Australian Broker Call

Morgan Stanley rates AGL as Underweight (5) -

After evaluating storage and hydrogen economics and strategies, Morgan Stanley thinks electricity price headwinds for AGL Energy will continue as renewables penetration increases.

This year the broker looks for a regional oil and gas price recovery, which drives a preference for Origin Energy ((ORG)) over the company.

Both companies are pursuing storage opportunities, which the analysts view as logical. 

For investors, the analysts believe the focus remains near-term energy market trading conditions and growth capex plans in storage and green hydrogen.

Morgan Stanley maintains the Underweight rating and reduces the target price to $10.68 from $14.14.

Target price is $10.68 Current Price is $12.19 Difference: minus $1.51 (current price is over target).
If AGL meets the Morgan Stanley target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.27, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.5

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

Credit Suisse rates AIA as Underperform (5) -

In response to border opening delays Credit Suisse delays the trans-Tasman bubble start from March to July 2021 and long-haul borders from July to a soft open pre-Christmas.

The broker revises FY21-23 forecast earnings (EBITDAI) by 20%, 26% and -4%, respectively.

Credit Suisse raises the target to NZ$6.95 from NZ$5.95.  Underperform retained.

Current Price is $7.10. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.0

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

Credit Suisse rates ALD as Neutral (3) -

Ampol has provided a partial update which includes a loss of -$145m for the Lytton Refinery. Credit Suisse believes investors may be indifferent to a strategic review of the asset by the company and a closure may not be viewed unfavourably. 

In the absence of a comprehensive update, the broker assumes (with the exception of the refinery number) the company is happy with the consensus estimate. Prior to this trading update earnings (EBIT) guidance was $405m.

The target price is reduced to $27.71 from $29.37 and the Neutral rating is unchanged. Industry view is Cautious.

Target price is $27.71 Current Price is $28.58 Difference: minus $0.87 (current price is over target).
If ALD meets the Credit Suisse target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $31.37, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Macquarie rates ALD as Outperform (1) -

Backed by lower crude premiums, Ampol's Lytton refinery's December quarter operating loss was down to -$4m, a far cry from the -$82m seen in the third quarter. The company's closing debt levels for the quarter were also much better than anticipated. 

While Ampol still faces headwinds in the form of legal battles with Chevron and EG Group, Macquarie considers the fuels industry structure in Australia attractive and believes the earnings outlook for Ampol is attractive with better volumes expected.

Outperform retained with a target price of $34.65.

Target price is $34.65 Current Price is $28.58 Difference: $6.07
If ALD meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $31.37, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Ord Minnett rates ALD as Hold (3) -

With a loss of -$4m in the December quarter, Ampol's (unaudited) Lytton refinery operating loss (replacement cost of sales operating profit) was less than Ord Minnett’s forecast. The Lytton refiner margin of US$5.13/bbl in the quarter was also better than expected.

The company's net debt for 2020 of $434m was higher than the broker expected but remained below consensus estimates.

Despite the strong share price performance and an earlier than expected off-market buyback, Ord Minnett decides to maintain its Hold rating due to a lack of valuation support. Target price is unchanged at $30.00.

Target price is $30.00 Current Price is $28.58 Difference: $1.42
If ALD meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $31.37, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

UBS rates ALD as Buy (1) -

Ampol provided a positive fourth-quarter update on the Lytton refinery with operating loss of -$4m materially ahead of consensus (-$24m loss). Also, led by working capital movements, Ampol's closing net debt at $434m was ahead of UBS's estimated $589m.

UBS expects Lytton refiner margins to lift to US$7.2/bbl by 2023 in light of oil demand recovery.

Expecting upside from capital management beyond the $300m buyback, UBS retains its Buy rating. Target falls to $33.50 from $33.70.

Target price is $33.50 Current Price is $28.58 Difference: $4.92
If ALD meets the UBS target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $31.37, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Credit Suisse rates AMP as Outperform (1) -

A fourth consecutive quarter of inflows ex-ERS (early release of super) for the industry suggests to Credit Suisse that confidence is returning after the disruption caused by the Royal Commission. 

The broker is restricted in it's coverage of AMP due to involvement in a corporate action and as a result doesn't proffer a target price or rating.

Current Price is $1.58. Target price not assessed.

Current consensus price target is $1.56, suggesting downside of -0.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Morgans rates BPT as Add (1) -

Morgans suggests now is an opportune time to invest in the oil and gas sector after gaining further conviction both oil and LNG markets have moved off their lows.

