Australian Broker Call

Credit Suisse rates AHY as Downgrade to Underperform from Neutral (5) -

Credit Suisse observes the share price has rallied and presents an opportunity to take some profits. The broker downgrades 2018-20 estimates for EPS by -3-16% because of persistent increases in pulp and fluff costs.

Critical to the broker's estimates is the assumption that sales growth will continue beyond 2018, as management is taking action to rejuvenate tissue sales. The company has reported declining sales for the past three years.

Rating is downgraded to Underperform from Neutral. Target is reduced to $1.30 from $1.35.

Target price is $1.30 Current Price is $1.38 Difference: minus $0.08 (current price is over target).
If AHY meets the Credit Suisse target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.33, suggesting downside of -3.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.7

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

Deutsche Bank rates ALL as Buy (1) -

Ahead of the first half result, Deutsche Bank expects the outcome could surprise to the upside because of the stronger-than-expected performance from the North American Class III and Class II gaming operations, digital and the Australian business.

Recurring revenue businesses are likely to drive earnings upgrades, in the broker's view. Buy rating. Target $33.90.

Target price is $33.90 Current Price is $28.16 Difference: $5.74
If ALL meets the Deutsche Bank target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $29.65, suggesting upside of 5.3% (ex-dividends)

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.7

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

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

Ord Minnett resumes coverage with a Buy rating on $9.55 target. The broker envisages higher US 10 year bond yields, opportunities for organic growth and the risk of re-regulation will drive the stock.

Overall, given a view that the US rates are near their peak and the company has been successful in identifying growth opportunities, while the risk of re-regulation remains low, Ord Minnett is positive on the stock.

Target price is $9.55 Current Price is $8.06 Difference: $1.49
If APA meets the Ord Minnett target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $8.63, suggesting upside of 7.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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

Morgans rates APE as Add (1) -

The company expects FY18 to be marginally ahead of the prior year while an accretive acquisition presents upside risk to Morgans' forecasts.

The company has noted the consolidation opportunity in the industry is likely to be rapid, because of persistently difficult conditions.

The company has been active in reviewing acquisition opportunities and is currently doing due diligence on a specific "quality" acquisition, likely to be encountered in the second half.

Add rating maintained. Target is reduced to $9.05 from $9.07.

Target price is $9.05 Current Price is $8.47 Difference: $0.58
If APE meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $8.60, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in December.

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

UBS rates APX as Buy (1) -

The company has guided towards the upper end of its prior guidance for the current financial year and UBS analysts comment this is in-line with what they'd already penciled in.

UBS remains of the view risk remains to the upside. By rating retained, as well as the $12 price target.

Target price is $12.00 Current Price is $10.60 Difference: $1.4
If APX meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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 BLD as Downgrade to Underperform from Neutral (5) -

Credit Suisse suspects fly ash earnings will be disappointing. While the US fly ash business has many attributes of a great investment, the broker believes  industry success at redirecting easily available supply to high-value applications is approaching a limit.

The broker also points out that the company was unable to grow its fly ash revenue in the last decade and targeted storage and reclamation efforts by Headwaters were not met in the ownership transition.

Credit Suisse suggests growth expectations for North America are too high and downgrades to Underperform from Neutral. Target is reduced to $6.40 from $7.45.

Target price is $6.40 Current Price is $6.34 Difference: $0.06
If BLD meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $7.61, suggesting upside of 20.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Morgans rates CRR as Add (1) -

The company has settled its recent acquisition in Moree. Subsequently, the portfolio comprises 69 properties valued at $335m.

Morgans makes small changes to forecasts to include the acquisition. No further acquisitions are assumed at this stage although a number of centres are under due diligence. Add rating is maintained. Target rises to $3.16 from $3.14.

Target price is $3.16 Current Price is $2.70 Difference: $0.46
If CRR meets the Morgans target it will return approximately 17% (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

Citi rates CSL as Buy (1) -

As the company has lifted its guidance for the FY, Citi analysts have lifted their estimates and their price target to $215 from $175. High margins for Haegarda and Idelvion are the main drivers, they explain.

In Citi's view, CSL remains a preferred name in the healthcare sector, which in itself is re-rating to higher valuations, due to the attractiveness of the plasma industry and the company's estimated FY17-20 EPS CAGR of circa 20%. Buy.

