Australian Broker Call

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January 15, 2020

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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).

Last Updated: 05:00 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
FMG - FORTESCUE Downgrade to Hold from Buy Ord Minnett
IGO - INDEPENDENCE GROUP Downgrade to Lighten from Hold Ord Minnett
MOZ - MOSAIC BRANDS Downgrade to Hold from Add Morgans
MTS - METCASH Upgrade to Neutral from Underperform Credit Suisse
OGC - OCEANAGOLD Upgrade to Buy from Accumulate Ord Minnett
ORE - OROCOBRE Downgrade to Sell from Hold Ord Minnett
PDL - PENDAL GROUP Downgrade to Hold from Add Morgans
SBM - ST BARBARA Upgrade to Buy from Accumulate Ord Minnett
FMG  FORTESCUE METALS GROUP LTD

Iron Ore

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Overnight Price: $10.86

Ord Minnett rates FMG as Downgrade to Hold from Buy (3) -

Ord Minnett notes the shares have surged more than 150% in 2019, but as iron ore approaches US$100/t investors may be reluctant to chase the stock, fearing the market will become overheated.

The stock still offers a strong dividend yield but has approached fair value and the broker downgrades to Hold from Buy. Target is raised to $11.00 from $10.50.

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

Target price is $11.00 Current Price is $10.86 Difference: $0.14
If FMG meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $8.75, suggesting downside of -19.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Ord Minnett forecasts a full year FY20 EPS of 182.84 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.94.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 199.0, implying annual growth of N/A.

Current consensus DPS estimate is 150.9, implying a prospective dividend yield of 13.9%.

Current consensus EPS estimate suggests the PER is 5.5.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 EPS of 123.81 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 112.5, implying annual growth of -43.5%.

Current consensus DPS estimate is 80.9, implying a prospective dividend yield of 7.4%.

Current consensus EPS estimate suggests the PER is 9.7.

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

IGO  INDEPENDENCE GROUP NL

Nickel

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Overnight Price: $6.66

Ord Minnett rates IGO as Downgrade to Lighten from Hold (4) -

While the macro outlook remains favourable, Ord Minnett believes several stocks in the base metals sector are overvalued.

The rating on Independence Group is downgraded to Lighten from Hold with the target steady at $5.70.

Target price is $5.70 Current Price is $6.66 Difference: minus $0.96 (current price is over target).
If IGO meets the Ord Minnett target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.86, suggesting downside of -12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Ord Minnett forecasts a full year FY20 EPS of 44.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 35.4, implying annual growth of 174.6%.

Current consensus DPS estimate is 13.3, implying a prospective dividend yield of 2.0%.

Current consensus EPS estimate suggests the PER is 18.8.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 EPS of 46.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.48.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 34.2, implying annual growth of -3.4%.

Current consensus DPS estimate is 16.6, implying a prospective dividend yield of 2.5%.

Current consensus EPS estimate suggests the PER is 19.5.

Market Sentiment: -0.2

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

LVT  LIVETILES LIMITED

Cloud services

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Overnight Price: $0.27

Citi rates LVT as Buy (1) -

Citi expects a step up in growth in the second quarter as the company angles for a partner-based channel strategy. The broker is looking for a record second quarter after a weaker-than-expected first quarter.

Revenue and operating earnings forecasts increase in FY20 as the broker now models non-recurring revenue from Wizdom and CYCL separately.

Buy rating maintained. Target is reduced to $0.63 from $0.75 to reflect slower ARR growth and incremental costs from the acquisition of CYCL.

Target price is $0.63 Current Price is $0.27 Difference: $0.36
If LVT meets the Citi target it will return approximately 133% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Citi forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 3.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 8.18.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 2.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 12.86.

Market Sentiment: 1.0

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

MME  MONEYME LIMITED

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Overnight Price: $1.51

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

Morgans initiates coverage on MoneyMe with an Add rating and $1.79 target. The broker assesses the addressable market is substantial at around $14bn and considers the company's businesses model attractive, driven by strong loan unit economics.