Looking at the next 12 months, the broker expects returning base load oil consumption to further contribute to recovering oil prices, which should remain in a more typical mid-cycle range of US$50-$65/bbl.

The analysts believe attractive upside potential remains beyond this base case as consensus is too optimistic on the pace in which it expects oil supply to respond to improving demand.

Morgans lowers the target price for Beach Energy to $2.25 from $2.29 and maintains the Add rating.

Target price is $2.25 Current Price is $1.97 Difference: $0.28
If BPT meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $2.03, suggesting upside of 3.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Morgan Stanley rates CCX as Overweight (1) -

Morgan Stanley believes the recently completed acquisition of Evans (UK plus-sized brand) makes both strategic and financial sense and should accelerate the company's global expansion.

The broker increases EPS forecasts by 8-21% for FY21-23 after incorporating Evans and factoring in higher organic growth.

As the company's online penetration increases, the analyst thinks the company is best compared to pure-play e-commerce companies such as Temple & Webster Group ((TPW)) and Kogan.com ((KGN)).

Overweight rating. Target is increased to $4.50 from $3.55. Industry view is In-line.

Target price is $4.50 Current Price is $3.78 Difference: $0.72
If CCX meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $4.27, suggesting upside of 12.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates COE as Add (1) -

Morgans suggests now is an opportune time to invest in the oil and gas sector after gaining further conviction both oil and LNG markets have moved off their lows.

Looking at the next 12 months, the broker expects returning base load oil consumption to further contribute to recovering oil prices, which should remain in a more typical mid-cycle range of US$50-$65/bbl.

The analysts believe attractive upside potential remains beyond this base case as consensus is too optimistic on the pace in which it expects oil supply to respond to improving demand.

The Add rating and target price of $0.43 are unchanged for Cooper Energy.

Target price is $0.43 Current Price is $0.40 Difference: $0.03
If COE meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $0.42, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Morgans rates CTP as Hold (3) -

Morgans suggests now is an opportune time to invest in the oil and gas sector after gaining further conviction both oil and LNG markets have moved off their lows.

Looking at the next 12 months, the broker expects returning base load oil consumption to further contribute to recovering oil prices, which should remain in a more typical mid-cycle range of US$50-$65/bbl.

The analysts believe attractive upside potential remains beyond this base case as consensus is too optimistic on the pace in which it expects oil supply to respond to improving demand.

Morgans raises the target price for Central Petroleum to $0.13 from $0.12 and maintains the Hold rating.

Target price is $0.13 Current Price is $0.14 Difference: minus $0.01 (current price is over target).
If CTP meets the Morgans target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Credit Suisse rates FPH as Upgrade to Neutral from Underperform (3) -

Following a period of share price underperformance, coupled with the ongoing surge in covid-19 hospitalisations in America and Europe, Credit Suisse believes there is strong valuation support for the company's share price. 

The broker lifts FY21-23 profit (NPAT) estimates by 7%, 2% and 1%, respectively, to reflect a likely stronger demand for consumables.

The rating is upgraded to Neutral from Underperform and the target rises to NZ$33.55 from NZ$31.

Current Price is $30.00. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

This company reports in NZD. 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

Credit Suisse rates HUB as Neutral (3) -

A fourth consecutive quarter of inflows ex-ERS (early release of super) for the industry suggests to Credit Suisse that confidence is returning after the disruption caused by the Royal Commission. 

The company remains a leader on net flows in the September 2020 quarter, capturing an outsized share from the institutional platforms that remained in outflow, explains the broker.

The analyst expects the company to continue to attract significant inflows and increase overall market share.

The Neutral rating and target price of $21.50 are unchanged.

Target price is $21.50 Current Price is $22.51 Difference: minus $1.01 (current price is over target).
If HUB meets the Credit Suisse target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $22.94, suggesting downside of -2.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Credit Suisse rates IFL as Outperform (1) -

A fourth consecutive quarter of inflows ex-ERS (early release of super) for the industry suggests to Credit Suisse that confidence is returning after the disruption caused by the Royal Commission. 

The removal of the ERS headwinds should benefit the institutional platforms (such as IOOF Holdings) the most as they were the most impacted by the scheme, explains the broker.

The analyst continues to see medium-term value and the company is the top pick amongst peers. While there are concerns over a recovery in flows, revenue margin pressure and attrition, it's considered these are more than factored into the share price.

The Outperform rating and target price of $5 are maintained.

