Australian Broker Call

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October 04, 2022

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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
ALD - Ampol Downgrade to Equal-weight from Overweight Morgan Stanley
PLS - Pilbara Minerals Downgrade to Hold from Buy Ord Minnett
SGM - Sims Downgrade to Hold from Buy Ord Minnett
VEA - Viva Energy Downgrade to Equal-weight from Overweight Morgan Stanley
AKE  ALLKEM LIMITED

New Battery Elements

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Overnight Price: $13.18

Ord Minnett rates AKE as Buy (1) -

Ord Minnett lowers its target prices for stocks under its Mining sector coverage, after undertaking a mark-to-market review of September-quarter commodity prices.

Given the odds of a global recession continue to increase, the broker feels risks for mining stocks are skewed to the downside.

Ord Minnett continues to see strong price support for lithium on a multi-year view due to supply shortages and prefers producers over developers.

Allkem is preferred in the space and the Buy rating is retained, while the target slips to $20.50 from $21.00.

Target price is $20.50 Current Price is $13.18 Difference: $7.32
If AKE meets the Ord Minnett target it will return approximately 56% (excluding dividends, fees and charges).

Current consensus price target is $16.79, suggesting upside of 15.4% (ex-dividends)

Forecast for FY23:

Current consensus EPS estimate is 99.6, implying annual growth of 40.0%.

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

Current consensus EPS estimate suggests the PER is 14.6.

Forecast for FY24:

Current consensus EPS estimate is 117.1, implying annual growth of 17.6%.

Current consensus DPS estimate is 13.7, implying a prospective dividend yield of 0.9%.

Current consensus EPS estimate suggests the PER is 12.4.

Market Sentiment: 0.4

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

ALD  AMPOL LIMITED

Crude Oil

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Overnight Price: $29.16

Morgan Stanley rates ALD as Downgrade to Equal-weight from Overweight (3) -

Morgan Stanley lowers target prices across its coverage of the Australian Energy sector after updating for energy prices and deal flow. 

While global energy demand has moderated with the economic outlook, the broker still favours exploration and production stocks with leverage to energy prices and strong balance sheets.

Regarding Ampol, Morgan Stanley feels refining margins may have peaked and is incrementally cautious on consumer sentiment. As a result, the rating falls to Equal-weight from Overweight. 

The target falls to $31.23 from $39.00 after the analyst updates forecasts for 1H results. Industry view is Attractive.

Target price is $31.23 Current Price is $29.16 Difference: $2.07
If ALD meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $36.48, suggesting upside of 24.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Morgan Stanley forecasts a full year FY22 dividend of 199.00 cents and EPS of 377.00 cents.
At the last closing share price the estimated dividend yield is 6.82%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.73.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 370.6, implying annual growth of 58.2%.

Current consensus DPS estimate is 217.5, implying a prospective dividend yield of 7.4%.

Current consensus EPS estimate suggests the PER is 7.9.

Forecast for FY23:

Morgan Stanley forecasts a full year FY23 dividend of 174.00 cents and EPS of 235.00 cents.
At the last closing share price the estimated dividend yield is 5.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.41.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 286.8, implying annual growth of -22.6%.

Current consensus DPS estimate is 180.3, implying a prospective dividend yield of 6.2%.

Current consensus EPS estimate suggests the PER is 10.2.

Market Sentiment: 0.6

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

ALL  ARISTOCRAT LEISURE LIMITED

Gaming

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Overnight Price: $32.18

Credit Suisse rates ALL as Outperform (1) -

With digital gaming data suggesting Casual Game revenue in the September half declined -10% on the previous comparable period, Credit Suisse has downgraded its Casual Game revenue forecast for Aristocrat Leisure, noting total earnings per share changes are less than -3%.

The broker had already expected flat growth from the Casual Game segment in the half, and upgraded its Social Casino segment revenue forecast. The broker finds results on trend with recent months.

The Outperform rating is retained and the target price decreases to $36.00 from $40.00.

Target price is $36.00 Current Price is $32.18 Difference: $3.82
If ALL meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $42.71, suggesting upside of 29.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Credit Suisse forecasts a full year FY22 dividend of 54.00 cents and EPS of 161.00 cents.
At the last closing share price the estimated dividend yield is 1.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.99.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 163.1, implying annual growth of 27.3%.

Current consensus DPS estimate is 58.4, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 20.2.

Forecast for FY23:

Credit Suisse forecasts a full year FY23 dividend of 65.00 cents and EPS of 185.00 cents.
At the last closing share price the estimated dividend yield is 2.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 184.2, implying annual growth of 12.9%.

Current consensus DPS estimate is 69.8, implying a prospective dividend yield of 2.1%.

Current consensus EPS estimate suggests the PER is 17.8.

Market Sentiment: 1.0

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: $1.24

Ord Minnett rates AWC as Buy (1) -

Ord Minnett lowers its target prices for stocks under its Mining sector coverage, after undertaking a mark-to-market review of September-quarter commodity prices.

Given the odds of a global recession continue to increase, the broker feels risks for mining stocks are skewed to the downside.

Within Ord Minnett's base metals coverage, the price target for Alumina Ltd falls to $1.60 from $1.80. Buy.

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

Target price is $1.60 Current Price is $1.24 Difference: $0.36
If AWC meets the Ord Minnett target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $1.66, suggesting upside of 27.7% (ex-dividends)

Forecast for FY22:

Current consensus EPS estimate is 8.9, implying annual growth of N/A.

Current consensus DPS estimate is 9.7, implying a prospective dividend yield of 7.5%.

Current consensus EPS estimate suggests the PER is 14.6.

Forecast for FY23:

Current consensus EPS estimate is 8.0, implying annual growth of -10.1%.

Current consensus DPS estimate is 7.3, implying a prospective dividend yield of 5.6%.

Current consensus EPS estimate suggests the PER is 16.3.

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

BHP  BHP GROUP LIMITED

Bulks

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Overnight Price: $38.60

Macquarie rates BHP as Outperform (1) -

Having provided further clarity on its WA iron ore growth plans, BHP Group remains Macquarie's preferred large diversified miner. The company reiterated decarbonisation targets, aiming to be net zero by 2050.

While the company progresses its production debottlenecking program to lift production to 300m tonnes per annum, studies are ongoing to further increase production to 330m tonnes per annum with results expected by 2025.

