Australian Broker Call

Macquarie rates AMI as Outperform (1) -

First quarter production was ahead of Macquarie's estimates. Higher production at Hera and Dargues more than offset lower gold output from Peak.

Dargues was the highlight as production more than doubled quarter on quarter. No changes were made to FY22 guidance with production still expected to be 112-123,000 ounces at an all-in sustainable cost of $1500-1700/oz.

Base metal production was also strong amid good grades at Peak. Macquarie observes the company has signalled the first quarter would be the weakest in FY22 and a stronger performance should be the way for the remainder of the year.

Outperform maintained. Target rises to $0.55 from $0.50.

Target price is $0.55 Current Price is $0.40 Difference: $0.15
If AMI meets the Macquarie target it will return approximately 38% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Morgans rates ANZ as Add (1) -

Ahead of ANZ Bank's result this Thursday, Morgans has trimmed its earnings forecasts to reflect notable items of -$129m after tax, a lower home loan growth forecast, a lower markets income forecast and a higher operating expense forecast.

Target is reduced to $32.00 from $34.50, Add retained.

Target price is $32.00 Current Price is $28.32 Difference: $3.68
If ANZ meets the Morgans target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $29.18, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Macquarie rates APT as Outperform (1) -

Macquarie adjusts estimates for Afterpay to factor in the impact of the likely changes to the no-surcharge rules in Australia. Based on the brokers previously-conducted surveys the change in surcharge rulles is estimated to result in a -10% decline in Australia's BNPL addressable market.

Yet increasing diversity reduces the concentration risk for the company. Beyond Australia, where BNPL is most mature, others may follow Australia's lead in enforcing stricter regulations and the broker considers the largest risk lies in the EU and UK.

Macquarie retains an Outperform rating and $160 target.

Target price is $160.00 Current Price is $122.60 Difference: $37.4
If APT meets the Macquarie target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $141.68, suggesting upside of 12.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Credit Suisse rates AZJ as No Rating (-1) -

Credit Suisse expects dividends to be toward the lower end of the range for one or two years after Aurizon Holdings announced the acquisition of OneRail Australia for -$2.35bn. The transaction will be fully funded by debt.

The company plans to divest the Coal above-rail part of the business via a demerger or trade sale.The analyst notes the remainder of the business, OneRail Bulk, will add $80m of earnings (EBITDA) to the company's existing Bulk segment (a 55% earnings uplift).

The broker is currently restricted on research and offers no target price or rating.

Current Price is $3.52. Target price not assessed.

Current consensus price target is $4.10, suggesting upside of 18.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Ord Minnett rates CNI as Accumulate (2) -

Centuria Capital has lifted assets under management by more than $18bn since June and Ord Minnett observes all acquisitions were sourced off-market or via invite-only campaigns, which underscores the company's ability to obtain prospects through less competitive channels.

The broker considers the stock attractively priced relative to other listed property fund managers and retains an Accumulate rating, raising the target to $3.70 from $3.40.

Target price is $3.70 Current Price is $3.27 Difference: $0.43
If CNI meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.39, suggesting upside of 2.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Credit Suisse rates COL as Neutral (3) -

Credit Suisse downgrades earnings forecasts across the Australian Food Retail sector in anticipation of labour and supply chain costs increasing faster than prices. It's noted that shelf prices appeared to remain in deflation in Q1 of FY22.

For Coles Group, the analyst downgrades FY22 earnings estimates by -5% though sales forecasts are increased. Nonetheless, the target price rises to $17.48 from $17.42, due to a valuation adjustment in the financial modelling. The Neutral rating is unchanged.

Target price is $17.48 Current Price is $17.83 Difference: minus $0.35 (current price is over target).
If COL meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.35, suggesting upside of 4.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Ord Minnett rates CSL as Hold (3) -

Ord Minnett reviews the potential for the mRNA platform to be used to develop an influenza vaccine. The broker acknowledges this is a more challenging target than covid-19 and it is not yet proven these will be sufficiently superior to existing vaccines for influenza.

The broker does not believe CSL's Seqirus division will face competition in this area until at least FY25. Moreover, there will be no rush for such trials and these will need to pass the same multi-year regulatory route of traditional vaccines.

The broker retains a Hold rating and $285 target.

