Australian Broker Call
Produced and copyrighted by 
at www.fnarena.com
July 06, 2018
Access Broker Call Report Archives here
COMPANIES DISCUSSED IN THIS ISSUE
Click on symbol for fast access.
The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)
THIS REPORT WILL BE UPDATED SHORTLY
Last Updated: 11:20 AM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
| ASX - | ASX | Downgrade to Sell from Neutral | Citi |
| ING - | INGHAMS GROUP | Downgrade to Neutral from Outperform | Credit Suisse |
| WOW - | WOOLWORTHS | Downgrade to Neutral from Buy | Citi |
Overnight Price: $14.11
Ord Minnett rates AMC as Accumulate (2) -
The broker has updated its modeling, including for FX movements. This leads to -5% negative impact for FY19 forecasts. Accumulate rating retained, while price target gains 30c to $15.80 (rolling forward of valuation).
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $15.80 Current Price is $14.11 Difference: $1.69
If AMC meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $15.27, suggesting upside of 8.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 58.07 cents and EPS of 81.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 84.0, implying annual growth of N/A. Current consensus DPS estimate is 60.7, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 16.8. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 60.65 cents and EPS of 86.46 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 90.9, implying annual growth of 8.2%. Current consensus DPS estimate is 65.0, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 15.5. |
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
Overnight Price: $64.15
Citi rates ASX as Downgrade to Sell from Neutral (5) -
Even though they see the risk for any disappointments as low in the short term, Citi analysts cannot get past the fact ASX shares seem expensively priced. For this reason, the rating has been downgraded to Sell from Neutral. Target price lifts to $58.40 from $57.85.
Target price is $57.85 Current Price is $64.15 Difference: minus $6.3 (current price is over target).
If ASX meets the Citi target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $55.57, suggesting downside of -13.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 217.10 cents and EPS of 241.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 240.2, implying annual growth of 7.0%. Current consensus DPS estimate is 215.6, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 26.7. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 229.50 cents and EPS of 255.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 251.6, implying annual growth of 4.7%. Current consensus DPS estimate is 225.8, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 25.5. |
Market Sentiment: -0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates ASX as Underperform (5) -
Activity trends for the second half improved in line with expectations and Credit Suisse expects EPS to be up 8%, the highest rate of growth since FY08.
However, the broker expects growth to slow in FY19-20 to between 4% and 5%. Valuation is considered full and the broker retains an Underperform rating and a $55 target.
Target price is $55.00 Current Price is $64.15 Difference: minus $9.15 (current price is over target).
If ASX meets the Credit Suisse target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $55.57, suggesting downside of -13.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 217.00 cents and EPS of 241.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 240.2, implying annual growth of 7.0%. Current consensus DPS estimate is 215.6, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 26.7. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 225.00 cents and EPS of 250.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 251.6, implying annual growth of 4.7%. Current consensus DPS estimate is 225.8, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 25.5. |
Market Sentiment: -0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $17.53
Morgan Stanley rates BSL as Overweight (1) -
Supportive US steel prices should drive earnings upside for BlueScope, the broker suggests, and subsequent cash flow should facilitate capital management options that will provide the next catalyst.
The broker believes the company will announce a doubling of its buyback at the FY18 result. Overweight and $20 target retained. Industry view: Cautious.
Target price is $20.00 Current Price is $17.53 Difference: $2.47
If BSL meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $18.51, suggesting upside of 5.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 13.00 cents and EPS of 142.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 148.8, implying annual growth of 18.8%. Current consensus DPS estimate is 12.8, implying a prospective dividend yield of 0.7%. Current consensus EPS estimate suggests the PER is 11.8. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 13.00 cents and EPS of 172.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 173.1, implying annual growth of 16.3%. Current consensus DPS estimate is 14.3, implying a prospective dividend yield of 0.8%. Current consensus EPS estimate suggests the PER is 10.1. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $32.02
Citi rates CTX as Buy (1) -
Target price has fallen to $39.21 from $42.06 in the wake of the new 15-year wholesale fuel distribution agreement with Woolworths, including the further rollout of 250 Metro/Caltex co-branded sites.
Citi analysts laud the agreement as it brings along earnings certainty for Caltex with the agreement labelled "essentially be an expensive insurance policy". Buy retained.
Target price is $39.21 Current Price is $32.02 Difference: $7.19
If CTX meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $36.29, suggesting upside of 13.3% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 113.00 cents and EPS of 226.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 235.9, implying annual growth of -0.9%. Current consensus DPS estimate is 116.9, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 13.6. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 122.00 cents and EPS of 244.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 241.6, implying annual growth of 2.4%. Current consensus DPS estimate is 121.6, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 13.3. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates CTX as Underweight (5) -
Caltex has retained its fuel supply deal with Woolworths ((WOW)). The bad news, the broker notes, is the cost is high and profitability is some way off. The good news is the deal secures supply volumes over the longer term and reduces some of the company's retail strategy execution risk.
