Australian Broker Call

May 16, 2017

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COMPANIES DISCUSSED IN THIS ISSUE

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

THIS REPORT WILL BE UPDATED SHORTLY

Last Updated: 10:10 AM

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
AHY - ASALEO CARE Downgrade to Neutral from Outperform Macquarie
CYB - CYBG Upgrade to Hold from Reduce Morgans
FXJ - FAIRFAX MEDIA Upgrade to Neutral from Sell Citi
IAG - INSURANCE AUSTRALIA Downgrade to Reduce from Hold Morgans
WSA - WESTERN AREAS Downgrade to Sell from Neutral UBS
AHY  ASALEO CARE LIMITED

Household & Personal Products

Overnight Price: $1.59

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

Headline multiples are not demanding but Macquarie observes rising input costs and the ongoing competitive retail environment means the earnings risk is increasing. The main catalyst could be capital management at the end of the year.

Guidance reiterated at the AGM earlier this month is for low single digit growth, and the broker revises its forecasts towards the lower end of commentary. Rating is downgraded to Neutral. Target is reduced to $1.65 from $1.70.

Target price is $1.65 Current Price is $1.59 Difference: $0.06
If AHY meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $1.63, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 10.50 cents and EPS of 12.00 cents.
At the last closing share price the estimated dividend yield is 6.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.25.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.8, implying annual growth of 2.6%.

Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 6.4%.

Current consensus EPS estimate suggests the PER is 13.5.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 11.00 cents and EPS of 12.50 cents.
At the last closing share price the estimated dividend yield is 6.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.72.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.2, implying annual growth of 3.4%.

Current consensus DPS estimate is 10.3, implying a prospective dividend yield of 6.5%.

Current consensus EPS estimate suggests the PER is 13.0.

Market Sentiment: -0.3

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

ALL  ARISTOCRAT LEISURE LIMITED

Gaming

Overnight Price: $19.97

Citi rates ALL as Buy (1) -

Despite the strong run up in the price since upgrading guidance, Citi still envisages further strength in the stock. The broker upgrades FY17-19 forecasts for earnings per share by 4-8%, largely from upgrades to North American participation, digital and Australian forecasts.

Buy rating retained.Target rises to $23.85 from $19.80.The upcoming first half result is considered a potential positive catalyst.

Target price is $23.85 Current Price is $19.97 Difference: $3.88
If ALL meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $20.63, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Citi forecasts a full year FY17 dividend of 34.00 cents and EPS of 82.30 cents.
At the last closing share price the estimated dividend yield is 1.70%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.26.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 80.2, implying annual growth of 45.6%.

Current consensus DPS estimate is 36.4, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 24.9.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 37.00 cents and EPS of 93.20 cents.
At the last closing share price the estimated dividend yield is 1.85%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.43.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 91.6, implying annual growth of 14.2%.

Current consensus DPS estimate is 45.8, implying a prospective dividend yield of 2.3%.

Current consensus EPS estimate suggests the PER is 21.8.

Market Sentiment: 0.8

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

AQZ  ALLIANCE AVIATION SERVICES LIMITED

Transportation & Logistics

Overnight Price: $0.85

Credit Suisse rates AQZ as Outperform (1) -

The announcement of increased services for Virgin Australia ((VAH)) is seen as vindication of management's strategy and decision to increase the company's fleet. It allows for grabbing opportunities as they come along, points out Credit Suisse.

The analysts see more evidence for more growth ahead and this supports their view the shares are still inexpensive. Outperform rating retained. Target price moves to $1.15 from $0.95.

Target price is $1.15 Current Price is $0.85 Difference: $0.305
If AQZ meets the Credit Suisse target it will return approximately 36% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Credit Suisse forecasts a full year FY17 dividend of 2.00 cents and EPS of 11.75 cents.
At the last closing share price the estimated dividend yield is 2.37%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.19.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 4.00 cents and EPS of 15.20 cents.
At the last closing share price the estimated dividend yield is 4.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.56.

