Australian Broker Call

Credit Suisse rates CMA as Neutral (3) -

The company has acquired a Canberra office asset for $256m at what Credit Suisse believes is a tight 5.1% capitalisation rate. The acquisition has been partly funded by a placement and increases the weighting to Canberra to 16% from 5%.

The broker also notes the company has pulled the planned sale of 483-517 Kingsford Smith Drive, Hamilton, Qld, and, in isolation, this provides earnings upside.

FY20 guidance is unchanged. Neutral rating and $2.92 target maintained.

Target price is $2.92 Current Price is $2.99 Difference: minus $0.07 (current price is over target).
If CMA meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.95, suggesting downside of -1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

UBS rates CMA as Neutral (3) -

The company has purchased an office building in New Acton Canberra for $256m funded by a placement and debt. UBS considers the acquisition logical as it improves geographic diversification and is marginally accretive.

The asset appears fully priced to the broker, notwithstanding solid annual rent reviews of 3.3% per annum. Nevertheless, UBS envisages more value in Dexus ((DXS)) on a relative basis and maintains a Neutral rating. Target rises to $3.02 from $2.82.

Target price is $3.02 Current Price is $2.99 Difference: $0.03
If CMA meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $2.95, suggesting downside of -1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Ord Minnett rates INR as Buy (1) -

The company has announced a letter of intent for 60% of its annual requirement for sulphur supply from Shell. This is a key project consumable and the company's largest expense.

Ord Minnett welcomes the slump in sulphur prices over the last month and raises its valuation of the stock, taking the target to $0.38 from $0.36. Speculative Buy rating maintained.

Target price is $0.38 Current Price is $0.19 Difference: $0.19
If INR meets the Ord Minnett target it will return approximately 100% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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 Buy (1) -

Lendlease has stopped work on two tunnel boring machines at the Melbourne Metro, its largest engineering project. Ord Minnett anticipates the company is close to effecting a sale of the engineering & services business and the stoppage has a number of potential implications.

The most likely outcome is that the sale concludes, albeit with a contingent liability. If the extent of the problem is worse than currently expected, the project could affect the sale of the engineering unit and result in an impairment.

Buy rating and $22.50 target maintained.

Target price is $22.50 Current Price is $18.33 Difference: $4.17
If LLC meets the Ord Minnett target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $21.27, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Ord Minnett rates MFG as Upgrade to Hold from Sell (3) -

All fund managers being reviewed by Ord Minnett generated solid absolute returns over the first half to the end of November. Flow momentum remains strong for Magellan Financial and the first half is on track to record the biggest retail inflow for a half year ever.

Ord Minnett upgrades to Hold from Sell and raises the target to $50.41 from $49.60.

Target price is $50.41 Current Price is $54.23 Difference: minus $3.82 (current price is over target).
If MFG meets the Ord Minnett target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $49.37, suggesting downside of -9.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.6

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

UBS rates MP1 as Buy (1) -

UBS believes the capital raising of $62m will de-risk funding requirements to break-even, which is expected in the fourth quarter of FY21. The capital provides plenty of options to either accelerate the roll-out into existing geographies or expand into additional ones.

There is also room for any strategic investments should these arise. UBS believes Megaport will be a major beneficiary of the data generation over the next decade. Buy rating maintained. Target rises to $11.55 from $11.30.

Target price is $11.55 Current Price is $9.37 Difference: $2.18
If MP1 meets the UBS target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $11.14, suggesting upside of 18.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

UBS rates PMV as Buy (1) -

Premier Investments has refreshed its global roll-out strategy for Smiggle over recent years, with fewer stand-alone retail stores and more online and wholesale stores.

UBS is positive about the outlook for the global roll-out and assesses there is potential upside to medium-term forecasts in terms of margins and wholesale.

The business continues to execute well across all its brands and the broker maintains a Buy rating and $20.95 target.

Target price is $20.95 Current Price is $19.20 Difference: $1.75
If PMV meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $19.56, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Citi rates SGM as Buy (1) -

With the recent rally in scrap prices, amid tight supply, as the Northern Hemisphere winter kicks in, Citi believes the company's FY20 guidance and consensus forecasts now hold upside risk.

Since the company's profit warning in late October Turkish import scrap prices have rallied 16% and US domestic scrap prices have jumped 23%. The company expects FY20 earnings (EBIT) of $20-50m, assuming prices hold steady.

Citi retains a Buy rating and $12.10 target.

Target price is $12.10 Current Price is $10.98 Difference: $1.12
If SGM meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $10.09, suggesting downside of -8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Morgan Stanley rates SGP as Overweight (1) -

Stockland is perceived to be an owner of lower-quality retail malls, which make up 40% of its earnings. While structurally bearish on retail, Morgan Stanley assesses the market has overlooked the steps the company has been taking to address the issues in its portfolio.

Hence, further downside in the form of downgrades or devaluation is likely to be more subdued vs peers. Morgan Stanley's Overweight rating is premised on a PE re-rating story as residential markets improve and FY20 being the trough year. Target is $5.50. Industry view is In-Line.

Target price is $5.50 Current Price is $4.89 Difference: $0.61
If SGP meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $4.49, suggesting downside of -8.2% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates SZL as Buy (1) -

The company has announced strong Black Friday and Cyber Monday sales and customer acquisitions. Ord Minnett anticipates the next quarterly update could be a catalyst for the stock.

Over the four-day weekend total transaction value was US$11.3m, representing a 402% increase on the preceding corresponding period. Ord Minnett retains a Buy rating and $3.40 target.

Target price is $3.40 Current Price is $2.27 Difference: $1.13
If SZL meets the Ord Minnett target it will return approximately 50% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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: 1.0

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