Target price is $5.00 Current Price is $3.68 Difference: $1.32
If IFL meets the Credit Suisse target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $4.58, suggesting upside of 24.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates KAR as Add (1) -

Morgans suggests now is an opportune time to invest in the oil and gas sector after gaining further conviction both oil and LNG markets have moved off their lows.

Looking at the next 12 months, the broker expects returning base load oil consumption to further contribute to recovering oil prices, which should remain in a more typical mid-cycle range of US$50-$65/bbl.

The analysts believe attractive upside potential remains beyond this base case as consensus is too optimistic on the pace in which it expects oil supply to respond to improving demand.

Morgans increases the target price for Karoon Energy to $1.64 from $1.59 and the Add rating is unchanged. 

Target price is $1.64 Current Price is $1.11 Difference: $0.53
If KAR meets the Morgans target it will return approximately 48% (excluding dividends, fees and charges).

Current consensus price target is $1.43, suggesting upside of 28.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates LFG as Initiation of coverage with Outperform (1) -

Macquarie initiates coverage on Liberty Financial Group with an Outperform rating and a target price of $8.27.

The group is a non-bank financial services business with a circa $12bn portfolio as at June 2020, including more than $8bn in residential mortgages.

With Liberty benefiting from higher-than-anticipated net interest margins, Macquarie forecasts earnings to be circa 15% above the prospectus net profit after tax. 

Target price is $8.27 Current Price is $7.76 Difference: $0.51
If LFG meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Credit Suisse rates NWL as Neutral (3) -

A fourth consecutive quarter of inflows ex-ERS (early release of super) for the industry suggests to Credit Suisse that confidence is returning after the disruption caused by the Royal Commission. 

The company remains a leader on net flows in the September 2020 quarter, capturing an outsized share from the institutional platforms that remained in outflow, explains the broker.

The analyst expects the company to continue to attract significant inflows and increase overall market share.

The Neutral rating and target price of $14.75 are maintained.

Target price is $14.75 Current Price is $15.11 Difference: minus $0.36 (current price is over target).
If NWL meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.90, suggesting downside of -6.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.2

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

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

After evaluating storage and hydrogen economics and strategies, Morgan Stanley thinks electricity price headwinds for Origin Energy will continue as renewables penetration increases.

This year the broker looks for a regional oil and gas price recovery, which drives a preference for the company over AGL Energy ((AGL)). Electricity headwinds that are buffeting the latter also apply but AGL Energy's 's positioning is relatively more flexible.

Both companies are pursuing storage opportunities, which the analysts view as logical, and see Origin Energy's green molecules explo-
ration as an incremental positive beyond 2025.

For investors, the analysts believe the focus remains near-term energy market trading conditions and growth capex plans in storage and green hydrogen.

The company's valuation remains closely linked to oil prices and the broker is also encouraged by the company's next potential growth initiatives in green hydrogen and ammonia.

The rating of Equal-Weight and target price of $5.83 are unchanged.

Target price is $5.83 Current Price is $5.15 Difference: $0.68
If ORG meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $6.13, suggesting upside of 19.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Morgans rates ORG as Add (1) -

Morgans suggests now is an opportune time to invest in the oil and gas sector after gaining further conviction both oil and LNG markets have moved off their lows.

Looking at the next 12 months, the broker expects returning base load oil consumption to further contribute to recovering oil prices, which should remain in a more typical mid-cycle range of US$50-$65/bbl.

The analysts believe attractive upside potential remains beyond this base case as consensus is too optimistic on the pace in which it expects oil supply to respond to improving demand.

A standout for the broker is the production performance of the Queensland producers which will benefit Origin Energy.

Morgans lowers the target price to $6.29 from $6.48 and maintains the Add rating.

Target price is $6.29 Current Price is $5.15 Difference: $1.14
If ORG meets the Morgans target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $6.13, suggesting upside of 19.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Morgans rates OSH as Hold (3) -

Morgans suggests now is an opportune time to invest in the oil and gas sector after gaining further conviction both oil and LNG markets have moved off their lows.

Looking at the next 12 months, the broker expects returning base load oil consumption to further contribute to recovering oil prices, which should remain in a more typical mid-cycle range of US$50-$65/bbl.

The analysts believe attractive upside potential remains beyond this base case as consensus is too optimistic on the pace in which it expects oil supply to respond to improving demand.

Morgans raises the target price for Oil Search to $4.10 from $3.80 and maintains the Hold rating.

