Australian Broker Call

September 07, 2017

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COMPANIES DISCUSSED IN THIS ISSUE

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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)

THIS REPORT WILL BE UPDATED SHORTLY

Last Updated: 12:31 PM

Your daily news report on the latest recommendation, valuation, forecast and opinion changes.

This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.

For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE

Today's Upgrades and Downgrades
AHG - AUTOMOTIVE HOLDINGS Upgrade to Add from Hold Morgans
BBN - BABY BUNTING Upgrade to Add from Hold Morgans
HSN - HANSEN TECHNOLOGIES Upgrade to Buy from Accumulate Ord Minnett
SUN - SUNCORP Upgrade to Buy from Neutral Citi
TLS - TELSTRA CORP Upgrade to Outperform from Neutral Credit Suisse
AGL  AGL ENERGY LIMITED

Infrastructure & Utilities

Overnight Price: $23.71

Ord Minnett rates AGL as Accumulate (2) -

Ord Minnett has reviewed the wholesale electricity market and believes policy uncertainty and historically weak generator returns have meant the rolling out of renewable generation has not kept pace with base-load capacity closures.

Shortages of electricity should lead to higher spot and forward prices and the assumption is that those with existing assets, such as AGL Energy should benefit.

Accumulate retained. Target is lifted to $28.85 from $28.30.

This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.

Target price is $28.85 Current Price is $23.71 Difference: $5.14
If AGL meets the Ord Minnett target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $26.56, suggesting upside of 9.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 117.00 cents and EPS of 157.00 cents.
At the last closing share price the estimated dividend yield is 4.93%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.10.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 153.7, implying annual growth of 90.9%.

Current consensus DPS estimate is 115.7, implying a prospective dividend yield of 4.7%.

Current consensus EPS estimate suggests the PER is 15.9.

Forecast for FY19:

Ord Minnett forecasts a full year FY19 dividend of 130.00 cents and EPS of 173.00 cents.
At the last closing share price the estimated dividend yield is 5.48%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 177.3, implying annual growth of 15.4%.

Current consensus DPS estimate is 133.7, implying a prospective dividend yield of 5.5%.

Current consensus EPS estimate suggests the PER is 13.7.

Market Sentiment: 0.4

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

AHG  AUTOMOTIVE HOLDINGS GROUP LIMITED

Automobiles & Components

Overnight Price: $3.34

Morgans rates AHG as Upgrade to Add from Hold (1) -

Industry data has shown the Western Australia new vehicle sales grew by 4.2% in August, the second month of positive growth in four months. The company faced a number of challenges in FY17 relating to finance impacts from tightening consumer credit conditions  and declining vehicle sales.

Morgans suspects the risk/reward is now to the upside. The broker likes the strong exposure to an eventual upswing in the WA economy and believes it's only a matter of time before trading conditions improve. Rating is upgraded to Add from Hold, target is $3.60.

Target price is $3.60 Current Price is $3.34 Difference: $0.26
If AHG meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.51, suggesting upside of 5.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 20.00 cents and EPS of 27.00 cents.
At the last closing share price the estimated dividend yield is 5.99%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.37.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 26.7, implying annual growth of 57.1%.

Current consensus DPS estimate is 19.1, implying a prospective dividend yield of 5.7%.

Current consensus EPS estimate suggests the PER is 12.5.

Forecast for FY19:

Morgans forecasts a full year FY19 dividend of 21.00 cents and EPS of 28.00 cents.
At the last closing share price the estimated dividend yield is 6.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.93.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.2, implying annual growth of 9.4%.

Current consensus DPS estimate is 20.5, implying a prospective dividend yield of 6.1%.

Current consensus EPS estimate suggests the PER is 11.4.

Market Sentiment: 0.5

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

ARF  ARENA REIT

REITs

Overnight Price: $2.27

Morgan Stanley rates ARF as Overweight (1) -

Morgan Stanley expects the benefits of upward market rent reviews will outweigh the risks from new childcare supply. The company is currently testing the market at higher yields for potential acquisitions, given the increased pressure on speculative developers.

