Australian Broker Call
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March 19, 2018
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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: 11:21 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
| BXB - | BRAMBLES | Upgrade to Outperform from Neutral | Credit Suisse |
| PMV - | PREMIER INVESTMENTS | Downgrade to Neutral from Buy | Citi |
Overnight Price: $9.85
Credit Suisse rates BXB as Upgrade to Outperform from Neutral (1) -
The company has offered a detailed plan for turning around the performance of the US business, improving cash conversion and offsetting cost inflation.
Credit Suisse is now more confident significant improvement can be delivered over the next 2-3 years and expects the technology investment will strengthen the network advantage.
Rating is upgraded to Outperform from Neutral. Target is raised to $10.40 from $9.40.
Target price is $10.40 Current Price is $9.85 Difference: $0.55
If BXB meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $10.45, suggesting upside of 6.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 37.49 cents and EPS of 52.74 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 56.2, implying annual growth of N/A. Current consensus DPS estimate is 32.4, implying a prospective dividend yield of 3.3%. Current consensus EPS estimate suggests the PER is 17.5. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 39.43 cents and EPS of 56.36 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 56.6, implying annual growth of 0.7%. Current consensus DPS estimate is 33.2, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 17.4. |
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
CAB CABCHARGE AUSTRALIA LIMITED
Transportation & Logistics
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Overnight Price: $1.72
UBS rates CAB as Neutral (3) -
UBS observes more positive momentum in the business and, while a continuation is required, notes the taxi share loss is not accelerating. Uber's dominance in app downloads continues but at a decelerating rate, the broker's research suggests.
UBS will assess the impact of new competitors before altering its view but there are first signs that Uber's share is potentially stabilising. Neutral rating maintained. Target is reduced to $1.65 from $1.85.
Target price is $1.65 Current Price is $1.72 Difference: minus $0.07 (current price is over target).
If CAB meets the UBS target it will return approximately minus 4% (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 8.00 cents and EPS of 12.00 cents. |
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 9.00 cents and EPS of 14.00 cents. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
DMP DOMINO'S PIZZA ENTERPRISES LIMITED
Food, Beverages & Tobacco
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Overnight Price: $43.36
UBS rates DMP as Buy (1) -
Risks may have increased with the advent of aggregators but UBS research suggests this has been more than priced into Domino's Pizza. The broker has increased confidence in a 9% per annum three-year growth rate for Australasian network sales.
The broker's research concludes that online delivery will grow at around 18% compound per annum and aggregators will grow to around 53% of online delivery in three years. Nevertheless, they will have a finite customer base, given they only compete across 10% of the market.
Buy rating and $57.50 target maintained.
Target price is $57.50 Current Price is $43.36 Difference: $14.14
If DMP meets the UBS target it will return approximately 33% (excluding dividends, fees and charges).
Current consensus price target is $47.81, suggesting upside of 10.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 121.40 cents and EPS of 156.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 155.8, implying annual growth of 34.3%. Current consensus DPS estimate is 116.4, implying a prospective dividend yield of 2.7%. Current consensus EPS estimate suggests the PER is 27.8. |
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 152.60 cents and EPS of 196.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 191.5, implying annual growth of 22.9%. Current consensus DPS estimate is 141.8, implying a prospective dividend yield of 3.3%. Current consensus EPS estimate suggests the PER is 22.6. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
LLC LEND LEASE CORPORATION LIMITED
Infra & Property Developers
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Overnight Price: $17.81
Citi rates LLC as Buy (1) -
Citi suggests Lend Lease may be watching the planned spin-off of Coles ((WES)) with interest. The broker believes Lend Lease could also unlock value via an in specie distribution of its engineering division, as the market is likely to place a higher multiple on the stock without this business.
Citi believes a spin-off of the Lend Lease engineering business could occur by FY20, once underperforming projects have been completed. Buy rating and $19 target retained.
Target price is $19.00 Current Price is $17.81 Difference: $1.19
If LLC meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $18.35, suggesting upside of 3.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 65.30 cents and EPS of 130.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 141.2, implying annual growth of 8.5%. Current consensus DPS estimate is 66.0, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 12.6. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 76.00 cents and EPS of 151.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 146.4, implying annual growth of 3.7%. Current consensus DPS estimate is 73.1, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 12.2. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
PMV PREMIER INVESTMENTS LIMITED
Apparel & Footwear
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Overnight Price: $15.12
Citi rates PMV as Downgrade to Neutral from Buy (3) -
Citi notes a large acceleration in online business during the first half. Bricks and mortar sales declined by -0.8% while online grew 72%. Citi forecasts a decline in second half gross margins of -43 basis points, softer than the first half decline of -87 basis points.
