Australian Broker Call

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July 01, 2020

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COMPANIES DISCUSSED IN THIS ISSUE

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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1).

Last Updated: 05:00 PM

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

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

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

Today's Upgrades and Downgrades
WHC - Whitehaven Coal Upgrade to Buy from Neutral Citi
AMC  AMCOR LIMITED

Paper & Packaging

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Overnight Price: $14.48

Macquarie rates AMC as Outperform (1) -

Macquarie suspects Amcor may be one of the few companies that will provide quantitative guidance for FY21.

FY20 earnings guidance has been maintained throughout the pandemic.

Earnings growth is expected to be 11-12% in FY20 amid a shift to home consumption and greater focus on hygiene, which is positive for packaged goods.

Macquarie retains an Outperform rating and $16.98 target.

Target price is $16.98 Current Price is $14.48 Difference: $2.5
If AMC meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $16.29, suggesting upside of 11.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Macquarie forecasts a full year FY20 dividend of 68.94 cents and EPS of 93.81 cents.
At the last closing share price the estimated dividend yield is 4.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.44.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 94.8, implying annual growth of N/A.

Current consensus DPS estimate is 69.6, implying a prospective dividend yield of 4.8%.

Current consensus EPS estimate suggests the PER is 15.4.

Forecast for FY21:

Macquarie forecasts a full year FY21 dividend of 70.88 cents and EPS of 101.40 cents.
At the last closing share price the estimated dividend yield is 4.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.28.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 101.0, implying annual growth of 6.5%.

Current consensus DPS estimate is 72.9, implying a prospective dividend yield of 5.0%.

Current consensus EPS estimate suggests the PER is 14.5.

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

CKF  COLLINS FOODS LIMITED

Food, Beverages & Tobacco

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Overnight Price: $9.42

Morgans rates CKF as Add (1) -

Collins Foods’ FY20 result beat expectations by about 6%, despite the pandemic which, as per Morgans, shows resilience.

The broker notes growth in all brands in the first seven weeks of the first half of FY21, with KFC Australia’s same-store sales (SSS) growing 11.6% while Taco Bell has almost reached pre-covid levels. KFC Europe recorded negative SSS growth.

Morgans expects the company to focus on the higher returning KFC Australia segment and approves of this strategy.

FY21 operating income is forecasted at $129m with earnings growing by circa 3-5% across FY21-23.

Morgans maintains its Add rating with the target price increasing to $10.23 from $8.17.

Target price is $10.23 Current Price is $9.42 Difference: $0.81
If CKF meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in May.

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 22.00 cents and EPS of 44.00 cents.
At the last closing share price the estimated dividend yield is 2.34%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.41.

Forecast for FY22:

Morgans forecasts a full year FY22 dividend of 25.00 cents and EPS of 50.00 cents.
At the last closing share price the estimated dividend yield is 2.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.84.

Market Sentiment: 1.0

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


UBS rates CKF as Buy (1) -

UBS notes the brand power of KFC Australia is uppermost as it has generated sales growth of 11.6% in the first seven weeks of FY21.

Delivery continues to provide the tailwind. Taco Bell is the main area that underperformed UBS estimates and management has decided to slow the roll-out in the coming 12 months.

Still, KFC's second half performance impressed UBS and the broker retains a Buy rating. Target is raised to $10.65 from $8.95.

Target price is $10.65 Current Price is $9.42 Difference: $1.23
If CKF meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

The company's fiscal year ends in May.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 17.40 cents and EPS of 34.70 cents.
At the last closing share price the estimated dividend yield is 1.85%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.15.

Forecast for FY22:

UBS forecasts a full year FY22 dividend of 21.00 cents and EPS of 41.80 cents.
At the last closing share price the estimated dividend yield is 2.23%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.54.

Market Sentiment: 1.0

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

CQR  CHARTER HALL RETAIL REIT

REITs

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Overnight Price: $3.35

Credit Suisse rates CQR as Outperform (1) -

Credit Suisse revises distribution estimates for the second half to be in line with guidance and has also lowered FY21 pay-out expectations.

The company has not yet quantified the earnings impact of the pandemic or cash rent collection relative to billings in the June quarter.

Conservatively, Credit Suisse assumes a -9% decline in asset value for the period to June 2020 relative to December 2019.

Outperform rating maintained. Target is raised to $3.41 from $3.32.

