Australian Broker Call

Ord Minnett rates AGL as Accumulate (2) -

Ord Minnett has reviewed its energy and utilities sector coverage, incorporating the latest oil price forecasts and marking to market commodity prices.

AGL Energy is the broker's preferred stock in the utility sector because of its leverage to rising electricity forward prices. Accumulate retained. Target is raised to $29.40 from $28.85.

Target price is $29.40 Current Price is $25.29 Difference: $4.11
If AGL meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $27.37, suggesting upside of 8.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.8

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

Macquarie rates AJM as Underperform (5) -

Altura has completed its debt funding and placement and is now is now sufficiently funded into production. However the broker retains an Underperform rating.

The broker is concerned about an aggressive repayment schedule vis a vis the risk of delivering on the ramp-up schedule and achieving a 6% spudomene target. De-risking milestones are required before the broker can be more confident. Target unchanged at 25c.

Target price is $0.25 Current Price is $0.36 Difference: minus $0.105 (current price is over target).
If AJM meets the Macquarie target it will return approximately minus 30% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -1.0

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

Credit Suisse rates API as Neutral (3) -

AstraZeneca intends to exclusively distribute a proportion of its products directly to pharmacy effective from November 1, 2017.

While Australian Pharmaceutical Industries did not provide a trading update, Credit Suisse assumes its revenue exposure is similar to that of Sigma ((SIG)), ie around 1% of pharmacy distribution revenues.

Neutral rating retained. Target reduced to $1.62 from $1.75.

Target price is $1.62 Current Price is $1.53 Difference: $0.095
If API meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $1.64, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.5

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

Ord Minnett rates ATL as Hold (3) -

Ord Minnett found the tone of the AGM positive and now suspects its previous numbers are on the conservative side. The broker is also more confident that the retail dealership acquisitions are performing in line with expectations.

The broker upgrades estimates by 5% for FY18 and 6% for FY19.  Hold rating. Target raised to $1.62 from $1.39.

Target price is $1.62 Current Price is $1.64 Difference: minus $0.015 (current price is over target).
If ATL meets the Ord Minnett 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:

Forecast for FY19:

Market Sentiment: 0.5

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

Citi rates AWE as Buy (1) -

Citi observes results at Waitsia were in line with expectations and remains encouraged by the quality of the reservoir in the southern and eastern flanks.

September quarter production was also supported by stronger outcomes at Casino. Buy/High Risk rating retained. Target price is $0.60.

Target price is $0.60 Current Price is $0.52 Difference: $0.08
If AWE meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $0.49, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.2

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

Deutsche Bank rates AWE as Hold (3) -

September quarter production was in line with Deutsche Bank's forecasts and up 16%, quarter on quarter. notably,  Bass Gas reported a 23% increase despite unplanned maintenance activity.

While little has changed in operations, the broker's FY18 estimates for earnings per share falls -3%, largely driven by revised FX assumptions.

Hold rating retained. Target is $0.45.

Target price is $0.45 Current Price is $0.52 Difference: minus $0.07 (current price is over target).
If AWE meets the Deutsche Bank target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.49, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.2

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

Macquarie rates AWE as Neutral (3) -

Stronger than expected volumes at Casino results in AWE's Sep Q production beating the broker by 9%. Performances elsewhere were mixed.

The broker retains Neutral, noting the company lacks any near term catalyst that might increase valuation, and has very little sensitivity to the oil price. Waitsia reserve upgrades are factored in. Target rises to 52c from 50c.

Target price is $0.52 Current Price is $0.52 Difference: $0
If AWE meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $0.49, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.2

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

UBS rates AWE as Downgrade to Sell from Neutral (5) -

September quarter production was ahead of expectations, up 16% and driven by strong east coast gas. However, UBS observes, this is not sufficient to change full year guidance of 2.5-2.7mmboe.

The broker attributes the 16% rally in the share price over the past two weeks to recent good news at Waitsia.

However, this appears overdone and UBS downgrades to Sell from Neutral. Target is lowered to $0.47 from $0.45.

Target price is $0.47 Current Price is $0.52 Difference: minus $0.05 (current price is over target).
If AWE meets the UBS target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.49, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.2

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

Citi rates BDR as Neutral (3) -

Citi observes a weak September quarter has forced at downgrade to 2017 guidance and reduced the cash balance to an uncomfortable level.

The weak quarter was driven by low head grades, while tonnes that were milled and mined both exceeded the broker's estimates. Neutral/High Risk rating retained. Target is reduced to $0.22 from $0.25.