Target price is $215.00 Current Price is $184.33 Difference: $30.67
If CSL meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $188.69, suggesting upside of 2.4% (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: 0.6

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

Credit Suisse rates CSL as Outperform (1) -

CSL upgraded FY18 guidance, citing a more favourable product mix and a stronger performance for Seqirus as well as the phasing of R&D investments. Credit Suisse increases earnings estimates by an average of 5.5% over the forecast period to meet guidance.

With 13% compound growth expected over the next three years, using FY18 as a base, the broker continues to believe the stock is attractive. Outperform rating maintained. Target rises to $190 from $173.

Target price is $190.00 Current Price is $184.33 Difference: $5.67
If CSL meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $188.69, suggesting upside of 2.4% (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: 0.6

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

Deutsche Bank rates CSL as Hold (3) -

The company has upgraded FY18 guidance, attributing it to a number of factors. Deutsche Bank considers some of the factors such as a mix shift to higher margin products and the operating performance of Seqirus will recur, others pose a headwind in FY19 such as higher R&D and a weaker flu season.

The broker's revised forecasts suggest the stock offers 9.5% growth in earnings per share in FY19. Hold rating. Target raised to $189 from $169.

Target price is $189.00 Current Price is $184.33 Difference: $4.67
If CSL meets the Deutsche Bank target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $188.69, suggesting upside of 2.4% (ex-dividends)

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: 0.6

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

Macquarie rates CSL as Outperform (1) -

The company expects net profit in FY18 of US$1.68-1.71bn. The mid point of the range implies an upgrade of around 7.5%, as management cited better-than-expected sales of Idelvion and Haegarda as well as a positive performance for Seqirus.

Macquarie believes the company can deliver robust growth into FY19. While current multiples are elevated relative to historical averages, the broker believes the company is well-positioned relative to domestic peers on a PE growth basis.

The stock remains the broker's preferred healthcare exposure. Outperform rating maintained. Target is raised to $190 from $172.

Target price is $190.00 Current Price is $184.33 Difference: $5.67
If CSL meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $188.69, suggesting upside of 2.4% (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: 0.6

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

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

The company has raised FY18 net profit guidance by around 8%. Stronger than expected sales of new products Idelvion and Haegarda as well as the strong flu season in the northern hemisphere are cited as reasons.

Morgan Stanley asserts, given the strength in the share price and an FY18 PE of 30.6x, revised guidance was demanded of the company.

Equal-weight rating. In-Line industry view. Target is $155.

Target price is $155.00 Current Price is $184.33 Difference: minus $29.33 (current price is over target).
If CSL meets the Morgan Stanley target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $188.69, suggesting upside of 2.4% (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: 0.6

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

Morgans rates CSL as Hold (3) -

The company has upgraded its FY18 outlook, increasing its net profit forecasts by 8%. Morgans notes, while such an upgrade appears substantial, the core plasma business did not contribute to the gain and is still slowing in the second half.

The increase was driven by improved product/geographic mix on the back of better Idelvion and Haegarda sales. Morgans estimates that 80% of the upgrade was driven by gains that either should not recur or because of benefits from delays.

Hold rating maintained. Target is raised $168.50 from $156.00.

Target price is $168.50 Current Price is $184.33 Difference: minus $15.83 (current price is over target).
If CSL 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 $188.69, suggesting upside of 2.4% (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: 0.6

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

Ord Minnett rates CSL as Accumulate (2) -

The company has raised net profit guidance, attributing the upgrade to the timing of costs and a maiden profit from the flu vaccine division. Ord Minnett also believes the rise in guidance underpins the company's intentions with regard to the aggressive investment in plasma collections and fractionation capacity.

The broker notes strong margin support from market leading therapies such as Idelvion, Haegarda and Hizentra. Accumulate rating is reiterated. Target is raised to $195 from $171.

Target price is $195.00 Current Price is $184.33 Difference: $10.67
If CSL meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $188.69, suggesting upside of 2.4% (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: 0.6

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

UBS rates CSL as Buy (1) -

The company has upgraded guidance and as a result UBS increases earnings forecasts by 4-5%. The upgrade is driven predominantly by higher sales assumptions for Haegarda and Idelvion.

