Australian Broker Call

UBS rates A2M as Buy (1) -

a2 Milk is in a trading halt ahead of a potential update to its guidance. 

Some issues facing the company include a slower-than-expected recovery in infant formula sales via daigou channels and surplus channel inventory, suggests UBS. The broker believes demand will return over time with receding covid led disruptions.

Choosing to look through the short-term earnings volatility, UBS maintains its Buy rating with a target of NZ$20.50.

Current Price is $13.28. Target price not assessed.

Current consensus price target is $15.66, suggesting upside of 54.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.1

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

Citi rates ABC as Neutral (3) -

Adbri is going ahead with its $199m Kwinana upgrade project. This will consolidate Adbri’s Western Australia cement operations into one location, deemed necessary investment by Citi given the aged assets at Munster.

Citi suggests the new facility will drive a material step change in profitability in WA with cash costs savings of $19m to be delivered in the first year.

While the company has a strong track record of executing on projects, Adbri has opted for a self-delivery model for Kwinana which could introduce execution risk, cautions the broker.

Neutral rating retained with the target rising to $3.50 from $3.10.

Target price is $3.50 Current Price is $3.58 Difference: minus $0.08 (current price is over target).
If ABC meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.84, suggesting downside of -14.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Morgan Stanley rates ABC as Overweight (1) -

Adbri has announced it will go ahead with a $199m investment to consolidate its WA cement facilities and increase capacity.

The broker notes that there will be a level of ongoing sustaining capex required, but on projected cost savings an returns there should be value accretion. Delivering on these projections is nevertheless key.

Target rises to $3.30 from $3.20, Overweight retained. Industry view: Cautious.

Target price is $3.30 Current Price is $3.58 Difference: minus $0.28 (current price is over target).
If ABC meets the Morgan Stanley target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.84, suggesting downside of -14.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Morgans rates ABC as Hold (3) -

Adbri will invest $199m over FY21-23 to consolidate its WA cement production into a single state-of-the-art facility.The company expects this will increase annual cement production capacity in WA to 1.5mt from 1.1mt at present.

The company will fund the project from existing debt facilities.

By assuming 35% of the savings are delivered in FY23, with the full benefit seen in FY24, Morgans lifts FY24 earnings (EBITDA) by $19m. The broker also assumes maintenance capex needs moderate by -$15m from FY23 onward.

The Hold rating is maintained and the target price is increased to $3.16 from $2.42.

Target price is $3.16 Current Price is $3.58 Difference: minus $0.42 (current price is over target).
If ABC meets the Morgans target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.84, suggesting downside of -14.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Ord Minnett rates ABC as Hold (3) -

Adbri has given the go-ahead for its $199m Kwinana upgrade project in Western Australia. Ord Minnett considers this a necessary investment given Adbri's cement operation in Western Australia is more than 50 years old.

The company estimates cost savings to be $19m once the cement plant is commissioned in mid-2023.

On a different note, management indicated strong trading conditions in November and December.

Ord Minnett maintains its Hold rating with a target price of $3.

Target price is $3.00 Current Price is $3.58 Difference: minus $0.58 (current price is over target).
If ABC meets the Ord Minnett target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.84, suggesting downside of -14.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

UBS rates ABC as Neutral (3) -

Adbri has committed $199m to a major upgrade of its cement production facilities in Western Australia involving the consolidation of two operating facilities into one. UBS notes the new facility will bring in more automation, lower vehicle movement and reduce capex significantly.

The broker finds it difficult to separate the earnings impact from the lost Alcoa contract and is waiting for the 2020 result when Adbri provides its outlook for 2021.

The target price is unchanged at $2.40. Neutral rating retained.

Target price is $2.40 Current Price is $3.58 Difference: minus $1.18 (current price is over target).
If ABC meets the UBS target it will return approximately minus 33% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.84, suggesting downside of -14.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Morgans rates ADI as Add (1) -

APN Industria REIT has announced the acquisition of four industrial assets in SA and QLD for $92.1m.

The new acquisitions will be funded via a $35m placement at $2.86 and new debt. A SPP will also be launched to raise up to $5m.

FY21 guidance has been increased with funds from operations (FFO) now expected to be 19.7-19.9 cents.

The Add rating is maintained and the target price is increased to $3.17 from $3.00.

Target price is $3.17 Current Price is $3.01 Difference: $0.16
If ADI meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Morgans rates ANZ as Add (1) -

APRA announced that it will no longer hold banks to a minimum level of earnings retention from the start of 2021, replacing its recommendation in July this year for banks to retain at least half of their earnings.

