Australian Broker Call

October 06, 2017

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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: 10:10 AM

Your daily news report on the latest recommendation, valuation, forecast and opinion changes.

This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.

For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE

Today's Upgrades and Downgrades
LHC - LIFEHEALTHCARE Downgrade to Neutral from Buy UBS
S32 - SOUTH32 Downgrade to Neutral from Buy UBS
AMP  AMP LIMITED

Insurance

Overnight Price: $4.79

ADDED

Credit Suisse rates AMP as Neutral (3) -

Credit Suisse adjusts earnings forecasts to allow for investment market movements in the September quarter. Overall, the broker decreases 2017 underlying profit forecasts by -0.2% and the outer years by -1-3%.

Reported profit estimates for 2017 are down by -8% because of expected negative investment income experience in the quarter.

Neutral retained. Target is $5.60.

Target price is $5.60 Current Price is $4.79 Difference: $0.81
If AMP meets the Credit Suisse target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $5.56, suggesting upside of 16.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Credit Suisse forecasts a full year FY17 dividend of 29.00 cents and EPS of 32.00 cents.
At the last closing share price the estimated dividend yield is 6.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.97.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 34.2, implying annual growth of N/A.

Current consensus DPS estimate is 29.2, implying a prospective dividend yield of 6.1%.

Current consensus EPS estimate suggests the PER is 14.0.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 29.00 cents and EPS of 34.00 cents.
At the last closing share price the estimated dividend yield is 6.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 35.6, implying annual growth of 4.1%.

Current consensus DPS estimate is 29.5, implying a prospective dividend yield of 6.2%.

Current consensus EPS estimate suggests the PER is 13.5.

Market Sentiment: 0.2

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

ASX  ASX LIMITED

Wealth Management & Investments

Overnight Price: $52.54

ADDED

Ord Minnett rates ASX as Hold (3) -

ASX has released its monthly activity report which has signalled higher capital raisings and volumes for derivatives for the September quarter. Taking this into account Ord Minnett increases FY18 earnings forecasts by 1%.

Hold rating retained. Target is $52.52.

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

Target price is $52.52 Current Price is $52.54 Difference: minus $0.02 (current price is over target).
If ASX 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 $51.32, suggesting downside of -2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 209.00 cents and EPS of 236.00 cents.
At the last closing share price the estimated dividend yield is 3.98%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.26.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 231.4, implying annual growth of 3.1%.

Current consensus DPS estimate is 207.7, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 22.7.

Forecast for FY19:

Ord Minnett forecasts a full year FY19 dividend of 216.00 cents and EPS of 244.00 cents.
At the last closing share price the estimated dividend yield is 4.11%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.53.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 244.4, implying annual growth of 5.6%.

Current consensus DPS estimate is 217.8, implying a prospective dividend yield of 4.2%.

Current consensus EPS estimate suggests the PER is 21.5.

Market Sentiment: -0.5

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

BHP  BHP BILLITON LIMITED

Bulks

Overnight Price: $26.13

UBS rates BHP as Buy (1) -

The company's new balance sheet metric of US$10-15bn of net debt suggests to UBS returns could step up from 2018. The broker anticipates an on-market buyback program at the February result.

Also, the broker canvases the prospect of the sale of US shale interests, which could mean additional returns to shareholders as was the case from Rio Tinto ((RIO)) post the sale of Coal & Allied.

Buy rating retained. Target rises to $30.00 from $29.50.

Target price is $30.00 Current Price is $26.13 Difference: $3.87
If BHP meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $29.14, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 120.72 cents and EPS of 202.07 cents.
At the last closing share price the estimated dividend yield is 4.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.93.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 167.6, implying annual growth of N/A.

Current consensus DPS estimate is 103.2, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 15.6.

Forecast for FY19:

UBS forecasts a full year FY19 dividend of 111.53 cents and EPS of 187.64 cents.
At the last closing share price the estimated dividend yield is 4.27%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.93.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 149.3, implying annual growth of -10.9%.