Overweight and $2.40 target retained. Industry view: Cautious.

Target price is $2.40 Current Price is $2.27 Difference: $0.13
If ARF meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Morgan Stanley forecasts a full year FY18 dividend of 12.80 cents and EPS of 13.10 cents.
At the last closing share price the estimated dividend yield is 5.64%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.33.

Forecast for FY19:

Morgan Stanley forecasts a full year FY19 dividend of 13.80 cents and EPS of 14.00 cents.
At the last closing share price the estimated dividend yield is 6.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.21.

Market Sentiment: 1.0

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

BBN  BABY BUNTING GROUP LIMITED

Apparel & Footwear

Overnight Price: $1.82

Morgans rates BBN as Upgrade to Add from Hold (1) -

The exit of another competitor in Queensland, Bubs, is an opportunity for Baby Bunting, Morgans believes. There is the potential to take on a couple of the leases where Baby Bunting does not have a presence.

In the short term the clearance of Bubs stock may impact sales growth for Baby Bunting and, therefore, margin but the broker believes the market will look through this for the medium-long-term.

Rating is upgraded to Add from Hold, as it is a reminder of the company's strengthening competitive position and the strong growth that is still on offer. Target rises to $1.96 from $1.80.

Target price is $1.96 Current Price is $1.82 Difference: $0.14
If BBN meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $1.93, suggesting upside of 6.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 8.00 cents and EPS of 11.00 cents.
At the last closing share price the estimated dividend yield is 4.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.55.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.5, implying annual growth of 18.6%.

Current consensus DPS estimate is 8.0, implying a prospective dividend yield of 4.4%.

Current consensus EPS estimate suggests the PER is 15.7.

Forecast for FY19:

Morgans forecasts a full year FY19 dividend of 9.00 cents and EPS of 13.00 cents.
At the last closing share price the estimated dividend yield is 4.95%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.8, implying annual growth of 11.3%.

Current consensus DPS estimate is 9.2, implying a prospective dividend yield of 5.1%.

Current consensus EPS estimate suggests the PER is 14.1.

Market Sentiment: 0.5

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

BHP  BHP BILLITON LIMITED

Bulks

Overnight Price: $27.73

UPDATED

UBS rates BHP as Buy (1) -

UBS reduces near-term oil price forecasts. September quarter prices have failed to recover to the extent the broker had originally expected. US production is not expected to balance global markets in the medium to long-term.

UBS reduces BHP Billiton's estimates by -4% for FY18. The oil & gas business represented around 20% of group earnings in FY17, down from 30% in FY16, as other commodities recovered from oversold positions, the broker observes.

Target price is $29.50 Current Price is $27.73 Difference: $1.77
If BHP meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $28.36, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 101.41 cents and EPS of 171.21 cents.
At the last closing share price the estimated dividend yield is 3.66%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 156.5, implying annual growth of N/A.

Current consensus DPS estimate is 95.9, implying a prospective dividend yield of 3.5%.

Current consensus EPS estimate suggests the PER is 17.5.

Forecast for FY19:

UBS forecasts a full year FY19 dividend of 102.73 cents and EPS of 172.53 cents.
At the last closing share price the estimated dividend yield is 3.70%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.07.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 145.4, implying annual growth of -7.1%.

Current consensus DPS estimate is 91.9, implying a prospective dividend yield of 3.4%.

Current consensus EPS estimate suggests the PER is 18.9.

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

BLD  BORAL LIMITED

Building Products & Services

Overnight Price: $6.46

Credit Suisse rates BLD as Outperform (1) -

Credit Suisse suspects the range in estimates for FY18 earnings can only be explained by disparate views around the US division post the consolidation of Headwaters.

The broker observes an opportunity in Hurricane Harvey, as Texas accounts for around 25% of US division revenue and 30% of EBIT because of the overweight fly ash position.

The broker does not assume upside from remediation works as it is too early to assess damage. Texas also accounts for around 70% of US ethylene production and most manufacturers are affected by the hurricane, which means resin prices could spike.