MoneyMe is a consumer credit business that utilises its digital and technology platform to offer loan products. The business generates a 42% net contribution margin per loan and delivered growth of 82% in FY19.

After becoming profitable in FY20, Morgans forecasts profit growth of more than 100% in FY21 and FY22.

Target price is $1.79 Current Price is $1.51 Difference: $0.28
If MME meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Morgans forecasts a full year FY20 dividend of 0.00 cents and EPS of 0.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 215.71.

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 7.00 cents and EPS of 1.80 cents.
At the last closing share price the estimated dividend yield is 4.64%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 83.89.

Market Sentiment: 1.0

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

MOZ  MOSAIC BRANDS LIMITED

Apparel & Footwear

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Overnight Price: $1.83

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

The company's first half trading update was below expectations, with the Christmas period being affected by the recent bushfires. As a result first half operating earnings (EBITDA) are expected to be $33m.

The impact of the fires has continued into the start of the second half and management will provide an update at the first half result in late February. This could mean the full year outcome is below revised expectations.

The stock remains attractively priced from a valuation perspective but Morgans downgrades to Hold from Add to reflect elevated earnings uncertainty. Target is reduced to $2.40 from $3.46.

Target price is $2.04 Current Price is $1.83 Difference: $0.21
If MOZ meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Morgans forecasts a full year FY20 dividend of 22.00 cents and EPS of 37.00 cents.
At the last closing share price the estimated dividend yield is 12.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.95.

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 25.00 cents and EPS of 41.00 cents.
At the last closing share price the estimated dividend yield is 13.66%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.46.

Market Sentiment: 0.0

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

MTS  METCASH LIMITED

Food, Beverages & Tobacco

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Overnight Price: $2.58

Credit Suisse rates MTS as Upgrade to Neutral from Underperform (3) -

Credit Suisse upgrades to Neutral from Underperform as the stock reflects better value. The target is raised to $2.64 from $2.39.

Nevertheless, Credit Suisse understands it is challenging to resolve the competitive issues facing the business and there is no easy solution to the heavy risk weighting applied to the company's food division.

The broker floats the idea that, whilst not a perfect solution, the sale of food distribution to retailers could achieve a better alignment of interests and facilitate a high level of investment.

Target price is $2.64 Current Price is $2.58 Difference: $0.06
If MTS meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $2.81, suggesting upside of 8.8% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY20:

Credit Suisse forecasts a full year FY20 dividend of 12.50 cents and EPS of 20.80 cents.
At the last closing share price the estimated dividend yield is 4.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.40.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.9, implying annual growth of 0.5%.

Current consensus DPS estimate is 12.4, implying a prospective dividend yield of 4.8%.

Current consensus EPS estimate suggests the PER is 12.3.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 11.90 cents and EPS of 19.84 cents.
At the last closing share price the estimated dividend yield is 4.61%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.2, implying annual growth of 1.4%.

Current consensus DPS estimate is 12.8, implying a prospective dividend yield of 5.0%.

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

OGC  OCEANAGOLD CORPORATION

Gold & Silver

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Overnight Price: $2.80

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

Ord Minnett upgrades to Buy from Accumulate based on valuation. Target is raised to $4.20 from $4.10.

The broker continues to be attracted to the turnaround potential in the business, expecting the strategies will become clearer in February when guidance is provided.

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

Target price is $4.20 Current Price is $2.80 Difference: $1.4
If OGC meets the Ord Minnett target it will return approximately 50% (excluding dividends, fees and charges).

Current consensus price target is $4.12, suggesting upside of 47.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Ord Minnett forecasts a full year FY19 dividend of 5.72 cents and EPS of 8.58 cents.
At the last closing share price the estimated dividend yield is 2.04%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.8, implying annual growth of N/A.

Current consensus DPS estimate is 4.0, implying a prospective dividend yield of 1.4%.

Current consensus EPS estimate suggests the PER is 23.7.

Forecast for FY20:

Ord Minnett forecasts a full year FY20 dividend of 5.72 cents and EPS of 28.60 cents.
At the last closing share price the estimated dividend yield is 2.04%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 36.0, implying annual growth of 205.1%.