Target price is $3.41 Current Price is $3.35 Difference: $0.06
If CQR meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.49, suggesting upside of 3.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Credit Suisse forecasts a full year FY20 dividend of 25.00 cents and EPS of 30.00 cents.
At the last closing share price the estimated dividend yield is 7.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.17.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.8, implying annual growth of 122.9%.

Current consensus DPS estimate is 25.0, implying a prospective dividend yield of 7.4%.

Current consensus EPS estimate suggests the PER is 11.8.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 23.00 cents and EPS of 27.00 cents.
At the last closing share price the estimated dividend yield is 6.87%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.41.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.9, implying annual growth of -10.1%.

Current consensus DPS estimate is 22.8, implying a prospective dividend yield of 6.7%.

Current consensus EPS estimate suggests the PER is 13.1.

Market Sentiment: 0.3

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

FBU  FLETCHER BUILDING LIMITED

Building Products & Services

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Overnight Price: $3.45

Macquarie rates FBU as Neutral (3) -

Macquarie adjusts forecasts for earnings per share down -36% to account for the trading update for May, which implies FY20 earnings guidance of NZ$309m.

Fletcher Building continues to preserve its balance sheet and retains conservative volume forecasts for FY21-22.

Neutral rating maintained. Target is reduced to NZ$3.92 from NZ$4.03.

Current Price is $3.45. Target price not assessed.

Current consensus price target is $3.59, suggesting upside of 4.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Macquarie forecasts a full year FY20 dividend of 0.00 cents and EPS of 11.66 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.58.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.1, implying annual growth of N/A.

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

Current consensus EPS estimate suggests the PER is 22.8.

Forecast for FY21:

Macquarie forecasts a full year FY21 dividend of 10.43 cents and EPS of 18.49 cents.
At the last closing share price the estimated dividend yield is 3.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.66.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.3, implying annual growth of 7.9%.

Current consensus DPS estimate is 7.7, implying a prospective dividend yield of 2.2%.

Current consensus EPS estimate suggests the PER is 21.2.

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

Market Sentiment: 0.0

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

GEM  G8 EDUCATION LIMITED

Childcare

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Overnight Price: $0.89

Morgans rates GEM as Hold (3) -

Transition payments under the shift from free childcare to Child Care Subsidy will provide G8 Education with more flexibility by removing the cap on revenues as was the case previously.

Morgans notes company management has implemented cost reduction measures like rostering optimisation, reducing non-essential capital expenditure and rent relief negotiations.

The company has deferred its FY19 final dividend of $0.06 until October, while deciding not to pay any this fiscal year.

Morgans reiterates its Hold rating with the target price decreasing to $1.12 from $1.89.

Target price is $1.12 Current Price is $0.89 Difference: $0.23
If GEM meets the Morgans target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $1.08, suggesting upside of 21.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Morgans forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 0.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 178.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 0.1, implying annual growth of -99.3%.

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

Current consensus EPS estimate suggests the PER is 890.0.

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 0.00 cents and EPS of 4.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.23.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 4.4, implying annual growth of 4300.0%.

Current consensus DPS estimate is 3.6, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 20.2.

Market Sentiment: 0.0

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

HUB  HUB24 LIMITED

Wealth Management & Investments

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Overnight Price: $9.30

Morgans rates HUB as Add (1) -

The ASX 200 has recovered by about 16% in the fourth quarter which has led to higher funds under administration (FUA) levels heading into FY21.

Morgans forecasts solid net inflows for the fourth quarter for Hub24. Also, the FUA is expected to grow by 15% for the fourth quarter, driven by market performance and flows.

The broker also expects the company to benefit from heightened trading activity in the fourth quarter and a higher cash balance.

Morgans reaffirms its Add rating with a target price of $11.15.

Target price is $11.15 Current Price is $9.30 Difference: $1.85
If HUB meets the Morgans target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $11.03, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Morgans forecasts a full year FY20 dividend of 8.00 cents and EPS of 19.00 cents.
At the last closing share price the estimated dividend yield is 0.86%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 48.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.6, implying annual growth of 78.5%.

Current consensus DPS estimate is 7.7, implying a prospective dividend yield of 0.7%.

Current consensus EPS estimate suggests the PER is 50.0.

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 11.00 cents and EPS of 25.00 cents.
At the last closing share price the estimated dividend yield is 1.18%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 37.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.4, implying annual growth of 18.4%.

Current consensus DPS estimate is 10.2, implying a prospective dividend yield of 1.0%.

Current consensus EPS estimate suggests the PER is 42.2.

