Australian Broker Call

Citi rates ABC as Downgrade to Sell from Neutral (5) -

The company has warned of a -10-15% drop in 2019 earnings. Softening demand for residential construction materials, increased competition from cement imports and increasing competition in Queensland were cited.

Citi notes the acceleration in the downturn in the residential market, particularly in NSW and Victoria, appears to have caught the company by surprise. The downgrade to expectations comes just 2.5 months after the 2019 outlook described a stable demand environment.

Citi downgrades to Sell from Neutral and reduces the target to $3.50 from $4.50.

Target price is $3.50 Current Price is $3.61 Difference: minus $0.11 (current price is over target).
If ABC meets the Citi target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.73, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Credit Suisse rates ABC as Downgrade to Neutral from Outperform (3) -

The company has provided maiden 2019 guidance, indicating net profit will be down -10-15%. Adelaide Brighton cited a weak residential environment, import competition and competitive pressure in Queensland.

Credit Suisse notes the dispute between Boral ((BLD)) and Wagners ((WGN)) appears to have had an impact. The company, and others, responded by lowering price expectations to protect volumes.

The dividend yield provides some store of value, in the broker's view. Rating is downgraded to Neutral from Outperform and the target lowered to $3.90 from $5.00.

Target price is $3.90 Current Price is $3.61 Difference: $0.29
If ABC meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.73, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Deutsche Bank rates ABC as Upgrade to Hold from Sell (3) -

Deutsche Bank analysts have responded to the company's pre-AGM profit warning by upgrading their rating to Hold from Sell, while reducing the price target to $3.60 from $4 in line with reduced forecasts.

While disappointing, the analysts now believe this is in the share price.

Target price is $3.60 Current Price is $3.61 Difference: minus $0.01 (current price is over target).
If ABC meets the Deutsche Bank target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.73, suggesting upside of 3.3% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Macquarie rates ABC as Neutral (3) -

Adelaide Brighton has downgraded FY profit guidance by -10-15% due to weak demand in residential construction, insufficiently offset by a lower exposure to infrastructure, falling cement/concrete prices in Qld which the broker sees going lower, and competition in South Australia.

The broker cuts forecasts by -19% and -14% in FY19-20 to below the low end of guidance, noting earnings visibility is poor. Despite a de-rating, the broker retains Neutral on ongoing earnings risk. Target falls to $3.70 from $4.65.

Target price is $3.70 Current Price is $3.61 Difference: $0.09
If ABC meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.73, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

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

Morgan Stanley considers Adelaide Brighton is in a difficult position, as it faces softness in residential construction at a time when competition in its key market is particularly severe. The broker does not rule out further earnings risk if conditions deteriorate.

The company has updated the market, expecting 2019 net profit to be -10-15% lower, which implies a meaningful downgrade to Morgan Stanley's forecasts. Increased competition in the Queensland cement and concrete markets and South Australian cement market appear to be key to the downgrade.

Equal-weight reiterated. Target is reduced to $4.00 from $4.75. Industry view: Cautious.

Target price is $4.00 Current Price is $3.61 Difference: $0.39
If ABC meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $3.73, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Ord Minnett rates ABC as Hold (3) -

Adelaide Brighton expects 2019 underlying net profit to decline by -10-15%. Management has flagged a number of issues that will weigh, including a further softening of the residential market, increased competition from cement imports and competitive pressures in Queensland.

Ord Minnett downgrades forecasts by an average of -11% over 2019-21. Sales and margin expectations for the construction materials division have also been lowered. The broker maintains a Hold rating and lowers the target to $4.00 from $4.50.

Target price is $4.00 Current Price is $3.61 Difference: $0.39
If ABC meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $3.73, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

UBS rates ABC as Sell (5) -

Adelaide Brighton is guiding for net profit in 2019 to be -10-15% lower than 2018. The company cites lower residential activity and increased competition from imports.

UBS believes the downgrade is not entirely specific to Adelaide Brighton and the industry is under pressure, with earnings risk for locally-exposed companies over the next 12 months.

The broker reduces 2019 net profit estimates by -10% and 2020-21 estimates by -15%, expecting no earnings growth in the near term.

Sell rating maintained, although the poor outlook for housing is beginning to be priced in, UBS suggests. Target is lowered to $3.40 from $3.90.

