Australian Broker Call

December 21, 2016

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COMPANIES DISCUSSED IN THIS ISSUE

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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)

Last Updated: 11:11 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
NCM - NEWCREST MINING Upgrade to Outperform from Neutral Macquarie
OZL - OZ MINERALS Downgrade to Neutral from Outperform Macquarie
PRU - PERSEUS MINING Downgrade to Neutral from Outperform Macquarie
SYD - SYDNEY AIRPORT Downgrade to Hold from Add Morgans
WHC - WHITEHAVEN COAL Upgrade to Neutral from Underperform Macquarie
APA  APA GROUP

Utilities

Overnight Price: $8.59

UPDATED

Credit Suisse rates APA as Underperform (5) -

The company has signed a new $40m per annum agreement with AGL Energy ((AGL)) over the Moomba Sydney pipeline. There is a $30-35m decrease in revenues, in line with Credit Suisse's expectations, and a long-standing source of uncertainty appears to have been resolved.

The broker notes the contract is short in duration, just three years, and is unsure whether this reflects the new world of reduced APA market power. Credit Suisse suspects it is likely to become more common as high prices and uncertain supply reduce the willingness of both buyer and seller to contract for long-term gas supply.

Underperform rating and $7.95 target maintained.

Target price is $7.95 Current Price is $8.59 Difference: minus $0.64 (current price is over target).
If APA meets the Credit Suisse target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.84, suggesting upside of 2.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Credit Suisse forecasts a full year FY17 dividend of 43.50 cents and EPS of 22.41 cents.
At the last closing share price the estimated dividend yield is 5.06%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 38.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 22.6, implying annual growth of 40.4%.

Current consensus DPS estimate is 43.9, implying a prospective dividend yield of 5.1%.

Current consensus EPS estimate suggests the PER is 38.1.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 45.68 cents and EPS of 22.63 cents.
At the last closing share price the estimated dividend yield is 5.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 37.96.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.1, implying annual growth of 11.1%.

Current consensus DPS estimate is 46.7, implying a prospective dividend yield of 5.4%.

Current consensus EPS estimate suggests the PER is 34.3.

Market Sentiment: -0.2

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

AQG  ALACER GOLD CORP

Materials

Overnight Price: $1.94

UPDATED

Credit Suisse rates AQG as Outperform (1) -

The company has released a maiden satellite oxide resource for Cakmaktepe in the Copler district, indicating high probability that the mineralisation can be mined profitably.

Mineralisation is similar to the Copler ore bodies and considered amenable to the same heap leaching and should supplement  Copler reserves, extending mine life and improving production flexibility.

Credit Suisse makes no changes to its Outperform rating or $5.30 target but notes spot gold is below the price used for valuation and the tragic events in Turkey point to increasing country risk.

Target price is $5.30 Current Price is $1.94 Difference: $3.365
If AQG meets the Credit Suisse target it will return approximately 174% (excluding dividends, fees and charges).

Current consensus price target is $4.05, suggesting upside of 106.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY16:

Credit Suisse forecasts a full year FY16 dividend of 0.00 cents and EPS of 6.42 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.7, 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 15.4.

Forecast for FY17:

Credit Suisse forecasts a full year FY17 dividend of 0.00 cents and EPS of 4.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 40.34.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 1.6, implying annual growth of -87.4%.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 122.5.

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

Market Sentiment: 0.8

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

AWC  ALUMINA LIMITED

Materials

Overnight Price: $1.77

UPDATED

Deutsche Bank rates AWC as Hold (3) -

JV AWAC will sell 400,000 tonnes of bauxite from its Huntly mine in Western Australia to a Chinese customer in 2017.The extra sales have raised Deutsche Bank's forecasts for Alumina Ltd earnings by 6%. Target is steady at $1.65.

Despite this minor positive, the broker retains a Hold rating based on valuation. The broker believes that over 10mtpa in Chinese aluminium production is in the process of re-starting and expect the alumina price to retrace during the first half.

Target price is $1.65 Current Price is $1.77 Difference: minus $0.12 (current price is over target).
If AWC meets the Deutsche Bank target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.61, suggesting downside of -11.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY16:

Deutsche Bank forecasts a full year FY16 dividend of 8.06 cents and EPS of 4.03 cents.
At the last closing share price the estimated dividend yield is 4.55%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 43.91.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 5.4, implying annual growth of N/A.