Macquarie sees possibility that BHP Group's constructive outlook on iron ore could accelerate progress. 

The Outperform rating and target price of $45.00 are retained.

Target price is $45.00 Current Price is $38.60 Difference: $6.4
If BHP meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $41.52, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 261.05 cents and EPS of 347.79 cents.
At the last closing share price the estimated dividend yield is 6.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.10.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 524.3, implying annual growth of N/A.

Current consensus DPS estimate is 368.4, implying a prospective dividend yield of 9.2%.

Current consensus EPS estimate suggests the PER is 7.6.

Forecast for FY24:

Macquarie forecasts a full year FY24 dividend of 307.37 cents and EPS of 409.12 cents.
At the last closing share price the estimated dividend yield is 7.96%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.43.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 426.8, implying annual growth of -18.6%.

Current consensus DPS estimate is 313.1, implying a prospective dividend yield of 7.8%.

Current consensus EPS estimate suggests the PER is 9.4.

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


Ord Minnett rates BHP as Hold (3) -

Ord Minnett lowers its target prices for stocks under its Mining sector coverage, after undertaking a mark-to-market review of September-quarter commodity prices.

Given the odds of a global recession continue to increase, the broker feels risks for mining stocks are skewed to the downside.

For iron ore-exposed stocks, Ord Minnett sees a lack of positive share price catalysts due to the China property slowdown, sluggish ex-China steel production and more supply in 2023.

The broker lowers its price target for BHP Group to $41 from $42 and retains its Hold rating.

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

Target price is $41.00 Current Price is $38.60 Difference: $2.4
If BHP meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $41.52, suggesting upside of 3.8% (ex-dividends)

Forecast for FY23:

Current consensus EPS estimate is 524.3, implying annual growth of N/A.

Current consensus DPS estimate is 368.4, implying a prospective dividend yield of 9.2%.

Current consensus EPS estimate suggests the PER is 7.6.

Forecast for FY24:

Current consensus EPS estimate is 426.8, implying annual growth of -18.6%.

Current consensus DPS estimate is 313.1, implying a prospective dividend yield of 7.8%.

Current consensus EPS estimate suggests the PER is 9.4.

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

BPT  BEACH ENERGY LIMITED

Crude Oil

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Overnight Price: $1.50

Morgan Stanley rates BPT as Underweight (5) -

Morgan Stanley lowers target prices across its coverage of the Australian Energy sector after updating for energy prices and deal flow. 

While global energy demand has moderated with the economic outlook, the broker still favours exploration and production stocks with leverage to energy prices and strong balance sheets.

Due to relative uncertainty and risk-adjusted valuation, Beach Energy is among stocks least preferred by the analysts.

The target falls to $1.54 from $1.80 and the Underweight rating is unchanged. Industry view: Attractive.

Target price is $1.54 Current Price is $1.50 Difference: $0.04
If BPT meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $1.80, suggesting upside of 15.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Morgan Stanley forecasts a full year FY23 dividend of 2.00 cents and EPS of 27.20 cents.
At the last closing share price the estimated dividend yield is 1.33%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.51.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.4, implying annual growth of 11.1%.

Current consensus DPS estimate is 2.3, implying a prospective dividend yield of 1.5%.

Current consensus EPS estimate suggests the PER is 6.4.

Forecast for FY24:

Morgan Stanley forecasts a full year FY24 dividend of 2.00 cents and EPS of 26.90 cents.
At the last closing share price the estimated dividend yield is 1.33%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.58.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.1, implying annual growth of 11.1%.

Current consensus DPS estimate is 4.1, implying a prospective dividend yield of 2.6%.

Current consensus EPS estimate suggests the PER is 5.8.

Market Sentiment: 0.1

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

BSL  BLUESCOPE STEEL LIMITED

Steel & Scrap

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Overnight Price: $15.39

Ord Minnett rates BSL as Buy (1) -

Ord Minnett lowers its target prices for stocks under its Mining sector coverage, after undertaking a mark-to-market review of September-quarter commodity prices.

Given the odds of a global recession continue to increase, the broker feels risks for mining stocks are skewed to the downside.

While not a mining company per se, BlueScope Steel is preferred over Sims in the steel sector, though both stocks lack a near-term catalyst and are considered more value plays by Ord Minnett.

The Buy rating is kept for BlueScope Steel, while the broker's target falls to $21 from $22.

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

Target price is $21.00 Current Price is $15.39 Difference: $5.61
If BSL meets the Ord Minnett target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $20.83, suggesting upside of 29.0% (ex-dividends)

Forecast for FY23:

Current consensus EPS estimate is 251.2, implying annual growth of -56.0%.

Current consensus DPS estimate is 50.0, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 6.4.

Forecast for FY24:

Current consensus EPS estimate is 192.6, implying annual growth of -23.3%.

Current consensus DPS estimate is 50.0, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 8.4.

Market Sentiment: 0.7

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

CBA  COMMONWEALTH BANK OF AUSTRALIA

Banks

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Overnight Price: $90.61

Ord Minnett rates CBA as Hold (3) -

The Australian Prudential Regulation Authority had a $500m operational risk capital overlay balance remaining for CommBank, to address weaknesses in its governance, culture and risk management practices.

In November 2020, APRA reduced the bank's operational risk add-on to $500m from $1bn.

Ord Minnett only considers the announced removal of this overlay (effective September 30) as a mild positive, and retains its Hold rating and $90.00 target price.

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

Target price is $90.00 Current Price is $90.61 Difference: minus $0.61 (current price is over target).
If CBA meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $89.83, suggesting downside of -5.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Ord Minnett forecasts a full year FY23 dividend of 445.00 cents and EPS of 586.00 cents.
At the last closing share price the estimated dividend yield is 4.91%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.46.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 571.1, implying annual growth of -8.7%.

Current consensus DPS estimate is 419.8, implying a prospective dividend yield of 4.4%.

Current consensus EPS estimate suggests the PER is 16.6.

Forecast for FY24:

Ord Minnett forecasts a full year FY24 dividend of 430.00 cents and EPS of 567.00 cents.
At the last closing share price the estimated dividend yield is 4.75%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.98.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 583.0, implying annual growth of 2.1%.

Current consensus DPS estimate is 439.2, implying a prospective dividend yield of 4.6%.

Current consensus EPS estimate suggests the PER is 16.2.

