Australian Broker Call
May 23, 2017
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COMPANIES DISCUSSED IN THIS ISSUE
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Last Updated: 10:37 AM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
| HVN - | HARVEY NORMAN HOLDINGS | Upgrade to Neutral from Underperform | Macquarie |
| MGR - | MIRVAC | Downgrade to Sell from Neutral | Citi |
| SGP - | STOCKLAND | Upgrade to Buy from Neutral | Citi |
| SUN - | SUNCORP | Downgrade to Hold from Accumulate | Ord Minnett |
Ord Minnett rates ALL as Buy (1) -
Ord Minnett expects net profit to rise 38.1% in the first half. The company is scheduled for first half results on May 25. The broker increases estimates for FY17 and FY18 by 0.6% and 1.6% respectively.
Buy rating retained. Target rises to $21 from $20.
Target price is $21.00 Current Price is $20.25 Difference: $0.75
If ALL meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $20.79, suggesting upside of 2.7% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 36.00 cents and EPS of 75.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 79.3, implying annual growth of 43.9%. Current consensus DPS estimate is 36.3, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 25.5. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 44.00 cents and EPS of 88.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 91.0, implying annual growth of 14.8%. Current consensus DPS estimate is 45.5, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 22.3. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates BAP as Overweight (1) -
The stock has de-rated as a result of unjustified concerns relating to the growth outlook and e-commerce competition, Morgan Stanley observes.
The broker believes this is an opportunity to buy a high-growth stable business at a discounted multiple. The broker believes concerns that the company's business will be threatened by Amazon are unwarranted.
Hellaby is expected to provide strong opportunities for growth and there is also the opportunity to increase the footprint in Autobarn. Overweight rating retained. Target rises to $7.00 from $6.75. Industry view: In-line.
Target price is $7.00 Current Price is $5.56 Difference: $1.44
If BAP meets the Morgan Stanley target it will return approximately 26% (excluding dividends, fees and charges).
Current consensus price target is $6.50, suggesting upside of 16.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 15.00 cents and EPS of 23.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.3, implying annual growth of 36.1%. Current consensus DPS estimate is 14.0, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 22.9. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 18.90 cents and EPS of 31.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.4, implying annual growth of 29.2%. Current consensus DPS estimate is 18.5, implying a prospective dividend yield of 3.3%. Current consensus EPS estimate suggests the PER is 17.7. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates BEN as Sell (5) -
Heightened concerns for the Australian economy have resulted in the credit ratings for Bendigo & Adelaide being downgraded one notch to BBB-plus by Standard & Poor's.
Deutsche Bank observes this will likely result in a modest increase in wholesale funding costs spread over a few years. The broker expects the downgrade will impact earnings by -1.5%.
Deutsche Bank retains a Sell rating. Target is $11.00.
Target price is $11.00 Current Price is $11.64 Difference: minus $0.64 (current price is over target).
If BEN meets the Deutsche Bank target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $11.22, suggesting downside of -3.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 68.00 cents and EPS of 88.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 89.6, implying annual growth of -6.3%. Current consensus DPS estimate is 68.0, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 13.0. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 68.00 cents and EPS of 82.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 89.1, implying annual growth of -0.6%. Current consensus DPS estimate is 68.3, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 13.1. |
Market Sentiment: -0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates BOQ as Hold (3) -
Heightened concerns for the Australian economy have resulted in the credit ratings for Bank of Queensland being downgraded one notch to BBB-plus by Standard & Poor's.
Deutsche Bank observes this will likely result in a modest increase in wholesale funding costs spread over a few years. The broker expects the downgrade will impact BOQ earnings by -2.4%, given its reliance on wholesale funding.
Hold rating and $11.90 target retained.