Target price is $0.22 Current Price is $0.19 Difference: $0.035
If BDR meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $0.21, suggesting upside of 13.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Macquarie rates BDR as Downgrade to Neutral from Outperform (3) -

While Beadell's Sep Q production and costs showed big improvement on the June Q, they still both fell well short of Macquarie's expectations. The company is now guiding to the lower end of the production range but this will require a big improvement in the Dec Q, the broker notes.

It is not beyond the realms, but falling short could put mill upgrade funding at risk, and this is critical, Macquarie suggests, to improving the long term outlook for Tucano. Downgrade to Neutral. Target falls to 20c from 25c.

Target price is $0.20 Current Price is $0.19 Difference: $0.015
If BDR meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $0.21, suggesting upside of 13.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

UBS rates BDR as Neutral (3) -

UBS believes the variability in production is holding the company back. Another delay to higher grade ore is adding to unit cost pressure.

The broker believes the company will need to do more to reduce this variability in order to offer the value that can offset currency risk.

Neutral retained. Target is $0.21.

Target price is $0.21 Current Price is $0.19 Difference: $0.025
If BDR meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $0.21, suggesting upside of 13.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Ord Minnett rates BPT as Downgrade to Lighten from Hold (4) -

Ord Minnett has reviewed its energy and utilities sector coverage, incorporating the latest oil price forecasts and marking to market commodity prices.

The broker increases its target for Beach Energy to $0.87 from $0.82 but downgrades its rating to Lighten from Hold based on valuation.

While the could be positive catalysts as the Lattice Energy transaction is completed the broker believes the stock appears expensive.

Target price is $0.87 Current Price is $1.00 Difference: minus $0.135 (current price is over target).
If BPT meets the Ord Minnett target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.80, suggesting downside of -20.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.2

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

Macquarie rates DCN as Outperform (1) -

Dacian's Sep Q report showed Mt Morgans is progressing well and the Beresford underground development is ahead of schedule.

The broker retains Outperform and a $3.00 target, noting exploration at Cameron Well could provide positive surprise.

Target price is $3.00 Current Price is $2.05 Difference: $0.95
If DCN meets the Macquarie target it will return approximately 46% (excluding dividends, fees and charges).

Current consensus price target is $2.90, suggesting upside of 41.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Deutsche Bank rates ILU as Sell (5) -

September quarter sales and revenue were down -4% and -6% respectively, quarter on quarter. Zircon pricing was better than Deutsche Bank's estimates, likely because of a better sales mix.

Production from Sierra Leone is expected to be flat in 2018 and US rehabilitation costs are rising. Sell rating retained. Target reduced to $6.70 from $7.00.

Target price is $6.70 Current Price is $9.60 Difference: minus $2.9 (current price is over target).
If ILU meets the Deutsche Bank target it will return approximately minus 30% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.30, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Macquarie rates MGC as Neutral (3) -

Murray Goulburn used its AGM to announce it had sold all of its assets and liabilities to Saputo for $1.31bn. MG will retain all the assets and liabilities of the MG Unit Trust and provide a 75cps distribution to shareholders.

Funds will be held back pending the outcome of the ACCC and ASIC proceedings and the class action. The broker believes such funds are more than adequate. Only 50% of farmers need to approve alongside ACCC/FIRB, which the broker expects will be no problem.

Target rises to 95c from 71c, Neutral retained.

Target price is $0.95 Current Price is $0.78 Difference: $0.175
If MGC meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

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

Morgan Stanley believes the stock is interesting, trading at around a -14% discount to the target. However, this discount feels permanent as it is averaged around -15% for the last four years.

The broker suggests REA Group ((REA)) has become the largest driver of News Corp shares and the reality is that most of the other assets that investors still focus on are in decline and falling in value.

The broker retains an Equal-weight rating and Attractive industry view. Target is US$15.

Current Price is $18.25. Target price not assessed.

Current consensus price target is $20.58, suggesting upside of 12.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

Deutsche Bank rates OGC as Hold (3) -

Production was up 9% in the September quarter and in line with Deutsche Bank's estimates. Guidance is maintained.

The broker revises 2017 earnings down -7% after adjusting for higher depreciation & amortisation and slightly higher costs. Hold rating retained. Target is $3.70.

