Australian Broker Call

Morgan Stanley rates APO as Overweight (1) -

JCDecaux has made an unsolicited bid for APN Outdoor at $6.52 a share. Morgan Stanley notes, if successful, the proposed deal could drive a combined market share of around 40%.

Of note, APN Outdoor has zero street furniture exposure while JCDecaux is only present in terms of street furniture in Australia.

Overweight. Target is $6.30. Industry view: Attractive.

Target price is $6.30 Current Price is $6.45 Difference: minus $0.15 (current price is over target).
If APO meets the Morgan Stanley target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.63, suggesting downside of -12.7% (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

Citi rates BAL as Buy (1) -

The government has implemented a new rule in the form of Country of Origin Labelling, which comes into effect on July 1 and basically ensures the true extent of Australian produce within a product is documented. Yesterday's announcement from Bellamy's of new strategic arrangements with milk producers will increase Bellamy's Australian organic milk supply.

This means Bellamy's products will have a higher proportion of Made in Australia which, the broker notes, appeals to Chinese customers. The broker also believes it's a matter of "when" rather than "if" the company will receive Chinese regulatory registration. Buy and $22 target retained.

Target price is $22.00 Current Price is $17.03 Difference: $4.97
If BAL meets the Citi target it will return approximately 29% (excluding dividends, fees and charges).

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

Morgans rates BAL as Downgrade to Hold from Add (3) -

Morgans believes the new arrangement to increase Australian organic milk supply is a smart move and will be well received. It takes up to three years to convert conventional farms to organic so it will take time for this supply to materially increase.

The share price has had a significant pullback from the highs in March and the broker attributes this to delays in receiving CFDA registration for China-labelled infant formula products. This potentially places FY19 forecasts at risk.

For these reasons the broker downgrades to Hold from Add. The main upside risk is a stronger-than-expected FY18 result in August and receipt of CFDA registration sooner than expected. Target is raised to $18.50 from $17.75.

Target price is $18.50 Current Price is $17.03 Difference: $1.47
If BAL meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

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

Credit Suisse rates CCL as Outperform (1) -

The consumer outlook in Indonesia is improving and Credit Suisse has recently upgraded Indonesian consumer stocks.

The broker is modelling a decline in Coca-Cola Amatil's Indonesian earnings for 2018 and a return to growth in 2019. In 2019 the company should also benefit from its $100m cost saving program.

Outperform rating and $9.80 target.

Target price is $9.80 Current Price is $8.99 Difference: $0.81
If CCL meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $8.86, suggesting downside of -1.5% (ex-dividends)

The company's fiscal year ends in December.

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 CCP as Downgrade to Hold from Add (3) -

Morgans downgrades to Hold from Add, ahead of the company's expected response to an anonymous sell report. The broker believes the credibility of the sell thesis is low, but secondary and reputation risks have potential to materialise.

The primary basis of the report is that the company is avoiding regulatory scrutiny in its lending division by offering a product which is not classified as a small account credit contract (pay-day) loan under consumer regulation.

Short term weakness is likely, in the broker's opinion, given the potential for negative sentiment. Morgans remains positive on the long-term growth prospects and management of the company. Target is steady at $23.

Target price is $23.00 Current Price is $18.84 Difference: $4.16
If CCP meets the Morgans target it will return approximately 22% (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

Ord Minnett rates CCP as Hold (3) -

The company is in a trading halt following advice from the ASX that an extremely negative report has been published on the company.

Ord Minnett considers the report relatively underwhelming as it has a clear intention of encouraging Westpac ((WBC)) to withdraw funding from the company, which would affect growth prospects.

Ord Minnett believes the report contained inaccuracies in the valuation methodology. Hold rating and $22 target maintained.