Target price is $285.00 Current Price is $295.59 Difference: minus $10.59 (current price is over target).
If CSL meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $305.32, suggesting upside of 3.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.2

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

Macquarie rates KED as Outperform (1) -

Macquarie observes Keypath Education is on track to achieve FY22 prospectus forecasts. The company has reiterated expectations for revenue of US$116.4m and has signed up two new partners and initiated seven new programs since September.

Macquarie's revenue forecasts are 8.5% above the prospectus and the broker considers these forecasts conservative relative to historical seasonality.

The broker retains an Outperform rating with a $4.30 target.

Target price is $4.30 Current Price is $2.90 Difference: $1.4
If KED meets the Macquarie target it will return approximately 48% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Citi rates LNK as Neutral (3) -

Citi believes Link Administration shares, ex-Pexa Group ((PXA)), seem cheaply valued, but the broker also retains a Neutral rating as there remain plenty of questions unanswered.

Citi points out Link is organising an investor day on November 3. Could this be a positive catalyst for the share price?

Management at the firm is likely to explain how it sees Link benefiting from macro tailwinds in the years ahead. If investors believe the story... Price target $4.75.

Target price is $4.75 Current Price is $4.40 Difference: $0.35
If LNK meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $5.21, suggesting upside of 18.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Macquarie rates MIN as Outperform (1) -

Mineral Resources has confirmed the re-start of Wodgina, which should mean spodumene production re-commences a year earlier than Macquarie had previously anticipated.

This translates to 4-9% upgrades to the broker's medium-term earnings forecasts. The broker asserts the staged re-start of the other two processing trains will be governed by the pace at which Albemarle completes construction of downstream processing in China.

Outperform rating maintained. Target is raised to $75 from $72.

Target price is $75.00 Current Price is $42.91 Difference: $32.09
If MIN meets the Macquarie target it will return approximately 75% (excluding dividends, fees and charges).

Current consensus price target is $57.75, suggesting upside of 44.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Morgan Stanley rates MIN as Underweight (5) -

Not only does the Wodinga restart align with the time line previously outlined by Mineral Resources, but also Morgan Stanley is cautious over the impact on prices of extra lithium supply entering the market in 2022.

In short, the analyst is not as excited as the initial share price reaction.

Production of spodumene is expected during the third quarter of 2022. The Underweight rating and $41 target price are unchanged. Industry view In-Line.

Target price is $41.00 Current Price is $42.91 Difference: minus $1.91 (current price is over target).
If MIN meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $57.75, suggesting upside of 44.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Ord Minnett rates MWY as Buy (1) -

Ord Minnett finds the outlook for Midway is becoming appealing. The broker envisages several catalysts that could improve the share price performance such as pulp prices recovering to commercially attractive levels and addressing the issues with forestry logistics.

Capital investment in the Geelong and Bell Bay development should also drive volume growth. Moreover, potential sale of plantation assets in the Otway Ranges could mean special dividends. Buy rating retained. Target rises to $1.78 from $1.23.

Target price is $1.78 Current Price is $1.30 Difference: $0.48
If MWY meets the Ord Minnett target it will return approximately 37% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Morgans rates MX1 as Speculative Buy (1) -

Micro-X reported September quarter cash receipts below Morgans' expectations but the broker expects a growing sales book to deliver much stronger growth over the rest of FY22. Two new contracts signed in the period should deliver solid revenues.

The broker expects the company's Argus x-ray camera to be a significant revenue driver, with customer demonstrations to begin in 2022.

Speculative Buy rating and 58c target retained.

Target price is $0.58 Current Price is $0.31 Difference: $0.27
If MX1 meets the Morgans target it will return approximately 87% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Credit Suisse rates ORG as Outperform (1) -

In a welcome end to a seven-year deleveraging quest, according to Credit Suisse, Origin Energy has sold a -10% stake in APLNG for $2.1bn. This price was around 10% higher than the broker's valuation. The target price jumps to $5.70 from $4.50. Outperform maintained. 

The analyst lifts the FY22 profit estimate by 15%, due to an increase to the Octopus Energy value, the APLNG sale proceeds, a roll-forward and other model changes.

Target price is $5.70 Current Price is $5.38 Difference: $0.32
If ORG meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $5.64, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Macquarie rates ORG as Outperform (1) -

Origin Energy has sold 10% of its stake in APLNG for $2.12bn, below Macquarie's valuation. Yet the broker acknowledges this provides flexibility for the company's balance sheet.

