Australian Broker Call

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September 28, 2020

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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: 05:00 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
NST - Northern Star Upgrade to Neutral from Sell UBS
SUN - Suncorp Upgrade to Outperform from Neutral Macquarie
ALQ  ALS LIMITED

Mining Sector Contracting

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Overnight Price: $9.12

Citi rates ALQ as Neutral (3) -

Citi upgrades net profit estimates by 2-8% for FY21-23 to reflect recent constructive exploration and financing data. The broker forecasts a -10% drop in sample volumes in the first half, offset by the strong price and favourable mix achieved at the end of FY20.

The outlook is constructive for a recovery in commodities and life sciences although asset care within the industrial segment is expected to remain weak throughout FY21.

Citi raises the target to $9.57 from $8.31. Neutral/High Risk retained.

Target price is $9.57 Current Price is $9.12 Difference: $0.45
If ALQ meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $8.72, suggesting downside of -7.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 16.80 cents and EPS of 33.70 cents.
At the last closing share price the estimated dividend yield is 1.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.06.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 33.3, implying annual growth of 25.9%.

Current consensus DPS estimate is 16.3, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 28.2.

Forecast for FY22:

Citi forecasts a full year FY22 dividend of 26.70 cents and EPS of 48.60 cents.
At the last closing share price the estimated dividend yield is 2.93%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 41.1, implying annual growth of 23.4%.

Current consensus DPS estimate is 23.7, implying a prospective dividend yield of 2.5%.

Current consensus EPS estimate suggests the PER is 22.8.

Market Sentiment: 0.6

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

AMC  AMCOR LIMITED

Paper & Packaging

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Overnight Price: $15.05

Ord Minnett rates AMC as Accumulate (2) -

Amcor will be selling its 47.6% equity stake in the Hong Kong-listed AMVIG Holdings to the private debt and equity firm New Prospect Capital. AMVIG is the market leader in the cigarette packaging printing industry in China with 10 production plants.

Ord Minnett notes the sale price will be US$124m, implying a 50% premium to the latest closing price.

The broker maintains its Accumulate rating with a target price of $17.50.

This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.

Target price is $17.50 Current Price is $15.05 Difference: $2.45
If AMC meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $16.89, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 dividend of 73.68 cents and EPS of 104.63 cents.
At the last closing share price the estimated dividend yield is 4.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.38.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 99.2, implying annual growth of N/A.

Current consensus DPS estimate is 69.0, implying a prospective dividend yield of 4.5%.

Current consensus EPS estimate suggests the PER is 15.5.

Forecast for FY22:

Ord Minnett forecasts a full year FY22 dividend of 76.63 cents and EPS of 109.49 cents.
At the last closing share price the estimated dividend yield is 5.09%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 107.6, implying annual growth of 8.5%.

Current consensus DPS estimate is 73.4, implying a prospective dividend yield of 4.8%.

Current consensus EPS estimate suggests the PER is 14.3.

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

AWC  ALUMINA LIMITED

Aluminium, Bauxite & Alumina

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Overnight Price: $1.43

UBS rates AWC as Buy (1) -

With mobility restrictions lifting, UBS notes manufacturing in China and the rest of the world is starting to increase as can be seen from the uplift in alumina prices to circa US$270/t currently from circa US$224/t in mid-April.

The broker expects China's alumina imports to be about 3.6mt in 2020. As caustic soda and energy costs rise, UBS notes high-cost producers will be impacted more than those who are self-sufficient in bauxite.

UBS believes Alumina Ltd looks well-placed to benefit as the company is self-sufficient in bauxite supply and is a low volume consumer of caustic soda.

UBS maintains its Buy rating with a target price of $2.

Target price is $2.00 Current Price is $1.43 Difference: $0.57
If AWC meets the UBS target it will return approximately 40% (excluding dividends, fees and charges).

Current consensus price target is $1.89, suggesting upside of 32.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

UBS forecasts a full year FY20 dividend of 8.84 cents and EPS of 7.37 cents.
At the last closing share price the estimated dividend yield is 6.18%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.41.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.6, implying annual growth of N/A.

Current consensus DPS estimate is 8.4, implying a prospective dividend yield of 5.9%.

Current consensus EPS estimate suggests the PER is 16.6.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 7.37 cents and EPS of 10.32 cents.
At the last closing share price the estimated dividend yield is 5.15%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.86.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.6, implying annual growth of 11.6%.

