Australian Broker Call

Morgan Stanley rates AD8 as Overweight (1) -

Following Audinate Group's guidance for FY22 revenue to exceed US$30m, Morgan Stanley estimates US$8.7m is attributable to the 4Q, in excess of the US$7.2m consensus expectation. The analyst had also underestimated the extent of the 4Q rebound.

The broker points out industry demand remains elevated (in part driven by a rebound in Live), which should alleviate investor concerns. The Overweight rating and $10.50 target are maintained. Industry view is In-Line.

Target price is $10.50 Current Price is $7.04 Difference: $3.46
If AD8 meets the Morgan Stanley target it will return approximately 49% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

UBS rates AD8 as Buy (1) -

Audinate Group has experienced strong demand in the fourth quarter while signalling supply constraints remain at manageable levels.

UBS notes a strong uplift in momentum in the fourth quarter but needs to understand just how much of this is simply catching up from a softer third quarter and how much can be attributed to price increases.

Nevertheless, the outlook for the long-term is positive although supply constraints remain real into FY23. The broker retains a Buy rating and $9.85 target. The company has guided to FY22 revenue of more than US$30m.

Target price is $9.85 Current Price is $7.04 Difference: $2.81
If AD8 meets the UBS target it will return approximately 40% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates AKE as Outperform (1) -

Allkem has reduced FY22 production guidance due to labour shortages and covid disruptions at Mt Cattlin. Realised lithium-carbonate pricing was ahead of Macquarie's forecast though management's expectation for 4Q spodumene prices and volumes were a miss.

Nonetheless, the broker highlights ongoing earnings-upgrade momentum and notes spot prices generate 25% and 100% higher forecast earnings in FY23 and FY24, respectively.

Macquarie cuts its FY22 earnings forecast by -9% though increases forecasts in FY23 by 5% and retains its $17.70 target price. Outperform.

Target price is $17.70 Current Price is $11.66 Difference: $6.04
If AKE meets the Macquarie target it will return approximately 52% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Morgans rates AKE as Add (1) -

As part of a trading update, Allkem has lifted pricing expectations for the Olaroz mine in Argentina by 14% for the current quarter, though this will be offset by weaker production in WA at Mt Cattlin. The latter is due to labour shortages and covid disruptions.

While the broker lowers its Mt Cattlin production forecasts, this has a minimal impact on valuation, given the short mine life remaining. The target price slips to $16.38 from $16.98, while the add rating is maintained.

Target price is $16.38 Current Price is $11.66 Difference: $4.72
If AKE meets the Morgans target it will return approximately 40% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Ord Minnett rates ALD as Buy (1) -

Ord Minnett notes refining margins have continued to set new records and estimates consensus is implying US$10/bbl for Ampol this year. The broker expects more than 100% upgrade to net profit forecasts as a result.

The broker, nevertheless, considers its refining margin estimates conservative and assumes a rapid normalisation of margins to around US$8/bbl is expected by the end of the year.

Buy rating and $37.90 target maintained.

Target price is $37.90 Current Price is $35.15 Difference: $2.75
If ALD meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $35.01, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Ord Minnett rates COE as Upgrade to Accumulate from Hold (2) -

Increased output at the Orbost gas plant  has meant Cooper Energy has exceeded contract nominations with up to 20 terajoules a day now sold into the spot market at elevated prices.

Ord Minnett believes the business is well-placed with its exposure to east coast gas markets amid growth options for a number of assets in various stages of development. Rating is upgraded to Accumulate from Hold  and the target is lifted to $0.33 from $0.32.

Target price is $0.33 Current Price is $0.29 Difference: $0.04
If COE meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $0.29, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

Credit Suisse rates CSL as No Rating (-1) -

Credit Suisse, in reviewing gene therapy and the treatment landscape, highlights CSL's EtranaDez, which is likely to be the first haemophilia gene therapy product in the market. This should complement Idelvion and its leading position in haemophilia B.

The US FDA has accepted the Biologics Licence Application for EtranaDez under priority review. While approval is likely in FY23 the broker does not expect meaningful sales will occur until FY24.

Due to research restrictions Credit Suisse has not provided a rating or target price. 

Current Price is $270.86. Target price not assessed.

Current consensus price target is $319.02, suggesting upside of 19.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.9

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

Credit Suisse rates DMP as Neutral (3) -

Credit Suisse downgrades FY22-24 forecasts on the back of currency translation for Japan and Europe. Nevertheless, the company's strategy update was consistent with long-term growth assumptions.

The Asian strategy highlighted an increasing scale advantage as Domino's Pizza Japan expanded to all prefectures in FY22. Franchisees in Japan also experienced improved profitability in FY22 compared with FY19.

Neutral maintained. Target is reduced to $71.66 from $87.80.

Target price is $71.66 Current Price is $66.20 Difference: $5.46
If DMP meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $92.97, suggesting upside of 43.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Morgans rates DMP as Add (1) -

During its Asian investor tour, management at Domino's Pizza Enterprises commented that it faces "historic headwinds, including inflation, conflict in Europe, and currency movements, but it is focused on the long-term".