Target price is $3.40 Current Price is $3.61 Difference: minus $0.21 (current price is over target).
If ABC meets the UBS target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.73, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Morgans rates APE as Add (1) -

AP Eagers has lifted its merger offer for Automotive Holdings Group to 1-for-3.6 AHG shares, from 1-for-3.8 previously. The increased offer has been unanimously recommended, pending ACCC approval.

AP Eagers has also waived other major conditions. Morgans estimates pro forma FY18 earnings accretion is 13% based on initial synergies and closer to 20% should around $27m in gross cost synergies be achieved.

The prize is even bigger, in the broker's view, should AP Eagers improve the AHG margins over time. Morgans maintains an Add rating and raises the target to $9.05.

Target price is $9.05 Current Price is $8.71 Difference: $0.34
If APE meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $7.89, suggesting downside of -9.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Macquarie rates ASB as Outperform (1) -

After attending Austal's ship-building site in Vietnam, the broker has updated its investment case. The company's performing well and the broker sees medium term upside risk to earnings, particularly from the US. The Asian ramp-up is on track.

As the company's ships are now mature, higher margin vessels will increasingly comprise a larger percentage of throughput, the broker notes. Outperform retained, target rises to $3.10 from $2.60.

Target price is $3.10 Current Price is $2.52 Difference: $0.58
If ASB meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $2.77, suggesting upside of 9.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Citi rates CTX as Buy (1) -

Citi estimates the first quarter run rate for earnings (EBIT) implies a -6% reduction to its first half forecast. The miss, the broker suspects, is because of higher Lytton costs.

The company's trading update has provided more detail regarding market conditions in retail fuels which it describes as encouraging. Citi reduces 2019 estimates for earnings per share by -11%.

The broker considers 2019 will represent a trough in earnings. Buy rating maintained. Target is reduced to $29.95 from $31.94.

Target price is $29.95 Current Price is $26.10 Difference: $3.85
If CTX meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $28.88, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Credit Suisse rates CTX as Outperform (1) -

Credit Suisse observes the first quarter trading update has confirmed previous disclosures regarding margin compression in fuel retailing and poor refiner margins. The broker believes retail fuel margins are likely to remain an uncertain factor for the remainder of the first half.

A softening of retail fuel margins has had a -$38m impact on earnings (EBIT). In addition, the company has flagged an unfavourable variance of -$8m in profit on the sale of assets.

Credit Suisse maintains an Outperform rating and $30.50 target, noting a flat year-on-year performance in the second quarter would achieve its first half forecasts.

Target price is $30.50 Current Price is $26.10 Difference: $4.4
If CTX meets the Credit Suisse target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $28.88, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Deutsche Bank rates CTX as Hold (3) -

Hiold rating and $26 price target retained as the analysts acknowledge they feel nervous about the company's Convenience Retail Strategy. The analysts see increasing competition from Coles Express, among other factors, and suggest Caltex might have to scale back its ambition in this space.

Target price is $26.00 Current Price is $26.10 Difference: minus $0.1 (current price is over target).
If CTX meets the Deutsche Bank target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.88, suggesting upside of 10.6% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Ord Minnett rates CTX as Hold (3) -

The company has announced a lower net profit, at $94m, for the March quarter, versus $164m in the prior corresponding quarter. Earnings have declined across all divisions.

Ord Minnett maintains its 2019 estimates, as lower convenience retail and Lytton earnings are offset by higher fuels and infrastructure earnings.

Hold rating and $27.50 target maintained.

Target price is $27.50 Current Price is $26.10 Difference: $1.4
If CTX meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $28.88, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

UBS rates CTX as Buy (1) -

First quarter trading was weaker but in line with expectations. Earnings (EBIT) were down -42%, largely because of lower earnings from Lytton and retail fuel margin compression.

The realised refiner margin in the year to April at US$8.30/bbl was 15% ahead of UBS estimates. UBS maintains a Buy rating and $30.20 target and does not believe the market is adequately valuing the convenience offer at current levels.

Target price is $30.20 Current Price is $26.10 Difference: $4.1
If CTX meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $28.88, suggesting upside of 10.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Citi rates DCG as Buy (1) -

The investor briefing maintained a focus on project management and the capabilities of the infrastructure team. Citi is increasingly confident, noting progress on the Sunraysia project.

The broker believes Decmil is well-placed to capitalise on increasing expenditure on infrastructure projects in Australia, social infrastructure in New Zealand and iron ore projects in Western Australia.

Citi notes the combined FY20-21 order book is currently $750m, of which $450m its calculated to be delivered in FY20. The broker maintains a Buy rating and reduces the target to $1.23 from $1.25.