Market Sentiment: -0.4

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

CHN  CHALICE MINING LIMITED

Industrial Metals

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Overnight Price: $3.72

Ord Minnett rates CHN as Buy (1) -

Ord Minnett lowers its target prices for stocks under its Mining sector coverage, after undertaking a mark-to-market review of September-quarter commodity prices.

Given the odds of a global recession continue to increase, the broker feels risks for mining stocks are skewed to the downside.

Higher nominal interest rate expectations are dampening gold prices, explains Ord Minnett, and a strong US dollar continues to weigh.

For Chalice Mining, the broker lowers its target price to $6.50 from $7.00 and retains its Buy rating.

Target price is $6.50 Current Price is $3.72 Difference: $2.78
If CHN meets the Ord Minnett target it will return approximately 75% (excluding dividends, fees and charges).

Market Sentiment: 1.0

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

CPU  COMPUTERSHARE LIMITED

Diversified Financials

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Overnight Price: $24.54

Ord Minnett rates CPU as Accumulate (2) -

Ord Minnett points out 62% of revenue for Computershare derives from the US, and only 7% from A&NZ. As a result, the stock is set to benefit from a lower Australian dollar.

In addition, margin income will likely be materially higher than implied by guidance, according to the analyst, due to sharp increases in cash rates and expectations.

The broker lifts its FY23 and FY24 EPS forecasts by 7.7% and 18%, respectively, and raises its target price to $27 from $26. Accumulate.

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

Target price is $27.00 Current Price is $24.54 Difference: $2.46
If CPU meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $28.81, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Ord Minnett forecasts a full year FY23 dividend of 88.42 cents.
At the last closing share price the estimated dividend yield is 3.60%.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 140.4, implying annual growth of N/A.

Current consensus DPS estimate is 107.5, implying a prospective dividend yield of 4.3%.

Current consensus EPS estimate suggests the PER is 18.0.

Forecast for FY24:

Ord Minnett forecasts a full year FY24 dividend of 92.63 cents.
At the last closing share price the estimated dividend yield is 3.77%.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 162.6, implying annual growth of 15.8%.

Current consensus DPS estimate is 111.1, implying a prospective dividend yield of 4.4%.

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: 0.8

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

CXO  CORE LITHIUM LIMITED

New Battery Elements

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Overnight Price: $1.06

Macquarie rates CXO as Outperform (1) -

Core Lithium has completed its maiden Direct Ship Ore (DSO) shipment through a digital exchange platform, achieving a benchmark equivalent price of US$5,822 per tonne. Macquarie finds this first sale, and solid lithium price realisation, encouraging. 

First spodumene production remains on track for the first half of 2023, and the broker assumes first shipment in June 2023. Having undertaken a $100m equity raising placement to accelerate growth, Macquarie expects capital to support the BP33 development and exploration program.

The Outperform rating and target price of $1.70 are retained.

Target price is $1.70 Current Price is $1.06 Difference: $0.64
If CXO meets the Macquarie target it will return approximately 60% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 0.50 cents and EPS of 1.30 cents.
At the last closing share price the estimated dividend yield is 0.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 81.54.

Forecast for FY24:

Macquarie forecasts a full year FY24 dividend of 6.10 cents and EPS of 20.30 cents.
At the last closing share price the estimated dividend yield is 5.75%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.22.

Market Sentiment: 1.0

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

FMG  FORTESCUE METALS GROUP LIMITED

Iron Ore

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Overnight Price: $16.93

Ord Minnett rates FMG as Hold (3) -

Ord Minnett lowers its target prices for stocks under its Mining sector coverage, after undertaking a mark-to-market review of September-quarter commodity prices.

Given the odds of a global recession continue to increase, the broker feels risks for mining stocks are skewed to the downside.

For iron ore-exposed stocks, Ord Minnett sees a lack of positive share price catalysts due to the China property slowdown, sluggish ex-China steel production and more supply in 2023.

The broker lowers its price target for Fortescue Metals to $16.80 from $17.50 and retains its Hold rating.

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

Target price is $16.80 Current Price is $16.93 Difference: minus $0.13 (current price is over target).
If FMG meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.24, suggesting downside of -5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Ord Minnett forecasts a full year FY23 dividend of 133.33 cents and EPS of 179.65 cents.
At the last closing share price the estimated dividend yield is 7.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.42.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 255.9, implying annual growth of N/A.

Current consensus DPS estimate is 168.0, implying a prospective dividend yield of 9.8%.

Current consensus EPS estimate suggests the PER is 6.7.

Forecast for FY24:

Ord Minnett forecasts a full year FY24 dividend of 110.88 cents and EPS of 140.35 cents.
At the last closing share price the estimated dividend yield is 6.55%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.06.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 182.1, implying annual growth of -28.8%.

Current consensus DPS estimate is 124.7, implying a prospective dividend yield of 7.2%.

Current consensus EPS estimate suggests the PER is 9.5.

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

ILU  ILUKA RESOURCES LIMITED

Mineral Sands

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Overnight Price: $9.32

Ord Minnett rates ILU as Hold (3) -

Ord Minnett lowers its target prices for stocks under its Mining sector coverage, after undertaking a mark-to-market review of September-quarter commodity prices.

Given the odds of a global recession continue to increase, the broker feels risks for mining stocks are skewed to the downside.

Iluka Resources escapes Ord Minnett's general price target reductions. The Hold rating and $11.10 target are unchanged.

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

Target price is $11.10 Current Price is $9.32 Difference: $1.78
If ILU meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $11.24, suggesting upside of 13.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Ord Minnett forecasts a full year FY22 dividend of 25.00 cents and EPS of 148.00 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 6.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 137.6, implying annual growth of 59.2%.

Current consensus DPS estimate is 36.8, implying a prospective dividend yield of 3.7%.

Current consensus EPS estimate suggests the PER is 7.2.

Forecast for FY23:

Ord Minnett forecasts a full year FY23 dividend of 20.00 cents and EPS of 79.00 cents.
At the last closing share price the estimated dividend yield is 2.15%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 107.0, implying annual growth of -22.2%.

Current consensus DPS estimate is 28.4, implying a prospective dividend yield of 2.9%.

Current consensus EPS estimate suggests the PER is 9.3.