Current consensus DPS estimate is 10.0, implying a prospective dividend yield of 5.5%.

Current consensus EPS estimate suggests the PER is 33.7.

Forecast for FY17:

Deutsche Bank forecasts a full year FY17 dividend of 6.72 cents and EPS of 8.06 cents.
At the last closing share price the estimated dividend yield is 3.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.9, implying annual growth of 64.8%.

Current consensus DPS estimate is 9.6, implying a prospective dividend yield of 5.3%.

Current consensus EPS estimate suggests the PER is 20.5.

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


UPDATED

Ord Minnett rates AWC as Accumulate (2) -

AWAC, 40% owned by Alumina Ltd, has secured its first third-party bauxite supply contract from Western Australia, with a deal to supply around 400,000 tonnes to China in 2017.

Ord Minnett estimates the initial volume could add around US$7m to operating earnings for the joint venture and rise to around US$43m per year at spot prices.

The broker expects AWAC to pursue further third-party bauxite supply options, given Alcoa has predicted the seaborne bauxite market will double over 2015-24. Accumulate rating and $1.80 target maintained.

Target price is $1.80 Current Price is $1.77 Difference: $0.03
If AWC meets the Ord Minnett target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $1.61, suggesting downside of -11.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY16:

Ord Minnett forecasts a full year FY16 dividend of 9.41 cents and EPS of 2.69 cents.
At the last closing share price the estimated dividend yield is 5.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 65.87.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 5.4, implying annual growth of N/A.

Current consensus DPS estimate is 10.0, implying a prospective dividend yield of 5.5%.

Current consensus EPS estimate suggests the PER is 33.7.

Forecast for FY17:

Ord Minnett forecasts a full year FY17 dividend of 5.38 cents and EPS of 4.03 cents.
At the last closing share price the estimated dividend yield is 3.04%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 43.91.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.9, implying annual growth of 64.8%.

Current consensus DPS estimate is 9.6, implying a prospective dividend yield of 5.3%.

Current consensus EPS estimate suggests the PER is 20.5.

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

BSL  BLUESCOPE STEEL LIMITED

Materials

Overnight Price: $9.06

Credit Suisse rates BSL as Outperform (1) -

Credit Suisse adopts updated commodity prices and makes adjustments to its steel spread estimate, noting that spot pricing suggests further upside to modelled earnings in the second half of FY17.

The broker believes rising iron ore and steel prices are a boon for New Zealand and should produce considerable margin expansion. FY17 earnings per share estimates are increased by 5.4%.

The broker retains an Outperform rating and raises the target to $10.30 from $8.30.

Target price is $10.30 Current Price is $9.06 Difference: $1.24
If BSL meets the Credit Suisse target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $9.67, suggesting upside of 5.5% (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 101.00 cents.
At the last closing share price the estimated dividend yield is 1.10%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.97.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 96.4, implying annual growth of 55.3%.

Current consensus DPS estimate is 10.7, implying a prospective dividend yield of 1.2%.

Current consensus EPS estimate suggests the PER is 9.5.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 17.00 cents and EPS of 83.00 cents.
At the last closing share price the estimated dividend yield is 1.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.92.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 81.9, implying annual growth of -15.0%.

Current consensus DPS estimate is 15.6, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 11.2.

Market Sentiment: 0.7

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

ING  INGHAMS GROUP LIMITED

Food, Beverage & Tobacco

Overnight Price: $3.12

Credit Suisse rates ING as Initiation of coverage with Outperform (1) -

Credit Suisse believes, in a market that is increasingly sceptical about IPOs, that Ingham's will need to do more than just screen cheaply. It will need to deliver on prospectus forecasts and grow earnings thereafter.

Still, while it will face challenges typical in a competitive, mature industry Ingham's could surprise on the upside. The broker's conviction is based on a strong market position, competent management and a plausible margin expansion program.

Credit Suisse initiates coverage with an Outperform rating and $3.60 target.

Target price is $3.60 Current Price is $3.12 Difference: $0.48
If ING meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $3.66, suggesting upside of 15.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Credit Suisse forecasts a full year FY17 dividend of 17.54 cents and EPS of 26.19 cents.
At the last closing share price the estimated dividend yield is 5.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.91.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 26.8, implying annual growth of N/A.