Target price is $1.23 Current Price is $0.84 Difference: $0.39
If DCG meets the Citi target it will return approximately 46% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Ord Minnett rates EVN as Upgrade to Accumulate from Hold (2) -

Ord Minnett reviews its valuation, noting the share price has fallen more than -20% from its January highs and has underperformed the ASX gold sector.

Outside of supportive mark-to-market valuations, the broker notes Evolution Mining is reaching a net cash position and should deliver improvements to operations at Cowal in the next 12 months.

Ord Minnett does not believe the share price correlates with fundamentals and upgrades to Accumulate from Hold. Target is steady at $3.50.

Target price is $3.50 Current Price is $3.34 Difference: $0.16
If EVN meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $3.38, suggesting upside of 1.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Macquarie rates GNC as No Rating (-1) -

Graincorp's loss came in at -$48m to the broker's -$6m forecast and the prior 8c dividend has been suspended. The biggest impact came from drought-affected Grains, for which the company continues to consider the introduction of a long term derivative (hedging) instrument.

Malt also fell short but sales are steady in the US where craft beer is now all the rage. Gearing has increased but remains below target.

The broker is currently restricted from making a recommendation.

Current Price is $7.55. Target price not assessed.

Current consensus price target is $9.31, suggesting upside of 23.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Morgans rates GNC as Upgrade to Hold from Reduce (3) -

First half results were poor and materially below Morgans' forecasts. Seasonal conditions are below average on the east coast of Australia leading into the 2019/20 winter cropping season which will affect FY20 earnings.

The business is also currently affected by unfavourable trading positions which have reduced operating earnings (EBITDA) by -$40m. The company has not provided FY19 earnings guidance.

While the de-merger may unlock value in the malt business, Morgans believes that, in the absence of a derivative instrument, the new GrainCorp will trade at a material discount.

Rating is upgraded to Hold from Reduce, after share price weakness, and the target is reduced to $7.57 from $7.90.

Target price is $7.57 Current Price is $7.55 Difference: $0.02
If GNC meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $9.31, suggesting upside of 23.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

UBS rates GNC as Buy (1) -

First half results were substantially weaker than UBS expected, particularly in grains. Low grain receivals and severe grain trading losses were the biggest contributors to the weakness. Oils continued to underperform, also partially drought related.

The broker notes the company's rail take-or-pay contracts end in FY19 and access to grain should improve when the drought breaks. UBS believes the de-merger plan will unlock value and maintains a Buy rating but reduces the target to $9.65 from $10.35.

Target price is $9.65 Current Price is $7.55 Difference: $2.1
If GNC meets the UBS target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $9.31, suggesting upside of 23.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Credit Suisse rates HT1 as Outperform (1) -

The company has issued a subdued trading update, highlighting a soft first quarter. As feedback from media buyers suggests some of the market weakness can be attributed to the federal election, Credit Suisse expects a subsequent improvement in the revenue run rate.

However, with better revenues costs are also likely to tick up in the second half. Outperform rating maintained. Target is reduced to $2.00 from $2.05.

Target price is $2.00 Current Price is $1.82 Difference: $0.18
If HT1 meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $1.78, suggesting downside of -2.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Citi rates ORI as Upgrade to Neutral from Sell (3) -

First half results have cleared any doubts about the company's operating leverage, Citi acknowledges. Strong growth was driven by higher volumes, improved product mix and better manufacturing. Market conditions are improving and price/cost headwinds fading.

However, the broker notes further delays with Burrup. Burrup remains a swing factor, with a negative impact on cash flow forecast by the company in FY19 of -$40-45m. Burrup's operating earnings (EBITDA) are forecast to be $45m in FY21.

Citi upgrades to Neutral from Sell and raises the target to $20 from $16.

Target price is $20.00 Current Price is $19.49 Difference: $0.51
If ORI meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $18.76, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Credit Suisse rates ORI as Downgrade to Neutral from Outperform (3) -

Credit Suisse found several positives in the company's first half results. The broker was pleased with the recovery in the Latin American performance, while noting the take-up of electronic and wireless blasting solutions appears to be accelerating and, potentially, validating the technology.

There is also prospective upside from product rationalisation initiatives and management appears more confident in the price environment. The broker also welcomes the absence of any "worse" news on Burrup.

Credit Suisse considers the stock is fair value and downgrades to Neutral from Outperform. Target is raised to $19.24 from $19.08.