As a result, Origin Energy can reduce the amount of oil hedging. The broker reduces estimates for FY22 by -21% and FY23 by -25%. Outperform maintained. Target is cut to $5.41 from $5.68.

Target price is $5.41 Current Price is $5.38 Difference: $0.03
If ORG meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $5.64, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Morgans rates ORG as Add (1) -

Origin Energy's sale of 27% of its stake, or 10% of total, of APLNG to private equity suggests to Morgans the expectation of a stronger for longer oil market. To reach the implied enterprise value of the deal, the broker would need to assume a long term oil price forcast of US$75/bbl.

The broker expects most of the funds will be used to reduce gearing. Target rises to $5.96 from $5.27, Add retained.

Target price is $5.96 Current Price is $5.38 Difference: $0.58
If ORG meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $5.64, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Ord Minnett rates ORG as Hold (3) -

Ord Minnett was surprised by the announcement of the sale of a 10% stake in APLNG. The broker estimates the transaction to be immediately 3% accretive to value, interpreting a further 9% uplift to the value of the remaining 27.5% stake.

The broker believes the transaction is opportunistic and represents an attractive price for Origin Energy as there is no immediate need to de-gear. Hold rating and $5.15 target maintained.

Target price is $5.15 Current Price is $5.38 Difference: minus $0.23 (current price is over target).
If ORG meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.64, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

UBS rates ORG as Buy (1) -

Origin Energy will sell 10% of its interest in a APLNG to the US-based EIG for $2.12m. This will reduce forecast net debt for FY22 to $2.3bn and reduce gearing to 19%.

UBS recognises this removes some investor concerns about the balance sheet, and there is now the option to pursue growth and consider capital management.

The broker reduces FY22-24 estimates by -6-42% because of the lower exposure to APLNG cash distributions. Buy rating retained. Target is raised to $5.85 from $5.15.

Target price is $5.85 Current Price is $5.38 Difference: $0.47
If ORG meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $5.64, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Ord Minnett rates PAC as Buy (1) -

Ord Minnett believes the listing of global asset manager GQG Partners ((GQG)) is positive for the Pacific Current share price. The latter has owned a preferred interest in GQG Partners since its inception in 2016.

This is converted since the IPO to a 5% common equity stake of which 4% will be retained and 1% sold. The broker assesses the stake is a material contributor to earnings and estimates the stock is significantly undervalued for its prospects.

Buy rating reiterated. Target rises to $10.30 from $8.30.

Target price is $10.30 Current Price is $7.52 Difference: $2.78
If PAC meets the Ord Minnett target it will return approximately 37% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Citi rates RIO as Buy (1) -

In light of Rio Tinto's decarbonisation commitments, with accompanying costs, Citi analysts have pared back their price target to $115 (was $120).

The recent market briefing by company management also included implied mid-term increases in Pilbara iron ore unit costs and higher sustained capex, the analysts highlight.

Buy rating retained as the share price remains well below the new target.

Target price is $115.00 Current Price is $96.44 Difference: $18.56
If RIO meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $110.29, suggesting upside of 15.5% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

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

Ord Minnett rates RIO as Buy (1) -

Ord Minnett observes Rio Tinto has moved away from a commitment to Pilbara iron ore capacity of 360mtpa over the medium term, providing a 345-360mtpa range.

The company has increased its emission reduction target to a -50% cut by 2030 and this will mean -US$7.5bn is spent on decarbonisation. Ord Minnett re-bases iron ore expectations amid higher capital expenditure, which lowers the valuation estimate by -21%.

While the investment case is less compelling, the broker considers the stock still inexpensive and retains a Buy rating. Target is lowered to $113 from $143.

Target price is $113.00 Current Price is $96.44 Difference: $16.56
If RIO meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $110.29, suggesting upside of 15.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Credit Suisse rates RMD as Outperform (1) -

In a preview of ResMed Inc's results due on October 29, Credit Suisse forecasts Q1 revenue growth of 17%, earnings (EBIT) to rise by 13% and Non-GAAP profit up by 11.6% versus the previous corresponding period. A dividend of US$0.42 is estimated.

The analyst thinks recent share underperformance provides significant valuation upside. The $44 target price and Outperform rating are unchanged. It's thought the market is underestimating the multi-year tailwind from the Philips recall.

