Australian Broker Call
October 04, 2016
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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: 01:41 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
Deutsche Bank rates BLD as Buy (1) -
Deutsche Bank has updated currency forecasts in line with its quarterly review, forecasting an average Australian dollar rate of US73.3c in FY17.
As a result estimates for Boral's FY17 and FY18 profits decline 0.6% and 0.7% respectively. Buy retained. Target falls to $7.48 from $7.53.
Target price is $7.48 Current Price is $6.78 Difference: $0.7
If BLD meets the Deutsche Bank target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $6.84, suggesting upside of 1.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 28.00 cents and EPS of 44.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 38.7, implying annual growth of 13.2%. Current consensus DPS estimate is 24.4, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 17.4. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 33.00 cents and EPS of 53.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 43.2, implying annual growth of 11.6%. Current consensus DPS estimate is 26.9, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 15.6. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates CSR as Buy (1) -
Deutsche Bank has updated currency forecasts in line with its quarterly review, forecasting an average Australian dollar rate of US73.3c in FY17.
The broker also upgrades forecasts for aluminium prices by 2.4%, expecting a price of US$1585/t in FY17.
The broker continues to rate CSR as a Buy with a $4.11 target.
Target price is $4.11 Current Price is $3.65 Difference: $0.46
If CSR meets the Deutsche Bank target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $3.67, suggesting downside of -1.4% (ex-dividends)
The company's fiscal year ends in March.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 26.00 cents and EPS of 36.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 32.4, implying annual growth of 14.9%. Current consensus DPS estimate is 23.8, implying a prospective dividend yield of 6.4%. Current consensus EPS estimate suggests the PER is 11.5. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 22.00 cents and EPS of 29.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.8, implying annual growth of -11.1%. Current consensus DPS estimate is 21.1, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 12.9. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates DXS as Overweight (1) -
Improving fundamentals in the Sydney CBD should be the main driver of 3-4% growth in net operating income for office over the next three years, Morgan Stanley believes, as 30% of the company's portfolio is re-set at improving rents.
The broker also suspects, with ongoing enquiry for ownership stakes in its assets, Dexus could selectively dispose of assets outside of its trading business.
The broker also notes the increasingly integrated business is already operating well beyond just owning and managing office and industrial assets. Overweight rating and $9.40 target retained. Industry view: Attractive.
Target price is $9.40 Current Price is $9.21 Difference: $0.19
If DXS meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $8.94, suggesting downside of -1.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 44.90 cents and EPS of 47.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 57.1, implying annual growth of -56.1%. Current consensus DPS estimate is 44.7, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 16.0. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 46.50 cents and EPS of 50.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 57.5, implying annual growth of 0.7%. Current consensus DPS estimate is 45.9, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 15.9. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates FBU as Buy (1) -
Deutsche Bank has upgraded NZ currency forecasts in line with its quarterly review, forecasting an average NZ dollar rate of US70.9c in FY17.
FY17 profit forecasts are reduced by 1%. The broker remains at the upper end of management's NZ$720-760m EBIT guidance range.
The broker continues to rate Fletcher Building as a Buy. Target is reduced to NZD11.41 from NZD11.52.
Current Price is $10.06. Target price not assessed.
Current consensus price target is $12.05, suggesting upside of 21.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 42.83 cents and EPS of 66.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 64.3, implying annual growth of N/A. Current consensus DPS estimate is 40.5, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 15.4. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 46.55 cents and EPS of 70.76 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 67.5, implying annual growth of 5.0%. Current consensus DPS estimate is 42.4, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 14.7. |
This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates JHX as Buy (1) -
Deutsche Bank has updated currency forecasts in line with its quarterly review, forecasting an average Australian dollar rate of US73.3c in FY17. The broker also updates forecasts for aluminium prices.
The broker's Buy rating is maintained. The target edges up to $22.47 from $22.46.
Target price is $22.47 Current Price is $20.37 Difference: $2.1
If JHX meets the Deutsche Bank target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $21.85, suggesting upside of 7.5% (ex-dividends)
The company's fiscal year ends in March.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 62.40 cents and EPS of 86.82 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 79.7, implying annual growth of N/A. Current consensus DPS estimate is 55.7, implying a prospective dividend yield of 2.7%. Current consensus EPS estimate suggests the PER is 25.5. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 70.54 cents and EPS of 105.81 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.9, implying annual growth of 21.6%. Current consensus DPS estimate is 64.4, implying a prospective dividend yield of 3.2%. Current consensus EPS estimate suggests the PER is 21.0. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates NAB as Buy (1) -
The life insurance sale to Nippon Life has been finalised earlier than expected. Citi expects, with the sale to affect the FY16 result, the dividend pay-out ratio will climb outside the target range.
With the first indications of the re-sized earnings base, the current 99c dividend per half year appears too large to manage. The broker continues to expect management will be challenged regarding coming up with a plan to get back to the target range.
Citi retains a $31.50 target. Buy rating retained.