Target price is $19.24 Current Price is $19.49 Difference: minus $0.25 (current price is over target).
If ORI meets the Credit Suisse target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.76, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Deutsche Bank rates ORI as Hold (3) -

Deutsche Bank analysts observe how Orica's interim report was better than expected with each of earnings, cashflow and the dividend all ahead of market expectations, plus lower net interest and minorities also boosted the bottom line.

However, management has nevertheless stuck with earlier guidance for the full year. The analysts highlight this implies a rather flat second half. Burrup remains the key risk to earnings and Deutsche Bank points out the company disclosed the shutdown to install the replacement equipment won’t commence until August/September.

Hold rating retained, as well as the $17.20 price target.

Target price is $17.20 Current Price is $19.49 Difference: minus $2.29 (current price is over target).
If ORI meets the Deutsche Bank target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.76, suggesting downside of -3.7% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Macquarie rates ORI as Neutral (3) -

Orica's first half result came in ahead of the broker, albeit the company was cycling weak comparables from the first half FY18 when production issues impacted.

Commentary was upbeat, driven by expected volume growth, plant reliability improvements and improvement at Burrup.

Delivery of Burrup improvement will be key over the next year, the broker suggests. The risk is timing continues to slip. Target rises to $19.40 from $18.16. Neutral retained on a fair valuation.

Target price is $19.40 Current Price is $19.49 Difference: minus $0.09 (current price is over target).
If ORI 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 $18.76, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

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

First half results beat Morgan Stanley's estimates. The broker is increasingly confident in the medium-term growth profile. Latin America proved resilient, despite significant contract losses in the prior half. Minova improved its performance.

North America was weaker than the broker expected. Management has reiterated expectations that Burrup will ramp up and commence operations in the first half of FY20.

Equal-weight maintained. Target is raised to $20.00 from $17.90. Industry view is Cautious.

Target price is $20.00 Current Price is $19.49 Difference: $0.51
If ORI meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $18.76, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Morgans rates ORI as Hold (3) -

First half results revealed earnings have recovered from the issues in the preceding year, Morgans observes. The company has reiterated expectations for growth in revenue and earnings to be underpinned by increased demand and manufacturing improvements.

Morgans makes downward revisions to forecasts because of more conservative assumptions on Burrup and to allow for higher depreciation & amortisation. Solid earnings growth is still expected over FY19-21.

The broker maintains a Hold rating and raises the target to $18.05 from $17.80.

Target price is $18.05 Current Price is $19.49 Difference: minus $1.44 (current price is over target).
If ORI meets the Morgans target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.76, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Ord Minnett rates ORI as Lighten (4) -

First half earnings (EBIT) were up 19.7%. FY19 is expected to remain strong as manufacturing and industry trends improve. However, Ord Minnett highlights increased risk around the Burrup re-commissioning and uncertainty around supporting contract obligations in FY20.

The expected shortfall in contract obligations in the second half of 2020 is expected to put pressure on the Yarwun operation to increase utilisation. The broker maintains a Lighten rating and raises the target to $16.50 from $16.20.

Target price is $16.50 Current Price is $19.49 Difference: minus $2.99 (current price is over target).
If ORI meets the Ord Minnett target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.76, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

UBS rates ORI as Neutral (3) -

First half results were solid, UBS observes. The company has reiterated expectations for earnings growth in all regions, except Latin America, and a first:second half skew of 45:55. UBS forecasts earnings growth in FY19-20 of 6-9%.

The broker notes Australia, the Pacific and Asia are all delivering strong results and benefiting from improved ammonium nitrate and services volumes, as well as manufacturing reliability.

This is partly offset by a prior period of re-pricing contracts. Neutral rating maintained. Target rises to $19.70 from $19.20.

Target price is $19.70 Current Price is $19.49 Difference: $0.21
If ORI meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $18.76, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Deutsche Bank rates PPH as Buy (1) -

Deutsche Bank analysts find the FY19 financial performance was in-line with the company's earlier provided guidance, but they find lots to like in the finer details. Alas, the well-regarded CEO has also announced his departure.

It is Deutsche Bank's view that, thus far, investors are underestimating how much leverage is embedded into the business model. To date management's execution has been "impressive" in the analysts' eyes.

Earnings estimates have received a significant boost. As a result, the price target jumps by 22% to NZ$5.60. Buy rating not simply repeated, it is hereby re-iterated.

Current Price is $3.82. Target price not assessed.