Target price is $11.90 Current Price is $11.37 Difference: $0.53
If BOQ meets the Deutsche Bank target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $11.70, suggesting upside of 2.9% (ex-dividends)
The company's fiscal year ends in August.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 76.00 cents and EPS of 88.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 90.0, implying annual growth of 4.8%. Current consensus DPS estimate is 75.7, implying a prospective dividend yield of 6.7%. Current consensus EPS estimate suggests the PER is 12.6. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 76.00 cents and EPS of 89.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 92.4, implying annual growth of 2.7%. Current consensus DPS estimate is 75.7, implying a prospective dividend yield of 6.7%. Current consensus EPS estimate suggests the PER is 12.3. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates CAT as Add (1) -
Morgans revises estimates to reflect recent acquisitions, the appointment of a new CEO and several forecasting scenario changes. Most of the changes involve increases to non-cash charges.
The main change stems from the first-time inclusion of the cost of share-based remuneration. The broker retains a positive view on the stock and an Add recommendation. Target drops to $2.99 from $4.43.
Target price is $2.99 Current Price is $1.82 Difference: $1.175
If CAT meets the Morgans target it will return approximately 65% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 1.10 cents. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 0.00 cents and EPS of 1.20 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates CWN as Neutral (3) -
Credit Suisse extends the prospect of special dividends to FY19. The broker suspects the share price could hold a higher-than-usual multiple for earnings over the medium term, as investors first anticipate returns of capital and then start to appreciate the value of the Sydney business, which should open in FY22.
The broker drops the target to $12.50 from $13.00, as more company value is assumed to be returned by way of a larger dividend versus stored capital. Neutral retained.
Target price is $12.50 Current Price is $12.85 Difference: minus $0.35 (current price is over target).
If CWN 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 $13.37, suggesting upside of 4.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 143.00 cents and EPS of 53.22 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 94.4, implying annual growth of -27.5%. Current consensus DPS estimate is 127.6, implying a prospective dividend yield of 9.9%. Current consensus EPS estimate suggests the PER is 13.6. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 143.00 cents and EPS of 56.75 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 60.3, implying annual growth of -36.1%. Current consensus DPS estimate is 73.7, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 21.3. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates FAR as Re-instate Coverage with Outperform (1) -
Credit Suisse re-instates coverage and updates numbers to reflect the $80m capital raising. Target is $0.14.
Rating is reinstated to Outperform. The broker retains conservative estimates on capital expenditure, ultimate resource size and plateau production rates.
Target price is $0.14 Current Price is $0.08 Difference: $0.059
If FAR meets the Credit Suisse target it will return approximately 73% (excluding dividends, fees and charges).
Current consensus price target is $0.14, suggesting upside of 66.7% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 0.49 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -0.4, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 0.38 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -0.3, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is N/A. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
FPH FISHER & PAYKEL HEALTHCARE CORPORATION LIMITED
Medical Equipment & Devices
Overnight Price: $9.49
Citi rates FPH as Buy (1) -
F&P Health achieved a strong result, in line with guidance and forecasts. The broker expects high-flow nasal oxygen use to continue to grow at a rate of around 20-25% for several years.
The drag on the result was the cost of the litigation battle with ResMed ((RMD)). The stock remains relatively attractive due to strong earnings growth potential, the broker suggests, notwithstanding litigation cost headwinds. Buy retained. Target rises to NZ$11.50 from NZ$11.00.
Current Price is $9.49. Target price not assessed.
Current consensus price target is N/A
The company's fiscal year ends in March.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 20.96 cents and EPS of 30.96 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.5, implying annual growth of N/A. Current consensus DPS estimate is 21.7, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 30.1. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 25.49 cents and EPS of 37.67 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 37.0, implying annual growth of 17.5%. Current consensus DPS estimate is 26.3, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 25.6. |
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
Credit Suisse rates FPH as Neutral (3) -
FY17 results were ahead of Credit Suisse forecasts. The most impressive aspect for the broker was the achievement of an 18% rise in net profit, despite litigation costs. The company appears to have absorbed these costs without compromising investment in top-line growth.
