Australian Broker Call

Morgan Stanley rates A2M as Initiation of coverage with Underweight (5) -

Morgan Stanley believes the market is being too aggressive regarding the company's earnings estimates, calculated as implying market share in China will expand to around 9% by FY23.

The broker believes it unlikely a single-product company can generate such share within one of the most competitive markets globally.

Morgan Stanley initiates coverage with an Underweight rating and $9.60 target. Industry view is Cautious.

Target price is $9.60 Current Price is $11.57 Difference: minus $1.97 (current price is over target).
If A2M meets the Morgan Stanley target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.30, suggesting downside of -2.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.4

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

Morgan Stanley rates BAL as Initiation of coverage with Overweight (1) -

Morgan Stanley initiates coverage with an Overweight rating and $11 target. Industry view is Cautious. The broker believes Bellamy's is on the cusp of a turnaround, having developed a premium brand with what is, in effect, an inferior product, given it lacks Omega 3 & 6.

The new formula is expected to prove an inflection point in sales and earnings. The broker believes the current discounted valuation is not taking into account a recovery in the business and subsequent strong earnings growth.

Target price is $11.00 Current Price is $8.36 Difference: $2.64
If BAL meets the Morgan Stanley target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $10.13, suggesting upside of 21.2% (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

Morgan Stanley rates BKL as Initiation of coverage with Underweight (5) -

Morgan Stanley acknowledges a combination of rising incomes in China and the health and wellness trend has supported growth in the company's product categories. However, the stock appears to be stretching to achieve sales, such that the earnings quality is reduced.

Morgan Stanley initiates coverage of Blackmores with an Underweight rating and $104 target. Industry view is Cautious.

The broker believes inventory controls in China still have room to improve which would allow Blackmores to more effectively control its pricing. Until it does so, it remains susceptible to channel stuffing.

Target price is $104.00 Current Price is $129.64 Difference: minus $25.64 (current price is over target).
If BKL meets the Morgan Stanley target it will return approximately minus 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $117.67, suggesting downside of -9.2% (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 CCP as Add (1) -

First half net profit rose 12.7% and the company has upgraded guidance by 1.5%. Morgans suspects competitive pressure may start to affect the company's domestic debt buying in FY20 but growth should still come from consumer lending and US debt buying.

The broker maintains an Add rating because of visible medium-term earnings growth and upside potential in the US. Target is raised to $24.10 from $22.65.

Target price is $24.10 Current Price is $21.26 Difference: $2.84
If CCP meets the Morgans target it will return approximately 13% (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

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

First half underlying net profit was broadly in line with Ord Minnett's forecasts. The broker believes the risk/reward equation is now more balanced, particularly with an uncertain macro economic backdrop in Australia.

Rating is downgraded to Hold from Accumulate, although the target is raised to $23 from $22 because of changes to earnings forecasts.

The broker still believes double-digit earnings growth in FY20 is readily achievable.

Target price is $23.00 Current Price is $21.26 Difference: $1.74
If CCP meets the Ord Minnett target it will return approximately 8% (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 ECX as Neutral (3) -

The company is guiding to only a marginally improved net profit in FY19. In the light of the announcement Citi lowers forecasts by -4%. Neutral rating maintained.

The core businesses are performing well and appear stable, in the broker's view, while more peripheral businesses are underperforming.

Should guidance be delivered at the FY19 result in November, the recent -17% slump in the share price will prove to be overdone, Citi asserts. Target is reduced to $2.38 from $2.55.

Target price is $2.38 Current Price is $2.23 Difference: $0.15
If ECX meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting upside of 12.2% (ex-dividends)

The company's fiscal year ends in September.

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

Macquarie rates ECX as Outperform (1) -

The company has made a small downgrade to FY19 net profit estimates, expecting this to be broadly in line with that reported in FY18. EclipX has also noted cost reductions and provisions in the first half will contribute to a 40:60 skew to the second half.

Macquarie observes the company's announcement does not make it clear as to the impact of the proposed merger with McMillan Shakespeare ((MMS)).