Market Sentiment: 0.6

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

IEL  IDP EDUCATION LIMITED

Education & Tuition

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Overnight Price: $15.49

UBS rates IEL as Buy (1) -

IDP Education is highly dependent on international travel but, UBS asserts, the structural thematic is unchanged.

Increasing wealth in developing countries is leading to increased demand for education in developed countries.

Moreover, the company's digital strategy differentiates, as it builds student contacts via "virtual" fairs while competitors remain in lockdown.

Buy rating retained. Target rises to $18.20 from $13.95.

Target price is $18.20 Current Price is $15.49 Difference: $2.71
If IEL meets the UBS target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $16.56, suggesting upside of 0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

UBS forecasts a full year FY20 dividend of 17.00 cents and EPS of 7.00 cents.
At the last closing share price the estimated dividend yield is 1.10%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 221.29.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.8, implying annual growth of -36.0%.

Current consensus DPS estimate is 18.5, implying a prospective dividend yield of 1.1%.

Current consensus EPS estimate suggests the PER is 98.3.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 10.00 cents and EPS of minus 3.00 cents.
At the last closing share price the estimated dividend yield is 0.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 516.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 22.2, implying annual growth of 32.1%.

Current consensus DPS estimate is 15.5, implying a prospective dividend yield of 0.9%.

Current consensus EPS estimate suggests the PER is 74.4.

Market Sentiment: 1.0

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

IFN  INFIGEN ENERGY

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Overnight Price: $0.94

Morgans rates IFN as Hold (3) -

Iberdrola, the Spanish utility company, has increased its offer price for Infigen Energy to $0.89 per share and has also removed most of the conditions of its bid. Iberdrola still needs FIRB approval although Morgans does not expect this to be an issue.

The broker notes Infigen Energy’s largest shareholder has agreed to support Iberdrola’s bid, implying Iberdrola is already 40% on its way towards meeting the minimum acceptable conditions.

Philippine investment company UAC has also lifted the offer price to $0.86 per share and this is totally unconditional but Infigen Energy’s board is backing Iberdrola because of its higher bid.

Morgans continues to rate the company as Hold but lifts its target price to $0.89 from $0.86.

Target price is $0.89 Current Price is $0.94 Difference: minus $0.05 (current price is over target).
If IFN meets the Morgans target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.77, suggesting downside of -17.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Morgans forecasts a full year FY20 dividend of 2.00 cents and EPS of 3.50 cents.
At the last closing share price the estimated dividend yield is 2.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.86.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 3.9, implying annual growth of -9.3%.

Current consensus DPS estimate is 1.7, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 23.8.

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 2.00 cents and EPS of 4.60 cents.
At the last closing share price the estimated dividend yield is 2.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.43.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 3.7, implying annual growth of -5.1%.

Current consensus DPS estimate is 2.0, implying a prospective dividend yield of 2.2%.

Current consensus EPS estimate suggests the PER is 25.1.

Market Sentiment: 0.3

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

NUF  NUFARM LIMITED

Agriculture

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Overnight Price: $4.09

Credit Suisse rates NUF as Outperform (1) -

Nufarm has guided to $15m in operating earnings (EBITDA) improvement with the closure of manufacturing at Raymond Road and 2, 4-D synthesis at its site in Austria.

Credit Suisse believes the decision recognises the reality of sub-scale manufacturing positions.

The Raymond Road plant has operated below nameplate even in normal seasonal conditions.

The broker retains an Outperform rating and $6.74 target.

Target price is $6.74 Current Price is $4.09 Difference: $2.65
If NUF meets the Credit Suisse target it will return approximately 65% (excluding dividends, fees and charges).

Current consensus price target is $5.44, suggesting upside of 32.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY20:

Credit Suisse forecasts a full year FY20 dividend of 7.00 cents and EPS of minus 17.47 cents.
At the last closing share price the estimated dividend yield is 1.71%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 23.41.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -1.7, implying annual growth of N/A.

Current consensus DPS estimate is 1.4, implying a prospective dividend yield of 0.3%.

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

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 9.00 cents and EPS of 30.82 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 13.27.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.3, implying annual growth of N/A.

Current consensus DPS estimate is 4.9, implying a prospective dividend yield of 1.2%.

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

NWL  NETWEALTH GROUP LIMITED

Wealth Management & Investments

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Overnight Price: $8.97

Morgans rates NWL as Hold (3) -

The ASX 200 has recovered by about 16% in the fourth quarter which has led to higher funds under administration levels heading into FY21.