Morgans interprets the announcement to mean that APRA is now more comfortable with the asset quality outlook of the banks.

However, the broker highlights APRA has said that a high degree of uncertainty remains in the outlook for the operating environment, and that the onus remains on boards to moderate dividend payout ratios to ensure they are sustainable.

The analyst expects the major banks to be able to sustainably operate with dividend payout ratios in the range of 56-83%. If credit growth remains in the current range of 0-3% per annum, then it's considered dividend payout ratios in the range of 78-100% are possible.

Morgans forecasts ANZ Bank will have a dividend payout ratio of 65-70% over the forecast period.

The Add rating is maintained and the target price is increased to $26 from $22.50.

Target price is $26.00 Current Price is $23.58 Difference: $2.42
If ANZ meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $23.75, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Citi rates BAP as Buy (1) -

Bapcor's latest update disclosed stronger than expected operating leverage after a period of record sales growth.

Citi expects second-quarter group sales will increase by 23%, slightly lower than the first quarter's 27%, led by the strong performance of trade and specialist wholesale businesses and a 30% lift in retail sales over October and November.

Bapcor is Citi's top pick in the small auto cap sector on account of its defensive business benefiting from consumer mobility changes, private label penetration and international expansion.

Buy rating retained. Target rises to $8.85 from $8.80.

Target price is $8.85 Current Price is $7.53 Difference: $1.32
If BAP meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $8.72, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Credit Suisse rates BAP as Outperform (1) -

Management's guidance for first half group revenue growth of at least 25% and profit (NPAT) of at least 50% is well ahead of Credit Suisse forecasts.

While undoubtedly positive, the broker notes recent share price volatility implies significant doubt regarding underlying trends beyond FY21. Additionally, it's considered the market has overstated the earnings benefit attributable to the pandemic.

While maintaining conservative forecasts, the analyst still maintains risk is clearly to the upside and highlights the potential for the company to drive consolidation via M&A in the commercial trucks market.

The Outperform rating is maintained and the target reduced to $8.60 from $8.75.

Target price is $8.60 Current Price is $7.53 Difference: $1.07
If BAP meets the Credit Suisse target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $8.72, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates BAP as Outperform (1) -

Bapcor's first-half revenue was up by more than 25% versus last year with net profit growing by more than 50%. The first-half net profit is about 58% of Macquarie's net profit forecast of $118.5m for the entire financial year. No guidance for FY21 was provided.

Macquarie notes strong trading across all segments with Bapcor looking well placed to accelerate its organic growth and operational performance initiatives. 

The outlook for 2021 remains positive, asserts the broker and expects higher sales through the trade and wholesale businesses.

Outperform rating is retained with the target rising to $8.75 from $8.50.

Target price is $8.75 Current Price is $7.53 Difference: $1.22
If BAP meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $8.72, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgan Stanley rates BAP as Overweight (1) -

A trading update showed Bapcor's FY21 sales to date up 26%. Management is guiding to 25% first half sales growth and 50% profit growth.

History shows a slight skew to the second half, but on current consensus FY forecasts the update suggests 60/40, the broker notes. Hence material upside revisions to forecasts may follow. Retail is expected to materially outperform, up 40% year on year.

Overweight retained, target rises to $9.00 from $8.45. Industry view: In-Line.

Target price is $9.00 Current Price is $7.53 Difference: $1.47
If BAP meets the Morgan Stanley target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $8.72, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates BAP as Add (1) -

Bapcor has provided first half guidance for 25% revenue and 50% profit (NPAT) growth.

For the first five months of the first half revenue is up 26%, representing a continuation of the momentum seen in the first quarter (up 27%). 

Morgans sees the strength in the Retail segment subsiding over the course of the second half. It’s considered the strength across the Trade segment (80% of earnings) can persist at above-trend levels for periods to come.

The broker lifts EPS forecasts by 7-10% over FY21-FY23.

The Add rating is maintained and the target price is increased to $8.57 from $8.42.

Target price is $8.57 Current Price is $7.53 Difference: $1.04
If BAP meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $8.72, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

UBS rates BAP as Buy (1) -

For the 5 months to November, Bapcor has posted group revenue growth of about 26% coupled with material opex leverage and incremental truckline returns, observes UBS.

The company expects to deliver first half revenue growth of more than 25% with net profit growth of more than 50%. The broker highlights Bapcor's trade, retail and specialist wholesale businesses continue to perform strongly.

As a result, UBS has lifted its FY21 net profit forecast to $120m and considers the company's risk-reward attractive versus peers.

UBS reaffirms its Buy rating with a target price of $8.55.