Target price is $22.00 Current Price is $18.84 Difference: $3.16
If CCP meets the Ord Minnett 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: 0.0

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

Citi rates CTX as Buy (1) -

BP has paid the price of being a bit quick to raise fuel prices and a bit slow to lower them, resulting in a knock-back from the ACCC in its attempts to acquire Woolworths' ((WOW)) fuel business. BP has taken its bat and ball and gone home.

The broker assumes Caltex will continue to see out its supply contract with Woolies and believes another possible buyer, who would meet ACCC approval, is unlikely to emerge given the only contenders already supply Woolies' rivals. Target increased to $42.06 from $39.98, Buy retained.

Target price is $42.06 Current Price is $32.19 Difference: $9.87
If CTX meets the Citi target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $37.10, suggesting upside of 15.3% (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

Morgan Stanley rates CTX as Underweight (5) -

Woolworths ((WOW)) has announced that BP will not buy its petrol stations. Morgan Stanley considers this a net positive for Caltex. Previous guidance from Caltex has suggested its supply to Woolworths is around $150m in EBIT.

The main issue for Caltex is whether it will retain this contract over time with whomever buys the petrol stations. In the short term, it is likely to mean the contract is kept by Caltex longer than expected previously.

Underweight rating. Target is $26. Industry view is Attractive.

Target price is $26.00 Current Price is $32.19 Difference: minus $6.19 (current price is over target).
If CTX meets the Morgan Stanley target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $37.10, suggesting upside of 15.3% (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 CTX as Buy (1) -

Ord Minnett suggests Caltex will probably face the same issues from the ACCC as BP regarding the acquisition of the Woolworths ((WOW)) petrol business, as it is a higher priced player with substantial existing market share.

However, a deeper partnership may be possible with both companies seeking to grow their convenience segments. Ord Minnett maintains earnings forecasts but raises the target to $37 from $35, factoring in a higher chance that the company retains the Woolworths volumes. Buy rating maintained.

Target price is $37.00 Current Price is $32.19 Difference: $4.81
If CTX meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $37.10, suggesting upside of 15.3% (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

UBS rates CTX as Buy (1) -

Woolworths ((WOW)) has announced that BP will not proceed with the proposed acquisition of its fuel business. The likelihood of Caltex retaining the supply deal has increased, UBS believes.

Assuming the likelihood of losing the supply deal is now 25-50%, and the net benefit to Caltex is around $125m of EBIT, this implies $1.40-2.80 upside to the current share price, in the broker's opinion. Buy rating and $39.20 target maintained.

Target price is $39.20 Current Price is $32.19 Difference: $7.01
If CTX meets the UBS target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $37.10, suggesting upside of 15.3% (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

Deutsche Bank rates FBU as Hold (3) -

The company has reaffirmed guidance for FY18 operating earnings and made no changes to project provisions. The FY19 growth trajectory is soft but in line with Deutsche Bank's expectations.

The broker notes 35-40% of FY19-23 capital expenditure plans are designated to growth oriented projects. The broker retains a Hold rating and NZ$5.66 target.

Current Price is $6.28. Target price not assessed.

Current consensus price target is $6.60, suggesting upside of 5.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.2

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

Morgan Stanley rates FBU as Downgrade to Equal-weight from Overweight (3) -

After the strategy briefing, which confirmed the divestment of Formica and Roof Tile Group, Morgan Stanley believes the outlook rests on the ability to generate improve returns in Australia. The broker considers this a challenge, as the easy gains have been made.

Morgan Stanley no longer envisages sufficient upside to support an Overweight rating and downgrades to Equal-weight. Cautious industry view and $6.60 target maintained.

Target price is $6.60 Current Price is $6.28 Difference: $0.32
If FBU meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $6.60, suggesting upside of 5.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.2

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

UBS rates FBU as Neutral (3) -

UBS is increasingly confident that the company is moving in the right direction and the cost overruns in the B&I division will not distract from other divisions.

The CEO has rebuffed the argument that the business is structurally challenged and a doubling of operating earnings (EBIT) by 2023 is targeted. UBS maintains a Neutral rating and NZ $6.30 target.