Meanwhile, inventory is expected to be in a good position and year-on-year discounting should not increase as much.
Rating is downgraded to Neutral from Buy, given the increase in the share price over the past four months. Target is raised to $16.40 from $15.30.
Target price is $16.40 Current Price is $15.12 Difference: $1.28
If PMV meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $15.70, suggesting upside of 3.8% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 57.00 cents and EPS of 71.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 75.3, implying annual growth of 12.8%. Current consensus DPS estimate is 58.4, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 20.1. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 63.00 cents and EPS of 83.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 86.6, implying annual growth of 15.0%. Current consensus DPS estimate is 65.4, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 17.5. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates PMV as Neutral (3) -
While the difficulties in the retail environment in Australia were reflected in an 80 basis points fall in reported gross margin in the first half, Credit Suisse observes the company navigates well through a highly competitive clothing market.
Smiggle continues to deliver strong like-for-like sales growth in Australasia and commentary on Singapore and Malaysia also appeared strong. Online is also growing more strongly than the broker expected. Neutral rating and $15.28 target maintained.
Target price is $15.28 Current Price is $15.12 Difference: $0.16
If PMV meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $15.70, suggesting upside of 3.8% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 58.28 cents and EPS of 74.72 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 75.3, implying annual growth of 12.8%. Current consensus DPS estimate is 58.4, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 20.1. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 65.25 cents and EPS of 84.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 86.6, implying annual growth of 15.0%. Current consensus DPS estimate is 65.4, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 17.5. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates PMV as Buy (1) -
First half results highlight the company's resilience in a weak apparel market, Deutsche Bank believes. This largely reflects the growing contribution of Smiggle.
Smiggle and Peter Alexander are the highest margin, highest growth brands and now account for 45% of Premier Investments' retail sales. Deutsche Bank maintains a Buy rating and raises the target to $16.70 from $14.80.
Target price is $16.70 Current Price is $15.12 Difference: $1.58
If PMV meets the Deutsche Bank target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $15.70, suggesting upside of 3.8% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 59.00 cents and EPS of 78.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 75.3, implying annual growth of 12.8%. Current consensus DPS estimate is 58.4, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 20.1. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 66.00 cents and EPS of 92.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 86.6, implying annual growth of 15.0%. Current consensus DPS estimate is 65.4, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 17.5. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates PMV as Equal-weight (3) -
First half results were roughly in line with Morgan Stanley. Gross margin was lower than expected because of intense competition.
Management has witnessed a strong start to 2018 but notes the second half is reliant on a good fourth quarter which includes winter and Mother's Day. Morgan Stanley notes costs will be higher in the second half.
Equal-weight rating, In-Line industry view retained. Target is $13.20.
Target price is $13.20 Current Price is $15.12 Difference: minus $1.92 (current price is over target).
If PMV meets the Morgan Stanley target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $15.70, suggesting upside of 3.8% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 58.80 cents and EPS of 78.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 75.3, implying annual growth of 12.8%. Current consensus DPS estimate is 58.4, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 20.1. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 64.10 cents and EPS of 85.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 86.6, implying annual growth of 15.0%. Current consensus DPS estimate is 65.4, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 17.5. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
PRY PRIMARY HEALTH CARE LIMITED
Healthcare services
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Overnight Price: $3.80
Citi rates PRY as Sell (5) -
Citi suggests new enterprise bargaining agreements in Victoria could provide a headwind for the company's net profit in FY19 of circa -1-8%.
The broker estimates around 5% of the company's total labour cost could be affected by the new agreement. However, given the uncertainty of arbitration, Citi does not include any pay rise in its numbers. Sell rating and $3.25 target maintained.
Target price is $3.25 Current Price is $3.80 Difference: minus $0.55 (current price is over target).
If PRY meets the Citi target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $3.56, suggesting downside of -6.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 10.90 cents and EPS of 18.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.2, implying annual growth of N/A. Current consensus DPS estimate is 11.2, implying a prospective dividend yield of 2.9%. Current consensus EPS estimate suggests the PER is 22.1. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 12.00 cents and EPS of 19.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 18.7, implying annual growth of 8.7%. Current consensus DPS estimate is 12.1, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 20.3. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $2.03
Deutsche Bank rates VVR as Buy (1) -
Deutsche Bank believes Wesfarmers' ((WES)) decision to de-merge Coles into a separate entity will have limited implications for Viva Energy.