Market Sentiment: 1.0

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

BHP  BHP BILLITON LIMITED

Bulks

Overnight Price: $23.82

UBS rates BHP as Neutral (3) -

The broker had held a positive view on the nickel price due to robust stainless steel production in China, but as China's stainless steel inventories rise and prices fall, Indonesian nickel exports resume and the Philippines plays politics, the broker's view has swung. Nickel price forecasts cut by -16% in 2017 and -20% in 2018.

This results in a trimming of BHP forecast earnings but Neutral and $28 target retained.

Target price is $28.00 Current Price is $23.82 Difference: $4.18
If BHP meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $27.65, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 129.02 cents and EPS of 207.50 cents.
At the last closing share price the estimated dividend yield is 5.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.48.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 202.9, implying annual growth of N/A.

Current consensus DPS estimate is 122.8, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 11.7.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 134.34 cents and EPS of 224.79 cents.
At the last closing share price the estimated dividend yield is 5.64%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.60.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 181.5, implying annual growth of -10.5%.

Current consensus DPS estimate is 106.7, implying a prospective dividend yield of 4.5%.

Current consensus EPS estimate suggests the PER is 13.1.

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

Market Sentiment: 0.5

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

CL1  CLASS LIMITED

Wealth Management & Investments

Overnight Price: $3.03

ADDED

Ord Minnett rates CL1 as Buy (1) -

The Australian Taxation Office has extended the lodgement date for 2015-16 SMSF by six weeks to June 30.The impact is immaterial for revenue and earnings but may affect the optics around net portfolio additions in the June quarter report and add volatility in the near term, Ord Minnett suggests.

The significance means the company's key annual selling period, typically after the May lodgement date, will now be pushed back six weeks into July/August. Buy rating retained. Target is raised to $3.86 from $3.75.

Target price is $3.86 Current Price is $3.03 Difference: $0.83
If CL1 meets the Ord Minnett target it will return approximately 27% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Ord Minnett forecasts a full year FY17 dividend of 4.00 cents and EPS of 6.10 cents.
At the last closing share price the estimated dividend yield is 1.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 49.67.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 6.00 cents and EPS of 7.70 cents.
At the last closing share price the estimated dividend yield is 1.98%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 39.35.

Market Sentiment: 0.5

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

CPU  COMPUTERSHARE LIMITED

Diversified Financials

Overnight Price: $15.04

Deutsche Bank rates CPU as Hold (3) -

Deutsche Bank likes the growth options the new mortgage servicing business provides. The company also has significant leverage to rising interest rates.

Nevertheless, the broker is concerned with the customer attrition in the core share registry business and believes the stock is fair value at current levels. Hold rating and $14.90 target.

Target price is $14.90 Current Price is $15.04 Difference: minus $0.14 (current price is over target).
If CPU meets the Deutsche Bank target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.84, suggesting downside of -8.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Deutsche Bank forecasts a full year FY17 dividend of 32.85 cents and EPS of 73.69 cents.
At the last closing share price the estimated dividend yield is 2.18%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.41.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 73.0, implying annual growth of N/A.

Current consensus DPS estimate is 38.2, implying a prospective dividend yield of 2.5%.

Current consensus EPS estimate suggests the PER is 20.6.

Forecast for FY18:

Deutsche Bank forecasts a full year FY18 dividend of 31.13 cents and EPS of 77.81 cents.
At the last closing share price the estimated dividend yield is 2.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 76.9, implying annual growth of 5.3%.

Current consensus DPS estimate is 39.9, implying a prospective dividend yield of 2.7%.

Current consensus EPS estimate suggests the PER is 19.6.

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

CYB  CYBG PLC

Banks

Overnight Price: $5.03

Morgans rates CYB as Upgrade to Hold from Reduce (3) -

Morgans is forecasting a first half underlying profit of GBP83m when the company releases its first half result on May 16. The broker is forecasting an inaugural interim dividend of 1p per share.