Current Price is $6.28. Target price not assessed.

Current consensus price target is $6.60, suggesting upside of 5.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.2

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

UBS rates GTY as Buy (1) -

The company has received an indicative bid from Brookfield Property at $2.30 a share. The board is currently assessing the proposal. UBS notes the offer premium is 10% above the offer received from Hometown.

Buy rating and $2.10 target.

Target price is $2.10 Current Price is $2.32 Difference: minus $0.22 (current price is over target).
If GTY meets the UBS target it will return approximately minus 9% (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

Macquarie rates KLL as Outperform (1) -

The company has signed an offtake agreement with an industry counterparty, K+S, for stage I Beyondie SOP production over 10 years. K+S is a German fertiliser/salt producer and distributor and will provide Kalium Lakes with technical support and expertise.

Given Beyondie is advancing rapidly, Macquarie believes that the company is in a good position to meet its development timeline. Outperform rating and $0.60 target maintained.

Target price is $0.60 Current Price is $0.48 Difference: $0.12
If KLL meets the Macquarie target it will return approximately 25% (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

Ord Minnett rates LLC as Upgrade to Hold from Lighten (3) -

The company has won a number of major development projects in recent months and Ord Minnett undertakes an in-depth review, focusing on the development earnings to FY24.

The broker upgrades to Hold from Lighten and raises the target to $20 from $17. EPS growth estimates are increased to 8-10% per annum for the next two years. Forecasts capture the next wave of development completions and the main driver is scheduled unit completions in Australia, the US and Europe.

Target price is $20.00 Current Price is $19.91 Difference: $0.09
If LLC meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $18.83, suggesting downside of -5.4% (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

Macquarie rates MPL as Neutral (3) -

Macquarie believes Ramsay Health Care's ((RHC)) downgrade to FY18 guidance, because of weaker growth rates in procedural work and inpatient admissions in Australian hospitals, is a positive for Medibank Private.

The potential for caps on pricing create significant margin risks for the industry and the broker does not believe this is completely priced in. Nevertheless, valuations remain supportive and Macquarie has a neutral stance on the health insurance sector.

Neutral rating maintained. Target is $2.90.

Target price is $2.90 Current Price is $2.91 Difference: minus $0.01 (current price is over target).
If MPL meets the Macquarie target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.93, suggesting upside of 0.5% (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

Citi rates MTS as Downgrade to Sell from Neutral (5) -

Industry feedback suggests the risk of another large retailer exiting the Metcash warehouse in 2019 is high, Citi notes, following on from Drakes' departure. Metcash needs to restore positive sale momentum in order to avoid operating deleverage, the broker suggests.

With new management on board, action may well be taken. This suggests the company's capacity for capital returns may well be offset by increased capex, and to that end Citi sees further downside risk to earnings. Downgrade to Sell from Neutral. Target falls to $2.50 from $2.80.

Target price is $2.50 Current Price is $2.78 Difference: minus $0.28 (current price is over target).
If MTS meets the Citi target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.09, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in April.

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 NST as Neutral (3) -

Northern Star has reached its targeted 600kozpa gold production run-rate and is on track to beat FY18 production guidance, the broker notes. Taking this into account, the broker has increased its target to $6.80 from $6.70.

Neutral retained.

Target price is $6.80 Current Price is $6.52 Difference: $0.28
If NST meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $5.53, suggesting downside of -15.2% (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

Credit Suisse rates ORG as Resume Coverage with Outperform (1) -

Credit Suisse resumes coverage with an Outperform rating and $10.50 target as Origin Energy is in the midst of de-leveraging and cost reductions.

The broker believes the company will not be judged on FY18 earnings yet considers consensus estimates too high, based on guidance and reports to date. Energy market earnings are expected to peak in FY19.