Current consensus DPS estimate is 15.4, implying a prospective dividend yield of 4.9%.

Current consensus EPS estimate suggests the PER is 11.8.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 19.54 cents and EPS of 29.18 cents.
At the last closing share price the estimated dividend yield is 6.26%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.69.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.4, implying annual growth of 2.2%.

Current consensus DPS estimate is 20.1, implying a prospective dividend yield of 6.4%.

Current consensus EPS estimate suggests the PER is 11.5.

Market Sentiment: 0.8

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


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

Ingham's is the market leader in the Australian chicken market with a 40% share by value and the number two in the New Zealand market with 34% share. Macquarie notes these are highly regulated markets which limits the extent of imports.

Australasian poultry consumption has grown substantially and is expected to continue, driven by the cheap relative cost compared with other meats. Macquarie initiates coverage with an Outperform rating and $3.65 target.

Target price is $3.65 Current Price is $3.12 Difference: $0.53
If ING meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $3.66, suggesting upside of 15.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 19.00 cents and EPS of 28.00 cents.
At the last closing share price the estimated dividend yield is 6.09%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 26.8, implying annual growth of N/A.

Current consensus DPS estimate is 15.4, implying a prospective dividend yield of 4.9%.

Current consensus EPS estimate suggests the PER is 11.8.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 20.00 cents and EPS of 29.50 cents.
At the last closing share price the estimated dividend yield is 6.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.58.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.4, implying annual growth of 2.2%.

Current consensus DPS estimate is 20.1, implying a prospective dividend yield of 6.4%.

Current consensus EPS estimate suggests the PER is 11.5.

Market Sentiment: 0.8

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


UPDATED

Morgan Stanley rates ING as Initiation of coverage with Equal-weight (3) -

The company faces longer-term earnings risks in terms of contract negotiations with major customers, but in the near term this is limited in Morgan Stanley's view. The broker cites cost reductions and strong retail chicken volume growth as supporting the stock currently.

The broker considers the 6.7% FY18 yield will be attractive to yield-focused investors. While the valuation is cheap, the earnings risk still needs to be priced, the report states.

The broker notes that major contracts may be in place until end of FY18 but Woolworths' ((WOW)) strong bargaining position may force the company to lower prices, effectively handing back recent gains.

Morgan Stanley initiates coverage with an Equal-weight rating, $3.40 target and In-Line industry view.

Target price is $3.40 Current Price is $3.12 Difference: $0.28
If ING meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.66, suggesting upside of 15.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgan Stanley forecasts a full year FY17 dividend of 13.00 cents and EPS of 26.90 cents.
At the last closing share price the estimated dividend yield is 4.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.60.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 26.8, implying annual growth of N/A.

Current consensus DPS estimate is 15.4, implying a prospective dividend yield of 4.9%.

Current consensus EPS estimate suggests the PER is 11.8.

Forecast for FY18:

Morgan Stanley forecasts a full year FY18 dividend of 20.90 cents and EPS of 20.90 cents.
At the last closing share price the estimated dividend yield is 6.70%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.93.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.4, implying annual growth of 2.2%.

Current consensus DPS estimate is 20.1, implying a prospective dividend yield of 6.4%.

Current consensus EPS estimate suggests the PER is 11.5.

Market Sentiment: 0.8

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

IPL  INCITEC PIVOT LIMITED

Materials

Overnight Price: $3.58

Macquarie rates IPL as Outperform (1) -

The consolidation theme continues in fertiliser with Mosaic acquiring Vale's Brazilian assets. Macquarie believes, with the start up of Louisiana, that Incitec Pivot could be more open to strategic options for fertiliser given the industry is on a consolidation footing.

Higher Australian gas costs are a deterrent, the broker notes, for potential acquirers of domestic fertiliser business. The broker retains an Outperform rating and $3.88 target.

Target price is $3.88 Current Price is $3.58 Difference: $0.3
If IPL meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.30, suggesting downside of -8.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 10.40 cents and EPS of 17.30 cents.
At the last closing share price the estimated dividend yield is 2.91%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.69.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.9, implying annual growth of 122.4%.

