An interim dividend of 17cps and special dividend of 13cps were declared. The combined dividend was a 50% beat versus what the analyst had expected.

While cash flow was better than the broker's forecast, earnings (EBITDA) and profit were in-line. Coal prices are forecast to remain buoyant into the 2H of FY22 and a final dividend of 47cps is forecast.

The expectation for lower near-term earnings causes the target price to ease by -10% to $4.50, explains Macquarie.

Target price is $4.50 Current Price is $3.18 Difference: $1.32
If NHC meets the Macquarie target it will return approximately 42% (excluding dividends, fees and charges).

Current consensus price target is $3.58, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Morgans rates NHC as Add (1) -

Following 1H results for New Hope, Morgans notes revenue exceeded its forecast by 4% and the 13cps fully franked special dividend was a surprise. The latter was attributed to higher-than-expected 1H cash flow and a very strong 2H cashflow outlook.

The broker now forecasts FY22 dividends of 50cps. The strong current coal price implies upside to the earnings forecast and the target rises to $3.40 from $3.05. Add.

Target price is $3.40 Current Price is $3.18 Difference: $0.22
If NHC meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.58, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Credit Suisse rates PMV as Outperform (1) -

Ahead of Premier Investments's first half results release, Credit Suisse notes the company's success in outperforming expectations and navigating a prolonged period of difficult conditions appears to be undervalued by the market.

The company has managed to improve online strength in response to covid-related challenges, with higher-margin online sales now accounting for 25% of total sales compared to 12% in FY19.

Credit Suisse notes near-term performance of the Smiggle brand is key to its outlook for the company.

The Outperform rating and target price of $29.16 are retained.

Target price is $29.16 Current Price is $28.04 Difference: $1.12
If PMV meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $30.55, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Ord Minnett rates PMV as Accumulate (2) -

With Premier Investments set to deliver first half results in coming days Ord Minnett notes given the company pre-announced a resilient earnings performance of $209.5-211.5m it expects the market will focus on the result composition.

Key to the broker's forecasts is the assumption that Premier Investments will report continued low rental costs, elevated gross margins remain, and strong employee cost management. The broker also assumes  improvement to trading in February and March.

The Accumulate rating and target price of $32.10 are retained.

Target price is $32.10 Current Price is $28.04 Difference: $4.06
If PMV meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $30.55, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Morgan Stanley rates PSQ as Overweight (1) -

Morgan Stanley lowers its target price for Pacific Smiles to $3.00 from $3.20 to reflect higher covid case numbers, fewer bookings and more cancellations. The timing of a rebound (previously very strong) this time around is considered unclear.

The broker sees upside to the target of 250 centres, especially as the HBF partnership has opened up Western Australian exposure. However, a faster rollout and the associated costs are also appraised as a near-term EPS headwind.

Overweight. Industry view: In-Line.

Target price is $3.00 Current Price is $2.16 Difference: $0.84
If PSQ meets the Morgan Stanley target it will return approximately 39% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Ord Minnett rates QAN as Buy (1) -

While Qantas Airways is well-positioned to weather elevated oil pricing in the short-term, with more than 90% of fuel costs hedged for the remainder of the year and 40% hedged for the first half of FY23, Ord Minnett notes long-term price elevation may force ticket price hikes.

The broker predicts a 7-8% ticket price increase could be used to recover costs, but expects this would have minimal impact on operations given pent-up demand for travel.

The Buy rating and target price of $5.95 are retained.

Target price is $5.95 Current Price is $5.02 Difference: $0.93
If QAN meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $5.86, suggesting upside of 15.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Citi rates RHC as Buy (1) -

Ramsay Health Care has received a bid from IHH Healthcare to acquire its seven-hospital Ramsey Sime Darby joint venture for $1.8bn, an offer Citi considers positive for the company given its potential to help reduce debt load after the Elysium acquisition.

The JV, which consists of seven locations in Malaysia, Indonesia and Hong Kong, contributed 2% of Ramsay Health Care's total net profit in FY21. With Sime Darby, Ramsay Health Care has granted a four week due diligence period.

The Buy rating and target price of $75.00 are retained.

Target price is $75.00 Current Price is $64.10 Difference: $10.9
If RHC meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $69.68, suggesting upside of 9.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

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

Morgan Stanley reviews the impact of historical interest rate rises upon shares within the Australian Real Estate sector and finds a rather loose relationship.

The broker notes the market generally trades off in anticipation of the RBA lifting rates, though the impact is more moderate once the rate rises commence. When bond yields stop increasing, the REIT sector price earnings ratio generally expands.

Morgan Stanley remains cautious on the Retail names and keeps an Equal-weight rating for Scentre Group with a $3.18 target. Industry View: In Line.

Target price is $3.18 Current Price is $3.07 Difference: $0.11
If SCG meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $3.08, suggesting downside of -0.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Morgan Stanley rates SGP as Overweight (1) -

Morgan Stanley reviews the impact of historical interest rate rises upon shares within the Australian Real Estate sector and finds a rather loose relationship.

The broker notes the market generally trades off in anticipation of the RBA lifting rates, though the impact is more moderate once the rate rises commence. When bond yields stop increasing, the REIT sector price earnings ratio generally expands.

Stockland remains one of Morgan Stanley's top picks due to its current valuation and new CEO strategy. The Overweight rating and $5.05 target are retained. Industry View: In Line.

Target price is $5.05 Current Price is $4.14 Difference: $0.91
If SGP meets the Morgan Stanley target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $4.90, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Credit Suisse rates SHL as Upgrade to Outperform from Neutral (1) -

With Sonic Healthcare's shares underperforming the ASX200 by -22% year-to-date, Credit Suisse believes the market is underestimating the opportunity that remains for the company in covid testing.