Current consensus DPS estimate is 4.4, implying a prospective dividend yield of 1.6%.

Current consensus EPS estimate suggests the PER is 7.8.

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

Market Sentiment: 0.8

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

ORE  OROCOBRE LIMITED

New Battery Elements

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Overnight Price: $3.58

Ord Minnett rates ORE as Downgrade to Sell from Hold (5) -

Ord Minnett downgrades to Sell from Hold, raising the target to $2.55 from $2.25. The broker expects global GDP growth could rebound by mid year, linked to a fading drag from political conflict.

However, miners largely reflect this improved outlook and inexpensive valuations will be harder to find.

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

Target price is $2.55 Current Price is $3.58 Difference: minus $1.03 (current price is over target).
If ORE meets the Ord Minnett target it will return approximately minus 29% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.15, suggesting downside of -12.0% (ex-dividends)

Forecast for FY20:

Current consensus EPS estimate is -0.2, implying annual growth of N/A.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY21:

Current consensus EPS estimate is 2.2, implying annual growth of N/A.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 162.7.

Market Sentiment: 0.1

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

PDL  PENDAL GROUP LIMITED

Wealth Management & Investments

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Overnight Price: $8.40

Citi rates PDL as Neutral (3) -

The first quarter update suggests to Citi a sharp recovery in earnings is unlikely in FY20 amid minimal performance fees and elevated fund outflows. Still, the broker remains constructive on the company's prospects.

A Neutral rating is maintained while the target is raised to $8.20 from $7.90 because of higher market multiples. FY20 and FY21 estimates for earnings per share are reduced by -6% and -3% respectively.

Target price is $8.20 Current Price is $8.40 Difference: minus $0.2 (current price is over target).
If PDL 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 $8.51, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Citi forecasts a full year FY20 dividend of 44.10 cents and EPS of 53.00 cents.
At the last closing share price the estimated dividend yield is 5.25%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 51.8, implying annual growth of -4.8%.

Current consensus DPS estimate is 43.9, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 16.2.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 50.90 cents and EPS of 61.60 cents.
At the last closing share price the estimated dividend yield is 6.06%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.64.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 55.9, implying annual growth of 7.9%.

Current consensus DPS estimate is 48.0, implying a prospective dividend yield of 5.7%.

Current consensus EPS estimate suggests the PER is 15.0.

Market Sentiment: -0.1

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


Credit Suisse rates PDL as Underperform (5) -

Funds under management and flows in the first quarter were below Credit Suisse estimates. JO Hambro reported its ninth consecutive quarter of outflows.

The broker expects performance fees will stay subdued and FY20 will be a challenging year. Underperform rating and $8.15 target maintained.

Target price is $8.15 Current Price is $8.40 Difference: minus $0.25 (current price is over target).
If PDL meets the Credit Suisse target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.51, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Credit Suisse forecasts a full year FY20 dividend of 43.00 cents and EPS of 50.00 cents.
At the last closing share price the estimated dividend yield is 5.12%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 51.8, implying annual growth of -4.8%.

Current consensus DPS estimate is 43.9, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 16.2.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 46.00 cents and EPS of 54.00 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 15.56.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 55.9, implying annual growth of 7.9%.

Current consensus DPS estimate is 48.0, implying a prospective dividend yield of 5.7%.

Current consensus EPS estimate suggests the PER is 15.0.

Market Sentiment: -0.1

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


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

First quarter funds under management of $101.4bn were up 1% on the prior quarter. Further net outflows were experienced at JO Hambro. Morgans observes the stock has rallied from a previously undemanding valuation because of improved sentiment in UK markets.

As the stock is now trading in line with valuation the rating is reduced to Hold from Add. Some risk of sustained outflows, amid a preference for the growth path being less reliant on market direction, prevents the broker from taking a more positive view. Target is reduced to $8.83 from $8.85.

Target price is $8.83 Current Price is $8.40 Difference: $0.43
If PDL meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $8.51, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Morgans forecasts a full year FY20 dividend of 46.00 cents and EPS of 52.00 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 16.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 51.8, implying annual growth of -4.8%.

