Australian Broker Call
June 28, 2017
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COMPANIES DISCUSSED IN THIS ISSUE
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THIS REPORT WILL BE UPDATED SHORTLY
Last Updated: 12:09 PM
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
| AST - | AUSNET SERVICES | Upgrade to Outperform from Neutral | Credit Suisse |
| CKF - | COLLINS FOODS | Upgrade to Buy from Neutral | UBS |
| MPL - | MEDIBANK PRIVATE | Upgrade to Outperform from Neutral | Macquarie |
| SKI - | SPARK INFRASTRUCTURE | Downgrade to Underperform from Neutral | Credit Suisse |
| SWL - | SEYMOUR WHYTE | Downgrade to Hold from Add | Morgans |
Macquarie rates AAD as Neutral (3) -
The company expects FY17 Main Event EBITDA of US$44-45m, around -12% below Macquarie's prior forecast. Guidance implies a margin of around 20% which is the lowest since FY10, the broker adds.
Macquarie awaits more details on the strategy at the upcoming results. Potential corporate activity is expected to underpin the share price while Main Event remains weak. Neutral retained. Target is reduced to $1.98 from $2.08.
Target price is $1.98 Current Price is $1.90 Difference: $0.08
If AAD meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $1.74, suggesting downside of -8.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 3.00 cents and EPS of minus 1.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 1.2, implying annual growth of -87.2%. Current consensus DPS estimate is 3.1, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 157.9. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 4.00 cents and EPS of 2.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 4.4, implying annual growth of 266.7%. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 43.1. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates AAD as Hold (3) -
FY17 guidance for both the group and Main Event missed Morgans forecasts and the broker makes further downgrades to estimates.
The broker struggles to find the value at current prices, with the update highlighting a real need for operating improvements in the Main Event existing store base. The broker observes the investment proposition hinges almost entirely on the Main Event business at current prices.
Hold rating maintained. Target is reduced to $1.70 from $1.98.
Target price is $1.70 Current Price is $1.90 Difference: minus $0.2 (current price is over target).
If AAD meets the Morgans target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $1.74, suggesting downside of -8.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 3.00 cents and EPS of 3.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 1.2, implying annual growth of -87.2%. Current consensus DPS estimate is 3.1, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 157.9. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 3.00 cents and EPS of 5.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 4.4, implying annual growth of 266.7%. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 43.1. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates AAD as Sell (5) -
Earnings forecasts for the Main Event have been downgraded again while the company has reiterated estimates for FY17 losses at Dreamworld of -$2-4m.
UBS remains concerned that Main Event may experience significantly increased competition before it reaches critical scale. Sell rating maintained. Target is reduced to $1.70 from $1.75, as the broker has now incorporated some value for surplus land adjacent to Dreamworld in its valuation.
Target price is $1.70 Current Price is $1.90 Difference: minus $0.2 (current price is over target).
If AAD meets the UBS target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $1.74, suggesting downside of -8.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 3.50 cents and EPS of minus 3.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 1.2, implying annual growth of -87.2%. Current consensus DPS estimate is 3.1, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 157.9. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 3.50 cents and EPS of 2.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 4.4, implying annual growth of 266.7%. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 43.1. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates AMC as Buy (1) -
Amcor's North American investor tour highlighted strong underlying performance over a number of years and significant organic and inorganic growth opportunities, the broker reports. Amcor has only a 4% share of the Americas flexibles market, 5% of the global containers market and 1.5% of the global closures market.
The broker does not expect the balance sheet to be any constraint to acquisitions. Buy and $17.35 target retained.
Target price is $17.35 Current Price is $16.42 Difference: $0.93
If AMC meets the Deutsche Bank target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $16.10, suggesting downside of -1.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 57.04 cents and EPS of 79.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 77.8, implying annual growth of N/A. Current consensus DPS estimate is 59.5, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 20.9. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 63.68 cents and EPS of 88.88 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 87.9, implying annual growth of 13.0%. Current consensus DPS estimate is 64.8, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 18.5. |
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
Deutsche Bank rates ANZ as Hold (3) -
In recent weeks the majors have lifted rates on interest only mortgages by 30-35bps and cut rates on owner-occupier principal plus interest loans by 3-8bps. The broker suggests this is a response to regulatory measures rather than to the levy. Margin benefits will be dampened by owner-occupiers switching loans, the broker believes.