As the marginal cost of production for these products is low the broker expects material expansion for Behring in FY18. Buy rating maintained. Target rises to $196 from $175.

Target price is $196.00 Current Price is $184.33 Difference: $11.67
If CSL meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $188.69, suggesting upside of 2.4% (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: 0.6

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

Macquarie rates ECX as Outperform (1) -

The first half result signals to Macquarie the company has made market share gains in fleet amid stable margins. Activity trends remain positive. FY18 guidance is reaffirmed for 27-30% growth in net profit and 10-12% growth in RPS.

The broker transfers coverage to another analyst and retains an Outperform rating. Target is reduced to $4.27 from $4.60.

Target price is $4.27 Current Price is $3.42 Difference: $0.85
If ECX meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $4.42, suggesting upside of 29.2% (ex-dividends)

The company's fiscal year ends in September.

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

Citi rates LVT as Initiation of coverage with Buy (1) -

Citi has initiated coverage with Buy/High Risk rating and a 56c price target, acknowledging this is a business model in its infancy and unproven at scale. The company develops digital workplace software tools for commercial, government and education markets.

A recently concluded partnership with N3 which will see the latter market LiveTiles products in North America and EMEA could prove "material", suggest the analysts.

Target price is $0.56 Current Price is $0.41 Difference: $0.15
If LVT meets the Citi target it will return approximately 37% (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

Macquarie rates SEK as Neutral (3) -

The company has released its new job advertising index for April which shows strength in domestic listing volumes. Macquarie notes while the strong April result means the index is up 16% for the first four months of the second half, May numbers are still normalising for the impact of an earlier Easter this year.

Nevertheless, the broker's analysis of recent volumes suggests growth in new job advertising will continue.

Neutral rating and $20.35 target maintained.

Target price is $20.35 Current Price is $20.56 Difference: minus $0.21 (current price is over target).
If SEK meets the Macquarie target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.70, suggesting downside of -9.0% (ex-dividends)

The company's fiscal year ends in June.

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

Macquarie rates SKI as Neutral (3) -

Transgrid has received the final regulatory decision from the NSW transmission regulator. The company has a 15% investment in Transgrid.

Macquarie suggests the outcome was anticipated and the result provides some certainty for investors for the next 24 months. While the numbers were not what Transgrid asked for the difference is considered minor.

The investment is small in terms of Spark Infrastructure but the growth opportunity is considered significant. Neutral rating and $2.67 target maintained.

Target price is $2.67 Current Price is $2.22 Difference: $0.45
If SKI meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $2.56, suggesting upside of 15.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Macquarie rates SYD as Outperform (1) -

Macquarie believes April traffic statistics are somewhat misleading as a capture movements of Easter and school holidays.

The better metric is spread over the two months of March and April, where international traffic increased 6.3% and domestic 3.3%.

The broker suggests the theme of stronger-for-longer growth is positive and intact. Outperform rating and $6.85 target maintained.

Target price is $6.85 Current Price is $7.04 Difference: minus $0.19 (current price is over target).
If SYD meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.30, suggesting upside of 3.7% (ex-dividends)

The company's fiscal year ends in December.

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

Ord Minnett rates SYD as Buy (1) -

Ord Minnett suggests care should be taken extrapolating monthly traffic data because of historical volatility. In the case of the April figures, the broker suggests international passenger growth was affected by the timing of Easter.

Importantly, the number of visitors to and from mainland China grew by 5.5% in the month. The broker maintains a Buy rating and $8.45 target.

Target price is $8.45 Current Price is $7.04 Difference: $1.41
If SYD meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $7.30, suggesting upside of 3.7% (ex-dividends)

The company's fiscal year ends in December.

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

Macquarie rates TCL as Outperform (1) -

The ACCC has raised a statement of issues with regard to WestConnex and the potential concentration of toll road ownership.

Macquarie finds the issues interesting as they do not speak to the soft competitive advantage the company may have in any one region, although they are not necessarily significant or anti-competitive.

The broker suggests residual issues should be able to be addressed by government or undertakings by Transurban.

Outperform rating and $12.44 target maintained.

Target price is $12.44 Current Price is $11.48 Difference: $0.96
If TCL meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $13.15, suggesting upside of 14.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.9

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