Outperform retained. Target is $7.30.

Target price is $7.30 Current Price is $6.46 Difference: $0.84
If BLD meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $6.91, suggesting upside of 5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 24.00 cents and EPS of 39.64 cents.
At the last closing share price the estimated dividend yield is 3.72%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 35.1, implying annual growth of 20.2%.

Current consensus DPS estimate is 24.2, implying a prospective dividend yield of 3.7%.

Current consensus EPS estimate suggests the PER is 18.6.

Forecast for FY19:

Credit Suisse forecasts a full year FY19 dividend of 29.00 cents and EPS of 45.60 cents.
At the last closing share price the estimated dividend yield is 4.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.17.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 43.3, implying annual growth of 23.4%.

Current consensus DPS estimate is 28.4, implying a prospective dividend yield of 4.3%.

Current consensus EPS estimate suggests the PER is 15.1.

Market Sentiment: 0.4

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

CRR  CONVENIENCE RETAIL REIT

REITs

Overnight Price: $0.00

UPDATED

Morgans rates CRR as Initiation of coverage with Add (1) -

Convenience Retail REIT has a portfolio of 66 service station sites valued at $308m, primarily leased to Puma Energy Australia and Woolworths ((WOW)). Income is supported by a weighted average lease expiry of 13.6 years. Leases are a mix of CPI and fixed increases averaging 2.9% per annum.

Morgans initiates coverage with an Add rating and $3.14 target. The company is forecast to pay an annualised FY18 distribution yield of 6.8% and FY19 distribution yield of 7.1%.

Target price is $3.14

The company's fiscal year ends in June.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 17.90 cents and EPS of 18.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 0.00.

Forecast for FY19:

Morgans forecasts a full year FY19 dividend of 20.30 cents and EPS of 20.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 0.00.

Market Sentiment: 1.0

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

CSR  CSR LIMITED

Building Products & Services

Overnight Price: $4.19

Deutsche Bank rates CSR as Hold (3) -

Deutsche Bank's expectations are largely unchanged after the company's site visit and investor presentation.

Given CSR is net cash, and there is the possibility of an aluminium sale as part of any Pacific Aluminium divestment, the broke believes it possible a special dividend could be paid, in the absence of an acquisition.

The company is no longer required to seek approval for the payment of special dividends from the end of 2017. The broker retains a Hold rating. Target is reduced to $4.44 from $4.47.

Target price is $4.44 Current Price is $4.19 Difference: $0.25
If CSR meets the Deutsche Bank target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $4.38, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Deutsche Bank forecasts a full year FY18 dividend of 29.00 cents and EPS of 44.00 cents.
At the last closing share price the estimated dividend yield is 6.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.52.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 41.2, implying annual growth of 16.7%.

Current consensus DPS estimate is 26.3, implying a prospective dividend yield of 6.3%.

Current consensus EPS estimate suggests the PER is 10.1.

Forecast for FY19:

Deutsche Bank forecasts a full year FY19 dividend of 21.00 cents and EPS of 34.00 cents.
At the last closing share price the estimated dividend yield is 5.01%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.32.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 32.8, implying annual growth of -20.4%.

Current consensus DPS estimate is 22.4, implying a prospective dividend yield of 5.4%.

Current consensus EPS estimate suggests the PER is 12.7.

Market Sentiment: -0.2

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

DOW  DOWNER EDI LIMITED

Mining Sector Contracting

Overnight Price: $6.94

Ord Minnett rates DOW as Re-instate Coverage with Lighten (4) -

Ord Minnett believes majority of the company's businesses are well-positioned to experience growth over the next couple of years, particularly in transport.

Nevertheless, earnings risks are heightened from the newly-acquired Spotless. Cash flow conversion is much lower at Spotless and the broker envisages a risk that the business will downgrade guidance for FY18.

Ord Minnett reinstates coverage with a Lighten rating and target of $6.20.

This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.