As a result of these near-term challenges, Morgans lowers its FY22 and FY23 earnings (EBITDA) estimates by -2% and -6%, and lowers its target price to $93 from $100. Nonetheless, the longer-term opportunity for growth is considered intact.

The analyst sees meaningful share price upside over the next 12 months. Add.

Target price is $93.00 Current Price is $66.20 Difference: $26.8
If DMP meets the Morgans target it will return approximately 40% (excluding dividends, fees and charges).

Current consensus price target is $92.97, suggesting upside of 43.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Ord Minnett rates DMP as Upgrade to Buy from Accumulate (1) -

Domino's Pizza Enterprises has outlined a continuation of its strategy for Asia with a target for net store growth of 9-12% per annum. No trading update was provided.

Delivery times in Japan have improved with greater store density. While inflationary pressures are significant, the company has managed to keep prices below peers.

Advertising in Japan is considerably higher and management does not expect this to fall to Australian levels. Nevertheless, as scale builds, margin should expand as a proportion of network sales.

Given the recent de-rating of the stock, Ord Minnett upgrades to Buy from Accumulate. Target is steady at $99.

Target price is $99.00 Current Price is $66.20 Difference: $32.8
If DMP meets the Ord Minnett target it will return approximately 50% (excluding dividends, fees and charges).

Current consensus price target is $92.97, suggesting upside of 43.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

UBS rates DMP as Buy (1) -

Domino's Pizza Enterprises remains confident in the longer-term and plans to use delivery run time as a means to manage labour costs better. The company continues to expect store growth of 9-12% per annum over 3-5 years.

In Japan the strategy is to improve profitability for franchisees, using in-house dough and national freight enablers. The plan is also to grow market share and expand the category in Taiwan.

UBS retains a Buy rating and $90 target.

Target price is $90.00 Current Price is $66.20 Difference: $23.8
If DMP meets the UBS target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $92.97, suggesting upside of 43.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Ord Minnett rates IPL as Downgrade to Hold from Accumulate (3) -

First half net profit at $384m was sharply ahead of the prior corresponding half's $36m. This highlighted strong leverage to a rising commodity environment, Ord Minnett suggests.

The share price may have lagged commodity prices in the current cycle because of the operating issues at Waggaman, yet the broker considers earnings momentum has peaked given the recent trajectory of fertiliser prices.

Ord Minnett also suspects uncertainty created by a plan to spin off the explosives segment may weigh on the share price. Rating is downgraded to Hold from Accumulate and the target raised to $3.90 from $3.50.

Target price is $3.90 Current Price is $3.59 Difference: $0.31
If IPL meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $4.10, suggesting upside of 17.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Macquarie rates LTR as Outperform (1) -

While an offtake agreement for the supply of spodumene concentrate from Kathleen Valley had already been announced, both Liontown Resources and Tesla have now released additional details in a full-form agreement.

Having already secured an agreement with LG Energy Solutions in May, Macquarie feels that securing a third and final offtake partner would be a near-term catalyst for the stock price. The Outperform rating and $2.50 target are retained.

Target price is $2.50 Current Price is $1.24 Difference: $1.26
If LTR meets the Macquarie target it will return approximately 102% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Morgan Stanley rates MFG as Underweight (5) -

Based on Magellan Financial's funds under management (FUM) update for May, Morgan Stanley estimates around -$2bn of global funds' outflows for the month. This is tracking broadly in-line with the broker's expectation for the remainder of the 2H.

The investment performance was weaker in May, after an improved performance in April, while the longer-term performance figures  remain soft, explains the aanlyst. The Underweight rating and $11.00 target are retained. Industry View: Attractive.

Target price is $11.00 Current Price is $12.85 Difference: minus $1.85 (current price is over target).
If MFG meets the Morgan Stanley target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.71, suggesting upside of 4.4% (ex-dividends)

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.7

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

Citi rates MP1 as Buy (1) -

Citi considers new bandwidth options are a positive, as high IP transit costs were a barrier to Megaport Virtual Edge adoption in Australasia.

While the broker acknowledges risk to consensus forecasts for FY23, a Buy rating is maintained given the stock is trading with 30% or more top-line growth.

Target is reduced by -26%,to $12.30 from $16.60, to reflect the higher cost of capital and earnings downgrades. The broker lowers forecasts, assuming a slower ramping from partners, supply chain constraints and slowing economic conditions in the US and Europe.

Target price is $12.30 Current Price is $6.30 Difference: $6
If MP1 meets the Citi target it will return approximately 95% (excluding dividends, fees and charges).

Current consensus price target is $14.33, suggesting upside of 140.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Credit Suisse rates MQG as Underperform (5) -

Credit Suisse asserts, as central banks battle inflation, the environment is less conducive to conditions that produce a stellar run of profit growth. The broker further observes that two out of three of the regions in which Macquarie Group operates are under threat of stagflation.