Current consensus DPS estimate is 43.9, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 16.2.

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 47.00 cents and EPS of 55.00 cents.
At the last closing share price the estimated dividend yield is 5.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.27.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 55.9, implying annual growth of 7.9%.

Current consensus DPS estimate is 48.0, implying a prospective dividend yield of 5.7%.

Current consensus EPS estimate suggests the PER is 15.0.

Market Sentiment: -0.1

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


Ord Minnett rates PDL as Accumulate (2) -

After the company reported first-quarter funds under management, Ord Minnett suggests the flow outlook is relatively benign. The broker considers the current share price presents an attractive risk/reward balance relative to other ASX-listed asset managers.

Historically, JO Hambro has been the driver of flows for the group but has experienced outflows from UK-based business over the past 8 quarters because of macro economic factors and a weakening underlying performance.

Ord Minnett maintains an Accumulate rating and raises the target to $9.40 from $9.30.

Target price is $9.40 Current Price is $8.40 Difference: $1
If PDL meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $8.51, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Ord Minnett forecasts a full year FY20 EPS of 50.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 51.8, implying annual growth of -4.8%.

Current consensus DPS estimate is 43.9, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 16.2.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 EPS of 54.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.56.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 55.9, implying annual growth of 7.9%.

Current consensus DPS estimate is 48.0, implying a prospective dividend yield of 5.7%.

Current consensus EPS estimate suggests the PER is 15.0.

Market Sentiment: -0.1

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


UBS rates PDL as Sell (5) -

Net fund flows were a key area of disappointment for UBS in the first quarter update, with -$1.3bn in net outflows spread across both PDL Australia and its higher margin JO Hambro business.

The broker believes headwinds to revenue are likely to persist and lowers FY20 estimates for earnings per share by -1.9%. UBS retains a Sell rating and $7.75 target. UBS continues to envisage limited scope for JO Hambro performance fees in 2020 and 2021.

Target price is $7.75 Current Price is $8.40 Difference: minus $0.65 (current price is over target).
If PDL meets the UBS target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.51, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

UBS forecasts a full year FY20 dividend of 43.00 cents and EPS of 50.00 cents.
At the last closing share price the estimated dividend yield is 5.12%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 51.8, implying annual growth of -4.8%.

Current consensus DPS estimate is 43.9, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 16.2.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 45.00 cents and EPS of 53.00 cents.
At the last closing share price the estimated dividend yield is 5.36%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 55.9, implying annual growth of 7.9%.

Current consensus DPS estimate is 48.0, implying a prospective dividend yield of 5.7%.

Current consensus EPS estimate suggests the PER is 15.0.

Market Sentiment: -0.1

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

RDY  READYTECH HOLDINGS LTD

Software & Services

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Overnight Price: $1.99

Macquarie rates RDY as Outperform (1) -

The company has won a $7m contract with an initial five-year software subscription period. Implementation revenue will commence being recognised in the fourth quarter of FY20.

The contract is with Bendigo Kangan TAFE and will use ReadyTech's cloud-based student management system and JR Plus.

Macquarie observes the stock is trading at more than -50% discount to ASX peers and ongoing execution should drive a re-rating of multiples. Outperform maintained. Target is raised 4% to $2.50.

Target price is $2.50 Current Price is $1.99 Difference: $0.51
If RDY meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Macquarie forecasts a full year FY20 dividend of 4.60 cents and EPS of 9.30 cents.
At the last closing share price the estimated dividend yield is 2.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.40.

Forecast for FY21:

Macquarie forecasts a full year FY21 dividend of 6.10 cents and EPS of 12.30 cents.
At the last closing share price the estimated dividend yield is 3.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.18.

Market Sentiment: 1.0

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

RSG  RESOLUTE MINING LIMITED

Gold & Silver

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Overnight Price: $1.18

Macquarie rates RSG as Outperform (1) -

The company's 2020 production guidance of 500,000 ounces is in line with Macquarie's expectations while guidance for AISC of US$980/oz is -19% below forecasts.