Target price is $8.55 Current Price is $7.53 Difference: $1.02
If BAP meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $8.72, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Citi rates BLX as Buy (1) -

Citi believes the reopening of state borders may divert some consumer spending from retail to domestic tourism and sees Beacon  Lighting well placed to outperform the broader discretionary retail sector.

Factors in its favour include housing sector tailwinds in the near term and growth opportunities in trade and international in the longer term. Citi expects Beacon's second-quarter net profit to increase by 66% versus last year.

Considering it is trading at a discount to peers, Citi thinks Beacon presents good value and remains Citi's second top pick in small-cap retail behind Nick Scali ((NCK)).

Citi reiterates a Buy rating and raises the target to $1.85 from $1.80.

Target price is $1.85 Current Price is $1.60 Difference: $0.25
If BLX meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

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

APRA announced that it will no longer hold banks to a minimum level of earnings retention from the start of 2021, replacing its recommendation in July this year for banks to retain at least half of their earnings.

Morgans interprets the announcement to mean that APRA is now more comfortable with the asset quality outlook of the banks.

However, the broker highlights APRA has said that a high degree of uncertainty remains in the outlook for the operating environment, and that the onus remains on boards to moderate dividend payout ratios to ensure they are sustainable.

The analyst expects the major banks to be able to sustainably operate with dividend payout ratios in the range of 56-83%. If credit growth remains in the current range of 0-3% per annum, then it's considered dividend payout ratios in the range of 78-100% are possible.

Morgans forecasts Bank Of Queensland will have a dividend payout ratio of 50% over the forecast period and forecasts a lower return on tangible equity (ROTE) than the major banks.

The rating is downgraded to Hold from Add and the target price is increased to $8 from $7.20

Target price is $8.00 Current Price is $7.89 Difference: $0.11
If BOQ meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $7.15, suggesting downside of -8.1% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

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

With downside risks receding in 2020, the broker has upgraded its industry view on the Australian energy sector to Attractive from Cautious. The broker's long term Brent forecast rises to US$47.50/bbl.

But the broker sees Brent hitting US$55/bbl by the second half of FY21. If so, the market should start factoring this into valuations.

Equal-weight retained for Beach Energy. Target rises to $1.75 from $1.50.

Target price is $1.75 Current Price is $1.94 Difference: minus $0.19 (current price is over target).
If BPT meets the Morgan Stanley target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.00, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Ord Minnett rates BSL as Accumulate (2) -

Spreads for BlueScope Steel’s North Star and Australian Steel Products divisions have lifted by 50% since bottoming in September/October.

A stronger Australian dollar led by strong iron ore prices is a modest headwind for BlueScope’s earnings. Ord Minnett's operating income forecasts are 18% above consensus for FY21, but -10% below consensus for FY22.

Ord Minnett retains its Accumulate rating with a target price of $19.90.

Target price is $19.90 Current Price is $17.60 Difference: $2.3
If BSL meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $18.79, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Morgans rates CBA as Reduce (5) -

APRA announced that it will no longer hold banks to a minimum level of earnings retention from the start of 2021, replacing its recommendation in July this year for banks to retain at least half of their earnings.

Morgans interprets the announcement to mean that APRA is now more comfortable with the asset quality outlook of the banks.

However, the broker highlights APRA has said that a high degree of uncertainty remains in the outlook for the operating environment, and that the onus remains on boards to moderate dividend payout ratios to ensure they are sustainable.

The analyst expects the major banks to be able to sustainably operate with dividend payout ratios in the range of 56-83%. If credit growth remains in the current range of 0-3% per annum, then it's considered dividend payout ratios in the range of 78-100% are possible.

Morgans forecasts Commonwealth Bank will have a dividend payout ratio of 70-75% over the forecast period.

The Reduce rating is maintained and the target price is increased to $64 from $63.

Target price is $64.00 Current Price is $84.72 Difference: minus $20.72 (current price is over target).
If CBA meets the Morgans target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $71.00, suggesting downside of -14.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.4

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

Credit Suisse rates CNU as Neutral (3) -

The company's capex outlook came in above the expectations of Credit Suisse, with long-term maintenance capex broadly in-line.

The broker trims dividend forecasts for FY22 and FY23, due to the combination of higher capex and the first signs of downward pressure on revenue on the back of the maximum allowable revenue cap.

From a cash flow perspective, the broker thinks the tilting of depreciation and amortisation period for losses are meaningful issues that will influence nearer-term cash flows.

Neutral retained. Target is lowered to NZ$7.75 from NZ$8.38.

Current Price is $7.32. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

UBS rates CNU as Sell (5) -

Chorus submitted its fibre opex and capex estimates for calculating allowable fibre revenues over 2022-24.