Morgans solid net inflows for the fourth quarter for Netwealth Group and estimates a sustained increase in cash will neutralise the impact of a lower cash margin.

The broker expects fourth-quarter net inflows for the group to be around $2.2bn with FY20 operating income at $64.8m, 5% above the group's guidance.

Morgans considers the group a high-quality business albeit fully valued and retains its Hold rating with a target price of $8.20.

Target price is $8.20 Current Price is $8.97 Difference: minus $0.77 (current price is over target).
If NWL meets the Morgans target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.36, suggesting downside of -19.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Morgans forecasts a full year FY20 dividend of 15.00 cents and EPS of 18.00 cents.
At the last closing share price the estimated dividend yield is 1.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 49.83.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.2, implying annual growth of 16.1%.

Current consensus DPS estimate is 14.2, implying a prospective dividend yield of 1.6%.

Current consensus EPS estimate suggests the PER is 53.1.

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 17.00 cents and EPS of 21.00 cents.
At the last closing share price the estimated dividend yield is 1.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 42.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.8, implying annual growth of 3.5%.

Current consensus DPS estimate is 14.6, implying a prospective dividend yield of 1.6%.

Current consensus EPS estimate suggests the PER is 51.3.

Market Sentiment: 0.0

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

PSQ  PACIFIC SMILES GROUP LIMITED

Healthcare services

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Overnight Price: $1.57

Morgan Stanley rates PSQ as Overweight (1) -

Patient demand has rebuilt since dental restrictions were eased in May.

June like-for-like sales were up 7% and this suggests to Morgan Stanley there is more deferred demand to work through.

However, the company's exposure to Victoria means conditions may take longer to normalise.

Overweight rating, In-Line industry view. Target is $1.60.

Target price is $1.60 Current Price is $1.57 Difference: $0.03
If PSQ meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Morgan Stanley forecasts a full year FY20 dividend of 2.40 cents and EPS of 4.00 cents.
At the last closing share price the estimated dividend yield is 1.53%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 39.25.

Forecast for FY21:

Morgan Stanley forecasts a full year FY21 dividend of 4.00 cents and EPS of 5.00 cents.
At the last closing share price the estimated dividend yield is 2.55%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.40.

Market Sentiment: 1.0

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

QAN  QANTAS AIRWAYS LIMITED

Transportation & Logistics

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Overnight Price: $3.78

Macquarie rates QAN as Resume Coverage with Outperform (1) -

Macquarie resumes coverage with an Outperform rating and $4.35 target.

The broker assesses, with -$1bn in sustainable cost reductions, Qantas should come through the pandemic as a more profitable entity.

Macquarie forecasts a return to profitability after FY22. Forecasts are updated to reflect the recent capital raising and proposed cost initiatives.

Target price is $4.35 Current Price is $3.78 Difference: $0.57
If QAN meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $4.37, suggesting upside of 13.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Macquarie forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 94.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -2.5, implying annual growth of N/A.

Current consensus DPS estimate is 2.7, implying a prospective dividend yield of 0.7%.

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

Forecast for FY21:

Macquarie forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 9.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 39.38.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -2.2, implying annual growth of N/A.

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

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

Market Sentiment: 0.6

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

RMS  RAMELIUS RESOURCES LIMITED

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Overnight Price: $1.99

Morgans rates RMS as Add (1) -

Ramelius Resources had a strong fourth quarter, reporting gold production of 74koz till June 22, which Morgans notes to be equivalent to an annualised 297koz.

The company also announced its new life of mine plan which will lead to a 34% increase in gold production over six years, while increasing FY21 guidance to 260-280koz at all-in sustaining costs (AISC) of $1,280/oz.

The broker notes the company has maintained its margins and controlled costs. 

Morgans retains its Add rating with the target price increased to $2.31 from $1.93.

Target price is $2.31 Current Price is $1.99 Difference: $0.32
If RMS meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Morgans forecasts a full year FY20 dividend of 1.00 cents and EPS of 13.00 cents.
At the last closing share price the estimated dividend yield is 0.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.31.

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 1.00 cents and EPS of 22.00 cents.
At the last closing share price the estimated dividend yield is 0.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.05.

Market Sentiment: 1.0

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

SGP  STOCKLAND

Infra & Property Developers

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Overnight Price: $3.31

Credit Suisse rates SGP as Outperform (1) -

Credit Suisse revises second half distribution estimates to 10.6c, in line with the recently declared dividend.