Macquarie expects production will peak in 2020 and lifts long-term cost assumptions. If operating stability is achieved, the broker believes de-leveraging will be a key positive catalyst for the stock in 2020.

Outperform rating maintained. Target is reduced by -19% to $1.30.

Target price is $1.30 Current Price is $1.18 Difference: $0.12
If RSG meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY19:

Macquarie forecasts a full year FY19 dividend of 0.00 cents and EPS of 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.50.

Forecast for FY20:

Macquarie forecasts a full year FY20 dividend of 0.00 cents and EPS of 16.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.24.

Market Sentiment: 1.0

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

SBM  ST BARBARA LIMITED

Gold & Silver

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Overnight Price: $2.92

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

Ord Minnett upgrades to Buy from Accumulate based on valuation and raises the target to $3.40 from $3.10.

The broker continues to be attracted to the deeper value and turnaround potential, expecting more clarity in February when the company provides guidance and plans for key projects.

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

Target price is $3.40 Current Price is $2.92 Difference: $0.48
If SBM meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $3.03, suggesting upside of 3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Ord Minnett forecasts a full year FY20 EPS of 31.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.42.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.0, implying annual growth of 3.7%.

Current consensus DPS estimate is 9.2, implying a prospective dividend yield of 3.2%.

Current consensus EPS estimate suggests the PER is 10.4.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 EPS of 44.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.64.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 35.5, implying annual growth of 26.8%.

Current consensus DPS estimate is 9.5, implying a prospective dividend yield of 3.3%.

Current consensus EPS estimate suggests the PER is 8.2.

Market Sentiment: 0.5

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

TYR  TYRO PAYMENTS LIMITED

Business & Consumer Credit

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Overnight Price: $3.50

Morgan Stanley rates TYR as Initiation of coverage with Overweight (1) -

Tyro Payments is an Australian merchant acquirer business competing against the major banks. Morgan Stanley believes this presents a rare opportunity to gain exposure to the payments system.

Card payments in Australia are worth around $650m in total transaction value per annum and are a structural growth story, increasing 7% per annum.

The broker does not expect Tyro to be profitable in FY20-21 as it requires further scale. Morgan Stanley initiates coverage with an Overweight rating and $4.15 target. Industry view is Attractive.

Target price is $4.15 Current Price is $3.50 Difference: $0.65
If TYR meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Morgan Stanley forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 87.50.

Forecast for FY21:

Morgan Stanley forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 87.50.

Market Sentiment: 0.8

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


Ord Minnett rates TYR as Initiation of coverage with Accumulate (2) -

Tyro Payments is a pure domestic payments company and has achieved 10% market share in its vertical businesses. Ord Minnett believes it is primed to accelerate growth through market share, new verticals and cross-selling opportunities.

The broker initiates coverage with an Accumulate rating and $3.75 target. The gains in market share have come at a cost to major competitors such as the big four banks.

As these competitors work to overhaul their offerings on payments, Ord Minnett believes this is an opportune time for a fast tech-enabled disruptor to move on market share aggressively.

Target price is $3.75 Current Price is $3.50 Difference: $0.25
If TYR meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Ord Minnett forecasts a full year FY20 EPS of minus 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 87.50.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 EPS of minus 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 175.00.

Market Sentiment: 0.8

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

WBC  WESTPAC BANKING CORPORATION

Banks

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Overnight Price: $24.67

Morgans rates WBC as Add (1) -

In the absence of an AUSTRAC-related civil penalty, and assuming no further customer remediation charges, Morgans expects Westpac to have around $4.5bn of surplus CET1 capital at the end of FY20.

The broker believes damage to the share price is excessive and Westpac remains its preferred major bank.

Cash earnings forecasts are reduced by -3.8% and -2.4% for FY20 and FY21 respectively because of the share purchase plan, which raised more than expected, and a reduction in first half non-interest income forecasts because of an expected rise in general insurance claims stemming from the bushfires.

Add maintained. Target is reduced to $30.00 from $30.50.