UBS does not expect NZ's Commerce Commission to allow 100% recovery and has not changed its forecasts.

UBS maintains its Sell rating with a target price of NZ$6.75.

Current Price is $7.32. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

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

With downside risks receding in 2020, the broker has upgraded its industry view on the Australian energy sector to Attractive from Cautious. The broker's long term Brent forecast rises to US$47.50/bbl.

But the broker sees Brent hitting US$55/bbl by the second half of FY21. If so, the market should start factoring this into valuations.

Equal-weight retained for Cooper Energy. Target unchanged at 40c.

Target price is $0.40 Current Price is $0.36 Difference: $0.04
If COE meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $0.42, suggesting upside of 15.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

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

Credit Suisse likes EBOS Group's modest organic growth outlook and execution track record.

Stronger first half trading versus the broker's initial expectations for FY21, coupled with moving to a lower weighted average cost of capital, leads to a rating upgrade to Outperform from Neutral.

The broker sees further upside from bolt-on acquisitions, a potential covid-19 vaccine distribution and the return of daigou for consumer products.

Top-line growth was supported by the first full year from the Chemist Warehouse wholesale contract. Credit Suisse increases the target to NZ$29.20 from NZ$22.47.

Current Price is $25.26. Target price not assessed.

Current consensus price target is $24.97, suggesting downside of -3.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Macquarie rates ELD as Outperform (1) -

At the 2020 AGM, Elders stated it remains committed to delivering its eight-point plan target of 5-10% growth in operating income and earnings through the cycle to the end of FY23.

Macquarie expects Elders' operating income to grow by 10% for the three years to FY23 given the company's solid track record since the turnaround of the business.

Macquarie considers Elders its preferred pick in the agriculture sector. Improving fundamentals coupled with the stock trading at a discount to peers, the broker thinks this presents a buying opportunity. Outperform retained. Target is $13.98.

Target price is $13.98 Current Price is $9.89 Difference: $4.09
If ELD meets the Macquarie target it will return approximately 41% (excluding dividends, fees and charges).

Current consensus price target is $12.89, suggesting upside of 27.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

UBS rates HT1 as Upgrade to Buy from Neutral (1) -

UBS has upgraded its ad market forecasts based on SMI data showing a return to positive ad market growth for the first time in two years, along with trading updates from listed corporates.

Earnings have been revised for HT&E for FY20-23 to the tune of 30-55%.

UBS upgrades its rating to Buy from Neutral with the target rising to $2 from $1.40.

Target price is $2.00 Current Price is $1.78 Difference: $0.22
If HT1 meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $1.47, suggesting downside of -18.9% (ex-dividends)

The company's fiscal year ends in December.

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

Morgan Stanley rates KAR as Overweight (1) -

With downside risks receding in 2020, the broker has upgraded its industry view on the Australian energy sector to Attractive from Cautious. The broker's long term Brent forecast rises to US$47.50/bbl.

But the broker sees Brent hitting US$55/bbl by the second half of FY21. If so, the market should start factoring this into valuations.

Overweight retained for Karoon Energy. Target unchanged at $1.30.

Target price is $1.30 Current Price is $0.96 Difference: $0.34
If KAR meets the Morgan Stanley target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $1.42, suggesting upside of 47.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

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

Ord Minnett initiates coverage on Lindsay Australia with a Buy rating and a target price of $0.40.

With company guidance pointing to high single digit operating income growth for the first half, the broker notes the company’s investment into high growth horticulture regions is starting to yield returns.

Lindsay Australia's commitment to more than double its rail transport business to 450 units by June 2022 is likely to provide material uplift to free cash flow and returns on capital during FY22-23.

Target price is $0.40 Current Price is $0.32 Difference: $0.08
If LAU 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 FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

UBS rates MIN as Initiation of coverage with Buy (1) -

UBS initiates coverage on Mineral Resources with a Buy rating and a target price of $41.90.

Mineral Resources offers exposure to a growing mining services business along with exposure to iron ore and lithium, assesses UBS. 

The broker sees the company at an inflection point in terms of growth opportunities for the commodities business. Over the last 12 months, the company has expanded Koolyanobbing and Iron Valley.

Iron ore prices are expected to remain elevated over the next 12-18 months which will likely see strong free cash flows, helping Mineral Resources fund its development pipeline.

Target price is $41.90 Current Price is $32.70 Difference: $9.2
If MIN meets the UBS target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $36.33, suggesting upside of 9.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgans rates MX1 as Add (1) -

Under a contract with Saab Australia Micro-X has signed an agreement with the Australian Defence Force to supply Rover systems totaling $1.3m.