Against an uncertain backdrop, the broker lowers the pay-out estimate to 70-75% for FY21 and beyond to allow for a greater proportion of retained earnings.

Outperform rating and $3.56 target maintained.

Target price is $3.56 Current Price is $3.31 Difference: $0.25
If SGP meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.54, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Credit Suisse forecasts a full year FY20 dividend of 24.00 cents and EPS of 34.00 cents.
At the last closing share price the estimated dividend yield is 7.25%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 32.7, implying annual growth of 151.5%.

Current consensus DPS estimate is 25.6, implying a prospective dividend yield of 7.4%.

Current consensus EPS estimate suggests the PER is 10.6.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 23.00 cents and EPS of 32.00 cents.
At the last closing share price the estimated dividend yield is 6.95%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.34.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.5, implying annual growth of -6.7%.

Current consensus DPS estimate is 24.2, implying a prospective dividend yield of 7.0%.

Current consensus EPS estimate suggests the PER is 11.3.

Market Sentiment: 0.2

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

WHC  WHITEHAVEN COAL LIMITED

Coal

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Overnight Price: $1.43

Citi rates WHC as Upgrade to Buy from Neutral (1) -

Citi is of the view that thermal coal prices are now so low for so long that a producer response will follow. Productions cuts are on the cards, predict the analysts.

Citi analysts are anticipating a repeat of 2015 when aggressive reductions followed, with the price for thermal coal subsequently rising.

Target price for Whitehaven Coal has been pared back to $1.75 from $1.80 but the anticipated scenario for the sector overall has now triggered an upgrade to Buy from Neutral.

Target price is $1.75 Current Price is $1.43 Difference: $0.32
If WHC meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $2.46, suggesting upside of 71.8% (ex-dividends)

Forecast for FY20:

Current consensus EPS estimate is 7.1, implying annual growth of -86.7%.

Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 2.7%.

Current consensus EPS estimate suggests the PER is 20.1.

Forecast for FY21:

Current consensus EPS estimate is 14.4, implying annual growth of 102.8%.

Current consensus DPS estimate is 5.3, implying a prospective dividend yield of 3.7%.

Current consensus EPS estimate suggests the PER is 9.9.

Market Sentiment: 0.6

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

Today's Price Target Changes
Company Last Price Broker New Target Prev Target Change
AMC Amcor $14.61 Macquarie 16.98 16.95 0.18%
CKF Collins Foods $9.36 Morgans 10.23 8.17 25.21%
UBS 10.65 8.95 18.99%
CQR Charter Hall Retail $3.39 Credit Suisse 3.41 3.32 2.71%
GEM G8 Education $0.89 Morgans 1.12 1.89 -40.74%
HUB HUB24 $10.29 Morgans 11.15 11.08 0.63%
IEL IDP Education $16.51 UBS 18.20 13.95 30.47%
IFN Infigen Energy $0.93 Morgans 0.89 0.86 3.49%
NWL Netwealth Group $9.13 Morgans 8.20 7.35 11.56%
QAN Qantas Airways $3.86 Macquarie 4.35 N/A -
RMS Ramelius Resources $2.00 Morgans 2.31 1.93 19.69%
WHC Whitehaven Coal $1.43 Citi 1.75 1.80 -2.78%
Summaries
AMC Amcor Outperform - Macquarie Overnight Price $14.48
CKF Collins Foods Add - Morgans Overnight Price $9.42
Buy - UBS Overnight Price $9.42
CQR Charter Hall Retail Outperform - Credit Suisse Overnight Price $3.35
FBU Fletcher Building Neutral - Macquarie Overnight Price $3.45
GEM G8 Education Hold - Morgans Overnight Price $0.89
HUB HUB24 Add - Morgans Overnight Price $9.30
IEL IDP Education Buy - UBS Overnight Price $15.49
IFN Infigen Energy Hold - Morgans Overnight Price $0.94
NUF Nufarm Outperform - Credit Suisse Overnight Price $4.09
NWL Netwealth Group Hold - Morgans Overnight Price $8.97
PSQ Pacific Smiles Group Overweight - Morgan Stanley Overnight Price $1.57
QAN Qantas Airways Resume Coverage with Outperform - Macquarie Overnight Price $3.78
RMS Ramelius Resources Add - Morgans Overnight Price $1.99
SGP Stockland Outperform - Credit Suisse Overnight Price $3.31
WHC Whitehaven Coal Upgrade to Buy from Neutral - Citi Overnight Price $1.43
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

12

3. Hold

4

Wednesday 01 July 2020

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