Target price is $6.20 Current Price is $6.94 Difference: minus $0.74 (current price is over target).
If DOW meets the Ord Minnett target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.58, suggesting downside of -2.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 25.00 cents and EPS of 41.10 cents.
At the last closing share price the estimated dividend yield is 3.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.89.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 42.1, implying annual growth of 17.6%.

Current consensus DPS estimate is 25.4, implying a prospective dividend yield of 3.8%.

Current consensus EPS estimate suggests the PER is 16.0.

Forecast for FY19:

Current consensus EPS estimate is 47.5, implying annual growth of 12.8%.

Current consensus DPS estimate is 28.8, implying a prospective dividend yield of 4.3%.

Current consensus EPS estimate suggests the PER is 14.2.

Market Sentiment: -0.2

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

GMG  GOODMAN GROUP

Infra & Property Developers

Overnight Price: $8.18

Morgan Stanley rates GMG as Overweight (1) -

Management has suggested that, whilst its business can drive earnings growth in excess of the 6-7% that was delivered over the past five years, it would rather use operating strengths to improve the portfolio quality. The US remains the preferred market.

The company envisages the peak in dilution from asset sales will occur over the next 12 months and the benefits of its re-mixing may not be seen until the next downturn, which could be some time away.

Overweight rating and $8.20 target retained. Industry view is Cautious.

Target price is $8.20 Current Price is $8.18 Difference: $0.02
If GMG meets the Morgan Stanley target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $8.25, suggesting upside of 0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Morgan Stanley forecasts a full year FY18 dividend of 27.60 cents and EPS of 46.10 cents.
At the last closing share price the estimated dividend yield is 3.37%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 46.2, implying annual growth of 6.2%.

Current consensus DPS estimate is 27.8, implying a prospective dividend yield of 3.4%.

Current consensus EPS estimate suggests the PER is 17.8.

Forecast for FY19:

Morgan Stanley forecasts a full year FY19 dividend of 29.30 cents and EPS of 48.80 cents.
At the last closing share price the estimated dividend yield is 3.58%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 48.9, implying annual growth of 5.8%.

Current consensus DPS estimate is 29.4, implying a prospective dividend yield of 3.6%.

Current consensus EPS estimate suggests the PER is 16.8.

Market Sentiment: 0.4

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

HSN  HANSEN TECHNOLOGIES LIMITED

IT & Support

Overnight Price: $3.15

UPDATED

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

Ord Minnett upgrades to Buy from Accumulate. The stock has significantly de-rated through 2017 and is now trading at levels that are lower than at any point since the broker started coverage.

Ord Minnett suspects the stock is now set to deliver a strong cash result in the first half. As Hansen is typically a mean reversion business, the broker envisages 15% upside to base case.

Price target is reduced to $3.93 from $3.98.

Target price is $3.93 Current Price is $3.15 Difference: $0.78
If HSN meets the Ord Minnett target it will return approximately 25% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 6.00 cents and EPS of 14.10 cents.
At the last closing share price the estimated dividend yield is 1.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.34.

Forecast for FY19:

Ord Minnett forecasts a full year FY19 dividend of 6.00 cents and EPS of 14.70 cents.
At the last closing share price the estimated dividend yield is 1.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.43.

Market Sentiment: 0.5

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

IAG  INSURANCE AUSTRALIA GROUP LIMITED

Insurance

Overnight Price: $6.20

UPDATED

Credit Suisse rates IAG as Outperform (1) -

Credit Suisse reviews the opportunities for capital management, envisaging $500m to in excess of $1bn could be returned in coming years.

With premium rates now moving higher and a strong focus on cost initiatives, the broker believes now is not the time to walk away from the stock despite a disappointing FY17 result.

Outperform retained. Target is $7.00.

Target price is $7.00 Current Price is $6.20 Difference: $0.8
If IAG meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $6.27, suggesting upside of 0.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 29.00 cents and EPS of 39.00 cents.
At the last closing share price the estimated dividend yield is 4.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.90.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 36.6, implying annual growth of -6.2%.

Current consensus DPS estimate is 29.1, implying a prospective dividend yield of 4.7%.

Current consensus EPS estimate suggests the PER is 17.0.