The impact on credit quality should be modest but loan growth will slow. The broker has made minor changes to earnings forecasts. Hold and $30 target retained for ANZ.
Target price is $30.00 Current Price is $28.03 Difference: $1.97
If ANZ meets the Deutsche Bank target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $30.56, suggesting upside of 9.0% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 160.00 cents and EPS of 225.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 228.9, implying annual growth of 13.0%. Current consensus DPS estimate is 161.1, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 12.3. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 160.00 cents and EPS of 235.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 234.8, implying annual growth of 2.6%. Current consensus DPS estimate is 163.5, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 11.9. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates AOG as Accumulate (2) -
Ord Minnett considers the sell-off in the stock in the wake of the expose in Four Corners as an over-reaction. The broker acknowledges there will be brand damage but the extent to which this lingers and impacts on resident demand and the leasing of developments is difficult to quantify.
The stock is now trading close to a -20% discount to the broker's expected net tangible assets and offers around 10% growth in earnings per share potential in the next two years. Accumulate rating maintained. Target is $3.70.
Target price is $3.70 Current Price is $2.73 Difference: $0.97
If AOG meets the Ord Minnett target it will return approximately 36% (excluding dividends, fees and charges).
Current consensus price target is $4.09, suggesting upside of 45.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 9.00 cents and EPS of 19.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 18.9, implying annual growth of -14.5%. Current consensus DPS estimate is 9.0, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 14.9. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 12.00 cents and EPS of 20.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 20.6, implying annual growth of 9.0%. Current consensus DPS estimate is 10.6, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 13.7. |
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates AST as Upgrade to Outperform from Neutral (1) -
The company is now on a solid footing, having completed its metering restoration and resolving outstanding litigation, and Credit Suisse increases revenue expectations based on the anticipated acceptance of a higher rate of depreciation and lower forecast inflation.
A favourable outcome from the gas distribution determination should also be supportive. Credit Suisse upgrades to Outperform from Neutral and the target is increased to $1.80 from $1.70.
Target price is $1.80 Current Price is $1.72 Difference: $0.085
If AST meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $1.73, suggesting downside of -2.0% (ex-dividends)
The company's fiscal year ends in March.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 9.25 cents and EPS of 6.62 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.9, implying annual growth of -3.5%. Current consensus DPS estimate is 9.5, implying a prospective dividend yield of 5.4%. Current consensus EPS estimate suggests the PER is 25.5. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 9.62 cents and EPS of 6.59 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.8, implying annual growth of -1.4%. Current consensus DPS estimate is 9.3, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 25.9. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates CBA as Hold (3) -
In recent weeks the majors have lifted rates on interest only mortgages by 30-35bps and cut rates on owner-occupier principal plus interest loans by 3-8bps. The broker suggests this is a response to regulatory measures rather than to the levy. Margin benefits will be dampened by owner-occupiers switching loans, the broker believes.
The impact on credit quality should be modest but loan growth will slow. The broker has made minor changes to earnings forecasts. Hold and $80.80 target retained for CBA.
Target price is $80.80 Current Price is $82.08 Difference: minus $1.28 (current price is over target).
If CBA meets the Deutsche Bank target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $80.35, suggesting downside of -2.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 424.00 cents and EPS of 550.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 556.9, implying annual growth of 0.3%. Current consensus DPS estimate is 424.0, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 14.8. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 440.00 cents and EPS of 569.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 572.9, implying annual growth of 2.9%. Current consensus DPS estimate is 430.6, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 14.3. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates CKF as Upgrade to Buy from Neutral (1) -
The company has acquired 28 KFC restaurants from Yum! Brands for $110m. The acquisition will be funded through a $44m non-renounceable entitlement offer and $66m in debt.
Meanwhile, the company reported a strong FY17 result, beating UBS expectations. This was predominantly driven by stronger-than-expected KFC Australia performance and lower depreciation.
Rating is upgraded to Buy from Neutral and the target is raised to $6.00 from $5.60.
Target price is $6.00 Current Price is $5.09 Difference: $0.91
If CKF meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).
