Australian Broker Call

Citi rates ALQ as Neutral (3) -

While there is potential for the recent strength in the gold price to benefit the company's geochemical earnings in the future, Citi retains a Neutral rating, envisaging downside risk to FY20 earnings.

This is because of the negative impact of weak exploration data. The broker notes financing by junior and intermediate mining companies is down -36% in the first half of 2019. Target is reduced to $8.10 from $8.25.

Target price is $8.10 Current Price is $7.47 Difference: $0.63
If ALQ meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $8.11, suggesting upside of 8.6% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Citi rates ASB as Downgrade to Neutral from Buy (3) -

Citi believes Austal has multiple earnings drivers over the longer term, given the backlog in two mature US Navy contracts and margin expansion potential as production ramps up in Asia.

However, the broker downgrades to Neutral from Buy as the share price has appreciated 87% since March.

The FY19 result has largely been pre-reported and the first FFG(X) is likely to be awarded in late 2020, so the stock appears to be lacking short-term catalysts. Target is steady at $4.04.

Target price is $4.04 Current Price is $3.96 Difference: $0.08
If ASB meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.50, suggesting downside of -11.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Credit Suisse rates CPU as Neutral (3) -

Credit Suisse notes, after almost seven years, the chief financial officer is stepping down. The broker observes the company is entering another challenging period of interest rate reductions and earnings growth is likely to slow, or potentially decline.

While the stock is trading below its historical 20% premium, the earnings risk remains elevated and, hence, Credit Suisse retains a Neutral rating. Target is reduced to $17.10 from $18.10.

Target price is $17.10 Current Price is $16.15 Difference: $0.95
If CPU meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $16.62, suggesting upside of 2.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: -0.1

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

UBS rates KGN as Neutral (3) -

The second half update was mixed, UBS suggests. The broker reduces FY19-21 estimates by -3%. UBS believes Kogan.com is a solid business, as it is net cash and has a large and growing customer base, while continuing to explore alternative profit streams.

Nevertheless, the broker considers the risk/reward balanced and retains a Neutral rating. To become more positive UBS would need to witness signs of another vertical ramping up and improving momentum in retail. Target is reduced to $5.70 from $5.80.

Target price is $5.70 Current Price is $5.17 Difference: $0.53
If KGN meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Morgans rates MP1 as Add (1) -

Morgans upgrades forecasts slightly for the short term and significantly for the longer term after a strong June quarter, which revealed record sales and lower cash burn. Sales momentum appears to be accelerating.

The broker increases the target to $8.80 from $5.12, largely because forecasts now include four services per port. Add rating maintained.

Target price is $8.80 Current Price is $7.61 Difference: $1.19
If MP1 meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

UBS rates MP1 as Buy (1) -

The company has hit the target of 300 physical data centres as well as increased services and customers. UBS believes the compounding effect of stronger quarterly growth could have a material impact on the long-term revenue potential.

The broker continues to highlight the multiple opportunities for upside and maintains a Buy rating. Upgrades to revenue estimates of 2-8% are incorporated for FY19-22. Target is raised to $8.65 from $6.25.

Target price is $8.65 Current Price is $7.61 Difference: $1.04
If MP1 meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Citi rates OZL as Buy (1) -

The company is on track to meet FY19 guidance, Citi observes. The underground mine at Carrapateena is on schedule. Revenue was lower-than-expected in the first half but the broker expects this to be balanced by higher sales in the second half.

Buy rating maintained. Target is raised to $12.50 from $12.25.

Target price is $12.50 Current Price is $10.26 Difference: $2.24
If OZL meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $11.08, suggesting upside of 8.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Credit Suisse rates OZL as Underperform (5) -

Credit Suisse points out management is confident regarding achieving December quarter production at Carrapateena but the timetable may be at risk, given time-consuming plant completion is still required.

Slippage of production into next year would have negligible impact on valuation, the broker adds. The greater driver of value is the caving performance which will not be known for some time. Underperform rating and $9.50 target.

Target price is $9.50 Current Price is $10.26 Difference: minus $0.76 (current price is over target).
If OZL meets the Credit Suisse target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.08, suggesting upside of 8.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Macquarie rates OZL as Outperform (1) -

OZ Minerals' June Q copper production beat the broker by 7% with costs in line. Shipments fell short but should recover this quarter. Carrapateena is now 80% complete above ground and underground is ramping up.