The second half skew will require additional due diligence by McMillan Shakespeare and the delay in timing has increased the uncertainty, in the broker's view.

Outperform rating maintained. Target is reduced to $2.48 from $2.52.

Target price is $2.48 Current Price is $2.23 Difference: $0.25
If ECX meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting upside of 12.2% (ex-dividends)

The company's fiscal year ends in September.

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 ECX as Overweight (1) -

Expectations have been downgraded but in businesses which Morgan Stanley suspects merger proponent McMillan Shakespeare will consider non-core.

The company has announced a significant 40:60 skew in FY19 earnings because of increased equipment finance provisions along with the selling season for novated and fleet leasing being weighted to the second half.

Morgan Stanley maintains an Overweight rating.Target is $3.00. Industry view is In-Line.

Target price is $3.00 Current Price is $2.23 Difference: $0.77
If ECX meets the Morgan Stanley target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting upside of 12.2% (ex-dividends)

The company's fiscal year ends in September.

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 FMG as Downgrade to Hold from Add (3) -

Following recent strength in the iron ore price and resulting rise in the Fortescue Metals share price, Morgans downgrades to Hold from Add. Target is reduced to $5.45 from $5.68.

The stock does not appear expensive but spot prices are already at around US$80/t and a discount on low-grade has already narrowed, so the near-term risks appear skewed to the downside, in the broker's view.

Target price is $5.45 Current Price is $5.41 Difference: $0.04
If FMG meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $4.71, suggesting downside of -12.9% (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: 0.4

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

Morgan Stanley rates GEM as Overweight (1) -

Morgan Stanley finds the longer-term supply/demand dynamics compelling. The broker expects capital to exit the sector, while demographics, affordability and self-help support demand.

The broker rolls forward the valuation to 2020 and lifts the target to $4.00 from $3.25.

Morgan Stanley does not believe consensus has factored in the potential for a multi-year upgrade cycle. Overweight rating maintained. Industry view is In-Line.

Target price is $4.00 Current Price is $3.05 Difference: $0.95
If GEM meets the Morgan Stanley target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $3.17, suggesting upside of 4.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.8

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

Citi rates IPL as Neutral (3) -

Unplanned outages have confirmed a weak start to FY19. While the issues are likely to be temporary, Citi believes it is a setback to the company's "manufacturing excellence" strategy.

 Incitec Pivot is now heavily reliant on firmer commodity prices in FY19. Citi observes value is emerging in the stock but the catalysts are lacking. Neutral rating maintained. Target is reduced to $3.65 from $4.10.

Target price is $3.65 Current Price is $3.30 Difference: $0.35
If IPL meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $3.94, suggesting upside of 19.3% (ex-dividends)

The company's fiscal year ends in September.

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

Credit Suisse rates IPL as Outperform (1) -

Credit Suisse is disappointed with the unplanned outages at Louisiana and Phosphate Hill. The broker believes it too early to tell whether the issues are related to revised maintenance schedules but understands these events can have a large impact on investor sentiment.

An expansion at Moranbah remains the main potential use of capital. Outperform rating maintained. Target rises to $4.29 from $4.26.

Target price is $4.29 Current Price is $3.30 Difference: $0.99
If IPL meets the Credit Suisse target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $3.94, suggesting upside of 19.3% (ex-dividends)

The company's fiscal year ends in September.

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

Deutsche Bank rates IPL as Buy (1) -

Deutsche Bank believes the decline in the share price after the announcement of unplanned outages represents a buying opportunity. While reducing FY19 estimates for earnings by -7% to reflect the outages the broker maintains FY20 forecasts.

The outages are considered one-off in nature and unrelated, while extensive corrective action is being taken. Deutsche Bank maintains a Buy rating and $4.80 target.

Target price is $4.80 Current Price is $3.30 Difference: $1.5
If IPL meets the Deutsche Bank target it will return approximately 45% (excluding dividends, fees and charges).

Current consensus price target is $3.94, suggesting upside of 19.3% (ex-dividends)

The company's fiscal year ends in September.