The company's fiscal year ends in April.
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 20.00 cents and EPS of 39.20 cents. |
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 24.80 cents and EPS of 49.40 cents. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates FMG as Neutral (3) -
The company has updated on its investment in projects to improve safety, productivity and efficiency. The investment is over three years and, while not quantified, is expected to be within the sustaining capital expenditure, which UBS assumes rises to US$3.00-3.50/t in FY18 and in the long run to US$4/t.
The major issue around investment in the stock today is the discount for low-grade iron ore and whether this is structural or cyclical, UBS asserts. The broker estimates a -25% discount is priced into the stock today.
Neutral and $7.00 target retained.
Target price is $7.00 Current Price is $4.87 Difference: $2.13
If FMG meets the UBS target it will return approximately 44% (excluding dividends, fees and charges).
Current consensus price target is $5.67, suggesting upside of 12.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 58.37 cents and EPS of 112.76 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 102.5, implying annual growth of N/A. Current consensus DPS estimate is 42.4, implying a prospective dividend yield of 8.4%. Current consensus EPS estimate suggests the PER is 4.9. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 50.41 cents and EPS of 75.62 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 63.5, implying annual growth of -38.0%. Current consensus DPS estimate is 30.3, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 8.0. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates LLC as Buy (1) -
The company is currently the preferred bidder for a 50:50 joint venture partnership with Haringey Council for the major regeneration of that London borough.
UBS believes this information highlights the company's success in moving its business to international markets. In the medium to longer term UBS estimates around $12bn in international development completions.
Buy rating and $17.70 target retained.
Target price is $17.70 Current Price is $16.32 Difference: $1.38
If LLC meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $16.98, suggesting upside of 2.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 66.40 cents and EPS of 134.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 129.0, implying annual growth of 2.1%. Current consensus DPS estimate is 64.3, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 12.8. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 70.70 cents and EPS of 141.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 138.9, implying annual growth of 7.7%. Current consensus DPS estimate is 69.9, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 11.9. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates LNK as Buy (1) -
Having missed out on a few opportunities post IPO, Link has acquired Capita Asset Services in the UK for $1.5bn, expanding the company into Europe, opening up new product lines and significantly increasing earnings growth, the broker notes.
Earnings growth benefits are balanced by a significant jump in gearing and an exposure to currency movements, but the broker retains Buy. Target rises to $9.50 from $8.70.
Target price is $9.50 Current Price is $7.83 Difference: $1.67
If LNK meets the Deutsche Bank target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $9.01, suggesting upside of 15.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 16.00 cents and EPS of 34.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 33.8, implying annual growth of 168.5%. Current consensus DPS estimate is 16.4, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 23.2. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 18.00 cents and EPS of 38.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 36.7, implying annual growth of 8.6%. Current consensus DPS estimate is 18.7, implying a prospective dividend yield of 2.4%. Current consensus EPS estimate suggests the PER is 21.3. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates MPL as Upgrade to Outperform from Neutral (1) -
Macquarie observes policy holder disputes are at the lowest level since 2000. This reduced level of disputes, amid expectations that IT system problems will diminish, increase the potential for improved customer retention and a more positive FY18, the broker believes.
Macquarie upgrades to Outperform from Neutral. Target is raised to $3.07 from $3.00.
Target price is $3.07 Current Price is $2.74 Difference: $0.33
If MPL meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $2.68, suggesting downside of -4.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 11.50 cents and EPS of 15.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.7, implying annual growth of 3.3%. Current consensus DPS estimate is 11.7, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 17.8. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 11.50 cents and EPS of 14.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.0, implying annual growth of -4.5%. Current consensus DPS estimate is 11.7, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 18.6. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates MTS as Overweight (1) -
After meeting with management, Morgan Stanley notes significant price investment and record competitor store openings should ease over the coming 12-18 months and alleviate some pressure on the company's supermarket business.
A sharper offer in tobacco, which now makes money from distribution rather than stock profits, and the launch of a private label product is expected to boost performance from FY18 onwards, as it has already done in liquor.
The company will assess whether it needs its current four hardware banners and the broker believes there is an opportunity to streamline these and move to core ranges. Savings in advertising and procurement would be incremental to the existing $15-20m synergy target.