Current consensus DPS estimate is 9.0, implying a prospective dividend yield of 2.5%.

Current consensus EPS estimate suggests the PER is 21.3.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 13.60 cents and EPS of 22.70 cents.
At the last closing share price the estimated dividend yield is 3.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.7, implying annual growth of 28.4%.

Current consensus DPS estimate is 11.7, implying a prospective dividend yield of 3.2%.

Current consensus EPS estimate suggests the PER is 16.6.

Market Sentiment: 0.4

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

JBH  JB HI-FI LIMITED

Retailing

Overnight Price: $27.42

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

The broker considers the stock is fairly valued as it adjusts earnings forecasts to factor in The Good Guys acquisition. Synergies of $10m are factored in to FY18, improving to $20m by FY20.

FY17-19 forecasts for earnings per share are upgraded by 6-7%. Equal-weight rating retained. Industry view is In-Line. Target rises to $28.00 from $27.66.

Target price is $28.00 Current Price is $27.42 Difference: $0.58
If JBH meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $29.84, suggesting upside of 7.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgan Stanley forecasts a full year FY17 dividend of 121.00 cents and EPS of 194.00 cents.
At the last closing share price the estimated dividend yield is 4.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 178.2, implying annual growth of 15.9%.

Current consensus DPS estimate is 114.8, implying a prospective dividend yield of 4.1%.

Current consensus EPS estimate suggests the PER is 15.6.

Forecast for FY18:

Morgan Stanley forecasts a full year FY18 dividend of 140.00 cents and EPS of 208.00 cents.
At the last closing share price the estimated dividend yield is 5.11%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.18.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 200.3, implying annual growth of 12.4%.

Current consensus DPS estimate is 131.0, implying a prospective dividend yield of 4.7%.

Current consensus EPS estimate suggests the PER is 13.9.

Market Sentiment: 0.4

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

MIN  MINERAL RESOURCES LIMITED

Commercial Services & Supplies

Overnight Price: $11.72

UPDATED

Macquarie rates MIN as Outperform (1) -

Macquarie updates earnings estimates following its lifting of the FY17 estimated iron ore price to US$60.40/tonne. Mineral Resources expects to grow volumes by 20% in FY18 and FY19 but the broker does not yet fully reflect this rate of growth.

The broker retains an Outperform rating, given the strong track record and large number of opportunities available to the business. Target is raised to $14.53 from $13.37.

Target price is $14.53 Current Price is $11.72 Difference: $2.81
If MIN meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $12.81, suggesting upside of 8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 54.00 cents and EPS of 107.30 cents.
At the last closing share price the estimated dividend yield is 4.61%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.92.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 85.8, implying annual growth of N/A.

Current consensus DPS estimate is 39.0, implying a prospective dividend yield of 3.3%.

Current consensus EPS estimate suggests the PER is 13.7.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 56.00 cents and EPS of 112.80 cents.
At the last closing share price the estimated dividend yield is 4.78%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 87.9, implying annual growth of 2.4%.

Current consensus DPS estimate is 47.0, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 13.4.

Market Sentiment: 0.5

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


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

Galaxy Resources ((GXY)) has announced 2017 lithium concentrate sales at an equivalent price of US$905/t. This is 65% higher than the price Morgan Stanley applies to its modelling for Mineral Resources.

As the offtake agreements of one miner may not be reflected in another, the broker does not revise its forecasts at this time. Yet, testing the scenario suggests a 10% uplift over the combined FY17-18 EBITDA in the base case.

Equal-weight and $11.70 target retained. Industry view: In Line.

Target price is $11.70 Current Price is $11.72 Difference: minus $0.02 (current price is over target).
If MIN meets the Morgan Stanley target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.81, suggesting upside of 8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgan Stanley forecasts a full year FY17 dividend of 17.80 cents and EPS of 66.00 cents.
At the last closing share price the estimated dividend yield is 1.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 85.8, implying annual growth of N/A.

Current consensus DPS estimate is 39.0, implying a prospective dividend yield of 3.3%.

Current consensus EPS estimate suggests the PER is 13.7.

Forecast for FY18:

Morgan Stanley forecasts a full year FY18 dividend of 60.10 cents and EPS of 94.00 cents.
At the last closing share price the estimated dividend yield is 5.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.47.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 87.9, implying annual growth of 2.4%.