Target price is $30.00 Current Price is $24.67 Difference: $5.33
If WBC meets the Morgans target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $26.44, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Morgans forecasts a full year FY20 dividend of 160.00 cents and EPS of 222.00 cents.
At the last closing share price the estimated dividend yield is 6.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 181.8, implying annual growth of -21.3%.

Current consensus DPS estimate is 160.0, implying a prospective dividend yield of 6.5%.

Current consensus EPS estimate suggests the PER is 13.6.

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 175.00 cents and EPS of 241.00 cents.
At the last closing share price the estimated dividend yield is 7.09%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.24.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 199.5, implying annual growth of 9.7%.

Current consensus DPS estimate is 160.8, implying a prospective dividend yield of 6.5%.

Current consensus EPS estimate suggests the PER is 12.4.

Market Sentiment: 0.3

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

WPL  WOODSIDE PETROLEUM LIMITED

NatGas

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Overnight Price: $35.82

Credit Suisse rates WPL as Outperform (1) -

The main milestones in 2020 include a Scarborough toll deal, a Browse toll/FEED and the interconnector deal with North West Shelf.

Other factors Credit Suisse believes will affect the company during the year are the low spot LNG prices, the price premium for Greater Enfield, the outcome of arbitration on Sangomer and possible trading losses from the US.

The broker maintains an Outperform rating on the back of de-risking Sangomer, with upside risk from the Greater Enfield ramp up and premium pricing. This is offset by the downside risk of US LNG trading losses and lower LNG spot prices.

Credit Suisse increases the target to $37.10 from $36.00, envisaging upside risk from Scarborough and Interconnector growth prospects.

Target price is $37.10 Current Price is $35.82 Difference: $1.28
If WPL meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $36.52, suggesting upside of 2.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Credit Suisse forecasts a full year FY19 dividend of 134.09 cents and EPS of 167.00 cents.
At the last closing share price the estimated dividend yield is 3.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.45.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 174.9, implying annual growth of N/A.

Current consensus DPS estimate is 133.2, implying a prospective dividend yield of 3.7%.

Current consensus EPS estimate suggests the PER is 20.5.

Forecast for FY20:

Credit Suisse forecasts a full year FY20 dividend of 154.45 cents and EPS of 192.92 cents.
At the last closing share price the estimated dividend yield is 4.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 210.7, implying annual growth of 20.5%.

Current consensus DPS estimate is 162.4, implying a prospective dividend yield of 4.5%.

Current consensus EPS estimate suggests the PER is 17.0.

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

Z1P  ZIP CO LIMITED

Business & Consumer Credit

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Overnight Price: $3.57

Ord Minnett rates Z1P as Accumulate (2) -

The company has signalled a strong finish to 2019 with positive surprises from higher transaction value and receivables.

Ord Minnett increases revenue and operating earnings forecasts going forward, given the first quarter contribution from Spotcap, which was acquired in September.

Whilst the TTV run rate is impressive, the broker still believes the FY20 target of 2.5m active customers is a stretch. Accumulate rating and $3.95 target maintained.

Target price is $3.95 Current Price is $3.57 Difference: $0.38
If Z1P meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $4.16, suggesting upside of 16.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Ord Minnett forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 2.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 170.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -2.4, implying annual growth of N/A.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 dividend of 0.00 cents and EPS of 2.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 148.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 2.8, implying annual growth of N/A.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 127.5.