Overweight rating maintained. Cautious sector view. Target is $2.80.
Target price is $2.80 Current Price is $2.21 Difference: $0.59
If MTS meets the Morgan Stanley target it will return approximately 27% (excluding dividends, fees and charges).
Current consensus price target is $2.39, suggesting upside of 6.9% (ex-dividends)
The company's fiscal year ends in April.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 13.20 cents and EPS of 22.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.2, implying annual growth of N/A. Current consensus DPS estimate is 13.3, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 10.5. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 14.00 cents and EPS of 23.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.5, implying annual growth of 6.1%. Current consensus DPS estimate is 14.2, implying a prospective dividend yield of 6.4%. Current consensus EPS estimate suggests the PER is 9.9. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates NAB as Buy (1) -
In recent weeks the majors have lifted rates on interest only mortgages by 30-35bps and cut rates on owner-occupier principal plus interest loans by 3-8bps. The broker suggests this is a response to regulatory measures rather than to the levy. Margin benefits will be dampened by owner-occupiers switching loans, the broker believes.
The impact on credit quality should be modest but loan growth will slow. The broker has made minor changes to earnings forecasts. Buy and $32.40 target retained for NAB.
Target price is $32.40 Current Price is $29.15 Difference: $3.25
If NAB meets the Deutsche Bank target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $31.56, suggesting upside of 8.5% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 198.00 cents and EPS of 243.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 243.1, implying annual growth of -0.8%. Current consensus DPS estimate is 195.6, implying a prospective dividend yield of 6.7%. Current consensus EPS estimate suggests the PER is 12.0. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 199.00 cents and EPS of 246.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 243.8, implying annual growth of 0.3%. Current consensus DPS estimate is 194.0, implying a prospective dividend yield of 6.7%. Current consensus EPS estimate suggests the PER is 11.9. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates OGC as Outperform (1) -
Credit Suisse notes the Hail optimisation study was robust and projects a mine life of over 16 years at an expanded 4mtpa rate. The broker also notes commissioning challenges should be resolved by the end of the year for little expenditure.
Outperform rating retained. Target is increased to $4.35 from $4.20, to reflect the incorporation of the update and revised guidance.
Target price is $4.35 Current Price is $4.14 Difference: $0.21
If OGC meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $4.75, suggesting upside of 16.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 2.65 cents and EPS of 53.12 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 39.4, implying annual growth of N/A. Current consensus DPS estimate is 3.5, implying a prospective dividend yield of 0.9%. Current consensus EPS estimate suggests the PER is 10.4. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 2.65 cents and EPS of 37.94 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 40.0, implying annual growth of 1.5%. Current consensus DPS estimate is 3.5, implying a prospective dividend yield of 0.9%. Current consensus EPS estimate suggests the PER is 10.2. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates OGC as Hold (3) -
Oceana has updated 2017 guidance, balancing strong production at Didipio but commissioning issues at Haile. The net effect is immaterial, the broker suggests, but Haile problems do warrant some conservatism.
Target rises to $4.50 from $4.40, Hold retained.
Target price is $4.50 Current Price is $4.14 Difference: $0.36
If OGC meets the Deutsche Bank target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $4.75, suggesting upside of 16.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 2.65 cents and EPS of 33.17 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 39.4, implying annual growth of N/A. Current consensus DPS estimate is 3.5, implying a prospective dividend yield of 0.9%. Current consensus EPS estimate suggests the PER is 10.4. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 2.66 cents and EPS of 38.57 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 40.0, implying annual growth of 1.5%. Current consensus DPS estimate is 3.5, implying a prospective dividend yield of 0.9%. Current consensus EPS estimate suggests the PER is 10.2. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates OGC as Outperform (1) -
The Haile optimisation study has exceeded Macquarie's expectations on throughput, albeit at lower grades. Operating expenditure has also improved because of economies of scale with mining and processing.
Macquarie will continue to monitor the ramp up closely. Outperform retained. Target is reduced to $6.00 from $6.25.
Target price is $6.00 Current Price is $4.14 Difference: $1.86
If OGC meets the Macquarie target it will return approximately 45% (excluding dividends, fees and charges).