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

Macquarie rates IPL as Outperform (1) -

The company has announced that unplanned outages at Louisiana and Phosphate Hill will affect operating earnings (EBIT) by -$45m. Macquarie suggests the issues reflect general operating risk rather than anything systemic.

The company is currently in the process of renewing its Moranbah ammonium nitrate contracts in Queensland. Macquarie factors in a -$10m impact over the next two years because of expectations for lower contracted ammonium nitrate prices but this does not assume any loss of volume.

Outperform rating maintained. Target is reduced to $4.05 from $4.19.

Target price is $4.05 Current Price is $3.30 Difference: $0.75
If IPL meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $3.94, suggesting upside of 19.3% (ex-dividends)

The company's fiscal year ends in September.

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

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

Morgan Stanley updates estimates to account for the unplanned outages and recent weakness in fertiliser prices. The company has announced a -$45m adverse impact from plant outages in Louisiana and Phosphate Hill.

Morgan Stanley also lowers fertiliser price assumptions and cuts FY19 estimates for earnings per share by -10%.

Equal-weight rating, Cautious industry view and target is reduced to $3.60 from $4.20.

Target price is $3.60 Current Price is $3.30 Difference: $0.3
If IPL meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.94, suggesting upside of 19.3% (ex-dividends)

The company's fiscal year ends in September.

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

Morgans rates IPL as Hold (3) -

The company has experienced unplanned outages at Louisiana and Phosphate Hill. Morgans makes material downgrades to forecasts and now expects FY19 profit to be marginally lower than FY18.

The broker believes, despite management's focus on improving manufacturing reliability, more improvements are required. Internal issues are reducing the leverage to more favourable fertiliser prices and a lower Australian dollar.

Morgans maintains a Hold rating and reduces the target to $3.50 from $3.84.

Target price is $3.50 Current Price is $3.30 Difference: $0.2
If IPL meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $3.94, suggesting upside of 19.3% (ex-dividends)

The company's fiscal year ends in September.

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

Ord Minnett rates IPL as Buy (1) -

Unplanned outages at Louisiana and Phosphate Hill are expected to result in a combined negative impact of -$45m to FY19 earnings (EBIT).

Repair work on the latter has been completed and the plant has resumed normal operations, while completion of repairs to the Waggaman plant in Louisiana is expected mid February.

Ord Minnett maintains a Buy rating and reduces the target to $4.10 from $4.20.

Target price is $4.10 Current Price is $3.30 Difference: $0.8
If IPL meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $3.94, suggesting upside of 19.3% (ex-dividends)

The company's fiscal year ends in September.

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

UBS rates IPL as Neutral (3) -

Unplanned manufacturing outages are likely to have a -$45m impact on FY19 earnings. UBS reduces estimates by -7% to reflect the outages.

While expecting a positive outlook for explosives volumes as mining demand normalises, UBS also expects oversupply and near-term re-pricing to weigh on earnings growth.

Neutral rating maintained. Target is reduced to $3.50 from $3.70.

Target price is $3.50 Current Price is $3.30 Difference: $0.2
If IPL meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $3.94, suggesting upside of 19.3% (ex-dividends)

The company's fiscal year ends in September.

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

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

The company's Magellan Global Trust has announced a unit purchase plan. Eligible holders will be able to purchase up to $15,000 in new units at a -5% discount to net asset value.

The company will pay for the -5% on this raising to minimise dilution. Morgan Stanley believes this makes sense, as in effect Magellan Financial is purchasing a revenue stream from a closed-end trust for around 5x earnings.

Equal-weight. Target is $25.00. Industry view: In-Line.

Target price is $25.00 Current Price is $27.87 Difference: minus $2.87 (current price is over target).
If MFG meets the Morgan Stanley target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.24, suggesting upside of 4.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Macquarie rates MMM as Outperform (1) -

The company has continued its acquisition momentum in the December quarter. However, Macquarie notes marketing investment is driving a higher loss profile.

2018 portions sold exceeded 15m, and collectively this underpins the company's confidence in guidance for break even by 2020.

