Australian Broker Call

Deutsche Bank rates AMC as Buy (1) -

Deutsche Bank analysts have updated their general projections for the Australian packaging industry, predominantly to incorporate updated FX input. The result is for slightly positive adjustments for both Orora and Pact Group, with Amcor's forecasts weakening by -1-3%.

For Amcor specific, the analysts point out 50% of group earnings are exposed to movements in the USD, 20-25% to the Euro, and 25-30% to other currencies. The analysts estimate every EUR1c move impacts Amcor's net profit by US$3m.

Price target declines to $16.15 from $16.65. Buy rating retained.

Target price is $16.15 Current Price is $13.69 Difference: $2.46
If AMC meets the Deutsche Bank target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $15.22, suggesting upside of 11.1% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.8

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

Morgans rates AMC as Hold (3) -

Morgans expects first half operating earnings (EBIT) to be up 1% when the company reports its results on February 11.

The main areas of focus will be the impact of higher raw material costs, beverage volumes in North America and progress on the Bemis acquisition.

Morgans maintains a Hold rating and raises the target to $13.78 from $13.34.

Target price is $13.78 Current Price is $13.69 Difference: $0.09
If AMC meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $15.22, suggesting upside of 11.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.8

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

Credit Suisse rates AUB as Neutral (3) -

The company has acquired the remainder of BrokerWeb Risk Services as well as two smaller acquisitions. Credit Suisse assumes an operating earnings (EBITDA) multiple slightly below 10x on around $70m in acquisition expenditure from FY20.

The company has addressed some of the market concerns around its equity raising and management changes but the broker needs further clarity at the first half result on the Canberra investigation and earnings for risk services. Neutral rating and $13.45 target maintained.

Target price is $13.45 Current Price is $12.05 Difference: $1.4
If AUB meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Citi rates COL as Buy (1) -

The company has announced two semi-automated distribution centres will be built over the next six years at a cost of $950m, which is ahead of Citi's expectations of around $650m.

The broker notes each of these two centres are around 35% more expensive than the recently-constructed distribution centre by Woolworths ((WOW)). Still, balance sheet metrics remain comfortable, in the broker's view.

Citi retains a preference for Coles over Woolworths given the wide valuation gap and the room for Coles to improve its execution off a low base. Buy rating maintained. Target is reduced to $14.40 from $14.50.

Target price is $14.40 Current Price is $12.75 Difference: $1.65
If COL meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $12.92, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Macquarie rates COL as Neutral (3) -

Coles has announced it will spend $950m over six years to build two new automated distribution centres in NSW and Qld. The cost is slightly less than the broker's forecast of $1bn over five years and while it will prove a near-term strain, medium term returns should be positive.

The market remains concerned over Coles' balance sheet but the broker notes that at a 13% return on invested capital, the new centres only slight increase net det to earnings. Outperform and $13.48 target retained.

Target price is $13.48 Current Price is $12.75 Difference: $0.73
If COL meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $12.92, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

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

Coles has now signed contracts to build two automated distribution centres, in Sydney and Brisbane, for an outlay of $950m over six years.

Morgan Stanley suspects capital expenditure will likely rise in FY20 by $150-200m versus the FY19 guidance. Rising expenditure will limit free cash flow such that net debt is expected to rise across the forecast period.

Equal-weight rating and Cautious industry view. Target is $13.

Target price is $13.00 Current Price is $12.75 Difference: $0.25
If COL meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $12.92, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Ord Minnett rates COL as Hold (3) -

The company will construct two new automated distribution centres. Capital expenditure has been quantified at $950m. Ord Minnett notes the supply chain investment is more expensive and has come later than that of competitor Woolworths ((WOW)).

The broker believes the food retail industry is improving and capital expenditure can be well funded.

Greater clarity on the food strategy and evidence that above-market growth can be achieved, as well as a resolution of declines in convenience store earnings, are required for a more positive perspective on the stock.

A Hold rating is maintained. Ord Minnett corrects the target price previously published at $13.25 on January 18, amending it to $12.75.

Target price is $12.75 Current Price is $12.75 Difference: $0
If COL meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $12.92, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Citi rates EVN as Downgrade to Neutral from Buy (3) -

Citi analysts didn't like the fact that operational costs made quite a pronounced jump in the December quarter, even though a number of events can be held responsible. They have downgraded to Neutral from Buy, also noting the share price has appreciated by some 40% since the October low last year.

Evolution Mining is probably en route to meeting its FY guidance, but higher costs remain the disappointment. Target lifts to $3.70 from $3.35 nevertheless, due to additional Cowal value attribution.