Meanwhile, retail fuel remains the dominant driver of Caltex earnings and trends are softening, the broker notes. Underweight and $26 target retained. Industry view: Attractive.
Target price is $26.00 Current Price is $32.02 Difference: minus $6.02 (current price is over target).
If CTX meets the Morgan Stanley target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $36.29, suggesting upside of 13.3% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 104.00 cents and EPS of 208.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 235.9, implying annual growth of -0.9%. Current consensus DPS estimate is 116.9, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 13.6. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 97.00 cents and EPS of 194.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 241.6, implying annual growth of 2.4%. Current consensus DPS estimate is 121.6, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 13.3. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates CTX as Buy (1) -
Woolworths and Caltex Australia have extended and expanded their long-term partnership in the retailer’s petrol business and Ord Minnett analysts see the new deal providing benefits for both companies.
For Caltex there is 15-year security which de-risks its convenience-store rollout and for Woolworths there is an immediate positive impact to the bottom line. Buy rating retained. Price target loses -$1 to $36.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $36.00 Current Price is $32.02 Difference: $3.98
If CTX meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $36.29, suggesting upside of 13.3% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 119.00 cents and EPS of 239.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 235.9, implying annual growth of -0.9%. Current consensus DPS estimate is 116.9, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 13.6. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 139.00 cents and EPS of 253.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 241.6, implying annual growth of 2.4%. Current consensus DPS estimate is 121.6, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 13.3. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates CTX as Buy (1) -
Caltex has announced an extended and expanded partnership with Woolworths ((WOW)) for fuel supply and some new agreements in relation to wholesale grocery supply.
The -$80m decline in EBIT from the deal is partially offset by earnings split in the new arrangement. However, the net impact is a downward revision to forecast earnings.
UBS is now more confident the company can deliver on its retail convenience strategy with a $120m EBIT uplift over 5 years. Buy rating retained and target lowered to $37.40 from $39.20.
Target price is $37.40 Current Price is $32.02 Difference: $5.38
If CTX meets the UBS target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $36.29, suggesting upside of 13.3% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 110.00 cents and EPS of 221.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 235.9, implying annual growth of -0.9%. Current consensus DPS estimate is 116.9, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 13.6. |
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 113.00 cents and EPS of 225.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 241.6, implying annual growth of 2.4%. Current consensus DPS estimate is 121.6, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 13.3. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
CWP CEDAR WOODS PROPERTIES LIMITED
Infra & Property Developers
More Research Tools In Stock Analysis - click HERE
Overnight Price: $6.16
Morgans rates CWP as Hold (3) -
Cedar Woods has guided to a -12% fall in profit in FY18. However the broker notes this is largely down to settlement timing and is within broad expectations.
FY19 should see a material step-up, the broker suggests, given very strong pre-sales and the sale of the Target HQ. The company's development pipeline provides a visible level of earnings delivery out to FY21, but the broker sees the price as fair.
Hold retained, target rises to $6.70 from $6.42.
Target price is $6.70 Current Price is $6.16 Difference: $0.54
If CWP meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 31.00 cents and EPS of 51.00 cents. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 35.00 cents and EPS of 71.00 cents. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
ING INGHAMS GROUP LIMITED
Food, Beverages & Tobacco
More Research Tools In Stock Analysis - click HERE
Overnight Price: $3.84
Credit Suisse rates ING as Downgrade to Neutral from Outperform (3) -
Credit Suisse downgrades to Neutral from Outperform while maintaining a constructive long-term view. However, in the short-term input price pressures (predominately feed) challenging market conditions in New Zealand and a one-off taxation charge point to a muted FY19 EPS outlook.
Of the -11% reduction to forecast FY19 EPS, operational changes account for 6% and a higher tax rate 5%. Target reduced to $4.10 from $4.30.
Target price is $4.10 Current Price is $3.84 Difference: $0.26
If ING meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $3.92, suggesting upside of 2.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 19.45 cents and EPS of 29.52 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.4, implying annual growth of 73.7%. Current consensus DPS estimate is 19.7, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 13.1. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 19.49 cents and EPS of 29.01 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.3, implying annual growth of 3.1%. Current consensus DPS estimate is 20.6, implying a prospective dividend yield of 5.4%. Current consensus EPS estimate suggests the PER is 12.7. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $9.91
Macquarie rates ORG as Outperform (1) -
Macquarie analysts have updated their modeling with an analysis of 4Q18 and FY18 electricity and gas data. On their assessment, demand remains soft in both markets with volatility shrinking.