Current consensus DPS estimate is 47.0, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 13.4.

Market Sentiment: 0.5

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

NCM  NEWCREST MINING LIMITED

Materials

Overnight Price: $17.54

Macquarie rates NCM as Upgrade to Outperform from Neutral (1) -

Macquarie has updated commodity prices forecasts. This has led to ongoing positive outlook for bulks, the nomination of nickel as favourite for calendar 2017 and the view value is emerging in the gold sector where weakness has followed the election of Donald Trump.

Newcrest Mining is upgraded to Outperform from Neutral. Target $20 (was $24).

Target price is $20.00 Current Price is $17.54 Difference: $2.46
If NCM meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $19.82, suggesting upside of 14.1% (ex-dividends)

Forecast for FY17:

Current consensus EPS estimate is 83.6, implying annual growth of 43.4%.

Current consensus DPS estimate is 11.8, implying a prospective dividend yield of 0.7%.

Current consensus EPS estimate suggests the PER is 20.8.

Forecast for FY18:

Current consensus EPS estimate is 101.4, implying annual growth of 21.3%.

Current consensus DPS estimate is 27.0, implying a prospective dividend yield of 1.6%.

Current consensus EPS estimate suggests the PER is 17.1.

Market Sentiment: -0.3

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

OZL  OZ MINERALS LIMITED

Materials

Overnight Price: $7.66

Macquarie rates OZL as Downgrade to Neutral from Outperform (3) -

Macquarie has updated commodity prices forecasts. This has led to ongoing positive outlook for bulks, the nomination of nickel as favourite for calendar 2017 and the view value is emerging in the gold sector where weakness has followed the election of Donald Trump.

OZ Minerals' rating has pulled back to Neutral from Outperform. Target $8.40 (was $9.20).

Target price is $8.40 Current Price is $7.66 Difference: $0.74
If OZL meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $7.53, suggesting downside of -4.3% (ex-dividends)

Forecast for FY16:

Current consensus EPS estimate is 37.5, implying annual growth of -12.6%.

Current consensus DPS estimate is 10.3, implying a prospective dividend yield of 1.3%.

Current consensus EPS estimate suggests the PER is 21.0.

Forecast for FY17:

Current consensus EPS estimate is 45.2, implying annual growth of 20.5%.

Current consensus DPS estimate is 11.7, implying a prospective dividend yield of 1.5%.

Current consensus EPS estimate suggests the PER is 17.4.

Market Sentiment: 0.0

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

PRU  PERSEUS MINING LIMITED

Materials

Overnight Price: $0.34

Macquarie rates PRU as Downgrade to Neutral from Outperform (3) -

Macquarie has updated commodity prices forecasts. This has led to ongoing positive outlook for bulks, the nomination of nickel as favourite for calendar 2017 and the view value is emerging in the gold sector where weakness has followed the election of Donald Trump.

Perseus Mining has been downgraded to Neutral from Outperform. Target $0.40.

Target price is $0.40 Current Price is $0.34 Difference: $0.065
If PRU meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $0.58, suggesting upside of 82.5% (ex-dividends)

Forecast for FY17:

Current consensus EPS estimate is -1.7, 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:

Current consensus EPS estimate is 2.7, 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 11.9.

Market Sentiment: 0.4

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

PRY  PRIMARY HEALTH CARE LIMITED

Health Care Equipment & Services

Overnight Price: $3.91

UPDATED

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

Morgan Stanley downgrades its estimates for earnings per share on the back of a re-analysis of GP remuneration/recruitment. The broker is more confident in cash flow.

Yet, for its price target to be achieved, the broker needs demonstrable stability in GP churn and lower recruitment costs across FY17.

Equal-weight retained. Price target is reduced to $4.45 from $4.68. In-Line sector view retained.

Target price is $4.45 Current Price is $3.91 Difference: $0.54
If PRY meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $3.99, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgan Stanley forecasts a full year FY17 dividend of 12.50 cents and EPS of 20.00 cents.
At the last closing share price the estimated dividend yield is 3.20%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.55.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.7, implying annual growth of 43.7%.

Current consensus DPS estimate is 14.5, implying a prospective dividend yield of 3.7%.