Forecast for FY19:

Credit Suisse forecasts a full year FY19 dividend of 33.00 cents and EPS of 43.00 cents.
At the last closing share price the estimated dividend yield is 5.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.42.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 39.0, implying annual growth of 6.6%.

Current consensus DPS estimate is 31.3, implying a prospective dividend yield of 5.0%.

Current consensus EPS estimate suggests the PER is 15.9.

Market Sentiment: 0.1

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

LVH  LIVEHIRE LIMITED

Jobs & Skilled Labour Services

Overnight Price: $0.73

Morgans rates LVH as Add (1) -

FY17 results were in line with Morgans. The broker changes accounting treatment for R&D costs, in line with the company's treatment. R&D costs will now be capitalised.

The broker believes the stock offers investors participation in the growth of the game-changing recruitment system and the rewards could be substantial. Yet, this is early-stage technology and is yet to become self-sustaining from a cash flow perspective.

Add rating retained. Target is raised to $0.86 from $0.68.

Target price is $0.86 Current Price is $0.73 Difference: $0.135
If LVH meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 2.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 31.52.

Forecast for FY19:

Morgans forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 1.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 40.28.

Market Sentiment: 1.0

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

MND  MONADELPHOUS GROUP LIMITED

Mining Sector Contracting

Overnight Price: $14.67

Ord Minnett rates MND as Re-instate Coverage with Hold (3) -

Ord Minnett suspects oil & gas construction will cause headwinds in FY19 but the business has a strong net cash balance sheet and aspirations for acquisitions. The broker believes Monadelphous is well-positioned to benefit from recovering mining capital expenditure.

The broker reinstates coverage with a Hold rating and $14.30 target.

This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.

Target price is $14.30 Current Price is $14.67 Difference: minus $0.37 (current price is over target).
If MND meets the Ord Minnett target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.02, suggesting downside of -23.8% (ex-dividends)

Forecast for FY18:

Current consensus EPS estimate is 61.8, implying annual growth of 0.6%.

Current consensus DPS estimate is 52.8, implying a prospective dividend yield of 3.6%.

Current consensus EPS estimate suggests the PER is 23.4.

Forecast for FY19:

Current consensus EPS estimate is 66.3, implying annual growth of 7.3%.

Current consensus DPS estimate is 56.1, implying a prospective dividend yield of 3.9%.

Current consensus EPS estimate suggests the PER is 21.8.

Market Sentiment: -0.9

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

NHC  NEW HOPE CORPORATION LIMITED

Coal

Overnight Price: $1.67

UPDATED

Credit Suisse rates NHC as Neutral (3) -

Upside for the stock is heavily dependent on approval for stage III at New Acland. The company has initiated a judicial review of the findings of the Queensland Land Court, which recommended that mining leases not be granted. The ultimate decision will be in the hands of the Queensland government minister.

Meanwhile, the company's 90%-owned Lenton joint venture has entered into an agreement with Peabody to acquire four tenements and infrastructure for $14m. The transaction is conditional on a number of regulatory requirements.

Neutral retained. Target is $1.60.

Target price is $1.60 Current Price is $1.67 Difference: minus $0.07 (current price is over target).
If NHC 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 $1.82, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Credit Suisse forecasts a full year FY17 dividend of 5.50 cents and EPS of 18.04 cents.
At the last closing share price the estimated dividend yield is 3.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.26.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.0, implying annual growth of 3296.2%.

Current consensus DPS estimate is 7.4, implying a prospective dividend yield of 4.4%.

Current consensus EPS estimate suggests the PER is 9.3.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 2.00 cents and EPS of 27.25 cents.
At the last closing share price the estimated dividend yield is 1.20%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 23.5, implying annual growth of 30.6%.

Current consensus DPS estimate is 8.1, implying a prospective dividend yield of 4.9%.

Current consensus EPS estimate suggests the PER is 7.1.