Delivering on Carrapateena by the December quarter remains key, the broker suggests, with project studies on Prominent Hill and West Musgrave due shortly. Outperform retained, target rises to $11.50 from $11.20.

Target price is $11.50 Current Price is $10.26 Difference: $1.24
If OZL meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $11.08, suggesting upside of 8.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

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

Morgan Stanley believes the main focus stemming from the June quarter production report should be on Prominent Hill stockpiles being high graded and drawn down faster because of lower mined tonnage and grade.

The broker maintains an Equal-weight rating and $10.90 target. Industry view is Attractive.

Target price is $10.90 Current Price is $10.26 Difference: $0.64
If OZL meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $11.08, suggesting upside of 8.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

Ord Minnett rates OZL as Hold (3) -

Output in the June quarter was softer than Ord Minnett expected, with copper -4% below forecasts and gold -19% below. Meanwhile, Carrapateena is on schedule and budget, with the plant almost 80% complete.

Ord Minnett rolls forward its valuation, leading to an increase in the target to $10.70 from $10.30. Hold rating maintained. The company continues to signal the court injunction over the CentroGold operation in Brazil will be removed later this year.

Target price is $10.70 Current Price is $10.26 Difference: $0.44
If OZL meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $11.08, suggesting upside of 8.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

UBS rates OZL as Buy (1) -

UBS notes the most important news in the quarterly report was the fact Carrapateena is on schedule for commissioning in the December quarter of 2019 and within budget. Development metres continue to improve and there is now 46,000t of development ore that is stockpiled.

Prominent Hill is still the cash cow but shipment timings have been delayed which means cash flow is heavily weighted to the second half of 2019. UBS maintains a Buy rating, given the copper exposure and long mine life. Target is reduced to $11.20 from $11.30.

Target price is $11.20 Current Price is $10.26 Difference: $0.94
If OZL meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $11.08, suggesting upside of 8.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

UBS rates PGL as Initiation of coverage with Buy (1) -

UBS initiates coverage on Prospa Group with a Buy rating and $4.55 target. The company uses a proprietary credit decision facility to approve and price amortising loans within its cloud-based technology platform.

UBS believes the company is in the early stages of a growth profile and profit is expected to grow rapidly. The current share price implies long-term operating earnings (EBITDA) margins of around 17% to which UBS envisages upside risk.

Target price is $4.55 Current Price is $4.05 Difference: $0.5
If PGL meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Citi rates RRL as Sell (5) -

Citi observes the share price has gained around 65% since the lows in May. FY20 guidance is for comparable gold production but at a higher cost.

The broker considers operating risks are skewed to the upside with the approvals and definitive feasibility studies in progress at McPhillamys and Duketon.

The broker maintains a Sell rating and raises the target to $4.85 from $4.80.

Target price is $4.85 Current Price is $5.68 Difference: minus $0.83 (current price is over target).
If RRL meets the Citi target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.70, suggesting downside of -17.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.9

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

Credit Suisse rates RRL as Underperform (5) -

Credit Suisse notes solid June quarter production, although costs are rising significantly. FY20 guidance is for 340-370,000 ounces at an elevated all-in sustainable cost of $1125-1195/oz.

Exploration has demonstrated multiple high-grade underground opportunities at Duketon, which can be blended with lower-grade bulk open pit feed. The broker maintains an Underperform rating and reduces the target to $3.90 from $4.44

Target price is $3.90 Current Price is $5.68 Difference: minus $1.78 (current price is over target).
If RRL meets the Credit Suisse target it will return approximately minus 31% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.70, suggesting downside of -17.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.9

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

Macquarie rates RRL as Downgrade to Underperform from Neutral (5) -

Regis Resources' June Q gold production was in line with expectation but costs were higher. Costs are set to increase further, Macquarie notes, as suggested by FY20 guidance.

A reserve update leads the broker to extend its mine life assumption for Duketon, while McPhillamys timing is key to valuation. On the higher cost outlook Macquarie lowers its target to $5.10 from $5.70 and its rating to Underperform.

Target price is $5.10 Current Price is $5.68 Difference: minus $0.58 (current price is over target).
If RRL meets the Macquarie target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.70, suggesting downside of -17.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.9

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

Morgan Stanley rates RRL as Underweight (5) -

Morgan Stanley notes costs in the June quarter were 24% ahead of its estimates and FY20 guidance on costs is 17% above estimates. Production beat the broker's estimates slightly. The broker reduces FY19 forecasts for operating earnings (EBITDA) by -6%.