Morgans highlights a decision on the grant application made as part of the Australian Stroke Alliance as a key upcoming catalyst. If successful it’s considered the company will receive $14.0m over two years.

The broker makes no changes to forecasts.

The Speculative Buy rating is maintained and the target price is unchanged at $0.50.

Target price is $0.50 Current Price is $0.39 Difference: $0.11
If MX1 meets the Morgans target it will return approximately 28% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates NAB as Hold (3) -

APRA announced that it will no longer hold banks to a minimum level of earnings retention from the start of 2021, replacing its recommendation in July this year for banks to retain at least half of their earnings.

Morgans interprets the announcement to mean that APRA is now more comfortable with the asset quality outlook of the banks.

However, the broker highlights APRA has said that a high degree of uncertainty remains in the outlook for the operating environment, and that the onus remains on boards to moderate dividend payout ratios to ensure they are sustainable.

The analyst expects the major banks to be able to sustainably operate with dividend payout ratios in the range of 56-83%. If credit growth remains in the current range of 0-3% per annum, then it's considered dividend payout ratios in the range of 78-100% are possible.

Morgans forecasts National Australia Bank will have a dividend payout ratio of 65-70% over the forecast period.

The Hold rating is maintained and the target price is increased to $22 from $20.

Target price is $22.00 Current Price is $23.85 Difference: minus $1.85 (current price is over target).
If NAB meets the Morgans target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $22.04, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Credit Suisse rates NEC as Outperform (1) -

Credit Suisse upgrades TV market forecasts after Nine Entertainment provided another strong trading update, with guidance
for Nine’s Metro TV ad revenues to grow circa 1% year-on-year in the first half of FY21.

The pace of the TV ad market recovery continues to impress the broker, and affirms the importance of the medium to advertisers. It's considered any structural declines will take longer to play out.

Credit Suisse now expects group earnings (EBITDA) to grow 40.5% year-on-year in the first half, with FY21earnings forecast to be up 30%.

Credit Suisse increases the price target to $2.80 from $2.75 and maintains the Outperform rating.

Target price is $2.80 Current Price is $2.43 Difference: $0.37
If NEC meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $2.73, suggesting upside of 16.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Macquarie rates NEC as Outperform (1) -

Nine Entertainment upgraded its operating income growth guidance to circa 40% against its prior guidance of 30%. This is 10% ahead of Macquarie's prior expectations.

The broker believes the upgrade was driven by a stronger recovery in broader ad markets and a more buoyant property market underpinning Domain Holdings ((DHG)) and better-than-expected cost management.

The Outperform rating is maintained with a target price of $2.90.

Target price is $2.90 Current Price is $2.43 Difference: $0.47
If NEC meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $2.73, suggesting upside of 16.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Ord Minnett rates NEC as Buy (1) -

Following Nine Entertainment's update, Ord Minnett updated its financial model and now expects the December-quarter metro free-to-air (FTA) advertising revenue to increase by 20% versus its previous forecast of 15%.

First-half FY21 operating earnings are expected to lift by more than 40% (30% previously).

Ord Minnett maintains a Buy rating with the target increased to $2.75 from $2.70.

Target price is $2.75 Current Price is $2.43 Difference: $0.32
If NEC meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $2.73, suggesting upside of 16.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

UBS rates NEC as Neutral (3) -

Nine Entertainment has upgraded its first-half operating income guidance, implying a circa $25m upside to UBS's FY21 operating income forecast of $501m.

UBS believes only part of the guidance upgrade is from metro TV with the remainder likely to be driven by Domain Holdings ((DHG)) and better performances from advertising mediums outside of metro TV.

UBS retains its Neutral rating with a target of $2.50.

Target price is $2.50 Current Price is $2.43 Difference: $0.07
If NEC meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $2.73, suggesting upside of 16.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Credit Suisse rates NIC as Initiation of coverage with Outperform (1) -

Credit Suisse initiates coverage of Nickel Mines with an Outperform rating and target price of $1.35. The broker views the company as the premier way for investors to gain nickel price exposure.

It's considered to be a low cost producer that offers strong earnings and cash flow leverage to nickel pricing. The analyst considers it has inherently lower operating risk and variability from its industrial park-based nickel pig iron production than mine-based producers.

Credit Suisse likes an established JV partnership with the world’s largest stainless steel producer and a clear pathway to doubling production by FY23 through committed portfolio expansion.

Additionally, the broker views the potential for additional future expansion following the blueprint of acquisition and operating-led-expansion success to-date as a positive.