Market Sentiment: 0.3

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

ORG  ORIGIN ENERGY LIMITED

NatGas

Overnight Price: $7.75

UPDATED

Ord Minnett rates ORG as Accumulate (2) -

Ord Minnett has reviewed the wholesale electricity market and believes policy uncertainty and historically weak generator returns have meant the rolling out of renewable generation has not kept pace with base-load capacity closures.

Shortages of electricity should lead to higher spot and forward prices and the assumption is that those with existing assets should benefit. Origin Energy is short electricity but is expected to benefit from higher retail prices.

The company's generation assets cover the residential retail book and higher wholesale cost are likely to pass through to commercial and industrial customers.

This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.

Ord Minnett retains an Accumulate rating and raises the target to $8.30 from $7.75.

Target price is $8.30 Current Price is $7.75 Difference: $0.55
If ORG meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $7.87, suggesting upside of 1.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 0.00 cents and EPS of 56.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 51.6, implying annual growth of N/A.

Current consensus DPS estimate is 4.4, implying a prospective dividend yield of 0.6%.

Current consensus EPS estimate suggests the PER is 15.1.

Forecast for FY19:

Ord Minnett forecasts a full year FY19 dividend of 20.00 cents and EPS of 70.00 cents.
At the last closing share price the estimated dividend yield is 2.58%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.07.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 64.5, implying annual growth of 25.0%.

Current consensus DPS estimate is 19.9, implying a prospective dividend yield of 2.6%.

Current consensus EPS estimate suggests the PER is 12.1.

Market Sentiment: 0.4

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

PMV  PREMIER INVESTMENTS LIMITED

Apparel & Footwear

Overnight Price: $12.98

Macquarie rates PMV as Outperform (1) -

Macquarie reviews the outlook ahead of the FY17 results. Coverage is also transferred to another analyst. Feedback from both listed and unlisted apparel retailers suggests trading conditions have been difficult.

The broker expects Smiggle and Peter Alexander to drive growth, and thus envisages any share price weakness on the back of a soft apparel result in established brands as a buying opportunity.

Outperform rating retained. Target reduced to $16.28 from $17.92.

Target price is $16.28 Current Price is $12.98 Difference: $3.3
If PMV meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $15.17, suggesting upside of 15.5% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 49.20 cents and EPS of 68.30 cents.
At the last closing share price the estimated dividend yield is 3.79%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 69.3, implying annual growth of 4.6%.

Current consensus DPS estimate is 52.6, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 18.9.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 54.90 cents and EPS of 76.30 cents.
At the last closing share price the estimated dividend yield is 4.23%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.01.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 78.1, implying annual growth of 12.7%.

Current consensus DPS estimate is 58.6, implying a prospective dividend yield of 4.5%.

Current consensus EPS estimate suggests the PER is 16.8.

Market Sentiment: 0.8

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

RCR  RCR TOMLINSON LIMITED

Mining Sector Contracting

Overnight Price: $4.06

Ord Minnett rates RCR as Initiation of coverage with Buy (1) -

Ord Minnett suggests Australian contractors may be set for a brighter future. Mining capital expenditure appears set to increase by more than 10% in FY18 and Australia's east coast should benefit from a boom in infrastructure spending.

The broker initiates coverage of RCR Tomlinson with a Buy rating and $5.08 target, envisaging great opportunity in solar. The company has won close to $1bn of solar work, has a strengthened balance sheet and attractive valuation relative to the opportunity.

This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.

Target price is $5.08 Current Price is $4.06 Difference: $1.02
If RCR meets the Ord Minnett target it will return approximately 25% (excluding dividends, fees and charges).

Market Sentiment: 1.0

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

SUN  SUNCORP GROUP LIMITED

Banks

Overnight Price: $12.53

Citi rates SUN as Upgrade to Buy from Neutral (1) -

Citi analysts have upgraded to Buy from Neutral in response to recent share price weakness. Target price is kept at $14. The analysts find Suncorp shares have by now fallen far enough to account for the FY18 margin headwinds.

Also, at present level Citi thinks the shares offer an attractive entry point to gain leverage to the improving Australian general insurance market. The banking operations should stay reasonably strong, the analysts add.

They see better value on offer than in Insurance Australia Group ((IAG)).