Market Sentiment: 0.4

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

IPH  IPH LIMITED

Legal

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Overnight Price: $9.54

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

UBS believes future M&A is not priced-in to shares of IP services group IPH, and the broker initiates coverage with a Buy rating and $11.00 target price.

The company (a leader in Asia Pacific and Canada) has a track record of successfully integrating acquisitions and delivering material synergies, notes the analyst.

Also attractive in current market conditions, the broker points out the defensive nature of IPH's business. Patent volumes are driven by corporate R&D investment, and patent/trademark applications typically providing multi-year future revenue streams;

The company also benefits from a lower Australian dollar, explains UBS.

Target price is $11.00 Current Price is $9.54 Difference: $1.46
If IPH meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $11.19, suggesting upside of 12.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

UBS forecasts a full year FY23 EPS of 43.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.19.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 43.8, implying annual growth of 81.8%.

Current consensus DPS estimate is 32.5, implying a prospective dividend yield of 3.3%.

Current consensus EPS estimate suggests the PER is 22.6.

Forecast for FY24:

UBS forecasts a full year FY24 EPS of 47.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 45.4, implying annual growth of 3.7%.

Current consensus DPS estimate is 32.8, implying a prospective dividend yield of 3.3%.

Current consensus EPS estimate suggests the PER is 21.9.

Market Sentiment: 0.7

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

KAR  KAROON ENERGY LIMITED

Crude Oil

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Overnight Price: $1.86

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

Morgan Stanley lowers target prices across its coverage of the Australian Energy sector after updating for energy prices and deal flow. 

While global energy demand has moderated with the economic outlook, the broker still favours exploration and production stocks with leverage to energy prices and strong balance sheets.

Due to relative uncertainty and risk-adjusted valuation, Karoon Energy is among stocks least preferred by the analysts.

The target falls to $1.98 from $2.25 and the Equal-weight rating is unchanged. Industry view: Attractive.

Target price is $1.98 Current Price is $1.86 Difference: $0.12
If KAR meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $2.71, suggesting upside of 35.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Morgan Stanley forecasts a full year FY23 EPS of 29.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.41.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 39.1, 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 5.1.

Forecast for FY24:

Morgan Stanley forecasts a full year FY24 EPS of 31.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 45.3, implying annual growth of 15.9%.

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

Current consensus EPS estimate suggests the PER is 4.4.

Market Sentiment: 0.7

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

LTR  LIONTOWN RESOURCES LIMITED

New Battery Elements

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Overnight Price: $1.46

Macquarie rates LTR as Outperform (1) -

Liontown Resources has received Mining Proposal and Works Approval from the WA government for a 4m tonne per annum lithium and tantalum mining operation at its Kathleen Valley asset. 

In line with the project execution schedule, this allows the company to start major construction works. Macquarie finds the project well underway, with two thirds of construction tenders being progressed and long-lead items already executed.

The broker expects progress to de-risk the Kathleen Valley project. The Outperform rating and target price of $2.50 are retained.

Target price is $2.50 Current Price is $1.46 Difference: $1.04
If LTR meets the Macquarie target it will return approximately 71% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 0.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 162.22.

Forecast for FY24:

Macquarie forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 146.00.

Market Sentiment: 0.5

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


Ord Minnett rates LTR as Hold (3) -

Ord Minnett lowers its target prices for stocks under its Mining sector coverage, after undertaking a mark-to-market review of September-quarter commodity prices.

Given the odds of a global recession continue to increase, the broker feels risks for mining stocks are skewed to the downside.

Ord Minnett continues to see strong price support for lithium on a multi-year view due to supply shortages and prefers producers over developers.

The broker lowers its target for Liontown Resources to $1.50 from $1.60. Hold.

Target price is $1.50 Current Price is $1.46 Difference: $0.04
If LTR meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Market Sentiment: 0.5

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

NCM  NEWCREST MINING LIMITED

Gold & Silver

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Overnight Price: $16.66

Ord Minnett rates NCM as Hold (3) -

Ord Minnett lowers its target prices for stocks under its Mining sector coverage, after undertaking a mark-to-market review of September-quarter commodity prices.

Given the odds of a global recession continue to increase, the broker feels risks for mining stocks are skewed to the downside.

Higher nominal interest rate expectations are dampening gold prices, explains Ord Minnett, and a strong US dollar continues to weigh.

For Newcrest Mining, the broker notes spot free cash flow yields are negative. The Hold rating is retained, while the target slips to $19 from $21. 

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

Target price is $19.00 Current Price is $16.66 Difference: $2.34
If NCM meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $21.69, suggesting upside of 22.2% (ex-dividends)

Forecast for FY23:

Current consensus EPS estimate is 120.1, implying annual growth of N/A.

Current consensus DPS estimate is 28.1, implying a prospective dividend yield of 1.6%.

Current consensus EPS estimate suggests the PER is 14.8.

Forecast for FY24:

Current consensus EPS estimate is 121.1, implying annual growth of 0.8%.

Current consensus DPS estimate is 28.3, implying a prospective dividend yield of 1.6%.

Current consensus EPS estimate suggests the PER is 14.6.

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

NHC  NEW HOPE CORPORATION LIMITED

Coal

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Overnight Price: $6.30

Morgans rates NHC as Add (1) -

FY22 results (on September 20) for New Hope were broadly in line with Morgans expectations, while the 56cps in final dividends (31cps ordinary, 25cps special) fell short of the 60cps expected.

The main message from the results, in the broker's view, was the potential for further distribution of surplus capital. The analyst estimates $2.00/share may be available for distribution in FY23, which compares to the current forecast of $1.20/share.

After making several forecast changes, including a lower Australian dollar and higher thermal coal prices, Morgans target price for New Hope rises to $7.20 from $5.50. Add.

Target price is $7.20 Current Price is $6.30 Difference: $0.9
If NHC meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $6.25, suggesting downside of -6.9% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Morgans forecasts a full year FY23 dividend of 120.00 cents and EPS of 230.00 cents.
At the last closing share price the estimated dividend yield is 19.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 2.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 249.8, implying annual growth of 111.5%.

Current consensus DPS estimate is 165.0, implying a prospective dividend yield of 24.6%.

Current consensus EPS estimate suggests the PER is 2.7.

Forecast for FY24:

Morgans forecasts a full year FY24 dividend of 75.00 cents and EPS of 104.00 cents.
At the last closing share price the estimated dividend yield is 11.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.06.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 184.3, implying annual growth of -26.2%.