Macquarie expects shareholders will vote in favour of convertible bonds, easing near-term liquidity concerns. The broker retains an Outperform rating and reduces the target to $1.30 from $1.50.

Target price is $1.30 Current Price is $0.57 Difference: $0.73
If MMM meets the Macquarie target it will return approximately 128% (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

Macquarie rates NWS as Outperform (1) -

Macquarie reduces estimates although remains positive about the changes across the business. Around 30% of revenue is now coming from digital advertising and subscribers in all three regions, although news and information services faces a tough comparable in the UK.

Foxtel is now under majority ownership and the main issue will be the extent to which Kayo Sports/Foxtel can extend penetration and minimise cannibalisation of the higher ARPU broadcast product.

Target is reduced to $24.80 from $25.84. Macquarie reiterates an Outperform rating.

Target price is $24.80 Current Price is $17.81 Difference: $6.99
If NWS meets the Macquarie target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $21.59, suggesting upside of 21.2% (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: 0.4

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

UBS rates OGC as Downgrade to Neutral from Buy (3) -

UBS believes the risks to Waihi and Macraes in terms of mine life have been addressed. These assets contribute around half of current production.

The broker notes permit approvals and the gold price have driven the share price 20% higher since December and it is now above valuation.

Rating is downgraded to Neutral from Buy as a result. Target is raised to $4.85 from $4.50.

Target price is $4.85 Current Price is $4.78 Difference: $0.07
If OGC meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $4.97, suggesting upside of 3.9% (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: 0.3

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

Macquarie rates PAN as Outperform (1) -

Expenditure on Savannah was ahead of Macquarie's estimates. Production has recommenced and ramp up to full mining rates is underway. The company expects to ship its first concentrate in early February.

Macquarie believes Panoramic Resources will perform better in a depressed nickel environment versus peers. Outperform rating and $0.72 target maintained.

Target price is $0.72 Current Price is $0.47 Difference: $0.25
If PAN meets the Macquarie target it will return approximately 53% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Ord Minnett rates PLS as Hold (3) -

Ord Minnett found the production update sound, although suspects it may take a further six months for operating leverage to materialise.

The company produced 48,000t of lithium concentrate in the December quarter, a significant increase on September.

The broker maintains a Hold rating and reduces the target to $0.85 from $0.90.

Target price is $0.85 Current Price is $0.66 Difference: $0.19
If PLS meets the Ord Minnett target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $1.10, suggesting upside of 66.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

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

Revenue growth, operating profit and cash generation were ahead of forecasts in the first half.

Morgans notes the company has adjusted swiftly to the change in the Google algorithm and clawed back the lost profit margin through pricing strategies and better deals with suppliers.

As the risks associated with the algorithm change are now quantifiable, Morgans upgrades to Add from Hold. Target is raised to $1.27 from $1.19.

Target price is $1.27 Current Price is $0.99 Difference: $0.28
If RBL meets the Morgans target it will return approximately 28% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Citi rates RSG as Buy (1) -

Citi believes investors should start to experience some rewards in the June half from the Syama transition to underground, as the mine ramps up and de-risks. December quarter production was close to the broker's estimates.

The next major expenditure is likely to be the $110m expansion of Ravenswood by 2020. This is the subject of a review so the outlay could be delayed, Citi suspects, in favour of opening ore sources at Syama, and de-leveraging.

Buy/High Risk rating maintained and target is raised to $1.70 from $1.55.

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

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Macquarie rates RSG as Outperform (1) -

Gold production in the December quarter was below expectations. While production from Syama sulphide was softer, Macquarie expects the underground operation to ramp up to full capacity over the next six months.

Full year guidance is maintained for 300,000 ounces per annum. Outperform rating and $1.60 target maintained.

Target price is $1.60 Current Price is $1.14 Difference: $0.46
If RSG meets the Macquarie target it will return approximately 40% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Citi rates TPM as Sell (5) -

The company is terminating its mobile network roll-out. This decision means Australia is likely to stay with three mobile networks, Citi points out, even if the ACCC blocks the proposed merger with Vodafone.