Current consensus DPS estimate is 94.3, implying a prospective dividend yield of 3.6%.

Current consensus EPS estimate suggests the PER is 17.5.

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

BOQ  BANK OF QUEENSLAND LIMITED

Banks

Overnight Price: $12.88

Morgans rates BOQ as Hold (3) -

Morgans suggests that the credit rating downgrade in May could have resulted in term deposit outflows from depositors that have portfolio allocations based on credit ratings.

The broker believes the bank offered relatively attractive term deposit rates over June July and August for this reason. Net interest margin forecasts are, therefore, reduced slightly.

Target is $12.00. Hold retained.

Target price is $12.00 Current Price is $12.88 Difference: minus $0.88 (current price is over target).
If BOQ meets the Morgans target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.99, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY17:

Morgans forecasts a full year FY17 dividend of 76.00 cents and EPS of 93.00 cents.
At the last closing share price the estimated dividend yield is 5.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 90.3, implying annual growth of 5.1%.

Current consensus DPS estimate is 76.1, implying a prospective dividend yield of 5.9%.

Current consensus EPS estimate suggests the PER is 14.3.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 76.00 cents and EPS of 98.00 cents.
At the last closing share price the estimated dividend yield is 5.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 95.0, implying annual growth of 5.2%.

Current consensus DPS estimate is 76.7, implying a prospective dividend yield of 6.0%.

Current consensus EPS estimate suggests the PER is 13.6.

Market Sentiment: -0.1

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

CAB  CABCHARGE AUSTRALIA LIMITED

Transportation & Logistics

Overnight Price: $1.80

Macquarie rates CAB as Neutral (3) -

Macquarie has updated modelling assumptions for FY18 and reduced forecasts for earnings per share in FY18 and FY19 by -12.8% and -2.0% respectively.

The company is now just a payments and taxi services business and the broker notes there is balance sheet capacity, should there be opportunities in a rapidly evolving industry. 

Underlying business performance supports a Neutral rating and target is reduced to $2.00 from $2.17.

Target price is $2.00 Current Price is $1.80 Difference: $0.2
If CAB meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $2.03, suggesting upside of 12.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 11.10 cents and EPS of 13.90 cents.
At the last closing share price the estimated dividend yield is 6.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.0, implying annual growth of N/A.

Current consensus DPS estimate is 11.1, implying a prospective dividend yield of 6.2%.

Current consensus EPS estimate suggests the PER is 12.9.

Forecast for FY19:

Macquarie forecasts a full year FY19 dividend of 13.30 cents and EPS of 16.60 cents.
At the last closing share price the estimated dividend yield is 7.39%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.3, implying annual growth of 16.4%.

Current consensus DPS estimate is 12.7, implying a prospective dividend yield of 7.1%.

Current consensus EPS estimate suggests the PER is 11.0.

Market Sentiment: 0.0

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

CGC  COSTA GROUP HOLDINGS LIMITED

Agriculture

Overnight Price: $5.46

ADDED

Ord Minnett rates CGC as Hold (3) -

Having viewed the company's citrus assets, Ord Minnett believes management's 10% adjusted net profit growth guidance is likely a little low.

With higher prices and yields likely in citrus this year this segment could be set for strong profit growth and lead to upside to forecasts, in the broker's opinion. The main concern centres on high market expectations around FY18 citrus prices.

Hold maintained. Target is $5.01.

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

Target price is $5.01 Current Price is $5.46 Difference: minus $0.45 (current price is over target).
If CGC meets the Ord Minnett target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 13.00 cents and EPS of 22.00 cents.
At the last closing share price the estimated dividend yield is 2.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.82.

Forecast for FY19:

Ord Minnett forecasts a full year FY19 dividend of 14.00 cents and EPS of 23.00 cents.
At the last closing share price the estimated dividend yield is 2.56%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.74.