Current consensus DPS estimate is 114.3, implying a prospective dividend yield of 17.0%.

Current consensus EPS estimate suggests the PER is 3.6.

Market Sentiment: 0.5

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

NIC  NICKEL INDUSTRIES LIMITED

Nickel

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Overnight Price: $0.75

Macquarie rates NIC as Neutral (3) -

Nickel Industries has warned it expects to report third quarter earnings between $52-55m, a -31% miss to Macquarie's previous forecast and a -48% miss to second quarter earnings. The decline has been attributed to lower nickel pig iron pricing.

More positively, the company announced the first production of nickel matte from its Hengjaya Nickel project, while faster than expected ramp up at its Angel Nickel project has the asset operating at more than 130% of nameplate capacity. 

The Neutral rating is retained and the target price decreases to $0.73 from $0.74.

Target price is $0.73 Current Price is $0.75 Difference: minus $0.02 (current price is over target).
If NIC meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in December.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 4.00 cents and EPS of 5.20 cents.
At the last closing share price the estimated dividend yield is 5.33%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.42.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 5.61 cents and EPS of 5.61 cents.
At the last closing share price the estimated dividend yield is 7.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.36.

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

Market Sentiment: 0.5

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

ORG  ORIGIN ENERGY LIMITED

NatGas

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Overnight Price: $5.32

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

Morgan Stanley lowers target prices across its coverage of the Australian Energy sector after updating for energy prices and deal flow. 

While global energy demand has moderated with the economic outlook, the broker still favours exploration and production stocks with leverage to energy prices and strong balance sheets.

Due to relative uncertainty and risk-adjusted valuation, Origin Energy is among stocks least preferred by the analysts. An example of uncertainty is the lack of FY23 Energy markets guidance by management.

The target falls to $6.08 from $6.22 and the Equal-weight rating is unchanged. Industry view: Attractive.

Target price is $6.08 Current Price is $5.32 Difference: $0.76
If ORG meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $6.48, suggesting upside of 17.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Morgan Stanley forecasts a full year FY23 dividend of 34.70 cents and EPS of 27.70 cents.
At the last closing share price the estimated dividend yield is 6.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.21.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 35.8, implying annual growth of N/A.

Current consensus DPS estimate is 32.6, implying a prospective dividend yield of 5.9%.

Current consensus EPS estimate suggests the PER is 15.4.

Forecast for FY24:

Morgan Stanley forecasts a full year FY24 dividend of 29.10 cents and EPS of 39.90 cents.
At the last closing share price the estimated dividend yield is 5.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 51.2, implying annual growth of 43.0%.

Current consensus DPS estimate is 33.0, implying a prospective dividend yield of 6.0%.

Current consensus EPS estimate suggests the PER is 10.7.

Market Sentiment: 0.3

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

PAN  PANORAMIC RESOURCES LIMITED

Nickel

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Overnight Price: $0.19

Macquarie rates PAN as Neutral (3) -

Drilling results above the 900 Fault at Panoramic Resources' Savannah project suggest thicker mineralisation than the current resource. Macquarie expects results will underpin the company's 2023 resource update, suggesting upside to the 36,000 tonne resource.

The broker highlights as a secondary mining front to the main Savannah North zone, the project helps with debottlenecking operations.

The Neutral rating and target price of $0.18 are retained.

Target price is $0.18 Current Price is $0.19 Difference: minus $0.01 (current price is over target).
If PAN meets the Macquarie target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 0.00 cents and EPS of 1.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.62.

Forecast for FY24:

Macquarie forecasts a full year FY24 dividend of 0.00 cents and EPS of 1.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.56.

Market Sentiment: 0.5

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

PLS  PILBARA MINERALS LIMITED

New Battery Elements

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Overnight Price: $4.55

Ord Minnett rates PLS as Downgrade to Hold from Buy (3) -

Ord Minnett lowers its target prices for stocks under its Mining sector coverage, after undertaking a mark-to-market review of September-quarter commodity prices.

Given the odds of a global recession continue to increase, the broker feels risks for mining stocks are skewed to the downside.

Ord Minnett continues to see strong price support for lithium on a multi-year view due to supply shortages and prefers producers over developers.

After recent share price gains, the broker lowers the rating for Pilbara Minerals to Hold from Buy and leaves the $4.10 target unchanged, (an exception to the trend for Ord Minnett's Mining sector coverage). Allkem is the preferred exposure for lithium.

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

Target price is $4.10 Current Price is $4.55 Difference: minus $0.45 (current price is over target).
If PLS meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.64, suggesting downside of -28.6% (ex-dividends)

Forecast for FY23:

Current consensus EPS estimate is 57.6, implying annual growth of 203.5%.

Current consensus DPS estimate is 10.5, implying a prospective dividend yield of 2.1%.

Current consensus EPS estimate suggests the PER is 8.9.

Forecast for FY24:

Current consensus EPS estimate is 42.5, implying annual growth of -26.2%.

Current consensus DPS estimate is 6.9, implying a prospective dividend yield of 1.4%.

Current consensus EPS estimate suggests the PER is 12.0.

Market Sentiment: -0.2

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

RED  RED 5 LIMITED

Gold & Silver

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Overnight Price: $0.17

Ord Minnett rates RED as Speculative Buy (1) -

Ord Minnett feels balance sheet concerns for some investors in Red 5 should be eased following an around $60m capital raising.

The target price is lowered to $0.32 from $0.38 to incorporate the raising and new grade assumptions in line with the recent resource/reserve metrics. The Speculative Buy rating is unchanged.

Funds raised will be applied to fund working capital requirements at the King Of The Hills project and for future organic growth, such as
mill expansion/exploration drilling.

Target price is $0.32 Current Price is $0.17 Difference: $0.15
If RED meets the Ord Minnett target it will return approximately 88% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Ord Minnett forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 1.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 9.44.

Forecast for FY23:

Ord Minnett forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 0.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 21.25.

Market Sentiment: 1.0

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

RIO  RIO TINTO LIMITED

Bulks

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Overnight Price: $93.10

Ord Minnett rates RIO as Hold (3) -

Ord Minnett lowers its target prices for stocks under its Mining sector coverage, after undertaking a mark-to-market review of September-quarter commodity prices.