Target price is $14.00 Current Price is $12.53 Difference: $1.47
If SUN meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $13.95, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 76.00 cents and EPS of 85.10 cents.
At the last closing share price the estimated dividend yield is 6.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.72.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 86.8, implying annual growth of 3.5%.

Current consensus DPS estimate is 74.3, implying a prospective dividend yield of 5.9%.

Current consensus EPS estimate suggests the PER is 14.6.

Forecast for FY19:

Citi forecasts a full year FY19 dividend of 79.00 cents and EPS of 97.60 cents.
At the last closing share price the estimated dividend yield is 6.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 96.3, implying annual growth of 10.9%.

Current consensus DPS estimate is 75.6, implying a prospective dividend yield of 6.0%.

Current consensus EPS estimate suggests the PER is 13.1.

Market Sentiment: 0.2

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

TGR  TASSAL GROUP LIMITED

Aquaculture

Overnight Price: $3.90

UPDATED

Ord Minnett rates TGR as Buy (1) -

Ord Minnett has been reassured by management commentary regarding the domestic wholesale price of salmon. Despite generally favourable results the broker believes concerns over pricing have restricted the performance of salmon companies in recent weeks.

Growing conditions remain positive and the broker considers the valuation attractive. The broker maintains a Buy rating and $5.00 target.

This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.

Target price is $5.00 Current Price is $3.90 Difference: $1.1
If TGR meets the Ord Minnett target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $4.70, suggesting upside of 19.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 17.00 cents and EPS of 33.00 cents.
At the last closing share price the estimated dividend yield is 4.36%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.82.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 31.5, implying annual growth of -15.5%.

Current consensus DPS estimate is 16.4, implying a prospective dividend yield of 4.2%.

Current consensus EPS estimate suggests the PER is 12.5.

Forecast for FY19:

Ord Minnett forecasts a full year FY19 dividend of 18.00 cents and EPS of 35.00 cents.
At the last closing share price the estimated dividend yield is 4.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 34.3, implying annual growth of 8.9%.

Current consensus DPS estimate is 17.9, implying a prospective dividend yield of 4.5%.

Current consensus EPS estimate suggests the PER is 11.5.

Market Sentiment: 0.8

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

TLS  TELSTRA CORPORATION LIMITED

Telecommunication

Overnight Price: $3.62

Credit Suisse rates TLS as Upgrade to Outperform from Neutral (1) -

Credit Suisse believes the majority of the negative news flow is now out of the way for Telstra and reflected in the share price.

The broker believes the new dividend policy and the creation of a special dividend pool provides flexibility for the company to maintain a $0.22 per share dividend for at least the next four years.

The broker upgrades to Outperform from Neutral. Target is raised to $4.00 from $3.90.

Target price is $4.00 Current Price is $3.62 Difference: $0.38
If TLS meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $3.91, suggesting upside of 5.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 22.00 cents and EPS of 33.61 cents.
At the last closing share price the estimated dividend yield is 6.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.7, implying annual growth of -5.5%.

Current consensus DPS estimate is 22.0, implying a prospective dividend yield of 5.9%.

Current consensus EPS estimate suggests the PER is 12.1.

Forecast for FY19:

Credit Suisse forecasts a full year FY19 dividend of 22.00 cents and EPS of 33.92 cents.
At the last closing share price the estimated dividend yield is 6.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.5, implying annual growth of -0.7%.

Current consensus DPS estimate is 22.1, implying a prospective dividend yield of 5.9%.

Current consensus EPS estimate suggests the PER is 12.2.

Market Sentiment: 0.1

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


Macquarie rates TLS as Re-instate Coverage with Neutral (3) -

Macquarie resumes coverage with a Neutral rating and $3.70 target. The broker considers the operating outlook is challenging across all key operating segments over the medium term, including from the introduction of the fourth mobile operator.

Telstra has adjusted its mobiles offering ahead of the launch of the iPhone 8 next week. Base plan costs are increased by $4 per month. Macquarie believes the new iPhone will be key to the December half year performance.