Wesfarmers management expects no material changes to current lease contracts and the agreement between Viva Energy and Coles Express does not expire until 2024. Buy rating and $2.55 target maintained.
Target price is $2.55 Current Price is $2.03 Difference: $0.52
If VVR meets the Deutsche Bank target it will return approximately 26% (excluding dividends, fees and charges).
Current consensus price target is $2.43, suggesting upside of 19.5% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 14.00 cents and EPS of 14.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.0, implying annual growth of -41.2%. Current consensus DPS estimate is 14.0, implying a prospective dividend yield of 6.9%. Current consensus EPS estimate suggests the PER is 14.5. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 14.00 cents and EPS of 14.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.5, implying annual growth of 3.6%. Current consensus DPS estimate is 14.3, implying a prospective dividend yield of 7.0%. Current consensus EPS estimate suggests the PER is 14.0. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.38
Macquarie rates WAF as Outperform (1) -
First half results were in line with expectations. Macquarie expects a strong resource upgrade this year and success at Sanbrado increases the prospect for consolidation by other West African producers.
An updated feasibility study is expected mid year which should include a high-grade underground base case at the M1S deposit. Outperform and 50c target maintained.
Target price is $0.50 Current Price is $0.38 Difference: $0.12
If WAF meets the Macquarie target it will return approximately 32% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 2.60 cents. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 0.60 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $43.22
Credit Suisse rates WES as Outperform (1) -
The company proposes to de-merge Coles which, on first glance, appears unambiguously positive to Credit Suisse. The broker suggests Coles would emerge as a high cash generating and attractive standalone supermarket. The broker estimates Coles is valued at between $17-18bn.
Outperform rating and $44.98 target maintained. The broker also suggests the defensive rationale for the ownership of Kmart and Target would disappear with the de-merger, expanding opportunities for the ownership of department stores.
Target price is $44.98 Current Price is $43.22 Difference: $1.76
If WES meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $43.06, suggesting downside of -0.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 195.00 cents and EPS of 250.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 231.7, implying annual growth of -9.0%. Current consensus DPS estimate is 216.6, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 18.7. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 175.00 cents and EPS of 244.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 250.9, implying annual growth of 8.3%. Current consensus DPS estimate is 219.0, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 17.2. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates WES as Hold (3) -
The company has announced an intention to de-merge the Coles business, subject to shareholder approval and not expected to be completed until FY19.
Deutsche Bank makes no changes to estimates but considers this active approach to portfolio management a positive signal. A renewed Wesfarmers will offer higher growth and returns and have greater options for acquisitions.
Hold rating and $40 target maintained.
Target price is $40.00 Current Price is $43.22 Difference: minus $3.22 (current price is over target).
If WES meets the Deutsche Bank target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $43.06, suggesting downside of -0.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 223.00 cents and EPS of 247.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 231.7, implying annual growth of -9.0%. Current consensus DPS estimate is 216.6, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 18.7. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 225.00 cents and EPS of 252.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 250.9, implying annual growth of 8.3%. Current consensus DPS estimate is 219.0, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 17.2. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates WES as Outperform (1) -
The company intends to de-merge Coles into a separate listing on the ASX and retain higher-growth businesses. Macquarie is pleased the company is seeking to release hidden value.
While highly uncertain, the broker believes a Wesfarmers ex Coles will be an attractive business for investors. With a smaller profit base for each business, the broker also believes strategic initiatives will be more material to earnings, which is a positive.
Outperform rating maintained. Target is $50.03.
Target price is $50.03 Current Price is $43.22 Difference: $6.81
If WES meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $43.06, suggesting downside of -0.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 215.70 cents and EPS of 249.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 231.7, implying annual growth of -9.0%. Current consensus DPS estimate is 216.6, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 18.7. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 243.20 cents and EPS of 270.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 250.9, implying annual growth of 8.3%. Current consensus DPS estimate is 219.0, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 17.2. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates WES as Underweight (5) -
The company's intention to de-merge Coles is a sign it wishes to re-shape the portfolio towards higher-growth non-retail businesses, Morgan Stanley believes. This is also a sign, in the broker's opinion, that the turnaround of Coles is finished.
Morgan Stanley does not believe a separate Coles will drive accountability or performance, and incremental costs of $10-20m should be expected as Coles operates as a separate entity.
Underweight rating retained. Industry view is Cautious. Target is $40.
Target price is $40.00 Current Price is $43.22 Difference: minus $3.22 (current price is over target).