Given the odds of a global recession continue to increase, the broker feels risks for mining stocks are skewed to the downside.

For iron ore-exposed stocks, Ord Minnett sees a lack of positive share price catalysts due to the China property slowdown, sluggish ex-China steel production and more supply in 2023.

The broker lowers its price target for Rio Tinto to $93 from $100 and retains its Hold rating.

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

Target price is $93.00 Current Price is $93.10 Difference: minus $0.1 (current price is over target).
If RIO meets the Ord Minnett target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $104.07, suggesting upside of 8.5% (ex-dividends)

Forecast for FY22:

Current consensus EPS estimate is 1485.3, implying annual growth of N/A.

Current consensus DPS estimate is 827.8, implying a prospective dividend yield of 8.6%.

Current consensus EPS estimate suggests the PER is 6.5.

Forecast for FY23:

Current consensus EPS estimate is 1347.2, implying annual growth of -9.3%.

Current consensus DPS estimate is 900.2, implying a prospective dividend yield of 9.4%.

Current consensus EPS estimate suggests the PER is 7.1.

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

RWC  RELIANCE WORLDWIDE CORP. LIMITED

Building Products & Services

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Overnight Price: $3.35

Citi rates RWC as Sell (5) -

Citi expects further downside revisions for Reliance Worldwide after a review of the evolving UK environment. It's felt the negative impact of rising interest rates outweighs favourable stamp duty concessions.

The broker suggests a 90-120bps increase in mortgage rates to around 5.5% has a more material impact on housing activity.

The Sell rating and $3.80 target price are unchanged.

Target price is $3.80 Current Price is $3.35 Difference: $0.45
If RWC meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $4.79, suggesting upside of 37.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Citi forecasts a full year FY23 dividend of 8.80 cents and EPS of 18.40 cents.
At the last closing share price the estimated dividend yield is 2.63%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.21.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.9, implying annual growth of N/A.

Current consensus DPS estimate is 14.7, implying a prospective dividend yield of 4.2%.

Current consensus EPS estimate suggests the PER is 12.0.

Forecast for FY24:

Citi forecasts a full year FY24 dividend of 9.40 cents and EPS of 19.80 cents.
At the last closing share price the estimated dividend yield is 2.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.92.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.9, implying annual growth of 3.5%.

Current consensus DPS estimate is 14.4, implying a prospective dividend yield of 4.1%.

Current consensus EPS estimate suggests the PER is 11.6.

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

S32  SOUTH32 LIMITED

Mining

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Overnight Price: $3.56

Ord Minnett rates S32 as Buy (1) -

Ord Minnett lowers its target prices for stocks under its Mining sector coverage, after undertaking a mark-to-market review of September-quarter commodity prices.

Given the odds of a global recession continue to increase, the broker feels risks for mining stocks are skewed to the downside.

Within the base metals coverage, the analyst considers South32 is a standout with diversified cash flows and unlikely further downside for aluminium prices as half of the industry is losing money.

Aluminium price forecasts are largely responsible for the target falling to $4.40 from $5.00, explains Ord Minnett. Buy. 

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

Target price is $4.40 Current Price is $3.56 Difference: $0.84
If S32 meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $4.93, suggesting upside of 31.8% (ex-dividends)

Forecast for FY23:

Current consensus EPS estimate is 62.4, implying annual growth of N/A.

Current consensus DPS estimate is 28.8, implying a prospective dividend yield of 7.7%.

Current consensus EPS estimate suggests the PER is 6.0.

Forecast for FY24:

Current consensus EPS estimate is 56.6, implying annual growth of -9.3%.

Current consensus DPS estimate is 22.7, implying a prospective dividend yield of 6.1%.

Current consensus EPS estimate suggests the PER is 6.6.

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

Market Sentiment: 0.9

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

SFR  SANDFIRE RESOURCES LIMITED

Copper

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Overnight Price: $3.62

Ord Minnett rates SFR as Hold (3) -

Ord Minnett lowers its target prices for stocks under its Mining sector coverage, after undertaking a mark-to-market review of September-quarter commodity prices.

Given the odds of a global recession continue to increase, the broker feels risks for mining stocks are skewed to the downside.

Within the base metals coverage, the target price for Sandfire Resources falls to $3.30 from $3.80. The broker requires a lower share price before raising the existing Hold rating.

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

Target price is $3.30 Current Price is $3.62 Difference: minus $0.32 (current price is over target).
If SFR meets the Ord Minnett target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.34, suggesting upside of 36.3% (ex-dividends)

Forecast for FY23:

Current consensus EPS estimate is 10.5, implying annual growth of N/A.

Current consensus DPS estimate is 3.2, implying a prospective dividend yield of 0.8%.

Current consensus EPS estimate suggests the PER is 37.3.

Forecast for FY24:

Current consensus EPS estimate is -0.5, implying annual growth of N/A.

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

Current consensus EPS estimate suggests the PER is N/A.

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

SGM  SIMS LIMITED

Steel & Scrap

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Overnight Price: $13.20

Ord Minnett rates SGM as Downgrade to Hold from Buy (3) -

Ord Minnett lowers its target prices for stocks under its Mining sector coverage, after undertaking a mark-to-market review of September-quarter commodity prices.

Given the odds of a global recession continue to increase, the broker feels risks for mining stocks are skewed to the downside.

Among non-mining steel producers BlueScope Steel is preferred over Sims, which Ord Minnett downgrades to Hold from Buy. Both stocks lack a near-term catalyst and are considered more value plays.

The target for Sims falls to $15.40 from $18.50.

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

Target price is $15.40 Current Price is $13.20 Difference: $2.2
If SGM meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $16.22, suggesting upside of 20.8% (ex-dividends)

Forecast for FY23:

Current consensus EPS estimate is 133.0, implying annual growth of -56.1%.

Current consensus DPS estimate is 47.9, implying a prospective dividend yield of 3.6%.

Current consensus EPS estimate suggests the PER is 10.1.

Forecast for FY24:

Current consensus EPS estimate is 116.3, implying annual growth of -12.6%.

Current consensus DPS estimate is 42.5, implying a prospective dividend yield of 3.2%.

Current consensus EPS estimate suggests the PER is 11.5.

Market Sentiment: 0.2

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: $7.17

Morgan Stanley rates STO as Overweight (1) -

Morgan Stanley lowers target prices across its coverage of the Australian Energy sector after updating for energy prices and deal flow. 