Target price is $31.50 Current Price is $28.08 Difference: $3.42
If NAB meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $28.59, suggesting upside of 2.1% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY16:
Citi forecasts a full year FY16 EPS of 234.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 243.5, implying annual growth of -3.6%. Current consensus DPS estimate is 193.0, implying a prospective dividend yield of 6.9%. Current consensus EPS estimate suggests the PER is 11.5. |
Forecast for FY17:
Citi forecasts a full year FY17 EPS of 218.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 239.0, implying annual growth of -1.8%. Current consensus DPS estimate is 183.6, implying a prospective dividend yield of 6.6%. Current consensus EPS estimate suggests the PER is 11.7. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates NEC as Neutral (3) -
Nine Entertainment has sold its 9.99% stake in Southern Cross Media ((SXL)) for $1.54 per share.
The sale follows a shift in the company's position on media reforms with the CEO indicating he would prefer additional reductions in TV licence fees before other media reforms are addressed.
Nine continues to face a difficult outlook, Macquarie observes, based on soft ratings outcomes and weak cash flow. Neutral maintained and target unchanged at $1.15.
Target price is $1.15 Current Price is $1.03 Difference: $0.12
If NEC meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $1.12, suggesting upside of 8.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 11.00 cents and EPS of 12.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 12.8, implying annual growth of -65.3%. Current consensus DPS estimate is 11.4, implying a prospective dividend yield of 11.1%. Current consensus EPS estimate suggests the PER is 8.0. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 13.00 cents and EPS of 12.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.6, implying annual growth of -9.4%. Current consensus DPS estimate is 10.8, implying a prospective dividend yield of 10.5%. Current consensus EPS estimate suggests the PER is 8.8. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates OZL as Neutral (3) -
The company has advised that electricity will be restored to Prominent Hill progressively over the next 7-10 days. 2016 copper production guidance of 115-125,000 ounces is maintained but lower margin gold guidance of 125-135,000 ozs may not be achieved.
Credit Suisse assumes the larger impact on forecast gold production reflects a decision to preferentially treat higher margin copper ore. The weather event that cut South Australian power has not affected the open pit but has reduced underground activity.
The broker's Neutral rating and $5.70 target are unchanged.
Target price is $5.70 Current Price is $6.02 Difference: minus $0.32 (current price is over target).
If OZL meets the Credit Suisse target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $5.93, suggesting upside of 0.3% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY16:
Credit Suisse forecasts a full year FY16 dividend of 12.00 cents and EPS of 34.52 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 33.9, implying annual growth of -21.0%. Current consensus DPS estimate is 11.1, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 17.4. |
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 12.00 cents and EPS of 23.91 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 32.0, implying annual growth of -5.6%. Current consensus DPS estimate is 13.0, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 18.5. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates QAN as Buy (1) -
Ord Minnett believes the extension of the international freight agreement with Australia Post is a small albeit important win for Qantas in the light of challenging global freight markets.
The freight segment represents around 3% of earnings. The total value of the contract is in excess of $500m over five years.
The broker observes the stock has underperformed the broader market since the August result and estimates international yields would need to fall 10-15% in FY17 and remain at those levels in perpetuity to justify the current share price. While the environment is challenging it is not "that" challenging, the broker asserts.
Buy rating is retained as is the $4.75 price target.
Target price is $4.75 Current Price is $3.13 Difference: $1.62
If QAN meets the Ord Minnett target it will return approximately 52% (excluding dividends, fees and charges).
Current consensus price target is $4.48, suggesting upside of 40.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 19.00 cents and EPS of 65.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 62.8, implying annual growth of 27.1%. Current consensus DPS estimate is 28.3, implying a prospective dividend yield of 8.8%. Current consensus EPS estimate suggests the PER is 5.1. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 19.00 cents and EPS of 62.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 60.3, implying annual growth of -4.0%. Current consensus DPS estimate is 26.6, implying a prospective dividend yield of 8.3%. Current consensus EPS estimate suggests the PER is 5.3. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates RWC as Hold (3) -
Deutsche Bank has updated currency forecasts in line with its quarterly review, forecasting an average Australian dollar rate of US73.3c in FY17.
Following the changes the broker's underlying profit forecast for FY17 is downgraded 4%. Hold rating retained. Target slips to $2.93 from $2.94.
Target price is $2.93 Current Price is $3.16 Difference: minus $0.23 (current price is over target).
If RWC meets the Deutsche Bank target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $3.16, suggesting upside of 3.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 6.00 cents and EPS of 12.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 12.0, implying annual growth of N/A. Current consensus DPS estimate is 6.0, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 25.3. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 6.00 cents and EPS of 15.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.0, implying annual growth of 16.7%. Current consensus DPS estimate is 6.8, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 21.7. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates SXL as Underweight (5) -
Nine Entertainment ((NEC)) has sold its 9.99% stake in Southern Cross for $1.54 a share. Morgan Stanley believes the sale may remove some of the takeover premium embedded in the share price.
Underweight rating retained. Industry view is Attractive. Target is $1.10.
Target price is $1.10 Current Price is $1.59 Difference: minus $0.485 (current price is over target).
If SXL meets the Morgan Stanley target it will return approximately minus 31% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $1.28, suggesting downside of -17.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 EPS of 10.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.2, implying annual growth of 10.7%. Current consensus DPS estimate is 7.4, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 13.8. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 EPS of 10.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.7, implying annual growth of 4.5%. Current consensus DPS estimate is 8.5, implying a prospective dividend yield of 5.5%. Current consensus EPS estimate suggests the PER is 13.2. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 7 |
| 3. Hold | 3 |
| 5. Sell | 1 |
Tuesday 04 October 2016
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This document is provided for informational purposes only. It does not
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