If WES meets the Morgan Stanley target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $43.06, suggesting downside of -0.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 208.00 cents and EPS of 248.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 231.7, implying annual growth of -9.0%. Current consensus DPS estimate is 216.6, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 18.7. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 217.00 cents and EPS of 255.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 250.9, implying annual growth of 8.3%. Current consensus DPS estimate is 219.0, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 17.2. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates WES as Hold (3) -
Morgans believes a de-merger of Coles makes sense, given the long-term structural headwinds for the supermarket sector. This also frees up Wesfarmers' capacity to invest in higher-returning businesses and/or pursue acquisitions. Hold maintained.
Morgans believes a greater focus on existing businesses should lead to improved growth prospects and increases the target to $44.65 from $41.18, based on a rolling forward of valuation to FY19 earnings forecasts as well as higher multiples for home improvement and Officeworks.
Target price is $44.65 Current Price is $43.22 Difference: $1.43
If WES meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $43.06, suggesting downside of -0.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 223.00 cents and EPS of 241.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 231.7, implying annual growth of -9.0%. Current consensus DPS estimate is 216.6, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 18.7. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 230.00 cents and EPS of 251.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 250.9, implying annual growth of 8.3%. Current consensus DPS estimate is 219.0, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 17.2. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates WES as Hold (3) -
The company intends to spin off Coles to focus on growth opportunities in the remaining businesses. Ord Minnett considers this a positive which should provide a catalyst for the Wesfarmers share price performance.
Under the new leadership of current Metcash ((MTS)) supermarket CEO, Steven Cain, Ord Minnett believes Coles could leverage the undemanding comparable numbers and margins to drive performance.
Hold rating. Target raised to $42.50 from $40.00.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $42.50 Current Price is $43.22 Difference: minus $0.72 (current price is over target).
If WES meets the Ord Minnett target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $43.06, suggesting downside of -0.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 225.00 cents and EPS of 121.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 231.7, implying annual growth of -9.0%. Current consensus DPS estimate is 216.6, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 18.7. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 225.00 cents and EPS of 241.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 250.9, implying annual growth of 8.3%. Current consensus DPS estimate is 219.0, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 17.2. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $26.54
Deutsche Bank rates WOW as Buy (1) -
Deutsche Bank believes news that Wesfarmers ((WES)) intends to de-merge the Coles business is good for Woolworths.
While believing Coles may be more successful as a stand-alone entity, the broker suggests the disruption from management changes and the de-merger process may enable Woolworths to extend its leadership and sales growth.
Buy rating and $30 target maintained.
Target price is $30.00 Current Price is $26.54 Difference: $3.46
If WOW meets the Deutsche Bank target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $26.93, suggesting upside of 1.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 98.00 cents and EPS of 124.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 125.4, implying annual growth of 5.0%. Current consensus DPS estimate is 91.1, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 21.2. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 109.00 cents and EPS of 139.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 137.8, implying annual growth of 9.9%. Current consensus DPS estimate is 99.7, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 19.3. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| BXB | BRAMBLES | Upgrade to Outperform from Neutral - Credit Suisse | Overnight Price $9.85 |
| CAB | CABCHARGE AUSTRALIA | Neutral - UBS | Overnight Price $1.72 |
| DMP | DOMINO'S PIZZA | Buy - UBS | Overnight Price $43.36 |
| LLC | LEND LEASE CORP | Buy - Citi | Overnight Price $17.81 |
| PMV | PREMIER INVESTMENTS | Downgrade to Neutral from Buy - Citi | Overnight Price $15.12 |
| Neutral - Credit Suisse | Overnight Price $15.12 | ||
| Buy - Deutsche Bank | Overnight Price $15.12 | ||
| Equal-weight - Morgan Stanley | Overnight Price $15.12 | ||
| PRY | PRIMARY HEALTH CARE | Sell - Citi | Overnight Price $3.80 |
| VVR | VIVA ENERGY REIT | Buy - Deutsche Bank | Overnight Price $2.03 |
| WAF | WEST AFRICAN RESOURCES | Outperform - Macquarie | Overnight Price $0.38 |
| WES | WESFARMERS | Outperform - Credit Suisse | Overnight Price $43.22 |
| Hold - Deutsche Bank | Overnight Price $43.22 | ||
| Outperform - Macquarie | Overnight Price $43.22 | ||
| Underweight - Morgan Stanley | Overnight Price $43.22 | ||
| Hold - Morgans | Overnight Price $43.22 | ||
| Hold - Ord Minnett | Overnight Price $43.22 | ||
| WOW | WOOLWORTHS | Buy - Deutsche Bank | Overnight Price $26.54 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 9 |
| 3. Hold | 7 |
| 5. Sell | 2 |
Monday 19 March 2018
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