While global energy demand has moderated with the economic outlook, the broker still favours exploration and production stocks with leverage to energy prices and strong balance sheets.

The Overweight rating is retained for Santos, while the target price falls to $9.30 from $11.00. The broker also raised its risk factor for Barossa after the Federal Court set aside acceptance of an environmental plan on 21 September. Industry view: Attractive.

Target price is $9.30 Current Price is $7.17 Difference: $2.13
If STO meets the Morgan Stanley target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $9.46, suggesting upside of 26.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Morgan Stanley forecasts a full year FY22 dividend of 45.33 cents and EPS of 131.93 cents.
At the last closing share price the estimated dividend yield is 6.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.43.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 136.4, implying annual growth of N/A.

Current consensus DPS estimate is 29.4, implying a prospective dividend yield of 3.9%.

Current consensus EPS estimate suggests the PER is 5.5.

Forecast for FY23:

Morgan Stanley forecasts a full year FY23 dividend of 64.56 cents and EPS of 116.49 cents.
At the last closing share price the estimated dividend yield is 9.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 110.2, implying annual growth of -19.2%.

Current consensus DPS estimate is 40.2, implying a prospective dividend yield of 5.4%.

Current consensus EPS estimate suggests the PER is 6.8.

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

Market Sentiment: 1.0

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

TLC  LOTTERY CORPORATION LIMITED

Gaming

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Overnight Price: $4.13

Credit Suisse rates TLC as Neutral (3) -

Credit Suisse estimates lottery sales are down -11% in the September quarter, as low jackpots and tough comparables drag on results. The broker expects Lottery Corp may look to seed jackpots in an effort to lift sales in the December quarter. 

Implying a -0.5% revenue growth decline in each of the remaining three quarters in FY23, Credit Suisse has lowered its full year revenue growth expectations for FY23 to -5%. The broker's earnings per share forecasts decrease -8-10% across its forecast period. 

The Neutral rating is retained and the target price decreases to $3.85 from $4.65.

Target price is $3.85 Current Price is $4.13 Difference: minus $0.28 (current price is over target).
If TLC meets the Credit Suisse target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.90, suggesting upside of 18.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Credit Suisse forecasts a full year FY23 dividend of 11.70 cents and EPS of 13.76 cents.
At the last closing share price the estimated dividend yield is 2.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.01.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.4, implying annual growth of -1.1%.

Current consensus DPS estimate is 14.6, implying a prospective dividend yield of 3.5%.

Current consensus EPS estimate suggests the PER is 26.8.

Forecast for FY24:

Credit Suisse forecasts a full year FY24 dividend of 23.10 cents and EPS of 15.43 cents.
At the last closing share price the estimated dividend yield is 5.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.9, implying annual growth of 9.7%.

Current consensus DPS estimate is 17.7, implying a prospective dividend yield of 4.3%.

Current consensus EPS estimate suggests the PER is 24.4.

Market Sentiment: 0.8

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

VEA  VIVA ENERGY GROUP LIMITED

Crude Oil

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Overnight Price: $2.65

Morgan Stanley rates VEA as Downgrade to Equal-weight from Overweight (3) -

Morgan Stanley lowers target prices across its coverage of the Australian Energy sector after updating for energy prices and deal flow. 

While global energy demand has moderated with the economic outlook, the broker still favours exploration and production stocks with leverage to energy prices and strong balance sheets.

Regarding Viva Energy, Morgan Stanley feels refining margins may have peaked and is incrementally cautious on consumer sentiment. As a result, the rating falls to Equal-weight from Overweight. 

The target falls to $2.89 from $3.30 after the analyst updates forecasts for 1H results. Industry view is Attractive.

Target price is $2.89 Current Price is $2.65 Difference: $0.24
If VEA meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.21, suggesting upside of 20.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Morgan Stanley forecasts a full year FY22 dividend of 29.00 cents and EPS of 48.00 cents.
At the last closing share price the estimated dividend yield is 10.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.52.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 52.5, implying annual growth of 259.1%.

Current consensus DPS estimate is 29.9, implying a prospective dividend yield of 11.2%.

Current consensus EPS estimate suggests the PER is 5.1.

Forecast for FY23:

Morgan Stanley forecasts a full year FY23 dividend of 21.00 cents and EPS of 35.00 cents.
At the last closing share price the estimated dividend yield is 7.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 31.3, implying annual growth of -40.4%.

Current consensus DPS estimate is 19.2, implying a prospective dividend yield of 7.2%.

Current consensus EPS estimate suggests the PER is 8.5.

Market Sentiment: 0.7

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

WDS  WOODSIDE ENERGY GROUP LIMITED

NatGas

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Overnight Price: $32.05

Morgan Stanley rates WDS as Overweight (1) -

Morgan Stanley lowers target prices across its coverage of the Australian Energy sector after updating for energy prices and deal flow. 

While global energy demand has moderated with the economic outlook, the broker still favours exploration and production stocks with leverage to energy prices and strong balance sheets.

The Overweight rating is retained for Woodside Energy, while the target falls to $37.00 from $40.00. Industry View is Attractive. 

Target price is $37.00 Current Price is $32.05 Difference: $4.95
If WDS meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $35.36, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Morgan Stanley forecasts a full year FY22 dividend of 345.97 cents and EPS of 509.33 cents.
At the last closing share price the estimated dividend yield is 10.79%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.29.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 565.9, implying annual growth of N/A.

Current consensus DPS estimate is 403.1, implying a prospective dividend yield of 12.0%.

Current consensus EPS estimate suggests the PER is 5.9.

Forecast for FY23:

Morgan Stanley forecasts a full year FY23 dividend of 363.23 cents and EPS of 453.90 cents.
At the last closing share price the estimated dividend yield is 11.33%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.06.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 480.9, implying annual growth of -15.0%.

Current consensus DPS estimate is 335.9, implying a prospective dividend yield of 10.0%.

Current consensus EPS estimate suggests the PER is 7.0.

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

Market Sentiment: 0.5

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

XRO  XERO LIMITED

Accountancy

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Overnight Price: $71.50

Citi rates XRO as Buy (1) -

Citi reviews Intuit's revised international strategy and feels a reduced focus on accounting software localisation in markets such as Singapore is a positive for Xero.