Current consensus EPS estimate suggests the PER is 18.9.

Forecast for FY18:

Morgan Stanley forecasts a full year FY18 dividend of 13.80 cents and EPS of 22.00 cents.
At the last closing share price the estimated dividend yield is 3.53%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 22.7, implying annual growth of 9.7%.

Current consensus DPS estimate is 17.2, implying a prospective dividend yield of 4.4%.

Current consensus EPS estimate suggests the PER is 17.3.

Market Sentiment: 0.1

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

SYD  SYDNEY AIRPORT HOLDINGS LIMITED

Transportation

Overnight Price: $6.40

Deutsche Bank rates SYD as Hold (3) -

The Australian government's notice outlining the terms on which SYD can exercise its first right of refusal to develop the proposed western Sydney airport has been issued.

The notice does not contain any procurement protection nor Commonwealth funding. Deutsche Bank has previously suggested the airport needs $1bn in subsidies or support over the first 10 years to make it commercially viable and de-risk the project.

Hold rating and $6.05 target retained.

Target price is $6.05 Current Price is $6.40 Difference: minus $0.35 (current price is over target).
If SYD 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 $6.78, suggesting upside of 9.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY16:

Deutsche Bank forecasts a full year FY16 dividend of 31.00 cents and EPS of 17.00 cents.
At the last closing share price the estimated dividend yield is 4.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 37.65.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.2, implying annual growth of 35.0%.

Current consensus DPS estimate is 31.0, implying a prospective dividend yield of 5.0%.

Current consensus EPS estimate suggests the PER is 36.1.

Forecast for FY17:

Deutsche Bank forecasts a full year FY17 dividend of 32.00 cents and EPS of 19.00 cents.
At the last closing share price the estimated dividend yield is 5.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 33.68.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.9, implying annual growth of 15.7%.

Current consensus DPS estimate is 33.6, implying a prospective dividend yield of 5.4%.

Current consensus EPS estimate suggests the PER is 31.2.

Market Sentiment: 0.1

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


Macquarie rates SYD as Outperform (1) -

The company has received the notice of intention from the Commonwealth setting out the terms to develop the western Sydney airport.

Macquarie notes the risk profile has increased with the approach taken by the government but finds it difficult to envisage how a third party could make the economics work better than SYD.

Traffic continues to be a point of strength for the company, with the November statistics confirming this trend, in the broker's assessment. Outperform and $7.45 target retained.

Target price is $7.45 Current Price is $6.40 Difference: $1.05
If SYD meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $6.78, suggesting upside of 9.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY16:

Macquarie forecasts a full year FY16 dividend of 31.00 cents and EPS of 14.60 cents.
At the last closing share price the estimated dividend yield is 4.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 43.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.2, implying annual growth of 35.0%.

Current consensus DPS estimate is 31.0, implying a prospective dividend yield of 5.0%.

Current consensus EPS estimate suggests the PER is 36.1.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 33.00 cents and EPS of 16.00 cents.
At the last closing share price the estimated dividend yield is 5.16%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 40.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.9, implying annual growth of 15.7%.

Current consensus DPS estimate is 33.6, implying a prospective dividend yield of 5.4%.

Current consensus EPS estimate suggests the PER is 31.2.

Market Sentiment: 0.1

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


Morgans rates SYD as Downgrade to Hold from Add (3) -

The surprise aspect for Morgans in the Commonwealth government's notice on the second Sydney airport was that SYD is required to fund all the construction costs without any federal funding or cost protections.

The business is required to take all traffic, operating and political risks in exchange for a 99-year lease. The broker had assumed the government would offer funding for a project it had proposed.

SYD has indicated the terms of the notice makes the airport a challenging investment proposition. Morgans suspects the government is testing the market for private sector funding for the project, as it clings to its AAA credit rating.

The broker reduces its base case valuation and lowers the target to $7.04 from $7.85. Rating is downgraded to Hold from Add.

Target price is $7.04 Current Price is $6.40 Difference: $0.64
If SYD meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $6.78, suggesting upside of 9.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY16:

Morgans forecasts a full year FY16 dividend of 31.00 cents and EPS of 30.80 cents.
At the last closing share price the estimated dividend yield is 4.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.78.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.2, implying annual growth of 35.0%.