The company's strategy remains hard to fault, in the broker's opinion. Nevertheless, the growth outlook is well understood, tailwinds should continue to ease and litigation remains an unwelcome distraction. Hence, Credit Suisse retains a Neutral rating. Target rises to NZ $10.50 from NZ$9.70.
Current Price is $9.49. Target price not assessed.
Current consensus price target is N/A
The company's fiscal year ends in March.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 21.24 cents and EPS of 32.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.5, implying annual growth of N/A. Current consensus DPS estimate is 21.7, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 30.1. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 25.49 cents and EPS of 37.38 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 37.0, implying annual growth of 17.5%. Current consensus DPS estimate is 26.3, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 25.6. |
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
Deutsche Bank rates FPH as Hold (3) -
The FY17 result and the outlook for FY18 were below Deutsche Bank's expectations, weighed down by the substantial costs of patent litigation. Besides this, however, the broker observes the business is trading well and the outlook is positive.
Equally clear to the broker is the fact that, with EBIT margins already at 27%, the company is finding it more challenging to expand margins, which have been the main driver of growth over the past five years.
Hold rating retained. Target rises to NZ$11.35 from NZ$11.15.
Current Price is $9.49. Target price not assessed.
Current consensus price target is N/A
The company's fiscal year ends in March.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 23.60 cents and EPS of 31.15 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.5, implying annual growth of N/A. Current consensus DPS estimate is 21.7, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 30.1. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 31.15 cents and EPS of 36.82 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 37.0, implying annual growth of 17.5%. Current consensus DPS estimate is 26.3, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 25.6. |
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
Macquarie rates FPH as Outperform (1) -
FY17 results were modestly above Macquarie's expectations and in line with the company's guidance. Operating expenses have been pushed up by litigation.
While the broker concedes the stock is trading at a demanding multiple this includes the consideration of $35m in litigation costs and the expansion into adjacencies which should allow the company to generate mid-teens growth rates for some time to come.
Outperform retained. Target rises to NZ$11.00 from NZ$10.25.
Current Price is $9.49. Target price not assessed.
Current consensus price target is N/A
The company's fiscal year ends in March.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 21.52 cents and EPS of 30.68 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.5, implying annual growth of N/A. Current consensus DPS estimate is 21.7, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 30.1. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 24.45 cents and EPS of 34.83 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 37.0, implying annual growth of 17.5%. Current consensus DPS estimate is 26.3, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 25.6. |
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
UBS rates FPH as Neutral (3) -
Headline results were slightly ahead of UBS estimates. FY18 guidance for net profit of NZ$180-190m is below expectations.
Neutral rating retained. Target is NZ$9.85.
Current Price is $9.49. Target price not assessed.
Current consensus price target is N/A
The company's fiscal year ends in March.
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 21.47 cents and EPS of 32.67 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.5, implying annual growth of N/A. Current consensus DPS estimate is 21.7, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 30.1. |
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 25.96 cents and EPS of 39.74 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 37.0, implying annual growth of 17.5%. Current consensus DPS estimate is 26.3, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 25.6. |
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
Morgans rates GHC as Hold (3) -
The target statement related to the NorthWest Australia takeover bid unanimously recommends shareholders accept the offer. The offer closes on June 8.
Morgans retains a Hold rating and $2.30 target.
Target price is $2.30 Current Price is $2.30 Difference: $0
If GHC meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 9.00 cents and EPS of 10.20 cents. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 9.30 cents and EPS of 10.60 cents. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates HVN as Upgrade to Neutral from Underperform (3) -
Comparables sales growth of Australian franchisees for the four months to April was up 4.8%, which implies comparables sales growth of around 2.3% over March and April. Macquarie compares this with the 7.4% recorded over January and February.
The slowdown in sales momentum was expected, as the benefit from the closing of Dick Smith rolls off and housing-related indicators continue to moderate.