Current consensus price target is $4.75, suggesting upside of 16.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 2.65 cents and EPS of 50.41 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 39.4, implying annual growth of N/A. Current consensus DPS estimate is 3.5, implying a prospective dividend yield of 0.9%. Current consensus EPS estimate suggests the PER is 10.4. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 2.65 cents and EPS of 53.06 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 40.0, implying annual growth of 1.5%. Current consensus DPS estimate is 3.5, implying a prospective dividend yield of 0.9%. Current consensus EPS estimate suggests the PER is 10.2. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates REA as Hold (3) -
REA will acquire 80% of mortgage broker Smartline and add a mortgage broking solution to its existing partnership with National Bank ((NAB)) affirming, the broker notes, that mortgages are the company's key target for an adjacent business to classifieds.
While classifieds provide REA with a leg-up in terms of leads, mortgage broking is a lower multiple and more volatile business, the broker warns. Hold retained, target rises to $56.75 from $56.00.
Target price is $56.75 Current Price is $66.08 Difference: minus $9.33 (current price is over target).
If REA meets the Deutsche Bank target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $63.43, suggesting downside of -6.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 100.00 cents and EPS of 176.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 180.7, implying annual growth of -5.9%. Current consensus DPS estimate is 92.6, implying a prospective dividend yield of 1.4%. Current consensus EPS estimate suggests the PER is 37.4. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 120.00 cents and EPS of 216.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 224.5, implying annual growth of 24.2%. Current consensus DPS estimate is 117.9, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 30.1. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates REA as Neutral (3) -
The company has announced the acquisition of an 80.3% stake in Smartline, and Australian mortgage broking franchise. The company has also announced a strategic mortgage broking partnership with National Australia Bank ((NAB)).
Macquarie expects, if execution is successful, the financial services platform will offer good returns on capital in isolation and be complementary to the core business. The broker retains a Neutral rating on valuation grounds and raises the target to $66 from $65.
Target price is $66.00 Current Price is $66.08 Difference: minus $0.08 (current price is over target).
If REA 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 $63.43, suggesting downside of -6.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 89.80 cents and EPS of 179.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 180.7, implying annual growth of -5.9%. Current consensus DPS estimate is 92.6, implying a prospective dividend yield of 1.4%. Current consensus EPS estimate suggests the PER is 37.4. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 114.30 cents and EPS of 228.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 224.5, implying annual growth of 24.2%. Current consensus DPS estimate is 117.9, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 30.1. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates REA as Sell (5) -
REA will acquire 80.3% of Smartline, a mortgage broking business, for $67m. UBS envisages one main strategic purpose, to tap those consumers willing to sign up to a residential home loan over the internet now the company will be able to leverage the network of 300 Smartline advisers nationally to promote its real estate.com.au home loans product.
The company has also built on its original agreement with National Australia Bank ((NAB)) to create an end-to-end digital property search and financing product.
While the transaction should be accretive, UBS does not believe the incremental earnings should be valued on the existing online classifieds multiple. Sell rating and $60 target retained.
Target price is $60.00 Current Price is $66.08 Difference: minus $6.08 (current price is over target).
If REA meets the UBS target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $63.43, suggesting downside of -6.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 88.00 cents and EPS of 175.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 180.7, implying annual growth of -5.9%. Current consensus DPS estimate is 92.6, implying a prospective dividend yield of 1.4%. Current consensus EPS estimate suggests the PER is 37.4. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 112.00 cents and EPS of 225.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 224.5, implying annual growth of 24.2%. Current consensus DPS estimate is 117.9, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 30.1. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates RIO as Outperform (1) -
Credit Suisse observes the bidding war for Coal & Allied rolls on. Rio Tinto has confirmed that Yancoal ((YAL)) is the preferred bidder after an improved offer was received. It remains unclear whether Glencore will return with a counter bid.
Outperform retained. Target is $72.
Target price is $72.00 Current Price is $59.85 Difference: $12.15
If RIO meets the Credit Suisse target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $71.38, suggesting upside of 17.3% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 372.78 cents and EPS of 716.37 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 654.6, implying annual growth of N/A. Current consensus DPS estimate is 353.3, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 9.3. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 310.43 cents and EPS of 531.97 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 474.6, implying annual growth of -27.5%. Current consensus DPS estimate is 277.3, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 12.8. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates SGM as Hold (3) -
Sims' US peer Schnitzer has reported a Q3 profit result in line with consensus and expects ongoing growth in ferrous volumes in Q4. The result is consistent with Sims' own guidance, the broker notes.
