Australian Broker Call

Ord Minnett rates AMC as Accumulate (2) -

Anti-plastic sentiment has intensified recently among consumers and at first glance this appears to be a headwind for Amcor volumes. The two threats observed are the switching to alternative materials for plastic and reduction in the overall consumption of packaging.

However, Ord Minnett believes the company is relatively insulated from the threats and well-positioned to help customers achieve sustainability goals. Accumulate rating and $16 target maintained.

Target price is $16.00 Current Price is $15.74 Difference: $0.26
If AMC meets the Ord Minnett target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $16.00, suggesting upside of 1.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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

Morgans rates GNX as Add (1) -

The company has reached financial close on the 50MW Jemalong solar project, expected to be brought online in the second quarter of FY21.

Finance from the existing Kidston Solar stage 1 project is being refinanced into a new facility that will also fund Jemalong.

The broker retains Speculative Buy (Add). Target is steady at $0.25.

Target price is $0.25 Current Price is $0.22 Difference: $0.03
If GNX meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Citi rates LLC as Buy (1) -

Lendlease has an agreement with Acciona for the purchase of its engineering business for $180m, less selling costs and working capital adjustments.

Two of the three projects which led to provisions being made in late 2018, NorthConnex and Kingsford Smith Drive, are excluded from the deal. Melbourne metro is currently excluded but subject to negotiation.

Citi assesses this reflects the first step in the process of exiting the engineering business.

The broker is confident there is potential for a multi-year re-rating as the business model evolves to a global real estate developer and fund manager. Buy rating and $24.72 target maintained.

Target price is $24.72 Current Price is $17.98 Difference: $6.74
If LLC meets the Citi target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $21.27, suggesting upside of 18.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Ord Minnett rates LLC as Buy (1) -

Lendlease has agreed to sell its engineering business to Acciona for $180m and will recognise a negative balance sheet adjustment of -$450m. The costs of transactions are in line with what Ord Minnett considers is an orderly wind-down.

The broker considers the sale an acceptable result although notes the purchaser has extracted maximum value. Buy rating and $22.50 target maintained.

Target price is $22.50 Current Price is $17.98 Difference: $4.52
If LLC meets the Ord Minnett target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $21.27, suggesting upside of 18.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

UBS rates LLC as Neutral (3) -

Lendlease has sold its engineering business to Acciona for $180m, excluding the NorthConnex, Kingsford Smith Drive and Melbourne metro projects. The price is below UBS estimates and, importantly, excludes certain known problem projects.

The sale of the remaining services segment is not likely to present a major risk, in the broker's view, with a sale expected to achieve a reasonable price. Neutral rating and $17.50 target maintained.

Target price is $17.50 Current Price is $17.98 Difference: minus $0.48 (current price is over target).
If LLC meets the UBS target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $21.27, suggesting upside of 18.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Morgans rates MX1 as Add (1) -

The company has completed a $16.5m capital raising that will fund the commercialisation of the Nano into the healthcare market. The $10m Thales convertible loan has also been varied, whereby conversion will require shareholder approval.

Catalysts, Morgans notes, include growing sales of the Nano into the hospital market and approval in the US of the first-generation version of the Rover for military use.

Speculative Buy (Add) maintained. Target is reduced to $0.41 from $0.45.

Target price is $0.41 Current Price is $0.20 Difference: $0.21
If MX1 meets the Morgans target it will return approximately 105% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

UBS rates PPH as Buy (1) -

UBS observes the company has outperformed the market by 20% over the last month because of improved operating leverage, double-digit back book growth and the acquisition of Church Community Builder.

Forecasts are upgraded to reflect higher payment margins and revenue synergies. FY21 and FY22 operating earnings estimates are increased by 30% and 31% respectively.

UBS maintains a Buy rating and raises the target to NZ$4.60 from NZ$3.75.

Current Price is $3.92. Target price not assessed.

Current consensus price target is $2.72, suggesting downside of -30.6% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.3

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

Morgan Stanley rates QBE as Overweight (1) -

Morgan Stanley reviews its assessment of the risk/reward after the company's operating update. Cash net profit estimates are reduced by -14% and -5% for 2019 and 2020 respectively.

The broker assumes a 96.5% underlying Combined Operating Ratio for 2019 and 93.5% for 2020. Overweight rating maintained. Target is reduced to $13.90 from $14.00. Industry view is In-Line.

Target price is $13.90 Current Price is $13.10 Difference: $0.8
If QBE meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $13.14, suggesting upside of 0.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.4

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