With the shift to rapid antigen tests, the broker believes PCR testing levels have stabilised at 80,000 per day and expects this will normalise to 50,000 tests per day, forecasting a $890m second half revenue benefit compared to the $1.3bn achieved in the first half.

Combined with pent-up demand driving strong base business performance, Credit Suisse increases earnings per share estimates 6% and 3% in FY22 and FY23 respectively.

The rating is upgraded to Outperform from Neutral and the target price of $40.00 is retained.

Target price is $40.00 Current Price is $34.80 Difference: $5.2
If SHL meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $39.11, suggesting upside of 10.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Credit Suisse rates SVW as Outperform (1) -

Extreme weather events and rising fuel costs have seen Seven Group's two-thirds owned Boral ((BLD)) downgrade full year forecasts, now guiding to earnings between $145-155m. Credit Suisse adjusts its own forecasts to the mid-point of the guidance range.

The broker expects Seven Group will both maintain and meet full year guidance despite the Boral downgrade, but notes some short-lived share price weakness is a risk. Credit Suisse's earnings per share decrease -4.3-4.5% through to FY24.

The Outperform rating and target price of $26.55 are retained. 

Target price is $26.55 Current Price is $21.22 Difference: $5.33
If SVW meets the Credit Suisse target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $26.60, suggesting upside of 25.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates SVW as Outperform (1) -

Macquarie still estimates the valuation for Seven Group is undemanding, despite the lowered earnings guidance by 70%-owned Boral ((BLD)) due to weather and energy cost issues.

The broker decrease its Seven Group EPS estimates for FY22-24 by -5%, -3% and -1%, respectively, and cuts its target price by -1% to $27.75. The cut is a result of Boral revisions and a mark-market for Beach Energy ((BPT)) and other business holdings.

Outperform retained.

Target price is $27.75 Current Price is $21.22 Difference: $6.53
If SVW meets the Macquarie target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $26.60, suggesting upside of 25.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

UBS rates SVW as Buy (1) -

After factoring in energy cost inflation for Boral ((BLD)), a subsidiary of Seven Group, UBS lowers its target price for Seven Group to $27.11 from $27.80, while retaining its Buy rating.

This comes as Boral issued a trading update and lowered FY22 guidance due to the impact of east coast weather and cost inflation issues. The latter relates to rises in both coal and diesel costs, in excess of recent price increases.

The analyst estimates that full year guidance for Seven Group will be maintained and retains its positive view on the main value drivers of Coates Hire and WesTrac.

Target price is $27.11 Current Price is $21.22 Difference: $5.89
If SVW meets the UBS target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $26.60, suggesting upside of 25.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Morgan Stanley rates VCX as Underweight (5) -

Morgan Stanley reviews the impact of historical interest rate rises upon shares within the Australian Real Estate sector and finds a rather loose relationship.

The broker notes the market generally trades off in anticipation of the RBA lifting rates, though the impact is more moderate once the rate rises commence. When bond yields stop increasing, the REIT sector price earnings ratio generally expands.

Morgan Stanley remains cautious on the Retail names and keeps an Underweight rating for Vicinity Centres with a $1.82 target. Industry View: In Line.

Target price is $1.82 Current Price is $1.82 Difference: $0
If VCX meets the Morgan Stanley target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $1.93, suggesting upside of 5.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.2

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

Ord Minnett rates VTG as Upgrade to Speculative Buy from Hold (1) -

Ord Minnett had previously taken a bearish view on Vita Group post the sale of its ICT business to Telstra ((TLS)), but today's update marks a reversal of that view.

With the company now wholly focused on the Artisan skin care and wellness business, Ord Minnett anticipates conditions to improve, which means the long term outlook is considered "positive" with organic, greenfield and acquisitions all seen as future contributions.

Shareholders already received 39c in the form of a special dividend from the ICT sale back in November and the broker anticipates a further 3c-6c (fully franked) is still forthcoming before June 30.

The rating has been upgraded to Speculative Buy from Hold, with a revised price target of 36c (down from 93c decided upon last year).

Updated forecasts now imply the company will remain loss-making for years to come (one assumes that is now the new 'organic' profile).

Target price is $0.36 Current Price is $0.28 Difference: $0.08
If VTG meets the Ord Minnett target it will return approximately 29% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

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

Morgan Stanley believes the release of capital from further non-core asset sales by Westpac could support new capital management initiatives. The bank finished a $3.5bn off-market buyback in February 2022.

The broker assumes the major banks will undertake $22bn of buybacks in the four years from FY21 to FY24, which will contribute to an average -4.5% reduction in shares on issue. The Equal-weight rating and $22.40 target are retained. Industry view: Attractive.

Target price is $22.40 Current Price is $23.62 Difference: minus $1.22 (current price is over target).
If WBC meets the Morgan Stanley target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $25.16, suggesting upside of 5.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

UBS rates WPL as Buy (1) -

After developing a detailed valuation of Woodside Petroleum to incorporate the Petroleum business acquired from BHP Group ((BHP)), UBS arrives at an unchanged $29 target price.

The broker points out the portfolio mix shifts to 29% oil and condensate post merger from 19%, and now offers greater leverage to higher oil prices.

The analyst retains a Buy rating though notes Woodside Petroleum is trading at the highest implied oil price price across UBS' coverage of the sector.

Target price is $29.00 Current Price is $32.16 Difference: minus $3.16 (current price is over target).
If WPL meets the UBS target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.78, suggesting downside of -10.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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