Current consensus DPS estimate is 8.4, implying a prospective dividend yield of 5.9%.

Current consensus EPS estimate suggests the PER is 14.9.

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

BLD  BORAL LIMITED

Building Products & Services

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Overnight Price: $4.29

Credit Suisse rates BLD as Neutral (3) -

Quarries may be attractive investments but Credit Suisse assesses Boral's record on Australian quarries falls short of expectations. The broker notes, in contrast, US companies with significant aggregate exposure trade at large premiums to their cement/concrete peers.

Credit Suisse believes the market is not undervaluing the Australian earnings and the main issue is whether Boral's quarries can be restored to profitability in Australia.

The broker expects government stimulus and the company strategic review will be positive catalysts. Target is raised to $4.15 from $3.75. Neutral maintained.

Target price is $4.15 Current Price is $4.29 Difference: minus $0.14 (current price is over target).
If BLD meets the Credit Suisse target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.15, suggesting downside of -8.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 0.00 cents and EPS of 15.58 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.54.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.3, implying annual growth of N/A.

Current consensus DPS estimate is 3.8, implying a prospective dividend yield of 0.8%.

Current consensus EPS estimate suggests the PER is 27.9.

Forecast for FY22:

Credit Suisse forecasts a full year FY22 dividend of 11.50 cents and EPS of 22.78 cents.
At the last closing share price the estimated dividend yield is 2.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.83.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.8, implying annual growth of 52.1%.

Current consensus DPS estimate is 14.2, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 18.3.

Market Sentiment: 0.0

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

CWN  CROWN RESORTS LIMITED

Gaming

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Overnight Price: $9.19

Credit Suisse rates CWN as Outperform (1) -

Despite considering it unlikely the NSW public inquiry into Crown Resorts will find the company unsuitable to hold a casino licence, Credit Suisse does acknowledge the press has frequently drawn observations of impropriety.

Hence, the broker considers it possible that individuals may be deemed unsuitable including close associates.

Credit Suisse reduces FY23 estimates for earnings per share by -5% and scales back VIP volume expectations because of regulatory pressures. Outperform retained. Target is reduced to $11.10 from $11.20.

Target price is $11.10 Current Price is $9.19 Difference: $1.91
If CWN meets the Credit Suisse target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $10.29, suggesting upside of 17.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 8.69 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 105.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.0, implying annual growth of -48.9%.

Current consensus DPS estimate is 18.0, implying a prospective dividend yield of 2.0%.

Current consensus EPS estimate suggests the PER is 146.7.

Forecast for FY22:

Credit Suisse forecasts a full year FY22 dividend of 60.00 cents and EPS of 28.38 cents.
At the last closing share price the estimated dividend yield is 6.53%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.38.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 44.9, implying annual growth of 648.3%.

Current consensus DPS estimate is 53.3, implying a prospective dividend yield of 6.1%.

Current consensus EPS estimate suggests the PER is 19.6.

Market Sentiment: 0.7

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

GOR  GOLD ROAD RESOURCES LIMITED

Gold & Silver

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Overnight Price: $1.47

Macquarie rates GOR as Outperform (1) -

A bearing failure at the mill at Gruyere has affected production for a week and 2020 guidance has been reduced by -15,000 ounces to 250-270,000 ounces. All-in sustainable costs have been lifted by $100 to $1,250-1,350/oz.

The company expects the third quarter will be the softest for 2020, as Gruyere transitions to a fresh feed. Macquarie retains an Outperform rating and lowers the target to $1.80 from $1.90.

Target price is $1.80 Current Price is $1.47 Difference: $0.33
If GOR meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY20:

Macquarie forecasts a full year FY20 dividend of 1.00 cents and EPS of 5.90 cents.
At the last closing share price the estimated dividend yield is 0.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.92.

Forecast for FY21:

Macquarie forecasts a full year FY21 dividend of 4.00 cents and EPS of 12.20 cents.
At the last closing share price the estimated dividend yield is 2.72%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.05.

Market Sentiment: 1.0

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

HLS  HEALIUS LIMITED

Healthcare services

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Overnight Price: $3.52

Citi rates HLS as Neutral (3) -

Citi anticipates Healius will finish FY21 with low net debt once the pending sale of the medical centre division is completed. Then the balance sheet will have potential for new gearing, given the stability of cash flow.