Target price is $4.10 Current Price is $4.40 Difference: minus $0.3 (current price is over target).
If OSH meets the Morgans target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.84, suggesting downside of -12.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: -0.1

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

UBS rates PME as Neutral (3) -

Pro Medicus signed a 7-year contract for Visage 7 viewer and open archive worth $40m with Intermountain Healthcare. UBS estimates the contract represents $5.8-6.5m per annum at full volumes. Rollout is expected to commence in the third quarter.

The broker views Pro Medicus as one of the highest quality companies in its coverage with earnings risk skewed to the upside from a materially higher pipeline conversion expected in FY21.

Neutral rating is reaffirmed with a target of $32.

Target price is $32.00 Current Price is $36.53 Difference: minus $4.53 (current price is over target).
If PME meets the UBS target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Macquarie rates PMV as Outperform (1) -

Premier Investments' latest trading update puts the first-half operating income between $221-$233m which not only exceeds the company's retail operating income for FY20 but is also considerably higher than Macquarie's forecast of $202.1m for the entire FY21.

A covid-led shift towards online sales drove the strong beat with the company's investment in e-commerce pre-pandemic enabling the group to make use of the higher-margin online channel. 

Earnings forecasts have been revised between 4-40% over FY21-23. 

Outperform rating is retained with the target rising to $28 from $24.22.

Target price is $28.00 Current Price is $24.38 Difference: $3.62
If PMV meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $23.80, suggesting downside of -2.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Macquarie rates RIO as Outperform (1) -

Rio Tinto has secured a revised electricity agreement at the New Zealand Aluminium Smelter (NZAS) which, observes Macquarie, positions the smelter better on a global scale.

While the agreement will see the smelter remain open until the end of 2024, with further concessions the broker believes the asset could remain operational for more than a decade.

Driven by buoyant iron ore prices, Rio Tinto continues to boast earnings upgrade momentum, with a spot price scenario generating 75% and 150% higher earnings than Macquarie's forecasts for 2021-22.

The Outperform rating and target of $127 are unchanged.

Target price is $127.00 Current Price is $119.66 Difference: $7.34
If RIO meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $119.29, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.4

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

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

Rio Tinto has announced an agreement on a new electricity agreement with Meridian Energy which will allow Tiwai Point
aluminium smelter to continue operations until December 31, 2024. This compares to a prior expectation of closure in August 2021.

Morgan Stanley estimates the EPS impacts are likely to be negligible (and a small positive for 2021). It's considered the negotiation has likely led the smelter to be operating close to break-even.

Equal-weight rating retained, alongside an Attractive industry view. Target price is unchanged at $116.

Target price is $116.00 Current Price is $119.66 Difference: minus $3.66 (current price is over target).
If RIO meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $119.29, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.4

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

UBS rates SHL as Neutral (3) -

With 16.4m PCR tests conducted during the first half, UBS pegs the total revenue contribution from the testing at a whopping circa $1.4bn for Sonic Healthcare. The company's operating income growth for the first half is expected to be 74%.

Assuming covid vaccines are distributed efficiently over the coming 12-18 months, UBS forecasts total PCR testing revenue of $2.2bn in FY21, which is expected to decline to $798m in FY22 and to $65m in FY23. 

The Neutral rating and $34.75 target price are unchanged.

Target price is $34.75 Current Price is $33.83 Difference: $0.92
If SHL meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $37.18, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Morgans rates STO as Add (1) -

Morgans suggests now is an opportune time to invest in the oil and gas sector after gaining further conviction both oil and LNG markets have moved off their lows.

Looking at the next 12 months, the broker expects returning base load oil consumption to further contribute to recovering oil prices, which should remain in a more typical mid-cycle range of US$50-$65/bbl.

The analysts believe attractive upside potential remains beyond this base case as consensus is too optimistic on the pace in which it expects oil supply to respond to improving demand.

A standout for the broker is the production performance of the Queensland producers which will benefit Santos.

Morgans increases the target price to $8.25 from $7.05 and maintains the Add rating.

Target price is $8.25 Current Price is $7.50 Difference: $0.75
If STO meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $7.07, suggesting downside of -5.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.7

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

Morgans rates SXY as Add (1) -

Morgans suggests now is an opportune time to invest in the oil and gas sector after gaining further conviction both oil and LNG markets have moved off their lows.

Looking at the next 12 months, the broker expects returning base load oil consumption to further contribute to recovering oil prices, which should remain in a more typical mid-cycle range of US$50-$65/bbl.

The analysts believe attractive upside potential remains beyond this base case as consensus is too optimistic on the pace in which it expects oil supply to respond to improving demand.

Morgans increases the target price for Senex Energy to $0.53 from $0.52. The Add rating is unchanged.