Market Sentiment: 0.5

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


UBS rates CGC as Buy (1) -

UBS has learnt that citrus is a key growth driver for the business and it is the least well understood of the five segments that make up the company's operations.

Scale and efficiency have been underestimated and the broker expects double-digit growth in FY18.

UBS is mmore confident in its medium-term forecasts and retains a Buy rating. Target is $5.70.

Target price is $5.70 Current Price is $5.46 Difference: $0.24
If CGC meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 12.00 cents and EPS of 22.00 cents.
At the last closing share price the estimated dividend yield is 2.20%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.82.

Forecast for FY19:

UBS forecasts a full year FY19 dividend of 15.00 cents and EPS of 27.00 cents.
At the last closing share price the estimated dividend yield is 2.75%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.22.

Market Sentiment: 0.5

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

CGF  CHALLENGER LIMITED

Wealth Management & Investments

Overnight Price: $12.10

ADDED

Credit Suisse rates CGF as Neutral (3) -

Credit Suisse adjusts earnings forecasts to allow for investment market movements in the September quarter.

The broker reduces FY18 net profit estimates by -2.7% as a result of investment market experience in the quarter.

Outperform. Target is $12.70.

Target price is $12.70 Current Price is $12.10 Difference: $0.6
If CGF meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $11.98, suggesting downside of -1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 34.00 cents and EPS of 68.00 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 17.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 66.7, implying annual growth of -5.7%.

Current consensus DPS estimate is 35.4, implying a prospective dividend yield of 2.9%.

Current consensus EPS estimate suggests the PER is 18.1.

Forecast for FY19:

Credit Suisse forecasts a full year FY19 dividend of 37.00 cents and EPS of 72.00 cents.
At the last closing share price the estimated dividend yield is 3.06%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.81.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 72.5, implying annual growth of 8.7%.

Current consensus DPS estimate is 37.9, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 16.7.

Market Sentiment: -0.1

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

DXS  DEXUS PROPERTY GROUP

REITs

Overnight Price: $9.36

Macquarie rates DXS as Outperform (1) -

Earnings growth is being adversely affected by dilutive asset sales and a reduced trading profit contribution, Macquarie observes.

Yet there are options with a relatively under-geared balance sheet and a healthcare real estate mandate that could be aggressively pursued.

Accordingly, the broker envisages upside risks to earnings estimates and, after attending a property tour in Sydney, finds the fundamentals of both the Sydney and office markets remains sound.

Outperform retained. Target is $10.21.

Target price is $10.21 Current Price is $9.36 Difference: $0.855
If DXS meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $9.46, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 48.00 cents and EPS of 53.70 cents.
At the last closing share price the estimated dividend yield is 5.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.42.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 58.2, implying annual growth of -55.4%.

Current consensus DPS estimate is 47.3, implying a prospective dividend yield of 5.1%.

Current consensus EPS estimate suggests the PER is 16.0.

Forecast for FY19:

Macquarie forecasts a full year FY19 dividend of 48.10 cents and EPS of 53.00 cents.
At the last closing share price the estimated dividend yield is 5.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.65.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 58.3, implying annual growth of 0.2%.

Current consensus DPS estimate is 48.2, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 16.0.

Market Sentiment: 0.0

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

GXY  GALAXY RESOURCES LIMITED

Rare Earth & Minerals

Overnight Price: $3.05

UBS rates GXY as Neutral (3) -

UBS expects the market to remain tight until at least 2020, with limited fully-funded lithium mining projects in the pipeline and growing demand for battery and energy storage applications.

The company has now exhausted legacy contracts and delivering into 2017 contracts while currently negotiating for 2018, which the broker believes may be a multi-year in nature in terms of volume and price.

Neutral retained. Target is raised to $3.20 from $1.95.