In the short term the broker believes there is upside risk to consensus expectations for FY21 should coronavirus testing volumes remain elevated. Neutral rating and $3.55 target retained.

Target price is $3.55 Current Price is $3.52 Difference: $0.03
If HLS meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.52, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 4.00 cents and EPS of 14.90 cents.
At the last closing share price the estimated dividend yield is 1.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.62.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.0, implying annual growth of N/A.

Current consensus DPS estimate is 6.2, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 20.1.

Forecast for FY22:

Citi forecasts a full year FY22 dividend of 10.00 cents and EPS of 16.40 cents.
At the last closing share price the estimated dividend yield is 2.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.46.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.6, implying annual growth of -7.8%.

Current consensus DPS estimate is 7.5, implying a prospective dividend yield of 2.1%.

Current consensus EPS estimate suggests the PER is 21.7.

Market Sentiment: 0.5

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

HMC  HOME CONSORTIUM LIMITED

Real Estate

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Overnight Price: $3.31

Morgans rates HMC as Add (1) -

Home Consortium has provided further detail on the Daily Needs REIT (DNR) spin-off, which is expected to list in late November 2020.

The REIT will be focused on hyper-convenience and daily needs tenants.

DNR will be established via an in-specie distribution to Home Consortium security holders.

The company will hold a direct co-investment stake of around 20-30% and manage the REIT.

Morgans explains the company is evolving into a capital light model with income to be sourced via rental income, distributions, fee income and developments.

Another near term focus is the launch of an unlisted Healthcare and Wellness fund in 2021.

The Add rating and target price of $3.60 are unchanged.

Target price is $3.60 Current Price is $3.31 Difference: $0.29
If HMC meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.34, suggesting downside of -1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 15.00 cents and EPS of 15.70 cents.
At the last closing share price the estimated dividend yield is 4.53%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.08.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.2, implying annual growth of N/A.

Current consensus DPS estimate is 14.7, implying a prospective dividend yield of 4.4%.

Current consensus EPS estimate suggests the PER is 22.2.

Forecast for FY22:

Morgans forecasts a full year FY22 dividend of 19.00 cents and EPS of 21.90 cents.
At the last closing share price the estimated dividend yield is 5.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.6, implying annual growth of 42.1%.

Current consensus DPS estimate is 18.7, implying a prospective dividend yield of 5.5%.

Current consensus EPS estimate suggests the PER is 15.6.

Market Sentiment: 0.3

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

NST  NORTHERN STAR RESOURCES LTD

Gold & Silver

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Overnight Price: $13.62

Macquarie rates NST as Outperform (1) -

Pogo and Yandal are expected to be the main drivers of production growth over the short term. Northern Star Resources intends to grow production by 40% over the next three years and reduce costs by -10%.

The company has reiterated an intention to supplement its pay-out policy of 6% of revenue with special dividends. Macquarie retains an Outperform rating and raises the target 1% to $16.60.

Target price is $16.60 Current Price is $13.62 Difference: $2.98
If NST meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $14.58, suggesting upside of 2.8% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Macquarie forecasts a full year FY21 dividend of 21.00 cents and EPS of 76.90 cents.
At the last closing share price the estimated dividend yield is 1.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 84.6, implying annual growth of 126.8%.

Current consensus DPS estimate is 24.0, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 16.8.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 21.00 cents and EPS of 77.30 cents.
At the last closing share price the estimated dividend yield is 1.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.62.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 105.7, implying annual growth of 24.9%.

Current consensus DPS estimate is 24.3, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 13.4.

Market Sentiment: 0.2

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


UBS rates NST as Upgrade to Neutral from Sell (3) -

Looking at Northern Star Resources' Strategy Day, UBS asserts its Sell recommendation no longer holds true.

Northern Star Resources expects to see its production to increase by 40% over the next three years led by Jundee/Yandal and Pogo. Costs are expected to decline and noting its forecasts were too conservative, the broker has reduced its cost outlook.

UBS upgrades its rating to Neutral from Sell with the target price raised to $14.20 from $14.

Target price is $14.20 Current Price is $13.62 Difference: $0.58
If NST meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $14.58, suggesting upside of 2.8% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 22.00 cents and EPS of 85.00 cents.
At the last closing share price the estimated dividend yield is 1.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.02.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 84.6, implying annual growth of 126.8%.