Target price is $10.50 Current Price is $9.86 Difference: $0.64
If ORG meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $10.11, suggesting upside of 2.5% (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

Macquarie rates PLS as Outperform (1) -

The company has produced its first spodumene and tantalite concentrates from the Pilgangoora fines flotation circuit ahead of schedule.

Macquarie suggests additional investment has started to pay off already and expects the operation to become one of the mainstays of Australian hard rock lithium production.

Outperform and $1.20 target retained.

Target price is $1.20 Current Price is $0.90 Difference: $0.3
If PLS meets the Macquarie target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $1.10, suggesting upside of 22.2% (ex-dividends)

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

Credit Suisse rates RHC as Underperform (5) -

FY18 guidance has been downgraded on a weaker operating environment. Core growth guidance for earnings per share has been reduced to 7% from 8-10% previously.

Credit Suisse observes affordability remains a core concern and there is low government appetite to drive reforms in Australia. Meanwhile, a softer UK operating environment prevails as a result of restrictions on NHS admissions.

The broker maintains an Underperform rating and reduces the target to $54.00 from $56.50.

Target price is $54.00 Current Price is $56.00 Difference: minus $2 (current price is over target).
If RHC meets the Credit Suisse target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $63.90, suggesting upside of 14.1% (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

Deutsche Bank rates RHC as Upgrade to Buy from Hold (1) -

Ramsay has revealed weak trading conditions in the Australian and UK markets, downgrading FY18 guidance and taking a $125m impairment charge.

Deutsche Bank believes the next two years will be challenging but likes the operating performance, high returns on equity and appealing valuation versus offshore peers. Hence, the rating is upgraded to Buy from Hold. Target is $63.92.

Target price is $63.92 Current Price is $56.00 Difference: $7.92
If RHC meets the Deutsche Bank target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $63.90, suggesting upside of 14.1% (ex-dividends)

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 RHC as Outperform (1) -

Ramsay has downgraded FY18 guidance amid a weaker performance in the UK and challenges in Australia. The company will also recognise a GBP70m charge consisting of an onerous lease provision and asset write-downs related to some UK sites.

Macquarie factors in lower growth assumptions in Australia relative to historical averages. The broker retains an Outperform rating, with its investment view underpinned by expectations for contributions from brownfield developments and procurement savings. Target is $71.50.

Target price is $71.50 Current Price is $56.00 Difference: $15.5
If RHC meets the Macquarie target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $63.90, suggesting upside of 14.1% (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

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

The company has downgraded FY18 guidance for earnings per share by around -2%, to 7%, because of weak admissions across the Australian and UK hospital sector.

While the downgrade appears immaterial at first glance, Morgan Stanley notes admissions are the growth engine and this undermines the perceived superiority of the company's model that once justified a PE of around 30x. The broker believes the recent de-rating is justified.

Equal-weight retained. In-Line sector view. Price target is reduced to $57 from $60.

Target price is $57.00 Current Price is $56.00 Difference: $1
If RHC meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $63.90, suggesting upside of 14.1% (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

Morgans rates RHC as Hold (3) -

Weakness in the UK and lower volume growth in Australia has meant the company will impair $125m in UK assets, downgrading FY18 guidance by -1-3%.

Morgans continues to believe the core fundamentals for the longer term are sound and there is value, but finds it difficult to determine when volumes will revert and the earnings outlook improve.

The broker maintains a Hold rating and reduces the target to $62.28 from $69.78.

Target price is $62.28 Current Price is $56.00 Difference: $6.28
If RHC meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $63.90, suggesting upside of 14.1% (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

Ord Minnett rates RHC as Hold (3) -

The earnings impact from weaker conditions has meant Ramsay has downgraded guidance for FY18. Ord Minnett envisages risk of a further slowdown as commentary and criticism of the private health system mounts ahead of the next federal election.

There is also little sign of improvement in offshore operations and the broker is wary that the earnings risk remains to the downside. A Hold rating is maintained and the target is lowered to $60 from $68.