In addition, the analysts note retail market churn remains high, with the backwardation forward curve strengthening. Some downward adjustments to forecast have been implemented. Target price $10.02 (unchanged). Outperform.
Target price is $10.02 Current Price is $9.91 Difference: $0.11
If ORG meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $10.11, suggesting upside of 2.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 10.00 cents and EPS of 57.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 53.5, implying annual growth of N/A. Current consensus DPS estimate is 4.4, implying a prospective dividend yield of 0.4%. Current consensus EPS estimate suggests the PER is 18.5. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 39.00 cents and EPS of 66.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 79.6, implying annual growth of 48.8%. Current consensus DPS estimate is 28.8, implying a prospective dividend yield of 2.9%. Current consensus EPS estimate suggests the PER is 12.4. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
PDL PENDAL GROUP LIMITED
Wealth Management & Investments
More Research Tools In Stock Analysis - click HERE
Overnight Price: $10.19
Morgan Stanley rates PDL as Overweight (1) -
European flows into Pendal funds remain negative, the broker notes, but are beginning to improve. US flows continue and there are further opportunities for growth.
Pendal's product breadth also continues to grow and current fund performance remains strong. Pendal should now "sail into calmer seas," the broker believes. Overweight retained, target rises to $12.00 from $11.80. Industry view: In-Line.
Target price is $12.00 Current Price is $10.19 Difference: $1.81
If PDL meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $10.98, suggesting upside of 7.7% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 50.50 cents and EPS of 63.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 64.9, implying annual growth of 18.4%. Current consensus DPS estimate is 51.1, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 15.7. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 57.50 cents and EPS of 67.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 67.5, implying annual growth of 4.0%. Current consensus DPS estimate is 54.6, implying a prospective dividend yield of 5.4%. Current consensus EPS estimate suggests the PER is 15.1. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.48
Credit Suisse rates PRU as Outperform (1) -
June quarter production was slightly better than Credit Suisse estimates, with guidance being met at Edikan but a very strong maiden quarter from Sissingue with 26,020oz produced.
FY19 guidance should reflect growth from a full year contribution from Sissingue and steady production from Edikan. The permitting process at Yaoure is on schedule.
The broker makes minor upgrades to EPS estimates and retains the Outperform rating and $0.69 target.
Target price is $0.69 Current Price is $0.48 Difference: $0.21
If PRU meets the Credit Suisse target it will return approximately 44% (excluding dividends, fees and charges).
Current consensus price target is $0.62, suggesting upside of 28.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 0.74 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 0.3, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 160.0. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 0.00 cents and EPS of 7.93 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 4.5, implying annual growth of 1400.0%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 10.7. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $30.68
Citi rates WOW as Downgrade to Neutral from Buy (3) -
Citi sees the renewed distribution agreement with Caltex ((CTX)) as a positive; it explains why the price target moves by 8% to $32.90. Operationally, the analysts continue to forecast Woolworths will outperform peer Coles ((WES)).
Alas, the recent share price rally cannot be ignored, and thus the recommendation is being pulled back to Neutral from Buy. A better pricing in the new agreement means the JV with Caltex will lead to higher profits from petrol sales.
Target price is $32.90 Current Price is $30.68 Difference: $2.22
If WOW meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $28.49, suggesting downside of -7.1% (ex-dividends)
Forecast for FY18:
Current consensus EPS estimate is 125.4, implying annual growth of 5.0%. Current consensus DPS estimate is 90.8, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 24.5. |
Forecast for FY19:
Current consensus EPS estimate is 138.1, implying annual growth of 10.1%. Current consensus DPS estimate is 99.7, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 22.2. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates WOW as Neutral (3) -
A new 15 year wholesale fuel agreement between Caltex ((CTX)) and Woolworths results in an $80mpa pre-tax earnings uplift to Woolworths Petrol, equivalent to 2c per litre. Caltex will make a one-off payment to Woolworths in July 2018.
There is also a wholesale food supply agreement to 700 Caltex sites and the rewards scheme will be extended to cover these. Woolworths will also receive a royalty for the use of the Metro brand and a profit contribution from the wholesale supply.
Neutral rating and $25.96 target retained.
Target price is $25.96 Current Price is $30.68 Difference: minus $4.72 (current price is over target).
If WOW meets the Credit Suisse target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $28.49, suggesting downside of -7.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 85.21 cents and EPS of 122.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 125.4, implying annual growth of 5.0%. Current consensus DPS estimate is 90.8, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 24.5. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 93.00 cents and EPS of 135.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 138.1, implying annual growth of 10.1%. Current consensus DPS estimate is 99.7, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 22.2. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates WOW as Underweight (5) -
The new Caltex ((CTX)) deal will boost Woolworths' petrol business earnings by 50-70%, the broker estimates, but the new 15-year term will limit the flexibility of any future owner. Woolworths' food business will benefit from the new wholesale supply deal for Caltex sites, and from a new rewards program.