Target price is $1.35 Current Price is $1.10 Difference: $0.25
If NIC meets the Credit Suisse target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $1.32, suggesting upside of 15.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

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

With downside risks receding in 2020, the broker has upgraded its industry view on the Australian energy sector to Attractive from Cautious. The broker's long term Brent forecast rises to US$47.50/bbl.

But the broker sees Brent hitting US$55/bbl by the second half of FY21. If so, the market should start factoring this into valuations.

Equal-weight retained for Origin Energy. Target rises to $5.83 from $5.55.

Target price is $5.83 Current Price is $4.97 Difference: $0.86
If ORG meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $6.15, suggesting upside of 25.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

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

With downside risks receding in 2020, the broker has upgraded its industry view on the Australian energy sector to Attractive from Cautious. The broker's long term Brent forecast rises to US$47.50/bbl.

But the broker sees Brent hitting US$55/bbl by the second half of FY21. If so, the market should start factoring this into valuations.

Equal-weight retained for Oil Search. Target rises to $4.00 from $3.30.

Target price is $4.00 Current Price is $3.68 Difference: $0.32
If OSH meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.71, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

This company reports in USD. 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

Morgans rates PME as Add (1) -

Pro Medicus has secured a long-term contract for $18m with a US based hospital system, replacing legacy picture archiving and communications services (PACS) systems with its full suite of products.

This marks the first major deal that is completely cloud-based. It also allows a showcase of the flexibility in configuration of the company’s systems and products, notes Morgans.

The broker awaits the submission to the FDA for software around calculating breast density (outcome expected before year-end).

The Add rating is maintained and the target price is increased to $35.02 from $33.32.

Target price is $35.02 Current Price is $32.15 Difference: $2.87
If PME meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

UBS rates PME as Neutral (3) -

Pro Medicus has signed a 5-year, $18m deal with MedStar Health across 10 hospitals (the largest health system in the Maryland / DC region). The rollout is expected to commence in the second quarter with the first site going live in the third quarter.

Although risks are skewed to the upside for FY22, UBS believes AUD/USD may provide some respite to earnings.

Noting Pro Medicus is one of the highest quality companies under UBS's coverage, supported by favourable economics and structural tailwinds, the broker reaffirms its Neutral rating with a target of $32.

Target price is $32.00 Current Price is $32.15 Difference: minus $0.15 (current price is over target).
If PME meets the UBS target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Morgans rates PPE as Add (1) -

People Infrastructure has acquired a technology staffing firm focused on the NSW market.

This is considered strategically important by Morgans given the IT contracting nature of the business, and the key government and financial sector clients.

The analyst forecasts the acquisition is around 4.3% accretive for earnings (EBITDA) in FY22.

Morgans adjusts forecasts to incorporate the acquisition and concurrently lifts revenue assumptions over the forecast period.

The Add rating is unchanged and the target price is increased to $4.05 from $3.30.

Target price is $4.05 Current Price is $3.41 Difference: $0.64
If PPE meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates RIO as Outperform (1) -

Rio Tinto announced its current Chief Financial Officer, Jakob Stausholm, will be appointed Chief Executive Officer from January 1, 2021. Macquarie is surprised with the internal appointment as the broker expected the company board to seek an external candidate for the role.

Buoyant iron-ore prices continue to underpin strong earnings upgrade momentum for Rio Tinto.

The Outperform rating and target of $118 are unchanged.

Target price is $118.00 Current Price is $116.44 Difference: $1.56
If RIO meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $117.64, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Macquarie rates SSM as Downgrade to Neutral from Outperform (3) -

Unify Services is expected to generate circa $70m revenue for Service Stream in its first year (FY22), lower than FY20's circa $330m and $280m in FY19, on account of lower activations.

Also, Service Stream has lost New South Wales and Victoria to BSA ((BSA)), with its market share declining to 25% from 40-45%.

Macquarie downgrades its rating to Neutral from Outperform with the target declining to $2.01 from $2.72.

Target price is $2.01 Current Price is $1.85 Difference: $0.16
If SSM meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Morgan Stanley rates STO as Overweight (1) -

With downside risks receding in 2020, the broker has upgraded its industry view on the Australian energy sector to Attractive from Cautious. The broker's long term Brent forecast rises to US$47.50/bbl.

But, the broker sees Brent hitting US$55/bbl by the second half of FY21. If so, the market should start factoring this into valuations.

Overweight retained for Santos. Target rises to $7.30 from $7.00.

Target price is $7.30 Current Price is $6.50 Difference: $0.8
If STO meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $6.79, suggesting upside of 6.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.7

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

UBS rates SWM as Upgrade to Buy from Neutral (1) -

UBS has upgraded its ad market forecasts based on SMI data showing a return to positive ad market growth for the first time in two years, along with trading updates from listed corporates.