Credit Suisse currently forecasts FY23 earnings of $3.9bn, -17% below FY22. Global comparables have de-rated yet the stock has held its valuation and expanded its premium.

As a result, the broker reiterates an Underperform rating and $150 target.

Target price is $150.00 Current Price is $182.90 Difference: minus $32.9 (current price is over target).
If MQG meets the Credit Suisse target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $202.50, suggesting upside of 14.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Ord Minnett rates PLY as Speculative Buy (1) -

Playside Studios has extended its work-for-hire deal with Meta Platforms. This is in conjunction with a separate six-month contract to provide a new virtual reality initiative for Meta.

Ord Minnett believes the announcement demonstrates the company's competence in the studio and the work-for-hire earnings base provides a strong footing on which to build scale.

Speculative Buy rating retained with a $0.95 target.

Target price is $0.95 Current Price is $0.71 Difference: $0.24
If PLY meets the Ord Minnett target it will return approximately 34% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Citi rates PME as Neutral (3) -

The company has a new $28m 7-year contract with Allina Health for its Visage Viewer and Workflow, to be implemented in the second half of 2022 and contributing to revenue in FY23. This is the third contract gained so far in FY22.

Citi considers the business model attractive with a competitive advantage, but the elevated valuation keeps the rating at Neutral with a $46 target. Moreover, while new contracts are important, it is difficult to predict the value in the short term, the broker adds.

Target price is $46.00 Current Price is $41.68 Difference: $4.32
If PME meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Ord Minnett rates PPE as Buy (1) -

The company has acquired Food Industry People for $45m and up to $25m in deferred consideration based on earn-outs. This is a large provider in the niche recruitment market and servicing local industry with labour from the Pacific.

Ord Minnett believes the addition of a specialised, high market-share business with growth potential strengthens the investment case of Peoplein. Buy rating reiterated. Target is raised to $4.59 from $4.35.

Target price is $4.95 Current Price is $3.35 Difference: $1.6
If PPE meets the Ord Minnett target it will return approximately 48% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates TAH as Neutral (3) -

Tabcorp estimates a $30m annual benefit from proposed regulatory reforms for wagering within Queensland, should they be implemented by March 31 next year.

Separately, the company has settled the Racing Queensland litigation, with a conditional agreement to make a -$150m payment. The payment also provides funding for future racing infrastructure needs and is conditional on the above-mentioned regulatory reforms.

While the target price rises to $1.05 from $1.00, the analyst is cautious around structural challenges within wagering and the potential for a capital raise to fund licence renewals and privatisations. The Neutral rating is maintained.

Target price is $1.05 Current Price is $0.99 Difference: $0.06
If TAH meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $1.07, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

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

Fees and taxes under Tabcorp's retail licenses in QLD will be scrapped, which helps level the playing field versus competitors, according to Morgan Stanley. The target price rises to $1.00 from $0.95.

Nonetheless, the broker sees a lack of global scale and inferior product/tech offering as ongoing impediments for the company, and retains its Equal-weight rating. Industry view is In-Line.

Target price is $1.00 Current Price is $0.99 Difference: $0.01
If TAH meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $1.07, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Ord Minnett rates TAH as Hold (3) -

Tabcorp will pay Racing Queensland and the Queensland government $150m to settle a legal dispute over betting taxes. In turn, the Queensland government has agreed to enact wagering tax reforms the company hopes will level the playing field with online bookmakers.

Ord Minnett believes, unless the company's product becomes competitive, even attractive pricing will be unlikely to stabilise market share losses.

Ord Minnett factors in the payment to Racing Queensland of an additional $75m in FY23 and maintains a Hold rating with a $1.10 target.

Target price is $1.10 Current Price is $0.99 Difference: $0.11
If TAH meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $1.07, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Ord Minnett rates TYR as Buy (1) -

Transaction volumes were up 0.7% in May although value is stabilising following the rebound post lockdowns.

High-frequency app downloads and active users statistics reflect a positive outlook for both merchant acquisition and engagement which Ord Minnett believes will drive further growth into the end of FY22. Buy rating and $3 target maintained.

Target price is $3.00 Current Price is $0.93 Difference: $2.07
If TYR meets the Ord Minnett target it will return approximately 223% (excluding dividends, fees and charges).

Current consensus price target is $2.97, suggesting upside of 222.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Ord Minnett rates VEA as Accumulate (2) -

Ord Minnett notes refining margins have continued to set new records and estimates consensus is implying US$13/bbl for Viva Energy this year. The broker expects more than 100% upgrade to net profit forecasts as a result.

The broker, nevertheless, considers its refining margin estimates conservative and assumes a rapid normalisation of margins to around US$8/bbl is expected by the end of the year.

Accumulate rating and $2.95 target maintained.

Target price is $2.95 Current Price is $2.93 Difference: $0.02
If VEA meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $2.96, suggesting downside of -1.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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