Target price is $44.00 Current Price is $35.99 Difference: $8.01
If RMD meets the Credit Suisse target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $38.59, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

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

Morgan Stanley expects supply chain issues and the competitive dynamics in masks will be the focus when ResMed announces its 1Q EPS result on Friday, October 29. Updates on new RTM codes targeted for January 1, 2022 will also be of interest.

The analyst forecasts revenue will rise by 7% to US$807m and Non-GAAP income from operations is estimated to be US$237m. The Equal-Weight rating and $36.20 target price are unchanged.  Industry view: In-Line.

Following the Philips' DreamStation recall, the broker sees an opportunity to gain market share of roughly one year, as long as supply constraints can be overcome.

Target price is $36.20 Current Price is $35.99 Difference: $0.21
If RMD meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $38.59, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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 RMD as Hold (3) -

ResMed Inc is due to report first quarter results on October 29. A lower weighting to devices and improved prices should support a sequential lift in gross margins, in Ord Minnett's view.

The broker retains a Hold rating and $36 target.

Target price is $36.00 Current Price is $35.99 Difference: $0.01
If RMD meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $38.59, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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 SBM as Neutral (3) -

St Barbara's September quarter production performance slightly missed Citi's forecast, as well as market consensus, comment the analysts.

Citi has left the $1.60 price target unchanged, as well as the Neutral/High Risk rating.

Target price is $1.60 Current Price is $1.56 Difference: $0.04
If SBM meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $1.77, suggesting upside of 15.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Credit Suisse rates SBM as Outperform (1) -

St Barbara's September quarter group production was a -5% miss on Credit Suisse's expectation, with lower grades at Atlantic the main driver. Simberi remains offline and covid disruptions are thought to challenge the expected December restart.

The broker lowers its FY22 EPS forecast on increased costs and lower volumes from Simberi. The target price falls to $1.75 from $1.90. The Outperform rating is unchanged, on valuation support.

Target price is $1.75 Current Price is $1.56 Difference: $0.19
If SBM meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $1.77, suggesting upside of 15.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Macquarie rates SBM as Neutral (3) -

St Barbara's first quarter was mixed, with a stronger performance at Gwalia countered by Atlantic, while the Simberi plant was shut down. Gold production was below Macquarie's estimates and costs were higher.

Guidance implies the first quarter will be the weakest of the year. Simberi's mill remains shut as repairs to the deep-sea tailings pipeline continue. Production is expected to resume by the end of the second quarter.

Atlantic is expected to reveal improved grades in the second  quarter as waste stripping allows for greater acccess to ore. Neutral rating and $1.60 target maintained.

Target price is $1.60 Current Price is $1.56 Difference: $0.04
If SBM meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $1.77, suggesting upside of 15.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Ord Minnett rates SBM as Hold (3) -

Higher Gwalia grades underpinned production in the September quarter. Ord Minnett notes the drill results at Trevor Bore highlight the potential for an open pit deposit.

While Gwalia appears to be at a turning point, the broker still envisages risks at Simberi and Atlantic. In balancing value against near-term risk, the broker retains a Hold rating. Target is $1.50.

Target price is $1.50 Current Price is $1.56 Difference: minus $0.06 (current price is over target).
If SBM meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.77, suggesting upside of 15.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Credit Suisse rates SIQ as Upgrade to Outperform from Neutral (1) -

The consortium comprising TPG Global and Potentia Capital has announced it will not proceed with its $10.35 bid to acquire SmartGroup Corp, though it did propose $9.25/share. The SmartGroup Corp board has decided not to proceed. The target falls to $8.90 from $10.35.

Separately, management said it's on track for 2021 results to be in-line with consensus expectations. Credit Suisse upgrades its rating to Outperform from Neutral and continues to expect a good EPS recovery, with a potential boost from the company's uplift program by FY24.

Target price is $8.90 Current Price is $8.35 Difference: $0.55
If SIQ meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $8.63, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

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

The consortium of investors has lowered its price to $9.25/share from $10.35 and the board of Smartgroup Corp has rejected the offer. Separately, management noted it is on-track to deliver 2021 results in-line with consensus profit expectations.

The analyst remains happy with the capital light, cash generative, low gearing, Smart Future nature of the company's product offering. Equal-weight rating. Target is $7.70. Industry view: In Line.