Target price is $3.70 Current Price is $3.62 Difference: $0.08
If TLS meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.91, suggesting upside of 5.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 22.00 cents and EPS of 24.40 cents.
At the last closing share price the estimated dividend yield is 6.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.7, implying annual growth of -5.5%.

Current consensus DPS estimate is 22.0, implying a prospective dividend yield of 5.9%.

Current consensus EPS estimate suggests the PER is 12.1.

Forecast for FY19:

Macquarie forecasts a full year FY19 dividend of 22.00 cents and EPS of 21.40 cents.
At the last closing share price the estimated dividend yield is 6.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.92.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.5, implying annual growth of -0.7%.

Current consensus DPS estimate is 22.1, implying a prospective dividend yield of 5.9%.

Current consensus EPS estimate suggests the PER is 12.2.

Market Sentiment: 0.1

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

WAF  WEST AFRICAN RESOURCES LIMITED

Gold & Silver

Overnight Price: $0.36

Macquarie rates WAF as Outperform (1) -

Further high-grade drill results are reported from Sanbrado gold project. Macquarie believes the new resource update, expected this quarter, will provide a significant lift to the resources while also increasing open reserves.

Drilling success over the next six months is expected to be a major catalyst. Outperform rating and $0.50 target maintained.

Target price is $0.50 Current Price is $0.36 Difference: $0.145
If WAF meets the Macquarie target it will return approximately 41% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 1.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 22.19.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 1.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 32.27.

Market Sentiment: 1.0

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

Summaries
AGL - AGL ENERGY Accumulate - Ord Minnett Overnight Price $23.71
AHG - AUTOMOTIVE HOLDINGS Upgrade to Add from Hold - Morgans Overnight Price $3.34
ARF - ARENA REIT Overweight - Morgan Stanley Overnight Price $2.27
BBN - BABY BUNTING Upgrade to Add from Hold - Morgans Overnight Price $1.82
BHP - BHP BILLITON Buy - UBS Overnight Price $27.73
BLD - BORAL Outperform - Credit Suisse Overnight Price $6.46
CRR - CONVENIENCE RETAIL REIT Initiation of coverage with Add - Morgans Overnight Price $0.00
CSR - CSR Hold - Deutsche Bank Overnight Price $4.19
DOW - DOWNER EDI Re-instate Coverage with Lighten - Ord Minnett Overnight Price $6.94
GMG - GOODMAN GRP Overweight - Morgan Stanley Overnight Price $8.18
HSN - HANSEN TECHNOLOGIES Upgrade to Buy from Accumulate - Ord Minnett Overnight Price $3.15
IAG - INSURANCE AUSTRALIA Outperform - Credit Suisse Overnight Price $6.20
LVH - LIVEHIRE Add - Morgans Overnight Price $0.73
MND - MONADELPHOUS GROUP Re-instate Coverage with Hold - Ord Minnett Overnight Price $14.67
NHC - NEW HOPE CORP Neutral - Credit Suisse Overnight Price $1.67
ORG - ORIGIN ENERGY Accumulate - Ord Minnett Overnight Price $7.75
PMV - PREMIER INVESTMENTS Outperform - Macquarie Overnight Price $12.98
RCR - RCR TOMLINSON Initiation of coverage with Buy - Ord Minnett Overnight Price $4.06
SUN - SUNCORP Upgrade to Buy from Neutral - Citi Overnight Price $12.53
TGR - TASSAL GROUP Buy - Ord Minnett Overnight Price $3.90
TLS - TELSTRA CORP Upgrade to Outperform from Neutral - Credit Suisse Overnight Price $3.62
Re-instate Coverage with Neutral - Macquarie Overnight Price $3.62
WAF - WEST AFRICAN RESOURCES Outperform - Macquarie Overnight Price $0.36
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

16

2. Accumulate

2

3. Hold

4

4. Reduce

1

Thursday 07 September 2017

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Disclaimer:
The content of this information does in no way reflect the opinions of FNArena, or of its journalists. In fact we don't have any opinion about the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface. This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FNArena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.