On the flipside, Intuit’s commentary on the difficulty to localise accounting solutions in new markets has implications for Xero’s margins, according to the broker. Xero will expand into new markets such as Europe in time.

The Buy rating and $106.80 target price are retained.

Target price is $106.80 Current Price is $71.50 Difference: $35.3
If XRO meets the Citi target it will return approximately 49% (excluding dividends, fees and charges).

Current consensus price target is $97.01, suggesting upside of 28.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Citi forecasts a full year FY23 dividend of 0.00 cents and EPS of 28.06 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 254.86.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.1, 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 259.5.

Forecast for FY24:

Citi forecasts a full year FY24 dividend of 0.00 cents and EPS of 55.37 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 129.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 65.1, implying annual growth of 123.7%.

Current consensus DPS estimate is 9.6, implying a prospective dividend yield of 0.1%.

Current consensus EPS estimate suggests the PER is 116.0.

This company reports in NZD. 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

Today's Price Target Changes
Company Last Price Broker New Target Prev Target Change
AKE Allkem $14.54 Ord Minnett 20.50 16.50 24.24%
ALD Ampol $29.20 Morgan Stanley 31.23 39.00 -19.92%
ALL Aristocrat Leisure $32.87 Credit Suisse 36.00 40.00 -10.00%
AWC Alumina Ltd $1.30 Ord Minnett 1.60 1.80 -11.11%
BHP BHP Group $39.99 Macquarie 45.00 44.00 2.27%
Ord Minnett 41.00 42.00 -2.38%
BPT Beach Energy $1.56 Morgan Stanley 1.54 1.80 -14.44%
BSL BlueScope Steel $16.14 Ord Minnett 21.00 22.00 -4.55%
CBA CommBank $94.52 Ord Minnett 90.00 83.80 7.40%
CHN Chalice Mining $4.06 Ord Minnett 6.50 7.00 -7.14%
CPU Computershare $25.21 Ord Minnett 27.00 26.00 3.85%
FMG Fortescue Metals $17.21 Ord Minnett 16.80 17.50 -4.00%
KAR Karoon Energy $2.00 Morgan Stanley 1.98 2.25 -12.00%
LTR Liontown Resources $1.59 Ord Minnett 1.50 1.10 36.36%
NCM Newcrest Mining $17.74 Ord Minnett 19.00 21.00 -9.52%
NHC New Hope $6.71 Morgans 7.20 5.50 30.91%
NIC Nickel Industries $0.80 Macquarie 0.73 0.74 -1.35%
ORG Origin Energy $5.50 Morgan Stanley 6.08 6.06 0.33%
RED Red 5 $0.19 Ord Minnett 0.32 0.38 -15.79%
RIO Rio Tinto $95.94 Ord Minnett 93.00 100.00 -7.00%
S32 South32 $3.74 Ord Minnett 4.40 5.00 -12.00%
SFR Sandfire Resources $3.92 Ord Minnett 3.30 3.80 -13.16%
SGM Sims $13.42 Ord Minnett 15.40 18.50 -16.76%
STO Santos $7.49 Morgan Stanley 9.30 11.00 -15.45%
TLC Lottery Corp $4.13 Credit Suisse 3.85 4.65 -17.20%
VEA Viva Energy $2.66 Morgan Stanley 2.89 3.30 -12.42%
WDS Woodside Energy $33.53 Morgan Stanley 37.00 40.00 -7.50%
Summaries
AKE Allkem Buy - Ord Minnett Overnight Price $13.18
ALD Ampol Downgrade to Equal-weight from Overweight - Morgan Stanley Overnight Price $29.16
ALL Aristocrat Leisure Outperform - Credit Suisse Overnight Price $32.18
AWC Alumina Ltd Buy - Ord Minnett Overnight Price $1.24
BHP BHP Group Outperform - Macquarie Overnight Price $38.60
Hold - Ord Minnett Overnight Price $38.60
BPT Beach Energy Underweight - Morgan Stanley Overnight Price $1.50
BSL BlueScope Steel Buy - Ord Minnett Overnight Price $15.39
CBA CommBank Hold - Ord Minnett Overnight Price $90.61
CHN Chalice Mining Buy - Ord Minnett Overnight Price $3.72
CPU Computershare Accumulate - Ord Minnett Overnight Price $24.54
CXO Core Lithium Outperform - Macquarie Overnight Price $1.06
FMG Fortescue Metals Hold - Ord Minnett Overnight Price $16.93
ILU Iluka Resources Hold - Ord Minnett Overnight Price $9.32
IPH IPH Initiation of coverage with Buy - UBS Overnight Price $9.54
KAR Karoon Energy Equal-weight - Morgan Stanley Overnight Price $1.86
LTR Liontown Resources Outperform - Macquarie Overnight Price $1.46
Hold - Ord Minnett Overnight Price $1.46
NCM Newcrest Mining Hold - Ord Minnett Overnight Price $16.66
NHC New Hope Add - Morgans Overnight Price $6.30
NIC Nickel Industries Neutral - Macquarie Overnight Price $0.75
ORG Origin Energy Equal-weight - Morgan Stanley Overnight Price $5.32
PAN Panoramic Resources Neutral - Macquarie Overnight Price $0.19
PLS Pilbara Minerals Downgrade to Hold from Buy - Ord Minnett Overnight Price $4.55
RED Red 5 Speculative Buy - Ord Minnett Overnight Price $0.17
RIO Rio Tinto Hold - Ord Minnett Overnight Price $93.10
RWC Reliance Worldwide Sell - Citi Overnight Price $3.35
S32 South32 Buy - Ord Minnett Overnight Price $3.56
SFR Sandfire Resources Hold - Ord Minnett Overnight Price $3.62
SGM Sims Downgrade to Hold from Buy - Ord Minnett Overnight Price $13.20
STO Santos Overweight - Morgan Stanley Overnight Price $7.17
TLC Lottery Corp Neutral - Credit Suisse Overnight Price $4.13
VEA Viva Energy Downgrade to Equal-weight from Overweight - Morgan Stanley Overnight Price $2.65
WDS Woodside Energy Overweight - Morgan Stanley Overnight Price $32.05
XRO Xero Buy - Citi Overnight Price $71.50
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

15

2. Accumulate

1

3. Hold

17

5. Sell

2

Tuesday 04 October 2022

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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.