Earnings have been revised for Seven West Media for FY20-23 to the tune of 60-80% along with a material change to the company's equity value.

UBS upgrades its rating to Buy from Neutral with the target rising to $0.40 from $0.14.

Target price is $0.40 Current Price is $0.28 Difference: $0.12
If SWM meets the UBS target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $0.35, suggesting upside of 16.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

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

With downside risks receding in 2020, the broker has upgraded its industry view on the Australian energy sector to Attractive from Cautious. The broker's long term Brent forecast rises to US$47.50/bbl.

But the broker sees Brent hitting US$55/bbl by the second half of FY21. If so, the market should start factoring this into valuations.

Equal-weight retained for Senex Energy. Target rises to 37c from 35c.

Target price is $0.35 Current Price is $0.33 Difference: $0.02
If SXY meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $0.43, suggesting upside of 34.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Ord Minnett rates SYD as Lighten (4) -

Domestic traffic was weaker than expected in November with total passengers dropping by -91%, of which domestic declined by -87% while international fell by -97%.

Ord Minnett has reduced its second-half domestic passengers forecast to -85% from -80% with international passenger numbers forecast to fall by -95% from -90%.

Beyond 2020, the broker's estimates remain largely unchanged. The airport operator will not pay a 2020 distribution, in line with Ord Minnett’s expectation.

Lighten rating and $6 target retained.

Target price is $6.00 Current Price is $6.59 Difference: minus $0.59 (current price is over target).
If SYD meets the Ord Minnett target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.08, suggesting downside of -5.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Citi rates TCL as Sell (5) -

Transurban Group has sold a 50% stake in its Greater Washington Assets into Chesapeake Partnership which will be co-owned by AustralianSuper (25%), CPPIB (15%) and Unisuper (10%).

The group expects gross sale proceeds of US$2.1bn along with an additional earn-out of up to $93m between FY24-26.

Citi believes the transaction helps reduce Transurban's leverage in the near term and help it diversify away from the revenue/covenant risk on the US toll roads.

On the flip side, the broker sees some downside to near-term dividend until the proceeds are deployed.

The Sell rating is maintained with a target of $12.83.

Target price is $12.83 Current Price is $14.27 Difference: minus $1.44 (current price is over target).
If TCL 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 $14.52, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Macquarie rates TCL as Outperform (1) -

Transurban Group announced the sale of 50% of its US assets including the existing roads and development projects in Maryland, Washington DC, and Virginia.

The total consideration of US$4.1bn, in-line with Macquarie's valuation for the assets, comes down to $2.4-2.5bn in net proceeds after including a tax loss in the US. The broker expects these proceeds will be used to reduce the capital demand associated with bidding for WestConnex.

According to the latest data, traffic is rebounding ahead of expectations at Citylink and M2.

Outperform. Target is unchanged at $15.93.

Target price is $15.93 Current Price is $14.27 Difference: $1.66
If TCL meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $14.52, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

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

Transurban has sold a 50% stake in its US roads to a consortium of Australian and Canadian super/pension funds.

An update shows traffic numbers on most roads here and abroad improving in November from October, but tracking slightly below the broker's forecast.

A dividend announcement will be forthcoming next week. Equal-weight retained, target falls to $14.80 from $14.88. Industry view: Cautious.

Target price is $14.80 Current Price is $14.27 Difference: $0.53
If TCL meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $14.52, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Morgans rates TCL as Hold (3) -

Transurban Group has sold down a 50% stake in Express Lanes (US), in advance of potential investment opportunities both domestically and in the US.

The gross proceeds of US$2.1bn (US$1.9bn post-tax) and potential earn-out of up to US$70m (between FY24-26) was ahead of Morgans expectations.

Morgans believes realising significant value for assets, whose earnings are currently under significant pressure, improves balance sheet capacity during a period of weakened traffic.

The Hold rating is maintained and the target price is decreased to $14 from $14.11.

Target price is $14.00 Current Price is $14.27 Difference: minus $0.27 (current price is over target).
If TCL meets the Morgans target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.52, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Ord Minnett rates TCL as Hold (3) -

Transurban Group has sold a 50% stake in its US assets for net proceeds of $2.5bn (post-tax and transaction costs).

Ord Minnett notes the transaction values the assets at an enterprise value of $8.3bn which is a material premium to the broker's assumed $5.7bn. This also implies $1.3bn in additional equity proceeds and materially improves debt serviceability.

The sale will position Transurban to participate in potential acquisitions, suggests the broker, including a further stake in WestConnex.