Target price is $3.70 Current Price is $3.75 Difference: minus $0.05 (current price is over target).
If EVN meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.32, suggesting downside of -11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Credit Suisse rates EVN as Underperform (5) -

December quarter production was slightly softer than Credit Suisse expected because of an outage at Cowal and seismicity issues at Frogs Leg underground that restricted higher grade ore access.

Costs are now guided to be at the upper end of prior ranges. Credit Suisse maintains an Underperform rating and $2.55 target.

Target price is $2.55 Current Price is $3.75 Difference: minus $1.2 (current price is over target).
If EVN meets the Credit Suisse target it will return approximately minus 32% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.32, suggesting downside of -11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Deutsche Bank rates EVN as Sell (5) -

Deutsche Bank analysts saw a "production miss" when the company released its December quarter production report, while costs surprised to the upside as well. The analysts identify a number of items that can be held responsible for the disappointing performance.

Adding further to the disappointment, it appears the company is now facing restraints on its cash flows and this means it won't be in a net cash position soon, as predicted, but more likely by the end of the June quarter.

Estimates have been scaled back. History suggests management can turn this ship around, but Deutsche Bank is also worried we might be witnessing peak production. Price target retained at $3.30, accompanied by a Sell rating, equally unchanged.

Target price is $3.30 Current Price is $3.75 Difference: minus $0.45 (current price is over target).
If EVN meets the Deutsche Bank target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.32, suggesting downside of -11.6% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Macquarie rates EVN as Outperform (1) -

Thanks to a mill breakdown and seismic activity, Evolution reported production -4% below expectation in the Dec Q and costs 22% above. The company has nevertheless retained its FY19 production guidance range and suggested costs will come in at the top end of guidance. Lower than expected copper prices impacted on costs.

Drilling to extend the Cowal underground is so far showing positive results, the broker notes. Neutral retained, target falls to $3.80 from $3.90.

Target price is $3.80 Current Price is $3.75 Difference: $0.05
If EVN meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.32, suggesting downside of -11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

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

December quarter production missed Morgan Stanley's estimates. The broker notes costs are tracking higher in FY19, although the company has reaffirmed guidance.

Exploration was positive in the quarter with some high-grade intercepts outside the resource at Scottish Archer (Mungari). This is important as Mungari needs new ore to extend the mine life beyond 2025.

Equal-weight rating maintained. Target is $2.80. Industry view is Attractive.

Target price is $2.80 Current Price is $3.75 Difference: minus $0.95 (current price is over target).
If EVN meets the Morgan Stanley target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.32, suggesting downside of -11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Ord Minnett rates EVN as Hold (3) -

December quarter gold production was -2% below Ord Minnett's forecasts, affected by operating issues at Cowal and Mungari. The broker lowers FY19 operating earnings (EBITDA) forecasts by -3%.

The broker suggests, as the balance sheet returns to net cash, the focus will return increasingly to capital allocation. Shareholder returns are expected to increase in the absence of M&A. Ord Minnett maintains a Hold rating and $3.40 target.

Target price is $3.40 Current Price is $3.75 Difference: minus $0.35 (current price is over target).
If EVN meets the Ord Minnett target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.32, suggesting downside of -11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

UBS rates EVN as Neutral (3) -

Management has not altered guidance, despite reported production being below estimates and costs higher because of a number of disruptions.

The company is not changing cut-off grades, which means strength in the gold price has not been diluted by chasing more marginal ounces.

UBS maintains a Neutral rating as valuation is starting to appear full. Target is raised to $3.70 from $3.20.

Target price is $3.70 Current Price is $3.75 Difference: minus $0.05 (current price is over target).
If EVN meets the UBS target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.32, suggesting downside of -11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Citi rates GXY as Buy (1) -

The December quarter was weaker than Citi expected, largely because of lower treated ore volumes. The broker downgrades 2018 and 2019 operating earnings estimates by -13% and -33% respectively, adjusting for production and costs, and lower price realisation in 2019.

The near-term catalyst is the potential strategic partnership in developing Sal de Vida. Target price moves to $4.00 from $4.30. Buy/High Risk rating retained.

Target price is $4.00 Current Price is $2.09 Difference: $1.91
If GXY meets the Citi target it will return approximately 91% (excluding dividends, fees and charges).

Current consensus price target is $3.10, suggesting upside of 48.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.8

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

UBS rates GXY as Buy (1) -

Grade, recoveries and production all rose in the December quarter after a weak September quarter. Guidance for 2019 is below UBS forecasts, with the company targeting first quarter spodumene production of 40-45,000t, and 180-210,000t in 2019.