The broker expects scrap prices to decline but not by as much as iron ore. Significant progress has been made in cost reduction but on declining scrap prices, the broker believes the 10% return on capital target for FY18 will be hard to achieve. Hold and $12.86 target retained.
Target price is $12.86 Current Price is $13.99 Difference: minus $1.13 (current price is over target).
If SGM meets the Deutsche Bank target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $13.39, suggesting downside of -12.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 37.00 cents and EPS of 58.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 70.4, implying annual growth of 31.1%. Current consensus DPS estimate is 39.7, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 21.7. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 32.00 cents and EPS of 74.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 83.4, implying annual growth of 18.5%. Current consensus DPS estimate is 42.0, implying a prospective dividend yield of 2.7%. Current consensus EPS estimate suggests the PER is 18.3. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates SKI as Downgrade to Underperform from Neutral (5) -
The stock is now trading at a three-year high relative to AusNet ((AST)), and at or above privatisation benchmarks.
Credit Suisse estimates that the value of synergies that may be achieved by combining the company's stake in Victorian assets with those of DUET are likely to be less than 1.4% of its discounted cash flow value.
Rating is downgraded to Underperform from Neutral. Target is $2.40.
Target price is $2.40 Current Price is $2.69 Difference: minus $0.29 (current price is over target).
If SKI meets the Credit Suisse target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $2.51, suggesting downside of -6.4% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 15.25 cents and EPS of 4.85 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.3, implying annual growth of 72.2%. Current consensus DPS estimate is 15.3, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 32.3. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 16.00 cents and EPS of 5.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.7, implying annual growth of 4.8%. Current consensus DPS estimate is 16.2, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 30.9. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates STO as Buy (1) -
Santos has entered into a strategic alliance with ENN and Hony Capital, which together hold around 15% of Santos, to pursue growth opportunities in Aust and PNG. The two consider Santos their primary investment vehicle into upstream LNG.
The broker has made no changes. Buy and $4.50 target retained.
Target price is $4.50 Current Price is $2.96 Difference: $1.54
If STO meets the Deutsche Bank target it will return approximately 52% (excluding dividends, fees and charges).
Current consensus price target is $4.02, suggesting upside of 33.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 9.31 cents and EPS of 22.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 18.6, implying annual growth of N/A. Current consensus DPS estimate is 3.6, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 16.2. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 13.29 cents and EPS of 31.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 26.7, implying annual growth of 43.5%. Current consensus DPS estimate is 8.4, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 11.3. |
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
Morgans rates SWL as Downgrade to Hold from Add (3) -
The company has recommended the proposed acquisition by VINCI at $1.285 cash per share. The company may decide to pay one or more dividends up to 44.5c and, if paid, the cash consideration as part of the scheme will be reduced by the cash amount of the dividends.
Morgans suspects the dividend payment is highly likely given the company's cash and franking credit balance. The broker downgrades to Hold from Add and sets the target at the offer price ($1.29).
Target price is $1.29 Current Price is $1.38 Difference: minus $0.085 (current price is over target).
If SWL meets the Morgans target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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 4.00 cents and EPS of 12.00 cents. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates TAH as Buy (1) -
Following on from last week's underwhelming trading update provided by Tabcorp, the broker believes that around half of the downgrade is attributable to peripheral businesses and the core downgrade encompasses both revenue and cost factors.
The broker nevertheless sees encouraging trends in the core wagering business and suggests the pending merger with Tatts ((TTS)) is compelling, and may be enhanced by an improving regulatory environment. Buy and $5.35 target retained.