Target price is $0.53 Current Price is $0.37 Difference: $0.16
If SXY meets the Morgans target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $0.44, suggesting upside of 20.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Citi rates WHC as Buy (1) -

Whitehaven Coal's December quarter trading update disappointed with saleable coal production no less than -22% below Citi's forecast.

In addition, realised prices for both thermal and met coal were also lower than expected. Citi analysts have grabbed the opportunity to incorporate a stronger AUD estimate into their forecasts.

Including rolling forward of the modeling, and while noting the disappointment seems to have had no impact on the company's prospects for FY21, Citi's valuation has increased to $3.53 from $3.38.

Buy/High Risk rating retained with a $2 target, equally unchanged.

Target price is $2.00 Current Price is $1.81 Difference: $0.19
If WHC meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $1.89, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Credit Suisse rates WHC as Outperform (1) -

In the wake of the December quarter update, Credit Suisse forecasts additional upside and meaningful free cashflow for Whitehaven Coal, as NEWC thermal prices continue to run hard.  

The broker highlights an unexpected -0.7m hit taken at Narrabri as the mine traversed through a previously unknown fault. There were also logistics challenges at NCIG and Waratah, but numbers were considered steady at Maules.

The Outperform and $1.95 target price are unchanged.

Target price is $1.95 Current Price is $1.81 Difference: $0.14
If WHC meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $1.89, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

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

While production and sales in the second quarter were on expected lines, the quarter was marred by damage at a ship loader and Chinese import restrictions.

Managed run-of-mine coal production guidance has been tightened to 21-22.5mt from 21-22.8mt after incorporating a circa 4% upgrade to Maules Creek guidance and reducing the Narrabri guidance by circa -10%.

Since run-of-mine coal production in the first half accounts for only about 43% of guidance, Macquarie believes there will be a step-up in the second half volumes.

Rating is upgraded to Neutral from Underperform with the target price rising to $1.80 from $1.30.

Target price is $1.80 Current Price is $1.81 Difference: minus $0.01 (current price is over target).
If WHC meets the Macquarie target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.89, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Morgan Stanley rates WHC as Overweight (1) -

December quarter coal production was in-line with Morgan Stanley's estimates. Maules outperformed the broker's estimates by 30%, while Narrabri underperformed by around -50% (as an unexpected fault was encountered).

The broker still sees strong stock upside to the base case valuation of $2.15 and spot valuation of $2.55. It's considered this bodes well for the company in a rising coal price environment.

Overweight rating maintained and the target price is increased to $2.15 from $1.90. Industry view: Attractive.

Target price is $2.15 Current Price is $1.81 Difference: $0.34
If WHC meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $1.89, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Morgans rates WHC as Add (1) -

Strong second quarter production reaffirms to Morgans that Whitehaven Coal is on track to meet FY21 production and cost guidance. It's considered a strong thermal price recovery should negate any prior balance sheet concerns.

This pricing recovery along with a low share price leads the broker to suggest compelling value is on offer. The analyst raises forecasts on slightly higher second half price forecasts and lower assumed capital expenditure.

Morgans raises the target price to $2.15 from $2 and maintains the Add rating.

Target price is $2.15 Current Price is $1.81 Difference: $0.34
If WHC meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $1.89, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

UBS rates WHC as Buy (1) -

Whitehaven Coal's production and sale of coal for the first half were in-line with UBS's forecasts. The only glitch was Narrabri missing its production targets.

The miner has revised its FY21 run-of-mine guidance to 21-22.5mt from 21-22.8mt with Narrabri guidance lowered to 5.4-6mt from 6-6.7mt. Sales guidance has been tightened to 19-20mt from 18.5-20mt. 

UBS retains its Buy rating with a target price of $2.15.

Target price is $2.15 Current Price is $1.81 Difference: $0.34
If WHC meets the UBS target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $1.89, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Morgans rates WPL as Add (1) -

Morgans suggests now is an opportune time to invest in the oil and gas sector after gaining further conviction both oil and LNG markets have moved off their lows.

Looking at the next 12 months, the broker expects returning base load oil consumption to further contribute to recovering oil prices, which should remain in a more typical mid-cycle range of US$50-$65/bbl.

The analysts believe attractive upside potential remains beyond this base case as consensus is too optimistic on the pace in which it expects oil supply to respond to improving demand.

Morgans raises the target price for Woodside Petroleum to $28.90 from $24.60 and maintains the Add rating.

Target price is $28.90 Current Price is $26.61 Difference: $2.29
If WPL meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $24.76, suggesting downside of -7.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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