The broker's target is $6.75, which assumes a merger is approved. However, with the stock already trading above all scenario valuations Citi maintains a Sell rating.

Target price is $6.75 Current Price is $7.02 Difference: minus $0.27 (current price is over target).
If TPM 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 $6.69, suggesting downside of -4.7% (ex-dividends)

The company's fiscal year ends in July.

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

Morgan Stanley rates TPM as Overweight (1) -

Morgan Stanley believes the end of the company's plans to build a new mobile network are a net positive for the shares because it reduces the balance sheet risk and there is a higher probability the merger with Vodafone Australia will be approved.

The company has ceased the roll-out of its mobile network in Australia, effective immediately, because of the recent ban on the use of Huawei for 5G equipment. Overweight rating and In-Line industry view. Target is $7.15.

Target price is $7.15 Current Price is $7.02 Difference: $0.13
If TPM meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $6.69, suggesting downside of -4.7% (ex-dividends)

The company's fiscal year ends in July.

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

Morgans rates TPM as Hold (3) -

The company has ceased the roll-out of its Australian mobile network largely because of challenges with Huawei, which has been blocked as a telco vendor because of concerns around its business practices.

This means costs and the network upgrade path from 4G to 5G are uncertain.

Conveniently, Morgans suggests this also means the ACCC will find it hard to argue against the merger with Vodafone Australia because of substantially lesser mobile competition. The broker believes the announcement increases the probability of the merger proceeding.

Hold rating and $6.65 target maintained.

Target price is $6.65 Current Price is $7.02 Difference: minus $0.37 (current price is over target).
If TPM meets the Morgans target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.69, suggesting downside of -4.7% (ex-dividends)

The company's fiscal year ends in July.

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

UBS rates TPM as Sell (5) -

UBS is somewhat cynical about the decision to cease rolling out a mobile network, given it removes the chief concern of the ACCC that the proposed merger with Vodafone would substantially lessen competition in the market for retail mobile services.

Nevertheless, the broker agrees that rolling out a fourth network is now less viable given the ban from using Huawei and the local community hurdles. The broker makes no changes to forecasts, given the lack of clarity, particularly around write-downs.

UBS maintains a Sell rating and reduces the target to $6.40 from $7.00.

Target price is $6.40 Current Price is $7.02 Difference: minus $0.62 (current price is over target).
If TPM meets the UBS target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.69, suggesting downside of -4.7% (ex-dividends)

The company's fiscal year ends in July.

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

Morgans rates VEA as Add (1) -

The company has achieved an average Geelong refining margin of US$7.40/bbl. Refining margins are bottoming at lower levels than Morgans expected, which is hurting the company's earnings.

The broker observes additional refining capacity coming online recently in China has contributed to the current regional surplus of gasoline and prolonged the downturn in margins.

While December is likely to be a low point the broker now factors in a longer period to absorb the supply excess. Add rating maintained. Target is reduced to $2.60 from $2.66.

Target price is $2.60 Current Price is $1.81 Difference: $0.79
If VEA meets the Morgans target it will return approximately 44% (excluding dividends, fees and charges).

Current consensus price target is $2.39, suggesting upside of 31.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.8

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

Morgans rates VHT as Add (1) -

Morgans observes cash receipts were solid for the third quarter in a row, although some delays in the signing of contracts has meant recurring revenue has been revised down for FY19.

The broker increases its forecast loss to -NZ$9.9m. Add rating maintained. Target is reduced $1.55 from $1.61.

Target price is $1.55 Current Price is $1.09 Difference: $0.46
If VHT meets the Morgans target it will return approximately 42% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 1.0

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

Ord Minnett rates VHT as Buy (1) -

While the growth in annual recurring revenue was solid at the end of the December quarter, it did not meet expectations. Penetration is now at 5.9% of the US market.

The inclusion of other services has materially dragged down the average unit price. Meanwhile, cash flows of NZ$1.9m were the highest on record.

Ord Minnett maintains a Buy rating and reduces the target to $1.18 from $1.46.

Target price is $1.18 Current Price is $1.09 Difference: $0.09
If VHT meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 1.0

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