Hold recommendation is reaffirmed with the target price rising to $16 from $15.50.

Target price is $16.00 Current Price is $14.27 Difference: $1.73
If TCL meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $14.52, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

UBS rates TCL as Buy (1) -

Transurban Group has agreed to sell a 50% interest in its Greater Washington Area operational assets to AustralianSuper, CPP Investments and UniSuper. Transurban will receive sale proceeds of $2.8bn with potential earn-out payments between FY24-26 of up to $93m.

UBS asserts the transaction is a positive read through for the value of toll road assets globally despite the pandemic.

Buy rating and $15.50 target retained.

Target price is $15.50 Current Price is $14.27 Difference: $1.23
If TCL meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $14.52, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Morgans rates WBC as Add (1) -

APRA announced that it will no longer hold banks to a minimum level of earnings retention from the start of 2021, replacing its recommendation in July this year for banks to retain at least half of their earnings.

Morgans interprets the announcement to mean that APRA is now more comfortable with the asset quality outlook of the banks.

However, the broker highlights APRA has said that a high degree of uncertainty remains in the outlook for the operating environment, and that the onus remains on boards to moderate dividend payout ratios to ensure they are sustainable.

The analyst expects the major banks to be able to sustainably operate with dividend payout ratios in the range of 56-83%. If credit growth remains in the current range of 0-3% per annum, then it's considered dividend payout ratios in the range of 78-100% are possible.

Morgans forecasts Westpac Bank will have a dividend payout ratio of 65-70% over the forecast period.

The Hold rating is maintained and the target price is increased to $23.50 from $21.50.

Target price is $23.50 Current Price is $20.21 Difference: $3.29
If WBC meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $21.67, suggesting upside of 8.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Macquarie rates WHC as Underperform (5) -

Whitehaven Coal announced a 350mt maiden coal reserve at Winchester South, reporting a circa 100% increase in resources to 1,100mt.

Since the project is still in its early stage of approvals, Macquarie does not expect a final investment decision on the project in the next 2 years. First production is expected in FY25 with the mine life pegged at more than 20 years.

Even with rebounding thermal coal prices, the broker believes there exists modest downside risk to earnings driven by weak semi-soft coking coal and pulverised coal injection (PCI) prices.

The Underperform rating and $1.30 price target are unchanged.

Target price is $1.30 Current Price is $1.56 Difference: minus $0.26 (current price is over target).
If WHC meets the Macquarie target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.76, suggesting upside of 7.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

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

With downside risks receding in 2020, the broker has upgraded its industry view on the Australian energy sector to Attractive from Cautious. The broker's long term Brent forecast rises to US$47.50/bbl.

But the broker sees Brent hitting US$55/bbl by the second half of FY21. If so, the market should start factoring this into valuations.

Equal-weight retained for Woodside Petroleum. Target rises to $22.90 from $21.20.

Target price is $22.90 Current Price is $23.56 Difference: minus $0.66 (current price is over target).
If WPL meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $23.82, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.6

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

Macquarie rates Z1P as Underperform (5) -

Zip Co raised $120m along with a $30m share purchase plan to fund expansion in existing and new markets.

The capital raise is expected to be circa 5% dilutive and highlights the capital intensity of the business following multiple capital raises over the last 12 months, notes a concerned Macquarie. 

With Zip Co aggressively pursuing growth in offshore markets, the broker sees execution risks building up.

Target rises to $5.05 from $4.95. Underperform retained.

Target price is $5.05 Current Price is $5.63 Difference: minus $0.58 (current price is over target).
If Z1P meets the Macquarie target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.51, suggesting upside of 20.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Morgans rates Z1P as Add (1) -

Zip Co announced it would be raising up to $150m in new equity ($120m institutional placement and a $30m SPP) to help accelerate growth.

90% of new capital will be used to fund offshore growth and Morgans highlights $85m will be allocated to capitalise on QuadPay’s recent robust momentum.

The broker notes QuadPay’s November monthly total transaction value and customers are both up over 200% on the previous corresponding period. A ‘New Markets’ division has been established, taking small strategic stakes in regions of interest like UAE and Europe.

Morgans lowers FY21 and FY22 forecasts by -8% and -5%, respectively, reflecting higher investment spend in the near term.

The price target falls to $8.89 from $9.80 after factoring in the capital raise. The Add rating is maintained.

Target price is $8.89 Current Price is $5.63 Difference: $3.26
If Z1P meets the Morgans target it will return approximately 58% (excluding dividends, fees and charges).

Current consensus price target is $6.51, suggesting upside of 20.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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