The broker has made no changes and having set a $23 target, retains Underweight. Industry view: Cautious.
Target price is $23.00 Current Price is $30.68 Difference: minus $7.68 (current price is over target).
If WOW meets the Morgan Stanley target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $28.49, suggesting downside of -7.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 89.00 cents and EPS of 109.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 125.4, implying annual growth of 5.0%. Current consensus DPS estimate is 90.8, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 24.5. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 97.00 cents and EPS of 115.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 138.1, implying annual growth of 10.1%. Current consensus DPS estimate is 99.7, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 22.2. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates WOW as Hold (3) -
Following the failure of the BP sale, Woolworths has entered a new alliance with Caltex ((CTX)) covering convenience, grocery, loyalty and fuel. The broker sees the deal as positive in lieu of the BP deal being blocked.
The broker has lifted its target to $27.38 from $25.87 and retains Hold, but given recent share price strength the broker suggests a trimming of positions ahead of further margin compression as supermarket competition heats up.
Target price is $27.38 Current Price is $30.68 Difference: minus $3.3 (current price is over target).
If WOW 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 $28.49, suggesting downside of -7.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 95.00 cents and EPS of 130.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 125.4, implying annual growth of 5.0%. Current consensus DPS estimate is 90.8, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 24.5. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 101.00 cents and EPS of 144.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 138.1, implying annual growth of 10.1%. Current consensus DPS estimate is 99.7, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 22.2. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates WOW as Accumulate (2) -
Woolworths and Caltex Australia have extended and expanded their long-term partnership in the retailer’s petrol business and Ord Minnett analysts see the new deal providing benefits for both companies.
For Caltex there is 15-year security which de-risks its convenience-store rollout and for Woolworths there is an immediate positive impact to the bottom line. Accumulate rating retained, while the price target moves to $32.50 from $31.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $32.50 Current Price is $30.68 Difference: $1.82
If WOW meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $28.49, suggesting downside of -7.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 89.00 cents and EPS of 135.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 125.4, implying annual growth of 5.0%. Current consensus DPS estimate is 90.8, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 24.5. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 99.00 cents and EPS of 148.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 138.1, implying annual growth of 10.1%. Current consensus DPS estimate is 99.7, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 22.2. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| AMC | AMCOR | Accumulate - Ord Minnett | Overnight Price $14.11 |
| ASX | ASX | Downgrade to Sell from Neutral - Citi | Overnight Price $64.15 |
| Underperform - Credit Suisse | Overnight Price $64.15 | ||
| BSL | BLUESCOPE STEEL | Overweight - Morgan Stanley | Overnight Price $17.53 |
| CTX | CALTEX AUSTRALIA | Buy - Citi | Overnight Price $32.02 |
| Underweight - Morgan Stanley | Overnight Price $32.02 | ||
| Buy - Ord Minnett | Overnight Price $32.02 | ||
| Buy - UBS | Overnight Price $32.02 | ||
| CWP | CEDAR WOODS PROPERTIES | Hold - Morgans | Overnight Price $6.16 |
| ING | INGHAMS GROUP | Downgrade to Neutral from Outperform - Credit Suisse | Overnight Price $3.84 |
| ORG | ORIGIN ENERGY | Outperform - Macquarie | Overnight Price $9.91 |
| PDL | PENDAL GROUP | Overweight - Morgan Stanley | Overnight Price $10.19 |
| PRU | PERSEUS MINING | Outperform - Credit Suisse | Overnight Price $0.48 |
| WOW | WOOLWORTHS | Downgrade to Neutral from Buy - Citi | Overnight Price $30.68 |
| Neutral - Credit Suisse | Overnight Price $30.68 | ||
| Underweight - Morgan Stanley | Overnight Price $30.68 | ||
| Hold - Morgans | Overnight Price $30.68 | ||
| Accumulate - Ord Minnett | Overnight Price $30.68 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 7 |
| 2. Accumulate | 2 |
| 3. Hold | 5 |
| 5. Sell | 4 |
Friday 06 July 2018
Access Broker Call Report Archives here
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.
Latest News
| 1 |
The Market In Numbers – 20 Apr 20249:09 AM - Australia |
| 2 |
ASX Winners And Losers Of Today – 19-04-24Apr 19 2024 - Daily Market Reports |
| 3 |
FNArena Corporate Results Monitor – 19-04-2024Apr 19 2024 - Australia |
| 4 |
In Case You Missed It – BC Extra Upgrades & Downgrades – 19-04-24Apr 19 2024 - Weekly Reports |
| 5 |
Weekly Top Ten News Stories – 19 April 2024Apr 19 2024 - Weekly Reports |