Target price is $5.35 Current Price is $4.50 Difference: $0.85
If TAH meets the Deutsche Bank target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $4.59, suggesting upside of 2.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 25.00 cents and EPS of 21.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.2, implying annual growth of 3.9%. Current consensus DPS estimate is 25.0, implying a prospective dividend yield of 5.6%. Current consensus EPS estimate suggests the PER is 21.0. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 26.00 cents and EPS of 23.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 23.2, implying annual growth of 9.4%. Current consensus DPS estimate is 25.4, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 19.2. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates WBC as Buy (1) -
In recent weeks the majors have lifted rates on interest only mortgages by 30-35bps and cut rates on owner-occupier principal plus interest loans by 3-8bps. The broker suggests this is a response to regulatory measures rather than to the levy. Margin benefits will be dampened by owner-occupiers switching loans, the broker believes.
The impact on credit quality should be modest but loan growth will slow. The broker has made minor changes to earnings forecasts. Buy and $33.50 target retained for Westpac.
Target price is $33.50 Current Price is $30.09 Difference: $3.41
If WBC meets the Deutsche Bank target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $33.08, suggesting upside of 9.2% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 188.00 cents and EPS of 233.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 237.3, implying annual growth of 5.7%. Current consensus DPS estimate is 188.0, implying a prospective dividend yield of 6.2%. Current consensus EPS estimate suggests the PER is 12.8. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 192.00 cents and EPS of 244.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 243.9, implying annual growth of 2.8%. Current consensus DPS estimate is 188.9, implying a prospective dividend yield of 6.2%. Current consensus EPS estimate suggests the PER is 12.4. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| AAD - | ARDENT LEISURE | Neutral - Macquarie | Overnight Price $1.90 |
| Hold - Morgans | Overnight Price $1.90 | ||
| Sell - UBS | Overnight Price $1.90 | ||
| AMC - | AMCOR | Buy - Deutsche Bank | Overnight Price $16.42 |
| ANZ - | ANZ BANKING GROUP | Hold - Deutsche Bank | Overnight Price $28.03 |
| AOG - | AVEO | Accumulate - Ord Minnett | Overnight Price $2.73 |
| AST - | AUSNET SERVICES | Upgrade to Outperform from Neutral - Credit Suisse | Overnight Price $1.72 |
| CBA - | COMMBANK | Hold - Deutsche Bank | Overnight Price $82.08 |
| CKF - | COLLINS FOODS | Upgrade to Buy from Neutral - UBS | Overnight Price $5.09 |
| FMG - | FORTESCUE | Neutral - UBS | Overnight Price $4.87 |
| LLC - | LEND LEASE CORP | Buy - UBS | Overnight Price $16.32 |
| LNK - | LINK ADMINISTRATION | Buy - Deutsche Bank | Overnight Price $7.83 |
| MPL - | MEDIBANK PRIVATE | Upgrade to Outperform from Neutral - Macquarie | Overnight Price $2.74 |
| MTS - | METCASH | Overweight - Morgan Stanley | Overnight Price $2.21 |
| NAB - | NATIONAL AUSTRALIA BANK | Buy - Deutsche Bank | Overnight Price $29.15 |
| OGC - | OCEANAGOLD | Outperform - Credit Suisse | Overnight Price $4.14 |
| Hold - Deutsche Bank | Overnight Price $4.14 | ||
| Outperform - Macquarie | Overnight Price $4.14 | ||
| REA - | REA GROUP | Hold - Deutsche Bank | Overnight Price $66.08 |
| Neutral - Macquarie | Overnight Price $66.08 | ||
| Sell - UBS | Overnight Price $66.08 | ||
| RIO - | RIO TINTO | Outperform - Credit Suisse | Overnight Price $59.85 |
| SGM - | SIMS METAL MANAGEMENT | Hold - Deutsche Bank | Overnight Price $13.99 |
| SKI - | SPARK INFRASTRUCTURE | Downgrade to Underperform from Neutral - Credit Suisse | Overnight Price $2.69 |
| STO - | SANTOS | Buy - Deutsche Bank | Overnight Price $2.96 |
| SWL - | SEYMOUR WHYTE | Downgrade to Hold from Add - Morgans | Overnight Price $1.38 |
| TAH - | TABCORP HOLDINGS | Buy - Deutsche Bank | Overnight Price $4.50 |
| WBC - | WESTPAC BANKING | Buy - Deutsche Bank | Overnight Price $30.09 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 14 |
| 2. Accumulate | 1 |
| 3. Hold | 10 |
| 5. Sell | 3 |
Wednesday 28 June 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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