Current consensus DPS estimate is 24.0, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 16.8.

Forecast for FY22:

UBS forecasts a full year FY22 dividend of 24.00 cents and EPS of 95.00 cents.
At the last closing share price the estimated dividend yield is 1.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.34.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 105.7, implying annual growth of 24.9%.

Current consensus DPS estimate is 24.3, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 13.4.

Market Sentiment: 0.2

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

ORG  ORIGIN ENERGY LIMITED

NatGas

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Overnight Price: $4.51

Ord Minnett rates ORG as Accumulate (2) -

Ord Minnett has made some adjustments to Origin Energy's earnings forecast which includes some downgrades driven by higher non-cash expenses. Overall, the broker remains positive on the company and projects a free cash flow yield of 13% in FY21 and 15% in FY22.

Capital management is expected to be a key driver in FY21, suggests the broker, with Origin’s high cash generation and low payout ratio providing potential upside to market estimates. 

Ord Minnett maintains its Accumulate rating with the target price reducing to $7.60 from $7.70.

This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.

Target price is $7.60 Current Price is $4.51 Difference: $3.09
If ORG meets the Ord Minnett target it will return approximately 69% (excluding dividends, fees and charges).

Current consensus price target is $6.38, suggesting upside of 39.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 dividend of 13.00 cents and EPS of 25.00 cents.
At the last closing share price the estimated dividend yield is 2.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.8, implying annual growth of 321.3%.

Current consensus DPS estimate is 14.7, implying a prospective dividend yield of 3.2%.

Current consensus EPS estimate suggests the PER is 23.1.

Forecast for FY22:

Ord Minnett forecasts a full year FY22 dividend of 29.00 cents and EPS of 40.00 cents.
At the last closing share price the estimated dividend yield is 6.43%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.27.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.4, implying annual growth of 48.5%.

Current consensus DPS estimate is 18.7, implying a prospective dividend yield of 4.1%.

Current consensus EPS estimate suggests the PER is 15.5.

Market Sentiment: 0.5

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

PMV  PREMIER INVESTMENTS LIMITED

Apparel & Footwear

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Overnight Price: $19.00

Citi rates PMV as Neutral (3) -

The margin outlook is improving, Citi observes, because of gross margin expansion and rent reductions as well as a shift in mix to online. The broker expects margins to expand to 15.1% in FY21, from 13.2% in FY19.

Online penetration is expected to increase to 20% in FY21, driven by store closures, investment in online and a soft outlook for shopping centres. Neutral retained. Target rises to $20.60 from $19.30.

Target price is $20.60 Current Price is $19.00 Difference: $1.6
If PMV meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $20.40, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 72.00 cents and EPS of 91.50 cents.
At the last closing share price the estimated dividend yield is 3.79%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 93.9, implying annual growth of N/A.

Current consensus DPS estimate is 63.1, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 21.5.

Forecast for FY22:

Citi forecasts a full year FY22 dividend of 76.00 cents and EPS of 94.50 cents.
At the last closing share price the estimated dividend yield is 4.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 101.7, implying annual growth of 8.3%.

Current consensus DPS estimate is 81.3, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 19.8.

Market Sentiment: 0.4

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


Credit Suisse rates PMV as Neutral (3) -

The FY20 result was previously guided so there were no material surprises for Credit Suisse. Earnings forecasts are upgraded based on a strong performance by Peter Alexander and solid momentum in apparel brands.

Smiggle sales were weaker because of school closures and the broker remains cautious about the division. Up to 55 UK Smiggle stores could close in FY21 although management is confident the profit contribution can be maintained.

The potential closures confirm the strategy to drive growth in margin accretive online sales, in the broker's view. Neutral rating and Credit Suisse raises the target to $20.39 from $18.12.

Target price is $20.39 Current Price is $19.00 Difference: $1.39
If PMV meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $20.40, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 86.87 cents and EPS of 112.00 cents.
At the last closing share price the estimated dividend yield is 4.57%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.96.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 93.9, implying annual growth of N/A.

Current consensus DPS estimate is 63.1, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 21.5.

Forecast for FY22:

Credit Suisse forecasts a full year FY22 dividend of 95.37 cents and EPS of 117.00 cents.
At the last closing share price the estimated dividend yield is 5.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.24.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 101.7, implying annual growth of 8.3%.

Current consensus DPS estimate is 81.3, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 19.8.