Macquarie upgrades to Neutral from Underperform. The broker still believes there are risks building which will become a headwind for the company but there is enough caution factored into the share price. Target is reduced to $4.50 from $5.05.
Target price is $4.50 Current Price is $3.78 Difference: $0.72
If HVN meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $4.70, suggesting upside of 24.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 31.30 cents and EPS of 33.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 34.8, implying annual growth of 11.0%. Current consensus DPS estimate is 32.1, implying a prospective dividend yield of 8.5%. Current consensus EPS estimate suggests the PER is 10.9. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 31.80 cents and EPS of 33.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 35.8, implying annual growth of 2.9%. Current consensus DPS estimate is 30.9, implying a prospective dividend yield of 8.2%. Current consensus EPS estimate suggests the PER is 10.6. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates MGR as Downgrade to Sell from Neutral (5) -
Downside risks to near and medium term residential volume guidance leads Citi to downgrade Mirvac to Sell. The broker cites extended settlement times, tighter lending conditions, slower pre-sales and an unfavourable shift towards master planned communities.
Citi notes estimates already account for strong office conditions. Target falls to $2.11 from $2.25.
Target price is $2.11 Current Price is $2.25 Difference: minus $0.14 (current price is over target).
If MGR meets the Citi target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $2.34, suggesting upside of 3.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 10.40 cents and EPS of 14.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.5, implying annual growth of -44.4%. Current consensus DPS estimate is 10.2, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 14.5. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 10.70 cents and EPS of 14.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.2, implying annual growth of -1.9%. Current consensus DPS estimate is 11.0, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 14.8. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates MRG as Hold (3) -
As the harvest reaches 80% completion, Murray River has been forced to downgrade earnings expectations for the second time this month due to lower than expected crop yields. The cold and wet spring has impacted on sultanas in particular, point out the analysts.
With 20% still to harvest, the broker is focused on the company's high debt level, which will lead to the breaching of covenants. Further downside will mean a capital injection becomes unavoidable.
The extent of downgrade has brought into question management's credibility and enhanced earnings uncertainty, says the broker. Morgans retains Hold but suggests any share price recovery will take some time. Target falls to 42c from 68c.
Target price is $0.42 Current Price is $0.30 Difference: $0.12
If MRG meets the Morgans target it will return approximately 40% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 0.00 cents and EPS of 1.00 cents. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 0.00 cents and EPS of 5.60 cents. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates SGP as Upgrade to Buy from Neutral (1) -
Citi suggests Stockland is benefitting from a favourable residential mix shift which is enabling earnings to grow while land sales moderate. The broker believes retail net operating income growth could exceed current expectations.
Valuation looks attractive on a 5.5% yield and modest PE, Citi suggests. Upgrade to Buy. Target rises to $5.08 from $4.91.
Target price is $5.08 Current Price is $4.63 Difference: $0.45
If SGP meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $4.82, suggesting upside of 4.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 25.50 cents and EPS of 33.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 35.2, implying annual growth of -5.9%. Current consensus DPS estimate is 25.7, implying a prospective dividend yield of 5.6%. Current consensus EPS estimate suggests the PER is 13.2. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 26.50 cents and EPS of 34.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 34.4, implying annual growth of -2.3%. Current consensus DPS estimate is 26.6, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 13.5. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates SUN as Neutral (3) -
The latest industry data show Suncorp's loan book growth remains soft, rising only 0.3% in the March Q. The broker nevertheless expects a better June Q thanks to a lending campaign and the impact of the levy on the big banks.
Impairments are in line with expectations and the broker retains Neutral and a $13.35 target.
Target price is $13.35 Current Price is $14.07 Difference: minus $0.72 (current price is over target).