Target price is $3.20 Current Price is $3.05 Difference: $0.15
If GXY meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $2.75, suggesting downside of -10.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 0.00 cents and EPS of 5.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 61.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.3, implying annual growth of -84.8%.

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

Current consensus EPS estimate suggests the PER is 48.6.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 0.00 cents and EPS of 20.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.25.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.4, implying annual growth of 303.2%.

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

Current consensus EPS estimate suggests the PER is 12.0.

Market Sentiment: 0.8

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

IGO  INDEPENDENCE GROUP NL

Nickel

Overnight Price: $3.70

UBS rates IGO as Neutral (3) -

UBS rejigs its nickel price forecast for 2020, lifting it by 20%. This move factors in an expected step change in demand from electric vehicles.

The broker continues to envisage near-mine extensions and regional exploration as key to the strategic options for Nova.

 Neutral  rating retained. Target rises to $3.75 from $3.35.

Target price is $3.75 Current Price is $3.70 Difference: $0.05
If IGO meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.59, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 7.00 cents and EPS of 23.00 cents.
At the last closing share price the estimated dividend yield is 1.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.2, implying annual growth of 760.1%.

Current consensus DPS estimate is 7.6, implying a prospective dividend yield of 2.1%.

Current consensus EPS estimate suggests the PER is 14.7.

Forecast for FY19:

UBS forecasts a full year FY19 dividend of 11.00 cents and EPS of 37.00 cents.
At the last closing share price the estimated dividend yield is 2.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 34.3, implying annual growth of 36.1%.

Current consensus DPS estimate is 11.5, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 10.8.

Market Sentiment: 0.2

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

LHC  LIFEHEALTHCARE GROUP LIMITED

Medical Equipment & Devices

Overnight Price: $2.32

UBS rates LHC as Downgrade to Neutral from Buy (3) -

UBS downgrades the stock to Neutral from Buy ahead of an expected announcement of -10-15% reductions to the prosthesis list prices.

The company's exposure to prosthesis is around 35% of revenue. At this stage the broker does not adjust the earnings outlook as it lacks clarity on the magnitude and timing of the cuts. Target is reduced to $2.30 from $2.75.

Target price is $2.30 Current Price is $2.32 Difference: minus $0.02 (current price is over target).
If LHC meets the UBS target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 14.00 cents and EPS of 20.00 cents.
At the last closing share price the estimated dividend yield is 6.03%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.60.

Forecast for FY19:

UBS forecasts a full year FY19 dividend of 15.00 cents and EPS of 21.00 cents.
At the last closing share price the estimated dividend yield is 6.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.05.

Market Sentiment: 0.0

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

OML  OOH!MEDIA LIMITED

Out of Home Advertising

Overnight Price: $4.28

Macquarie rates OML as Outperform (1) -

Macquarie observes September quarter revenues grew strongly, up 7.2%. Improving trends are noted in large format and retail/other which points to solid momentum for the December quarter.

The broker believes the recent sell-off presents a good entry point for investors. Target is $4.90. Outperform reiterated.

Target price is $4.90 Current Price is $4.28 Difference: $0.62
If OML meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $4.90, suggesting upside of 14.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 15.90 cents and EPS of 28.10 cents.
At the last closing share price the estimated dividend yield is 3.71%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.23.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.4, implying annual growth of 81.4%.

Current consensus DPS estimate is 15.2, implying a prospective dividend yield of 3.6%.

Current consensus EPS estimate suggests the PER is 16.9.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 16.40 cents and EPS of 29.10 cents.
At the last closing share price the estimated dividend yield is 3.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.7, implying annual growth of 9.1%.

Current consensus DPS estimate is 16.6, implying a prospective dividend yield of 3.9%.

Current consensus EPS estimate suggests the PER is 15.5.

Market Sentiment: 0.9

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

S32  SOUTH32 LIMITED

Mining

Overnight Price: $3.29

UBS rates S32 as Downgrade to Neutral from Buy (3) -

UBS believes the stock has run too hard for now and aluminium/alumina, metallurgical coal and manganese remain vulnerable to the correction seen in copper and iron ore.