Target price is $7.70 Current Price is $8.35 Difference: minus $0.65 (current price is over target).
If SIQ meets the Morgan Stanley target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.63, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Morgans rates SIQ as Upgrade to Add from Hold (1) -

The private equity consortium conditionally offering $10.35ps to takeover SmartGroup had cut its offer to $9.25, which the board rejected, hence the consortium has walked away. Morgans has cut its target to $8.80 from the initial $10.35 bid.

But returning to fundamentals, the broker upgrades to Add from Hold to reflect resilient earnings in the face of lockdowns and expected incremental growth in FY22. Upside is on offer, the broker suggests, if the company can execute on its Smart Future strategy.

Target price is $8.80 Current Price is $8.35 Difference: $0.45
If SIQ meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $8.63, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Credit Suisse rates TLS as Outperform (1) -

Credit Suisse increases its target price for Telstra Corp to $4.40 from $4.35 after the telco agreed to acquire Digicel Pacific in partnership with the Australian government. Payback on the original -US1.6bn investment has been guaranteed over a six year period.

While the analyst sees some risk that near-term capex for Digicel Pacific may trend higher than the stated target, in general there's considered a significant level of protection for Telstra.

Target price is $4.40 Current Price is $3.81 Difference: $0.59
If TLS meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $4.43, suggesting upside of 16.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Morgans rates TLS as Add (1) -

Telstra's announced acquisition of PNG mobile operator Digicel has not surprised Morgans, but the structure is "smarter" than the broker anticipated. The federal government will effectively guarantee payback on Telstra's $270m equity contribution for six years.

Only after that do payments to the givernnment kick in, and Telstra will do nothing more operationally than sit on the board. The broker forecasts 3.5% earnings accretion and around 7% free cash flow accretion over those six years.

Target rises to $4.55 from $4.44, Add retained.

Target price is $4.55 Current Price is $3.81 Difference: $0.74
If TLS meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $4.43, suggesting upside of 16.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Ord Minnett rates TLS as Buy (1) -

Telstra Corp has partnered with the Australian government to acquire Digicel for US$1.6bn with an additional US$250m in contingent performance payments over three years.

Telstra will fund US$1bn to obtain 100% of the ordinary shares in the business. Ord Minnett estimates the transaction will be up to 4% accretive to earnings per share.

Digicel is a provider of telecommunications across the South Pacific and generates annual EBITDA of US$233m. Buy rating maintained. Target rises to $4.70 from $4.60.

Target price is $4.70 Current Price is $3.81 Difference: $0.89
If TLS meets the Ord Minnett target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $4.43, suggesting upside of 16.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

UBS rates TLS as Neutral (3) -

Telstra Corp will acquire the Digicel business in the South Pacific for US$1.6bn. The company will contribute US$270m for the ordinary equity, with the Australian government contributing US$1.33bn through a combination of US debt and securities.

Telstra will be entitled to a preferred return of US$45m/year for the first six months before priority is given to senior debt repayment.

UBS considers the transaction, to be completed in 3-6 months, relatively small for Telstra yet, as it exceeds all the company's M&A criteria, is more accretive than a share buyback.

Neutral and $4.00 target retained.

Target price is $4.00 Current Price is $3.81 Difference: $0.19
If TLS meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $4.43, suggesting upside of 16.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Credit Suisse rates VEA as Outperform (1) -

Viva Energy Group's Q3 update was weaker than Credit Suisse expected, largely due to lower volumes in the Retail and Commercial segments. Moreover there were extra costs from shipping surplus production from the Geelong refinery, explains the analyst.

The broker reduces its 2H forecasts and lowers its target price to $2.58 from $2.66. However, there's considered to be hope in sight from improved domestic travel activity in the December and March quarters, as well as aviation fuel upside.

Target price is $2.58 Current Price is $2.33 Difference: $0.25
If VEA meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $2.55, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates VEA as Outperform (1) -

The September quarter was weaker than Macquarie expected with the impact of lockdowns in evidence across the business. The broker expects a 20% rise in fourth-quarter volumes amid rising demand.

Avviation is expected to experience the largest uptick in consumption of fuel, amid a resumption of international travel in November and progressive opening of state borders. The broker retains its $2.60 target and Outperform rating.