Target price is $3.70 Current Price is $3.55 Difference: $0.15
If OGC meets the Deutsche Bank target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.49, suggesting upside of 26.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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

Ord Minnett rates OGC as Accumulate (2) -

Third quarter production was ahead of forecasts, with Ord Minnett noting solid results from all four operating assets. The highlight for the broker is that Haile is back on track.

The broker believes the company has now reached peak debt, with gearing currently at 15%, and should de-gear from this quarter.

Accumulate. Target is $4.50.

Target price is $4.50 Current Price is $3.55 Difference: $0.95
If OGC meets the Ord Minnett target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $4.49, suggesting upside of 26.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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

Macquarie rates PNL as Outperform (1) -

Paringa's Sep Q update revealed Poplar Grove is on track for first coal in a year's time. The compnay's cash flow for the quarter exceeded the broker's forecast due to delayed capex.

The broker continues to believe Paringa can deliver coal down the Ohio River at an energy equivalent price some 25-30% cheaper than gas. Outperform and 70c target retained.

Target price is $0.70 Current Price is $0.38 Difference: $0.325
If PNL meets the Macquarie target it will return approximately 87% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 1.0

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

Morgan Stanley rates RMD as Overweight (1) -

With back-order issues resolved, Morgan Stanley envisages accelerating F20/N20-driven re-supply sales supporting a stable margin trend and some upside risk.

The broker also envisages FY18 device growth in high single digits globally and mask growth in the mid teens in the US and rest of the world.

Overweight rating. Industry view is In-Line. Price target is raised to US$82.70 from US$77.90.

Current Price is $10.97. Target price not assessed.

Current consensus price target is $10.57, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.7

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

Morgans rates RMD as Add (1) -

September quarter earnings were in line while sales surprised Morgans, underpinned by strong volume growth and market share gains across key products.

The broker is encouraged by the improvement in underlying patient volumes. Add retained. Target rises to $11.76 from $10.52.

Target price is $11.76 Current Price is $10.97 Difference: $0.79
If RMD meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $10.57, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.7

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

Macquarie rates SEH as Outperform (1) -

Sino's Sep Q production was weaker than expected, leading to a guidance downgrade. That was the negative. The positive, the broker notes, is the submission of a development plan for the first phase of Linxing for which US$100m of funding has been secured.

This is a significant milestone. Outperform and 20c target retained.

Target price is $0.20 Current Price is $0.10 Difference: $0.101
If SEH meets the Macquarie target it will return approximately 102% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Credit Suisse rates SIG as Neutral (3) -

AstraZeneca intends to exclusively distribute nine of its 41 pharmaceutical products direct to pharmacy effective from November 1, 2017. The products identified currently represent around 1% of Sigma's total wholesaling distribution sales on an annualised basis.

The company has maintained FY18 and FY19 guidance. Credit Suisse adjusts PBS revenue assumptions to account for the lost volumes, resulting in downgrades to earnings per share of -2%.

Credit Suisse retains a Neutral rating and reduces the target to $0.84 from $0.89.

Target price is $0.84 Current Price is $0.78 Difference: $0.06
If SIG meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $0.75, suggesting downside of -4.5% (ex-dividends)

The company's fiscal year ends in January.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.8

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

Morgans rates VTG as Hold (3) -

FY18 earnings guidance is around -20% lower than previous consensus forecasts, at EBITDA of $36-43m.. Earnings have been affected by the timing of the release of new devices, in particular the delayed availability of the iPhone X stock.

 Morgans suggests the base level of Telstra ((TLS)) retail earnings remains uncertain. At this stage, the broker cannot gain confidence that the new venture will drive meaningful growth over FY19/20.

Hold retained. Target reduced to $1.54 from $1.86.

Target price is $1.54 Current Price is $1.35 Difference: $0.19
If VTG meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Macquarie rates WAF as Outperform (1) -

West African Resources has provided a strong resource upgrade thanks to a newly defined high grade resource at M1S and a strong upgrade in categorisation at M5. Perhaps now they could come up with some names.

The broker retains Outperform and a 50c target.

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:

Forecast for FY19:

Market Sentiment: 1.0

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

Deutsche Bank rates XRO as Hold (3) -

Deutsche Bank observes the company's record of growth outside its home market is improving, seen growing strongly the UK and several earlier-stage markets.

This leads the broker to lift long-term revenue estimates. Deutsche Bank believes the company is on track to reach break even and self-fund future growth.

Hold retained, with the shares rising in line with revised target. Target rises to NZ $33.40 from NZ$27.20.

Current Price is $30.29. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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