The broker downgrades to Neutral from Buy. Target is raised to $3.25 from $3.00.

The stock is appreciated for its cash balance sheet and 20% free cash flow yield at spot prices but UBS would have liked to see more cash returns to shareholders, and remains concerns about operations at Illawarra and Cannington.

Target price is $3.25 Current Price is $3.29 Difference: minus $0.04 (current price is over target).
If S32 meets the UBS target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.15, suggesting downside of -4.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 15.75 cents and EPS of 31.49 cents.
At the last closing share price the estimated dividend yield is 4.79%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.45.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 22.1, implying annual growth of N/A.

Current consensus DPS estimate is 11.1, implying a prospective dividend yield of 3.4%.

Current consensus EPS estimate suggests the PER is 14.8.

Forecast for FY19:

UBS forecasts a full year FY19 dividend of 15.75 cents and EPS of 31.49 cents.
At the last closing share price the estimated dividend yield is 4.79%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.45.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.5, implying annual growth of -2.7%.

Current consensus DPS estimate is 11.7, implying a prospective dividend yield of 3.6%.

Current consensus EPS estimate suggests the PER is 15.3.

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

SUN  SUNCORP GROUP LIMITED

Banks

Overnight Price: $13.21

ADDED

Credit Suisse rates SUN as Neutral (3) -

There were no major events for the company in the September quarter and Credit Suisse assumes total weather-related claims are in line with guidance of $346m for the first half.

The broker makes minor adjustments to earnings forecasts of -0.6% for FY18 to allow for investment market movements.

Neutral rating and $14.50 target maintained.

Target price is $14.50 Current Price is $13.21 Difference: $1.29
If SUN meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $13.90, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 73.00 cents and EPS of 88.00 cents.
At the last closing share price the estimated dividend yield is 5.53%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.01.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 86.9, implying annual growth of 3.6%.

Current consensus DPS estimate is 74.2, implying a prospective dividend yield of 5.6%.

Current consensus EPS estimate suggests the PER is 15.2.

Forecast for FY19:

Credit Suisse forecasts a full year FY19 dividend of 75.00 cents and EPS of 99.00 cents.
At the last closing share price the estimated dividend yield is 5.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.34.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 96.3, implying annual growth of 10.8%.

Current consensus DPS estimate is 75.6, implying a prospective dividend yield of 5.7%.

Current consensus EPS estimate suggests the PER is 13.7.

Market Sentiment: 0.2

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

Summaries
AMP - AMP Neutral - Credit Suisse Overnight Price $4.79
ASX - ASX Hold - Ord Minnett Overnight Price $52.54
BHP - BHP BILLITON Buy - UBS Overnight Price $26.13
BOQ - BANK OF QUEENSLAND Hold - Morgans Overnight Price $12.88
CAB - CABCHARGE AUSTRALIA Neutral - Macquarie Overnight Price $1.80
CGC - COSTA GROUP Hold - Ord Minnett Overnight Price $5.46
Buy - UBS Overnight Price $5.46
CGF - CHALLENGER Neutral - Credit Suisse Overnight Price $12.10
DXS - DEXUS PROPERTY Outperform - Macquarie Overnight Price $9.36
GXY - GALAXY RESOURCES Neutral - UBS Overnight Price $3.05
IGO - INDEPENDENCE GROUP Neutral - UBS Overnight Price $3.70
LHC - LIFEHEALTHCARE Downgrade to Neutral from Buy - UBS Overnight Price $2.32
OML - OOH!MEDIA Outperform - Macquarie Overnight Price $4.28
S32 - SOUTH32 Downgrade to Neutral from Buy - UBS Overnight Price $3.29
SUN - SUNCORP Neutral - Credit Suisse Overnight Price $13.21
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

4

3. Hold

11

Friday 06 October 2017

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