Target price is $2.60 Current Price is $2.33 Difference: $0.27
If VEA meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $2.55, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgan Stanley rates VEA as Overweight (1) -

Viva Energy Group's third quarter Retail and Commercial volumes were approximately 50% of Morgan Stanley's 2H estimates, which implies trading volumes are going well. Particularly as volumes should increase as lock-downs dissipate, notes the analyst.

During the 3Q, the broker notes higher oil prices weighed on retail margins, during a period of lower driving volumes, while refining margins were lower than regional benchmarks, given higher operating costs.

Overweight retained. Target is $2.50. Industry view: Attractive.

Target price is $2.50 Current Price is $2.33 Difference: $0.17
If VEA meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $2.55, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates VEA as Add (1) -

Viva Energy's September quarter retail volumes and margins came in slightly below Morgans' forecast, but it matters not given the December quarter will reflect lockdowns ending in NSW and Victoria, and 55% of the country's population getting back on the road.

Target falls to $2.55 from $2.60, Add retained.

Target price is $2.55 Current Price is $2.33 Difference: $0.22
If VEA meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.55, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

UBS rates VEA as Buy (1) -

UBS found the September quarter update positive, with both retail and commercial volumes ahead of estimates. Commercial volumes were up 11% because of strong demand in all sectors outside of aviation and wholesale.

Operating earnings were below estimates because of lower realised refining margins as Geelong sustained downtime for maintenance of the sulphur removal unit.

UBS maintains a Buy rating, expecting the business will benefit from rising demand for fuel as travel restrictions ease. Target is raised to $2.50 from $2.45.

Target price is $2.50 Current Price is $2.33 Difference: $0.17
If VEA meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $2.55, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates VRT as Outperform (1) -

The Federal Court has allowed the ACCC to temporarily halt the proposed acquisition of Adora Fertiility. Given the uncertainty, Macquarie removes the acquisition from its forecasts for Virtus Health.

The broker is positive about the medium-longer term outlook and considers the valuation undemanding. The ACCC is reviewing the potential competition issues and the court will determine the potential timing of the matter on November 3.

This appears to be the first intervention by the ACCC in relation to an M&A in the IVF market, Macquarie observes, and further detail is anticipated over coming months. Outperform rating maintained. Target is reduced to $7.00 from $7.50.

Target price is $7.00 Current Price is $5.27 Difference: $1.73
If VRT meets the Macquarie target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $7.06, suggesting upside of 38.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Morgans rates WBC as Add (1) -

When Westpac announced a write down of -$1.3bn of notable items in the second half of its FY21, Morgans "conservatively" reduced its final dividend forecast to 30c from 54c on uncertainty as to whether the bank would take notable items into account in its payout.

But given most of the notable items this time are intangible, the broker has decided to return its forecast to 50c, and continues to assume a $5bn off-market buyback. Add and $29.50 target retained. Westpac reports on November 1.

Target price is $29.50 Current Price is $25.71 Difference: $3.79
If WBC meets the Morgans target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $28.37, suggesting upside of 9.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Credit Suisse rates WOW as Underperform (5) -

Credit Suisse downgrades earnings forecasts across the Australian Food Retail sector in anticipation of labour and supply chain costs increasing faster than prices. It's noted that shelf prices appeared to remain in deflation in Q1 of FY22.

For Woolworths, the analyst downgrades FY22 earnings estimates by -6% though sales forecasts are increased. Earnings forecasts for Big W are also lowered in the 1H. Nonetheless, the target price rises to $31.40 from $31.02, due to a smaller share count post buyback.

The Underperform rating is unchanged.

Target price is $31.40 Current Price is $40.79 Difference: minus $9.39 (current price is over target).
If WOW meets the Credit Suisse target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $39.06, suggesting downside of -3.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.1

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

Macquarie rates WPL as Neutral (3) -

Woodside Petroleum's new energy ambitions are increasingly being outlined. The company will develop a commercial-scale liquid hydrogen and ammonia facility in Rockingham, Western Australia, deploying blue & green hydrogen technologies.

Woodside Petroleum has also announced a partnership with Heliogen to develop a 5MW concentrated solar plant in California using the latter's technology. There are also hydrogen projects in Tasmania, South Korea and the joint study being undertaken with Japanese industry operators.

Macquarie expects the developments will enhance the company's investor appeal. Neutral rating and $25.90 target maintained.

Target price is $25.90 Current Price is $24.13 Difference: $1.77
If WPL meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $26.37, suggesting upside of 9.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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