Market Sentiment: 0.5

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

Today's Price Target Changes
Company Last Price Broker New Target Prev Target Change
AWC ALUMINA $2.28 Ord Minnett 1.90 2.30 -17.39%
BHP BHP $40.09 Ord Minnett 42.00 39.00 7.69%
BSL BLUESCOPE STEEL $15.75 Ord Minnett 17.20 17.00 1.18%
EVN EVOLUTION MINING $3.84 Ord Minnett 3.70 4.00 -7.50%
FMG FORTESCUE $10.86 Ord Minnett 11.00 10.50 4.76%
GXY GALAXY RESOURCES $1.21 Ord Minnett 1.40 1.60 -12.50%
ILU ILUKA RESOURCES $9.57 Ord Minnett 9.50 9.20 3.26%
LVT LIVETILES $0.27 Citi 0.63 0.75 -16.00%
MIN MINERAL RESOURCES $17.52 Ord Minnett 14.80 14.40 2.78%
MOZ MOSAIC BRANDS $1.83 Morgans 2.04 3.46 -41.04%
MTS METCASH $2.58 Credit Suisse 2.64 2.39 10.46%
NCM NEWCREST MINING $31.32 Ord Minnett 28.00 27.00 3.70%
NST NORTHERN STAR $11.86 Ord Minnett 13.20 11.90 10.92%
OGC OCEANAGOLD $2.80 Ord Minnett 4.20 4.10 2.44%
ORE OROCOBRE $3.58 Ord Minnett 2.55 2.25 13.33%
OZL OZ MINERALS $10.91 Ord Minnett 9.80 9.60 2.08%
PDL PENDAL GROUP $8.40 Citi 8.20 7.45 10.07%
Morgans 8.83 8.85 -0.23%
Ord Minnett 9.40 9.30 1.08%
UBS 7.75 7.45 4.03%
RDY READYTECH HOLDINGS $1.99 Macquarie 2.50 2.40 4.17%
RIO RIO TINTO $103.37 Ord Minnett 112.00 102.00 9.80%
RRL REGIS RESOURCES $4.50 Ord Minnett 4.30 4.80 -10.42%
RSG RESOLUTE MINING $1.18 Macquarie 1.30 1.60 -18.75%
S32 SOUTH32 $2.84 Ord Minnett 2.60 2.75 -5.45%
SBM ST BARBARA $2.92 Ord Minnett 3.40 3.10 9.68%
SFR SANDFIRE $6.05 Ord Minnett 6.30 6.10 3.28%
WBC WESTPAC BANKING $24.67 Morgans 30.00 30.50 -1.64%
WPL WOODSIDE PETROLEUM $35.82 Credit Suisse 37.10 36.00 3.06%
WSA WESTERN AREAS $2.84 Ord Minnett 2.70 3.20 -15.63%
Summaries
FMG FORTESCUE Downgrade to Hold from Buy - Ord Minnett Overnight Price $10.86
IGO INDEPENDENCE GROUP Downgrade to Lighten from Hold - Ord Minnett Overnight Price $6.66
LVT LIVETILES Buy - Citi Overnight Price $0.27
MME MONEYME Initiation of coverage with Add - Morgans Overnight Price $1.51
MOZ MOSAIC BRANDS Downgrade to Hold from Add - Morgans Overnight Price $1.83
MTS METCASH Upgrade to Neutral from Underperform - Credit Suisse Overnight Price $2.58
OGC OCEANAGOLD Upgrade to Buy from Accumulate - Ord Minnett Overnight Price $2.80
ORE OROCOBRE Downgrade to Sell from Hold - Ord Minnett Overnight Price $3.58
PDL PENDAL GROUP Neutral - Citi Overnight Price $8.40
Underperform - Credit Suisse Overnight Price $8.40
Downgrade to Hold from Add - Morgans Overnight Price $8.40
Accumulate - Ord Minnett Overnight Price $8.40
Sell - UBS Overnight Price $8.40
RDY READYTECH HOLDINGS Outperform - Macquarie Overnight Price $1.99
RSG RESOLUTE MINING Outperform - Macquarie Overnight Price $1.18
SBM ST BARBARA Upgrade to Buy from Accumulate - Ord Minnett Overnight Price $2.92
TYR TYRO PAYMENTS Initiation of coverage with Overweight - Morgan Stanley Overnight Price $3.50
Initiation of coverage with Accumulate - Ord Minnett Overnight Price $3.50
WBC WESTPAC BANKING Add - Morgans Overnight Price $24.67
WPL WOODSIDE PETROLEUM Outperform - Credit Suisse Overnight Price $35.82
Z1P ZIP CO Accumulate - Ord Minnett Overnight Price $3.57
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

9

2. Accumulate

3

3. Hold

5

4. Reduce

1

5. Sell

3

Wednesday 15 January 2020

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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.