Forecast for FY20:

Forecast for FY21:

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

Citi rates QAN as Buy (1) -

Citi lowers FY19 estimates for pre-tax profit by -5% to reflect slower growth in the domestic segments in the second half. Despite a strong performance in the Easter period domestic growth of 2.3% is expected in the second half.

International growth is expected to accelerate to 6.1% in the second half. The broker envisages scope for capital distributions of around $800m per annum, should gearing levels remain in line with management's targets. Buy rating and $6.90 target maintained.

Target price is $6.90 Current Price is $5.41 Difference: $1.49
If QAN meets the Citi target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $5.86, suggesting upside of 8.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Credit Suisse rates QAN as Neutral (3) -

Unit revenue growth was 5.5% in the first four months of the year, slightly below first half growth of 5.7%. Management remains upbeat on international travel while believing the outlook for domestic demand is mixed.

There is growth in resources, solid leisure business and a slowdown in corporate, small-medium enterprise travel. Credit Suisse expects Qantas to complete the current buyback and announce an additional buyback of $300m at the full year result in August.

Neutral rating maintained. Target is reduced to $6.00 from $6.20.

Target price is $6.00 Current Price is $5.41 Difference: $0.59
If QAN meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $5.86, suggesting upside of 8.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Deutsche Bank rates QAN as Buy (1) -

On Deutsche Bank's assessment, Qantas continues to deliver solid performance, given the present context, but expectation of softer domestic demand has nevertheless triggered a reduction in estimates.

Buy rating and $6.40 price target retained as the analysts believe Qantas remains on track to fully offset the impact of significantly higher fuel costs as well as to continue to deliver surplus capital to shareholders.

Target price is $6.50 Current Price is $5.41 Difference: $1.09
If QAN meets the Deutsche Bank target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $5.86, suggesting upside of 8.4% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

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

Qantas increased revenues in the March Q, reflecting the timing of Easter. Macquarie sees revenue per available seat-kilometre growth easing into FY20 given lower corporate travel, the impact from the election and a weaker domestic consumer.

The broker's forecast is below consensus and Macquarie sees RASK risk skewed to the downside. Downgrade to Neutral. Target falls to $5.75 from $6.25.

Target price is $5.75 Current Price is $5.41 Difference: $0.34
If QAN meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $5.86, suggesting upside of 8.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

UBS rates QAN as Neutral (3) -

Growth in the March quarter was below UBS estimates, even taking into account the negative impact of Easter's timing. Management has highlighted emerging weakness in domestic forward bookings but reiterated a favourable outlook in international, where unit revenue grew by 6%.

UBS currently believes it will be difficult for Qantas to hold the same level of profitability in FY20, resulting in a forecast -10% decline in profit to $1.2bn. The broker expects the current pay-out to moderate in FY20 as capital expenditure starts to rise. Neutral rating maintained. Target reduced to $5.30 from $5.70.

Target price is $5.30 Current Price is $5.41 Difference: minus $0.11 (current price is over target).
If QAN meets the UBS target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.86, suggesting upside of 8.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Credit Suisse rates QBE as Outperform (1) -

Credit Suisse observes the commentary from the AGM was balanced. FY19 guidance has been maintained and the company appears on track to achieve targets. No detail was provided on premium rate increases by region, although, overall, the broker notes rate increases have slowed.

The company has pointed out the business mix in Europe limited premium rate increases and Credit Suisse concurs that reinsurance rates are now softening in Europe and QBE will be affected.

While elevated natural perils claims occurred in the first quarter domestically, QBE points out this was largely offset by a relatively benign northern hemisphere. Outperform rating and $13 target maintained.

Target price is $13.00 Current Price is $12.63 Difference: $0.37
If QBE meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $13.11, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.7

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

Deutsche Bank rates QBE as Downgrade to Sell from Hold (5) -

Recent share price recovery has been followed up with a downgrade to Sell from Hold at Deutsche Bank with an $11.80 price target. Direct reason is the expectation of a more prolonged housing downturn in Australia, which should lead to a spike in lenders' insurance claims.

QBE's LMI business is the second largest in Australia, the broker explains. It generated $100m of insurance profit in FY18, representing approximately 17% of Australian insurance profit or 8% of group earnings.

Target price is $11.80 Current Price is $12.63 Difference: minus $0.83 (current price is over target).
If QBE meets the Deutsche Bank target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.11, suggesting upside of 3.8% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.7

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

Morgans rates QBE as Add (1) -

The company's update suggests it is on track for FY19 operating targets. Morgans considers the turnaround is gaining traction.