UBS found little clarity on the market outlook. The company stated that, while 2019 spodumene prices are notably weaker, they have not been reduced to the same extent as Chinese lithium carbonate prices.

UBS retains a Buy rating and lowers the target to $2.70 from $3.75.

Target price is $2.70 Current Price is $2.09 Difference: $0.61
If GXY meets the UBS target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $3.10, suggesting upside of 48.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.8

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

Citi rates IAG as Neutral (3) -

After marking to market, Citi's estimates for earnings per share decline by -11% in FY19 and -1% for FY20 and FY21.

The broker believes the first half result should be solid, provided there are no major adverse findings from the Hayne Royal Commission in the meantime.

While some value has crept back into the stock, Citi is not completely swayed and retains a Neutral rating and $8.05 target.

Target price is $8.05 Current Price is $7.18 Difference: $0.87
If IAG meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $7.52, suggesting upside of 4.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Morgans rates KGL as Add (1) -

Morgans points out that drilling over the past three years has concentrated on the higher grade, deeper Rock Face and Reward prospects.

The new Jervois resource has excluded the lower grade material that was previously included and the average copper grade is up 43%, with contained copper up 18%. Contained silver is up 4%.

As the company completes a more advanced feasibility study and obtains regulatory approvals and funding, the broker expects valuation to move to an NPV basis from a contained metal basis.

Morgans maintains an Add rating and reduces the target to $0.41 from $0.52.

Target price is $0.41 Current Price is $0.32 Difference: $0.09
If KGL meets the Morgans target it will return approximately 28% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Citi rates NAB as Buy (1) -

National Australia Bank is re-pricing variable interest rates from January 31, stepping back into line with major bank peers which re-priced in September.

Citi believes the current share price offers material upside and compensates for risk, as the bank is poised to benefit from its major restructure.

Combined momentum in commercial banking means the bank is well-placed relative to peers, in the broker's opinion. Buy rating and $31 target maintained.

Target price is $31.00 Current Price is $24.80 Difference: $6.2
If NAB meets the Citi target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $28.48, suggesting upside of 14.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.2

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

Citi rates NWH as Buy (1) -

The company has now won major contracts at Koodaideri and Eliwana. While the combined value is only $104m, Citi is more confident in its FY20 forecasts as a result, as this positions the company to win subsequent work from all three major iron ore producers in the Pilbara.

The broker maintains a Buy rating but adds a High Risk to reflect the risks associated with the Forestfield Airport contract. Target is steady at $2.25.

The company has indicated the delay to the Forestfield Airport link is not likely to be material, and has reiterated first half guidance, but the broker is concerned that the schedule slippage leaves little room in terms of further issues or delays.

Target price is $2.25 Current Price is $1.84 Difference: $0.41
If NWH meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $2.23, suggesting upside of 21.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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

UBS rates NWH as Buy (1) -

The company has been awarded initial bulk earthworks at Koodaideri iron ore mine. Along with the Eliwana contract, this will primarily be delivered across FY20. UBS estimates civil works for both projects will total at least $1.6bn.

The broker believes upside risks to the company's win rates are heightened now, with 10-23% upside in FY20 if NRW Holdings can win 33-50% of the estimated pipeline of work. Buy rating and $2.35 target maintained.

Target price is $2.35 Current Price is $1.84 Difference: $0.51
If NWH meets the UBS target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $2.23, suggesting upside of 21.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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

Deutsche Bank rates ORA as Hold (3) -

Deutsche Bank analysts have updated their general projections for the Australian packaging industry, predominantly to incorporate updated FX input. The result is for slightly positive adjustments for both Orora and Pact Group, with Amcor's forecasts weakening by -1-3%.

Deutsche Bank points out Orora's earnings are sensitive to movements in the Australian dollar, which impacts the translation of offshore and export earnings, but also the company’s competitiveness, and the purchase of raw materials.

Overall, the broker's valuation has risen slightly, pushing up the price target by 5c to $3.35. Hold rating retained.

Target price is $3.35 Current Price is $3.20 Difference: $0.15
If ORA meets the Deutsche Bank target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $3.64, suggesting upside of 13.8% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Morgans rates ORA as Add (1) -

Morgans expects first half operating earnings (EBIT) growth of 7% when the company reports its first half result in February 13. This should be driven both organically and from acquisitions.

Currency movements should also contribute favourably to the result. The broker increases the target to $3.81 from $3.74. Valuation remains attractive and the broker maintains an Add rating.