If SUN meets the Citi target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $13.73, suggesting downside of -2.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 74.00 cents and EPS of 90.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 88.9, implying annual growth of 9.2%. Current consensus DPS estimate is 73.0, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 15.8. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 80.00 cents and EPS of 97.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.0, implying annual growth of 8.0%. Current consensus DPS estimate is 76.9, implying a prospective dividend yield of 5.5%. Current consensus EPS estimate suggests the PER is 14.7. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates SUN as Outperform (1) -
The update on the banking business for the March quarter revealed low growth but also a lack of major bad debt issues. This highlights the earnings upside and also centres the risk on the general insurance business for now, Credit Suisse observes.
The broker believes the recent increase in the share price is justified in this environment of improving general insurance conditions. Outperform and $14.20 target retained.
Target price is $14.20 Current Price is $14.07 Difference: $0.13
If SUN meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $13.73, suggesting downside of -2.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 68.00 cents and EPS of 89.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 88.9, implying annual growth of 9.2%. Current consensus DPS estimate is 73.0, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 15.8. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 71.00 cents and EPS of 94.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.0, implying annual growth of 8.0%. Current consensus DPS estimate is 76.9, implying a prospective dividend yield of 5.5%. Current consensus EPS estimate suggests the PER is 14.7. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates SUN as Neutral (3) -
The company has updated on its banking division, which Macquarie observes is supported by impairment losses that are below levels which are sustainable over the medium term.
The company has noted modest growth which reflects challenging market conditions. The origination mix by loan purpose and repayment type is 70% owner occupied and 76% principal & interest. Lending growth is flat.
Neutral retained. Target is raised to $14.05 from $13.60.
Target price is $14.05 Current Price is $14.07 Difference: minus $0.02 (current price is over target).
If SUN meets the Macquarie target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $13.73, suggesting downside of -2.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 71.00 cents and EPS of 91.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 88.9, implying annual growth of 9.2%. Current consensus DPS estimate is 73.0, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 15.8. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 80.00 cents and EPS of 101.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.0, implying annual growth of 8.0%. Current consensus DPS estimate is 76.9, implying a prospective dividend yield of 5.5%. Current consensus EPS estimate suggests the PER is 14.7. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates SUN as Downgrade to Hold from Accumulate (3) -
The latest disclosures on the company's banking arm show weak lending growth in retail in the March quarter, although Ord Minnett observes this was offset by very low loan losses and a strong capital position.
The broker remains cautious about the stock and the potential divergence in general insurance margin trends between Suncorp and Insurance Australia Group ((IAG)). The fact that the stock is also trading around the broker's steady target price of $14.11 leads to a lowering of the recommendation to Hold from Accumulate.
Target price is $14.11 Current Price is $14.07 Difference: $0.04
If SUN meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).
Current consensus price target is $13.73, suggesting downside of -2.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 73.00 cents and EPS of 79.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 88.9, implying annual growth of 9.2%. Current consensus DPS estimate is 73.0, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 15.8. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 71.00 cents and EPS of 90.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.0, implying annual growth of 8.0%. Current consensus DPS estimate is 76.9, implying a prospective dividend yield of 5.5%. Current consensus EPS estimate suggests the PER is 14.7. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates SUN as Buy (1) -
UBS observes the March quarter bank disclosures reveal a stagnant top line and gross loans rising 0.3%.
The broker finds the lack of commentary on net interest margins a mild positive as the company in the past has flagged pressure on margins.
A Buy rating is maintained. Target is $14.45.
Target price is $14.45 Current Price is $14.07 Difference: $0.38
If SUN meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $13.73, suggesting downside of -2.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 73.00 cents and EPS of 88.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 88.9, implying annual growth of 9.2%. Current consensus DPS estimate is 73.0, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 15.8. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 82.00 cents and EPS of 102.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.0, implying annual growth of 8.0%. Current consensus DPS estimate is 76.9, implying a prospective dividend yield of 5.5%. Current consensus EPS estimate suggests the PER is 14.7. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates VOC as Neutral (3) -
Amid speculation that the company is on the radar of private equity, Credit Suisse runs the numbers and believes there is a robust case. The broker believes the core corporate and wholesale business is underpinned by strong base of network assets.