Underweight rating maintained. Target is $4.20. Industry view is Attractive.

Target price is $4.20 Current Price is $5.68 Difference: minus $1.48 (current price is over target).
If RRL meets the Morgan Stanley target it will return approximately minus 26% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.70, suggesting downside of -17.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.9

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

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

Quarterly production was -3% below UBS estimates. The broker notes the share price has rallied around 35% in the year to date, largely driven by the rise in the gold price.

However, cost guidance implies only 50-70% of the gold price increase translated into higher cash margins.

The broker considers the stock is more than fully priced and downgrades to Sell from Neutral, although acknowledges an ongoing rally in the Australian dollar gold price is a key risk. Target is reduced to $4.85 from $5.10.

Target price is $4.85 Current Price is $5.68 Difference: minus $0.83 (current price is over target).
If RRL meets the UBS target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.70, suggesting downside of -17.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.9

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

Credit Suisse rates SXY as Downgrade to Neutral from Outperform (3) -

June quarter revenue was in line with Credit Suisse numbers. The broker remains wary of the ramp-up risks at Roma North.

While Artemis does not appear to be a near-term catalyst, it supports the broker's view that the company's position as a local motivated explorer will enable preferential access to acreage.

Rating is downgraded to Neutral from Outperform as the share price has recovered. Target is $0.37.

Target price is $0.37 Current Price is $0.35 Difference: $0.02
If SXY meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $0.43, suggesting upside of 23.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Macquarie rates SXY as Outperform (1) -

Senex Energy's June Q production and sales were in line although revenues fell short on a higher proportion of gas sales. Roma North exceeded expectations, leading the broker to upgrade gas production forecasts.

The broker awaits first gas at Project Atlas as a driver of a re-rating for the stock, given the project is risked by the market at 35%. Outperform and 55c target retained.

Target price is $0.55 Current Price is $0.35 Difference: $0.2
If SXY meets the Macquarie target it will return approximately 57% (excluding dividends, fees and charges).

Current consensus price target is $0.43, suggesting upside of 23.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Morgans rates SXY as Add (1) -

Fourth quarter results were solid, with Roma North continuing to ramp up. Morgans considers the company's CSG operations at Roma North and Project Atlas are comparable to a mining operation, where development expenditure is sunk and construction completed before peak earnings growth ensues.

This sets up FY21 as a key year for the business, when Morgans expects cumulative earnings growth will reach a point where the company is trading on just 5.0x enterprise value/operating earnings (EBITDAX). Add rating maintained. Target is reduced to $0.50 from $0.55.

Target price is $0.50 Current Price is $0.35 Difference: $0.15
If SXY meets the Morgans target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $0.43, suggesting upside of 23.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Ord Minnett rates SXY as Hold (3) -

Ord Minnett reduces earnings estimates slightly to account for the outlook for lower oil production. The broker notes Senex Energy expects to complete its entire drilling campaign at Project Atlas by mid 2020, with plateau production expected at the end of FY21.

The broker maintains a Hold rating and reduces the target to $0.36 from $0.40.

Target price is $0.36 Current Price is $0.35 Difference: $0.01
If SXY meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $0.43, suggesting upside of 23.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Ord Minnett rates TCL as Resume Coverage with Buy Rating (1) -

Ord Minnett believes Transurban is undervalued and attractively priced. Projections show debt serviceability will decline temporarily in the next 1-2 years, although relatively strong growth in earnings should mean serviceability ratios are restored and the investment grade credit rating maintained.

The broker resumes coverage with a Buy rating and $16.75 target. Traffic growth is forecast to average 3% per annum. Over FY19-25 free cash flow is expected to grow at 8% per annum.

Target price is $16.75 Current Price is $15.25 Difference: $1.5
If TCL meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $13.76, suggesting downside of -9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Ord Minnett rates WEB as Buy (1) -

Ord Minnett poses the question of whether the company is about to downgrade its FY20 incremental operating earnings (EBITDA) guidance of $40m. Having said that, the broker considers this unlikely.

The main risk envisaged is weakness in domestic B2C. Ord Minnett maintains a Buy rating and reduces the target to $19.32 from $19.67.

Target price is $19.32 Current Price is $13.75 Difference: $5.57
If WEB meets the Ord Minnett target it will return approximately 41% (excluding dividends, fees and charges).

Current consensus price target is $17.07, suggesting upside of 24.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.6

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