Target price is $3.81 Current Price is $3.20 Difference: $0.61
If ORA meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $3.64, suggesting upside of 13.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Ord Minnett rates ORA as Hold (3) -

Ord Minnett observes the Australasian business has performed steadily and should benefit from recent organic growth initiatives, while the Pollock acquisition adds scale to North America.

The broker concedes modest valuation support but prefers Amcor ((AMC)) in the packaging segment. Hold rating maintained. Target is reduced to $3.50 from $3.60.

Target price is $3.50 Current Price is $3.20 Difference: $0.3
If ORA meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.64, suggesting upside of 13.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Citi rates OZL as Buy (1) -

December quarter production beat Citi's estimates. The broker believes construction progress at Carrapateena and further development of the Brazilian asset should drive the share price in 2019.

Carrapateena is on schedule for the first production in the December quarter. Citi maintains a Buy rating and reduces the target to $11.85 from $12.30.

Target price is $11.85 Current Price is $9.49 Difference: $2.36
If OZL meets the Citi target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $10.56, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.7

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

Credit Suisse rates OZL as Neutral (3) -

December quarter production was solid, Credit Suisse observes. Costs were below guidance and the schedule for Carrapateena has held up, despite investor concerns the timeline may be optimistic.

An updated resource from Brazil in the current quarter is expected to provide greater clarity around the Antas opportunity. Neutral rating and $9.00 target maintained.

Target price is $9.00 Current Price is $9.49 Difference: minus $0.49 (current price is over target).
If OZL meets the Credit Suisse target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $10.56, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.7

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

Macquarie rates OZL as Outperform (1) -

OZ Minerals posted a solid Dec Q production result, leading to a 15% guidance upgrade for Prominent Hill in 2019. Carrapateena remains on track and the broker is encouraged OZ Minerals is confident enough to provide production guidance.

The company boasts several upcoming catalysts, the broker notes, with studies for at least five projects due in the next six months. Outperform retained, target falls to $12.00 from $12.40.

Target price is $12.00 Current Price is $9.49 Difference: $2.51
If OZL meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $10.56, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.7

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

Morgans rates OZL as Add (1) -

2018 copper production was at the top end of guidance while higher gold grades and production helped deliver a beat to Morgans' estimates. The company has confirmed the construction schedule and expenditure at Carrapateena.

Morgans believes the market continues to under appreciate the company's valuation uplift, as Carrapateena will move from peak expenditure in 2019 to generating cash in 2020.

The broker is far more conservative in valuing the company's other growth options. Add rating maintained. Target is raised to $10.75 from $10.30.

Target price is $10.75 Current Price is $9.49 Difference: $1.26
If OZL meets the Morgans target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $10.56, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.7

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

Ord Minnett rates OZL as Hold (3) -

Copper output was slightly ahead of estimates and gold beat forecasts by 17% in the December quarter. Ord Minnett believes the share price is already pricing in material value for the company's development projects.

The broker has not ascribed a value to Carrapateena phase 2 but will look for more certainty on potential development costs and scope in order to gain confidence in the economic viability.

A Hold rating is maintained. Target is raised to $9.30 from $8.90.

Target price is $9.30 Current Price is $9.49 Difference: minus $0.19 (current price is over target).
If OZL meets the Ord Minnett target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $10.56, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.7

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

UBS rates OZL as Buy (1) -

Prominent Hill copper production was in line with estimates while gold production exceeded. This drove costs materially below UBS forecasts.

The broker believes the stock stands out amongst peers, with a number of options to deploy capital in new projects or to expand.

Moreover, few of these options are included in the share price and many are likely to have news flow over the next 12 months.

UBS maintains a Buy rating and raises the target to $11.00 from $10.60.

Target price is $11.00 Current Price is $9.49 Difference: $1.51
If OZL meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $10.56, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.7

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

Deutsche Bank rates PGH as Buy (1) -

Deutsche Bank analysts have updated their general projections for the Australian packaging industry, predominantly to incorporate updated FX input. The result is for slightly positive adjustments for both Orora and Pact Group, with Amcor's forecasts weakening by -1-3%.

For Pact Group, the broker's valuation has risen by 2% to $5.60, which becomes the new price target. The analysts highlight the company is most sensitive to NZD and USD movements. Buy rating retained.

Target price is $5.60 Current Price is $3.86 Difference: $1.74
If PGH meets the Deutsche Bank target it will return approximately 45% (excluding dividends, fees and charges).