Market Sentiment: 0.4

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


UPDATED

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

Results were in line with previous guidance and no outlook commentary was provided. FY20 retail earnings (EBIT) were up 12%.

Morgan Stanley finds the re-opening trends encouraging, noting Australasia delivered like-for-like sales growth of 14% in the final 10 weeks of FY20.

Equal-weight rating. Target price is increased to $18.40 from $17.40. Industry view: In-Line.

Target price is $18.40 Current Price is $19.00 Difference: minus $0.6 (current price is over target).
If PMV meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.40, suggesting upside of 1.3% (ex-dividends)

Forecast for FY21:

Morgan Stanley forecasts a full year FY21 EPS of 90.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 93.9, implying annual growth of N/A.

Current consensus DPS estimate is 63.1, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 21.5.

Forecast for FY22:

Morgan Stanley forecasts a full year FY22 EPS of 96.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 101.7, implying annual growth of 8.3%.

Current consensus DPS estimate is 81.3, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 19.8.

Market Sentiment: 0.4

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


UBS rates PMV as Buy (1) -

Premier Investments delivered an in-line FY20 result with strong cash flow, observes UBS. For FY21, the broker estimates a circa -14% fall in underlying earnings growth.

The broker highlights Smiggle disappointed due to reduced retail footfall, school closures & slower wholesale door growth. The broker is positive and believes covid-19 has delayed but not structurally challenged Premier Investments' strategy. 

While uncertainty is high, the broker believes the company is well placed given its net-cash balance and asset backing. In the medium-term, opportunities include the rollout of Smiggle globally, consolidation in apparel and improving online margins.

Buy rating maintained. Target is increased to $20.50 from $19.30.

Target price is $20.50 Current Price is $19.00 Difference: $1.5
If PMV meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $20.40, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 60.70 cents and EPS of 84.20 cents.
At the last closing share price the estimated dividend yield is 3.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 93.9, implying annual growth of N/A.

Current consensus DPS estimate is 63.1, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 21.5.

Forecast for FY22:

UBS forecasts a full year FY22 dividend of 72.50 cents and EPS of 99.20 cents.
At the last closing share price the estimated dividend yield is 3.82%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 101.7, implying annual growth of 8.3%.

Current consensus DPS estimate is 81.3, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 19.8.

Market Sentiment: 0.4

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

SOL  WASHINGTON H SOUL PATTINSON & COMPANY LIMITED

Diversified Financials

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Overnight Price: $24.78

Morgans rates SOL as Hold (3) -

Washington H Soul Pattinson & Company released its FY20 result with the headline numbers impacted by several moving parts, explains Morgans. These moving parts included New Hope Corporation ((NHC)) and the TPG Telecom ((TPG))/Vodafone merger.

The company’s investment portfolio remained resilient, in the analyst’s view, outperforming the All Ordinaries index by around 7% in the 12 months to July 31, 2020.

Morgans lowers FY21 and FY22 cash profit (NPAT) by over -35%, mainly due to the cyclical nature of earnings for New Hope and Brickworks ((BKW)).

The broker continues to like the story and the company’s long history of dividend distributions.

The Hold rating is unchanged and the target price is increased to $23.32 from $20.04.

Target price is $23.32 Current Price is $24.78 Difference: minus $1.46 (current price is over target).
If SOL 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 July.

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 62.00 cents and EPS of 20.60 cents.
At the last closing share price the estimated dividend yield is 2.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 120.29.

Forecast for FY22:

Morgans forecasts a full year FY22 dividend of 64.50 cents and EPS of 66.60 cents.
At the last closing share price the estimated dividend yield is 2.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 37.21.

Market Sentiment: 0.0

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

SSR  SSR MINING INC

Gold & Silver

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Overnight Price: $26.06

UBS rates SSR as Initiation of coverage with Buy (1) -

UBS has initiated coverage on SSR Mining post its merger with Alacer Gold ((AQG)).

The broker expects group gold production to be 836koz in 2021. UBS highlights the company's key assets are Copler and Marigold with Copler performing consistently through 2020 and Marigold processing ore below reserve grade.

The group production growth is lower than peers and UBS suggests the key here is to arrest a longer-term production decline. 

Looking at SSR Mining's attractive valuation and strong cashflow, UBS initiates coverage with a Buy rating and a target price of $33.