Current consensus DPS estimate is 31.0, implying a prospective dividend yield of 5.0%.

Current consensus EPS estimate suggests the PER is 36.1.

Forecast for FY17:

Morgans forecasts a full year FY17 dividend of 34.50 cents and EPS of 34.80 cents.
At the last closing share price the estimated dividend yield is 5.39%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.9, implying annual growth of 15.7%.

Current consensus DPS estimate is 33.6, implying a prospective dividend yield of 5.4%.

Current consensus EPS estimate suggests the PER is 31.2.

Market Sentiment: 0.1

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

VHT  VOLPARA HEALTH TECHNOLOGIES LIMITED

Health Care Equipment & Services

Overnight Price: $0.61

Morgans rates VHT as Add (1) -

The company has completed a capital raising and Morgans observes it is now fully funded to achieve its key milestones.

This includes the expansion of the US sales force, roll out of cloud-based software and appointment of a major distributor in Europe.

Morgans notes the focus on expanding sales of VolparaEnterprise. Add rating retained. Target lifts to 87c from 85c.

Target price is $0.87 Current Price is $0.61 Difference: $0.265
If VHT meets the Morgans target it will return approximately 44% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY17:

Morgans forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 6.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 9.92.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 4.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 12.35.

Market Sentiment: 1.0

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

WHC  WHITEHAVEN COAL LIMITED

Energy

Overnight Price: $2.65

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

Macquarie has updated commodity prices forecasts. This has led to ongoing positive outlook for bulks, the nomination of nickel as favourite for calendar 2017 and the view value is emerging in the gold sector where weakness has followed the election of Donald Trump.

Whitehaven Coal has been upgraded to Neutral from Underperform. Target $2.70.

Target price is $2.70 Current Price is $2.65 Difference: $0.05
If WHC meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.14, suggesting upside of 15.3% (ex-dividends)

Forecast for FY17:

Current consensus EPS estimate is 33.6, implying annual growth of 1500.0%.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 8.1.

Forecast for FY18:

Current consensus EPS estimate is 30.5, implying annual growth of -9.2%.

Current consensus DPS estimate is 8.5, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 8.9.

Market Sentiment: 0.4

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

Summaries
APA - APA Underperform - Credit Suisse Overnight Price $8.59
AQG - ALACER GOLD Outperform - Credit Suisse Overnight Price $1.94
AWC - ALUMINA Hold - Deutsche Bank Overnight Price $1.77
Accumulate - Ord Minnett Overnight Price $1.77
BSL - BLUESCOPE STEEL Outperform - Credit Suisse Overnight Price $9.06
ING - INGHAMS GROUP Initiation of coverage with Outperform - Credit Suisse Overnight Price $3.12
Initiation of coverage with Outperform - Macquarie Overnight Price $3.12
Initiation of coverage with Equal-weight - Morgan Stanley Overnight Price $3.12
IPL - INCITEC PIVOT Outperform - Macquarie Overnight Price $3.58
JBH - JB HI-FI Equal-weight - Morgan Stanley Overnight Price $27.42
MIN - MINERAL RESOURCES Outperform - Macquarie Overnight Price $11.72
Equal-weight - Morgan Stanley Overnight Price $11.72
NCM - NEWCREST MINING Upgrade to Outperform from Neutral - Macquarie Overnight Price $17.54
OZL - OZ MINERALS Downgrade to Neutral from Outperform - Macquarie Overnight Price $7.66
PRU - PERSEUS MINING Downgrade to Neutral from Outperform - Macquarie Overnight Price $0.34
PRY - PRIMARY HEALTH CARE Equal-weight - Morgan Stanley Overnight Price $3.91
SYD - SYDNEY AIRPORT Hold - Deutsche Bank Overnight Price $6.40
Outperform - Macquarie Overnight Price $6.40
Downgrade to Hold from Add - Morgans Overnight Price $6.40
VHT - VOLPARA HEALTH TECHNOLOGIES Add - Morgans Overnight Price $0.61
WHC - WHITEHAVEN COAL Upgrade to Neutral from Underperform - Macquarie Overnight Price $2.65
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

9

2. Accumulate

1

3. Hold

10

5. Sell

1

Wednesday 21 December 2016

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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.