Target price is $60.00 Current Price is $56.00 Difference: $4
If RHC meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $63.90, suggesting upside of 14.1% (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

UBS rates RHC as Neutral (3) -

The company has reduced guidance for FY18 EPS growth to 7% from 8-10% and flagged GBP70m of non-cash onerous lease provisions and asset write-downs for the UK business.

Weaker growth rates in procedural work and inpatient admissions in Australia and an ongoing downturn in NHS volumes in the UK are cited as reasons for the downgrade.

UBS does not envisage any material recovery in Australian private hospital volume growth in the near term. The broker maintains a Neutral rating and reduces the target to $64 from $70.

Target price is $64.00 Current Price is $56.00 Difference: $8
If RHC meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $63.90, suggesting upside of 14.1% (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

Morgans rates SXY as Add (1) -

Morgans believes the deal with infrastructure operator Jemena de-risks an essential element of Project Atlas and almost halves the required capital expenditure.

The broker envisages significant potential for Senex to now strike a similar deal on WSGP, which could unlock further upside that is not represented in forecasts. An Add rating is maintained. Target lifts to $0.53 from $0.51.

Target price is $0.53 Current Price is $0.43 Difference: $0.1
If SXY meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $0.44, suggesting upside of 2.7% (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

UBS rates SYD as Downgrade to Neutral from Buy (3) -

As the stock has outperformed since the February result UBS downgrades to Neutral from Buy. The broker also slightly reduces international traffic growth estimates for 2018 to 5.5% from 6.0%. The broker's forecasts also show 103% cash flow coverage of the 37.5c distribution guidance.

UBS raises the target to $7.30 from $7.10. Beyond 2018 the broker envisages a three-year period of stable and predictable growth in cash flow of 8% despite assumptions that international traffic moderates and effective interest rates rise.

Target price is $7.30 Current Price is $7.54 Difference: minus $0.24 (current price is over target).
If SYD meets the UBS target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.40, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in December.

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

Deutsche Bank rates WOW as Buy (1) -

Woolworths has announced that BP Australia will not pursue the purchase of its petrol business and it will now explore alternative options.

The deal was originally announced in December 2016 and opposed by the ACCC because of concerns that the sale to a premium priced operator would reduce competition in the retail fuels market.

Buy rating and $30 target maintained.

Target price is $30.00 Current Price is $30.00 Difference: $0
If WOW meets the Deutsche Bank target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $27.79, suggesting downside of -7.4% (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

Morgan Stanley rates WOW as Underweight (5) -

Woolworths has announced that BP is withdrawing its bid for the petrol business following concerns cited by the competition regulator, ACCC. Woolworths will seek alternative sale options.

Capital management is set to be delayed, Morgan Stanley asserts, as any new bidder will have to move through the same competition regulation process.

Target is $23. Underweight retained. Industry view: Cautious.

Target price is $23.00 Current Price is $30.00 Difference: minus $7 (current price is over target).
If WOW meets the Morgan Stanley target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $27.79, suggesting downside of -7.4% (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

Ord Minnett rates WOW as Accumulate (2) -

Woolworths has announced that BP will not continue with the purchase of its petrol business. The company is assessing its options with other potential buyers. Ord Minnett expects capital management will now be delayed.

Accumulate rating and $31 target maintained.

Target price is $31.00 Current Price is $30.00 Difference: $1
If WOW meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $27.79, suggesting downside of -7.4% (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 WOW as Buy (1) -

BP has withdrawn the proposed purchase of the Woolworths petrol business following opposition from the ACCC. While UBS expects the company is likely to try selling to another party it does not believe retaining the business is a negative.

The main negative is that it likely ensures a delay to capital management until the first half of FY19. UBS maintains a Buy rating and $30 target.

Target price is $30.00 Current Price is $30.00 Difference: $0
If WOW meets the UBS target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $27.79, suggesting downside of -7.4% (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