Target price is $33.00 Current Price is $26.06 Difference: $6.94
If SSR meets the UBS target it will return approximately 27% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY20:

UBS forecasts a full year FY20 dividend of 0.00 cents and EPS of 108.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.13.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 58.00 cents and EPS of 234.00 cents.
At the last closing share price the estimated dividend yield is 2.23%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.14.

Market Sentiment: 1.0

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

STO  SANTOS LIMITED

NatGas

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Overnight Price: $5.12

Citi rates STO as Buy (1) -

The NSW Independent Planning Commission is considered likely to hand down its decision on the Narrabri gas project on September 30. If the project is approved Citi anticipates an expedited federal approval process of just 1-2 months.

Santos would then be afforded the opportunity to appraise a resource and an investment decision is likely in early 2022.

Santos continues to be the broker's top pick because of a greater level of confidence in farming down growth assets. Target is reduced to $7.14 from $7.43. Buy (High Risk) rating retained.

Target price is $7.14 Current Price is $5.12 Difference: $2.02
If STO meets the Citi target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $6.53, suggesting upside of 28.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Citi forecasts a full year FY20 dividend of 6.19 cents and EPS of 15.77 cents.
At the last closing share price the estimated dividend yield is 1.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.47.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.5, implying annual growth of N/A.

Current consensus DPS estimate is 7.4, implying a prospective dividend yield of 1.5%.

Current consensus EPS estimate suggests the PER is 23.7.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 9.28 cents and EPS of 41.41 cents.
At the last closing share price the estimated dividend yield is 1.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.36.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 34.7, implying annual growth of 61.4%.

Current consensus DPS estimate is 9.5, implying a prospective dividend yield of 1.9%.

Current consensus EPS estimate suggests the PER is 14.7.

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

STX  STRIKE ENERGY LIMITED

NatGas

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Overnight Price: $0.26

Credit Suisse rates STX as Outperform (1) -

Credit Suisse observes, unlike sector peers which have sustained lower prices and strained balance sheets, Strike Energy has avoided adverse impacts from the pandemic. Growth remains on track with the stock up 50% since pre-pandemic levels in January.

Credit Suisse increases the target to $0.31 from $0.27 on the back of some exploration upside. The main issue is whether the stock is now pricing in too much upside too early, but the broker does not believe this is a risk at this stage. Outperform retained.

Target price is $0.31 Current Price is $0.26 Difference: $0.05
If STX meets the Credit Suisse target it will return approximately 19% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 0.00 cents and EPS of 0.00 cents.

Forecast for FY22:

Credit Suisse forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 260.00.

Market Sentiment: 1.0

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

SUN  SUNCORP GROUP LIMITED

Banks

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Overnight Price: $8.59

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

Macquarie considers the risks of business interruption are over stated and the bank provisions are fair. Hence the discount of -33% compared with the ASX100 is considered excessive.

The broker understands Suncorp has provisioned -$70-75m, post reinsurance, for Australian business interruption losses. While Macquarie's estimate is closer to -$225m, pre-reinsurance, this is considered substantially less than the discount currently encapsulated in the stock price.

Rating is upgraded to Outperform from Neutral and the target is raised to $11.00 from $10.40.

Target price is $11.00 Current Price is $8.59 Difference: $2.41
If SUN meets the Macquarie target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $10.48, suggesting upside of 20.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Macquarie forecasts a full year FY21 dividend of 36.00 cents and EPS of 61.70 cents.
At the last closing share price the estimated dividend yield is 4.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.92.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 62.5, implying annual growth of -13.1%.

Current consensus DPS estimate is 45.0, implying a prospective dividend yield of 5.1%.

Current consensus EPS estimate suggests the PER is 14.0.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 54.00 cents and EPS of 67.40 cents.
At the last closing share price the estimated dividend yield is 6.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 69.3, implying annual growth of 10.9%.

Current consensus DPS estimate is 54.8, implying a prospective dividend yield of 6.3%.

Current consensus EPS estimate suggests the PER is 12.6.

Market Sentiment: 0.4

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

TWE  TREASURY WINE ESTATES LIMITED

Food, Beverages & Tobacco

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Overnight Price: $9.01

Morgan Stanley rates TWE as Overweight (1) -

Morgan Stanley considers the risk/reward skew to the upside despite the investigation into wine dumping in China and the risk of tariffs. Industry participants expects some tariff will be imposed on Australian winemakers by China.