Current consensus price target is $4.04, suggesting upside of 4.7% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.2

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

Credit Suisse rates QAN as Downgrade to Neutral from Outperform (3) -

Credit Suisse suspects, at some point, a weak consumer environment and increasing geopolitical uncertainty will weigh on demand for air travel. The broker expects Qantas will respond with capacity adjustments, but there could be a lag.

The broker lowers second half domestic ticket yield growth forecasts to 2.5% from 4% and international to 3% from 4.4%. The broker is now less confident of an additional buyback in the second half.

Target is reduced to $6.70 from $7.35. While there remains plenty of upside at the current share price, the broker believes it is insufficient to justify the prior rating and downgrades to Neutral from Outperform.

Target price is $6.70 Current Price is $5.99 Difference: $0.71
If QAN meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $6.50, suggesting upside of 8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Macquarie rates RRL as Neutral (3) -

Regis Resources' Dec Q production was in line with the broker's forecast while costs were -9% lower. The broker anticipates production will come in at the high end of FY19 guidance and costs at the low end.

The company's organic pipeline is strong, with the Rosemount underground set to improve Duketon grades and McPhillamy's permitting ongoing. Neutral and $5.10 target retained.

Target price is $5.10 Current Price is $4.92 Difference: $0.18
If RRL meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.46, suggesting downside of -9.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.4

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

Citi rates STO as Neutral (3) -

Citi suggests production at Fairview may be poised to recover. Production has been disappointing over the past 18 months because of poor well availability. Remediation efforts have stabilised the decline.

2019 production guidance is softer than the broker's initial forecast, being 71-78mmboe versus 81mmboe.

While longer-term growth and the balance sheet are favourable, Citi struggles to become more constructive on share price performance in 2019.

A Neutral rating is maintained and the target is reduced to $6.17 from $6.22.

Target price is $6.17 Current Price is $6.29 Difference: minus $0.12 (current price is over target).
If STO meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.84, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

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 STO as Outperform (1) -

Santos' Dec Q production report showed the company met with the broker's expectations for 2018 but well exceeded consensus. Management has guided to a slightly weaker 2019 but is typically conservative.

The broker suspects Santos will now focus on Quadrant synergies, upside in existing assets and Dorado, and also anticipates a 5-10% reserve upgrade to be announced at the upcoming result release. Outperform retained, target falls to $6.80 from $$7.00.

Target price is $6.80 Current Price is $6.29 Difference: $0.51
If STO meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $6.84, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

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 STO as Buy (1) -

December quarter production was ahead of Ord Minnett's estimates. Completing the Quadrant Energy acquisition supported a record quarter while a strong performance in core assets also meant the company beat 2018 sales guidance.

Ord Minnett maintains a Buy rating and raises the target to $7.30 from $7.20.

Target price is $7.30 Current Price is $6.29 Difference: $1.01
If STO meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $6.84, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

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 STO as Upgrade to Buy from Neutral (1) -

Sales revenue in the December quarter beat estimates, largely because of higher domestic gas prices. UBS upgrades to Buy from Neutral and the stock is now its preferred pick of the Australian E&P majors.

The three-year production growth forecast is 13% and growth is expected from all core assets. UBS reduces the target to $7.20 from $7.55, setting the target based on an estimated oil price of US$65/bbl in 2019.

Target price is $7.20 Current Price is $6.29 Difference: $0.91
If STO meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $6.84, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

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 SUN as Upgrade to Buy from Neutral (1) -

Operating conditions, as anticipated, have probably worsened of late in Suncorp's banking division, Citi suggests.

Suncorp is confident that cost savings could drive a cost-to-income ratio below 50% and the broker continues to give the company the benefit of the doubt.

Citi factors in the impact of the life sale, including a likely capital return and stranded costs.

With operating conditions seemingly favourable in the core general insurance business. the broker upgrades to Buy from Neutral and reduces the target to $14.60 from $16.00.

Target price is $14.60 Current Price is $13.05 Difference: $1.55
If SUN meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $14.45, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Morgan Stanley rates SYD as Upgrade to Overweight from Equal-weight (1) -

Morgan Stanley upgrades to Overweight from Equal-weight, in view of the recent underperformance in the stock and the value relative to global listed airports, as well as Australian infrastructure stocks.

The broker acknowledges investors may be wary of passenger growth this year, as airports are cycling higher comparables and forward capacity data is pointing to moderating near-term growth.

The broker believes Sydney Airport has the best potential returns in the grouping and will benefit from a diversity of traffic sources. Target is reduced to $7.07 from $7.47. Industry view is Cautious.

Target price is $7.07 Current Price is $6.65 Difference: $0.42
If SYD meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $7.11, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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