The issues with systems and processes means these assets are not operating to their full potential. Credit Suisse suspects private ownership could provide time for these issues to be fixed and for excess costs to be taken out.
Neutral rating retained, as earnings visibility is limited following recent downgrades and the stock remains high risk. Target is raised to $2.80 from $2.60 to reflect potential for private equity interest.
Target price is $2.80 Current Price is $2.82 Difference: minus $0.02 (current price is over target).
If VOC meets the Credit Suisse target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $2.72, suggesting downside of -3.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 10.00 cents and EPS of 26.16 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.4, implying annual growth of 29.4%. Current consensus DPS estimate is 10.7, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 11.6. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 10.00 cents and EPS of 23.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.8, implying annual growth of -10.7%. Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 12.9. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| ALL - | ARISTOCRAT LEISURE | Buy - Ord Minnett | Overnight Price $20.25 |
| BAP - | BAPCOR LIMITED | Overweight - Morgan Stanley | Overnight Price $5.56 |
| BEN - | BENDIGO AND ADELAIDE BANK | Sell - Deutsche Bank | Overnight Price $11.64 |
| BOQ - | BANK OF QUEENSLAND | Hold - Deutsche Bank | Overnight Price $11.37 |
| CAT - | CATAPULT GROUP | Add - Morgans | Overnight Price $1.82 |
| CWN - | CROWN RESORTS | Neutral - Credit Suisse | Overnight Price $12.85 |
| FAR - | FAR Ltd | Re-instate Coverage with Outperform - Credit Suisse | Overnight Price $0.08 |
| FPH - | FISHER & PAYKEL HEALTHCARE | Buy - Citi | Overnight Price $9.49 |
| Neutral - Credit Suisse | Overnight Price $9.49 | ||
| Hold - Deutsche Bank | Overnight Price $9.49 | ||
| Outperform - Macquarie | Overnight Price $9.49 | ||
| Neutral - UBS | Overnight Price $9.49 | ||
| GHC - | GENERATION HEALTHCARE REIT | Hold - Morgans | Overnight Price $2.30 |
| HVN - | HARVEY NORMAN HOLDINGS | Upgrade to Neutral from Underperform - Macquarie | Overnight Price $3.78 |
| MGR - | MIRVAC | Downgrade to Sell from Neutral - Citi | Overnight Price $2.25 |
| MRG - | MURRAY RIVER ORGANICS | Hold - Morgans | Overnight Price $0.30 |
| SGP - | STOCKLAND | Upgrade to Buy from Neutral - Citi | Overnight Price $4.63 |
| SUN - | SUNCORP | Neutral - Citi | Overnight Price $14.07 |
| Outperform - Credit Suisse | Overnight Price $14.07 | ||
| Neutral - Macquarie | Overnight Price $14.07 | ||
| Downgrade to Hold from Accumulate - Ord Minnett | Overnight Price $14.07 | ||
| Buy - UBS | Overnight Price $14.07 | ||
| VOC - | VOCUS COMMUNICATIONS | Neutral - Credit Suisse | Overnight Price $2.82 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 9 |
| 3. Hold | 12 |
| 5. Sell | 2 |
Wednesday 24 May 2017
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Disclaimer:
The content of this information does in no way reflect the opinions of
FNArena, or of its journalists. In fact we don't have any opinion about
the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe
and comment on. By doing so we believe we provide intelligent investors
with a valuable tool that helps them in making up their own minds, reading
market trends and getting a feel for what is happening beneath the surface.
This document is provided for informational purposes only. It does not
constitute an offer to sell or a solicitation to buy any security or other
financial instrument. FNArena employs very experienced journalists who
base their work on information believed to be reliable and accurate, though
no guarantee is given that the daily report is accurate or complete. Investors
should contact their personal adviser before making any investment decision.
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