Meanwhile, feedback regarding the outlook for the Americas is more constructive, as some planted acreage has been removed since a previous assessment in January and there is strong pandemic-driven demand at certain price points.

Moreover, the risk of significant taint from smoke due to Californian fires is likely to mean the US 2020 vintage is meaningfully lower.

Overweight rating maintained. Target is reduced to $11 from $14. Industry view: Cautious.

Target price is $11.00 Current Price is $9.01 Difference: $1.99
If TWE meets the Morgan Stanley target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $11.31, suggesting upside of 27.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Morgan Stanley forecasts a full year FY21 dividend of 30.80 cents and EPS of 47.00 cents.
At the last closing share price the estimated dividend yield is 3.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.17.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 46.7, implying annual growth of 29.0%.

Current consensus DPS estimate is 30.2, implying a prospective dividend yield of 3.4%.

Current consensus EPS estimate suggests the PER is 19.0.

Forecast for FY22:

Morgan Stanley forecasts a full year FY22 dividend of 41.30 cents and EPS of 63.00 cents.
At the last closing share price the estimated dividend yield is 4.58%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 58.3, implying annual growth of 24.8%.

Current consensus DPS estimate is 37.7, implying a prospective dividend yield of 4.2%.

Current consensus EPS estimate suggests the PER is 15.2.

Market Sentiment: 0.1

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

Today's Price Target Changes
Company Last Price Broker New Target Prev Target Change
ALQ ALS Limited $9.39 Citi 9.57 8.31 15.16%
BLD Boral $4.55 Credit Suisse 4.15 3.75 10.67%
CWN Crown Resorts $8.80 Credit Suisse 11.10 11.20 -0.89%
GOR Gold Road Resources $1.50 Macquarie 1.80 1.90 -5.26%
NST Northern Star $14.18 Macquarie 16.60 16.40 1.22%
UBS 14.20 14.00 1.43%
ORG Origin Energy $4.57 Ord Minnett 7.60 7.70 -1.30%
PMV Premier Investments $20.15 Citi 20.60 19.30 6.74%
Credit Suisse 20.39 18.12 12.53%
Morgan Stanley 18.40 17.40 5.75%
UBS 20.50 19.30 6.22%
SOL Washington H Soul Patt $24.54 Morgans 23.32 20.04 16.37%
STO Santos $5.10 Citi 7.14 7.18 -0.56%
STX Strike Energy Ltd $0.27 Credit Suisse 0.31 0.27 14.81%
SUN Suncorp $8.74 Macquarie 11.00 10.40 5.77%
TWE Treasury Wine Estates $8.89 Morgan Stanley 11.00 14.00 -21.43%
Summaries
ALQ ALS Limited Neutral - Citi Overnight Price $9.12
AMC Amcor Accumulate - Ord Minnett Overnight Price $15.05
AWC Alumina Buy - UBS Overnight Price $1.43
BLD Boral Neutral - Credit Suisse Overnight Price $4.29
CWN Crown Resorts Outperform - Credit Suisse Overnight Price $9.19
GOR Gold Road Resources Outperform - Macquarie Overnight Price $1.47
HLS Healius Neutral - Citi Overnight Price $3.52
HMC Home Consortium Ltd Add - Morgans Overnight Price $3.31
NST Northern Star Outperform - Macquarie Overnight Price $13.62
Upgrade to Neutral from Sell - UBS Overnight Price $13.62
ORG Origin Energy Accumulate - Ord Minnett Overnight Price $4.51
PMV Premier Investments Neutral - Citi Overnight Price $19.00
Neutral - Credit Suisse Overnight Price $19.00
Equal-weight - Morgan Stanley Overnight Price $19.00
Buy - UBS Overnight Price $19.00
SOL Washington H Soul Patt Hold - Morgans Overnight Price $24.78
SSR SSR MINING Initiation of coverage with Buy - UBS Overnight Price $26.06
STO Santos Buy - Citi Overnight Price $5.12
STX Strike Energy Ltd Outperform - Credit Suisse Overnight Price $0.26
SUN Suncorp Upgrade to Outperform from Neutral - Macquarie Overnight Price $8.59
TWE Treasury Wine Estates Overweight - Morgan Stanley Overnight Price $9.01
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

11

2. Accumulate

2

3. Hold

8

Monday 28 September 2020

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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.