Catastrophe experience is broadly in line with expectations as a more volatile first quarter in Australia was offset by benign experience in the northern hemisphere.

The broker maintains an Add rating and raises the target to $13.51 from $13.36.

Target price is $13.51 Current Price is $12.63 Difference: $0.88
If QBE meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $13.11, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.7

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

Morgans rates RDH as Add (1) -

Guidance for FY19 earnings is below expectations. Morgans understands this relates to continued weakness in ELICOS volumes and lower intake in T&D. FY19 will also be affected by the expansion of the Melbourne campus.

The launch of the Brisbane campus in FY20 may also mean another year of investment but significantly add to the scale and addressable market in the medium term.

Morgans maintains an Add rating and lowers the target to $2.84 from $3.16.

Target price is $2.84 Current Price is $2.05 Difference: $0.79
If RDH meets the Morgans target it will return approximately 39% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Macquarie rates RIO as Outperform (1) -

The broker has made no change to forecasts following Rio Tinto's AGM, at which management was bombarded with questions over carbon emissions. Otherwise the broker sees the company having a strong first half on buoyant iron ore prices.

The broker's dividend payout ratio forecast is below consensus as a special dividend is more likely if spare capital is available. Outperform and $107 target retained.

Target price is $107.00 Current Price is $95.29 Difference: $11.71
If RIO meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $95.92, suggesting upside of 0.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Citi rates SIQ as Buy (1) -

At its AGM, the company has noted that market conditions are challenging, with new car sales posting the 13th consecutive month of declines. Regardless, Citi reiterates a Buy rating and raises the target to $12.00 from $11.93, believing the softness is relatively minor.

The broker notes the company continues to succeed in delivering multiple services to clients and has announced two modest acquisitions that should be financially rewarding. These include MyLease for $7m and an undisclosed company for $2.2m.

Target price is $12.00 Current Price is $8.99 Difference: $3.01
If SIQ meets the Citi target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $10.57, suggesting upside of 17.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Macquarie rates SIQ as Outperform (1) -

Smartgroup noted at its AGM that volumes and yields are relatively flat and the environment remains challenging. Two small acquisitions were announced. Target falls to $10.53 from $11.48.

The broker retains Outperform on a -22% PE discount to Emerging Leaders despite low gearing, a defensive client mix and attractive operating performance.

Target price is $10.53 Current Price is $8.99 Difference: $1.54
If SIQ meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $10.57, suggesting upside of 17.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Morgan Stanley rates TPM as Overweight (1) -

Morgan Stanley considers the lack of clarity over the ultimate structure of the 5G telecommunications industry should be of concern to investors.

The decision by the ACCC to oppose the merger with Vodafone Australia ((HTA)) is negative for TPG Telecom and the broker expects the wider telco sector will de-rate. The two companies will challenge the decision in the Federal Court and have extended their merger agreement until August 2020.

The broker maintains an Overweight rating and $7.15 target. Industry view is In-Line.

Target price is $7.15 Current Price is $6.37 Difference: $0.78
If TPM meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $6.24, suggesting downside of -2.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Ord Minnett rates TPM as Upgrade to Accumulate from Hold (2) -

The ACCC opposes the merger between TPG Telecom and Vodafone Australia ((HTA)). The regulator cited an already very concentrated mobile and fixed broadband industry as well as its belief there is a real chance the company will roll out a mobile network if the proposed merger does not proceed.

Ord Minnett agrees with the two companies' legal analysis and believes the case has a better chance of being approved in court. Rating is upgraded to Accumulate from Hold and the target raised to $6.90 from $6.50.

Target price is $6.90 Current Price is $6.37 Difference: $0.53
If TPM meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $6.24, suggesting downside of -2.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

UBS rates TPM as Sell (5) -

The ACCC has opposed the merger with Vodafone Australia ((HTA)), believing it likely to lessen competition in the supply of mobile services. The decision ignores TPG Telecom's earlier announcement that it will cease rolling out its mobile network.

The companies will take the issue to the Federal Court on appeal. UBS notes successful appeals are not without precedent but, in the event the decision is affirmed by the court, flags potential for the companies to extend the scope of the 5G spectrum joint venture.

Sell rating maintained. Target is reduced to $5.60 from $6.40.

Target price is $5.60 Current Price is $6.37 Difference: minus $0.77 (current price is over target).
If TPM meets the UBS target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.24, suggesting downside of -2.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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