The broker believes there is potential for significant share price weakness in the near term, if speculation around the bank bidding for The Co-operative Bank disappears.

On a 12-month view, nonetheless, the broker upgrades to Hold from Reduce, believing the potential IRB accreditation story will become the main focus and lead to positive sentiment. Target is raised to $4.83 from $4.17.

Target price is $4.83 Current Price is $5.03 Difference: minus $0.2 (current price is over target).
If CYB meets the Morgans target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.75, suggesting downside of -5.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Morgans forecasts a full year FY17 dividend of 3.71 cents and EPS of 37.06 cents.
At the last closing share price the estimated dividend yield is 0.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 32.7, implying annual growth of N/A.

Current consensus DPS estimate is 7.0, implying a prospective dividend yield of 1.4%.

Current consensus EPS estimate suggests the PER is 15.4.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 6.84 cents and EPS of 42.72 cents.
At the last closing share price the estimated dividend yield is 1.36%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 39.1, implying annual growth of 19.6%.

Current consensus DPS estimate is 26.6, implying a prospective dividend yield of 5.3%.

Current consensus EPS estimate suggests the PER is 12.9.

Market Sentiment: -0.3

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

DCN  DACIAN GOLD LIMITED

Gold & Silver

Overnight Price: $1.70

Macquarie rates DCN as Outperform (1) -

Drilling has highlighted strong grades at Beresford and also indicated significant mineralisation outside of the existing reserve.

Macquarie is impressed by the grades and with the potential upside that exists outside the reserve.

Outperform rating and $3.00 target retained.

Target price is $3.00 Current Price is $1.70 Difference: $1.305
If DCN meets the Macquarie target it will return approximately 77% (excluding dividends, fees and charges).

Current consensus price target is $3.05, suggesting upside of 79.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 10.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 15.99.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -7.5, 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 FY18:

Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of 10.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.62.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.6, 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 22.3.

Market Sentiment: 1.0

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

ELD  ELDERS LIMITED

Agriculture

Overnight Price: $4.46

Morgans rates ELD as Add (1) -

First half results were materially stronger than Morgans expected. FY17 guidance has been upgraded and, given the strength of the first half result, the broker suspects this is conservative.

EBIT guidance is upgraded to $66m from $60m previously. Management has stated an intention to grow earnings by 5-10% per annum out to 2020, both organically and through acquisitions.

The broker believes the stock is undervalued and retains an Add rating. Target is raised to $5.05 from $4.75.

Target price is $5.05 Current Price is $4.46 Difference: $0.59
If ELD meets the Morgans target it will return approximately 13% (excluding dividends, fees and charges).

The company's fiscal year ends in September.

Forecast for FY17:

Morgans forecasts a full year FY17 dividend of 13.00 cents and EPS of 45.00 cents.
At the last closing share price the estimated dividend yield is 2.91%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.91.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 14.00 cents and EPS of 48.00 cents.
At the last closing share price the estimated dividend yield is 3.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.29.

Market Sentiment: 1.0

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

FXJ  FAIRFAX MEDIA LIMITED

Real Estate

Overnight Price: $1.14

Citi rates FXJ as Upgrade to Neutral from Sell (3) -

The TPG consortium has revised its indicative offer to $1.20 a share for 100% of the company. The revised offer removes most of the issues with the original bid such as the uncertainty surrounding the value of the residual assets such as regional newspapers, Citi observes.

The broker upgrades to Neutral from Sell. Target rises to $1.20 from $0.85.

Target price is $1.20 Current Price is $1.14 Difference: $0.06
If FXJ meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $1.15, suggesting upside of 0.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Citi forecasts a full year FY17 dividend of 4.00 cents and EPS of 6.10 cents.
At the last closing share price the estimated dividend yield is 3.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.69.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.1, implying annual growth of N/A.

Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 3.4%.

Current consensus EPS estimate suggests the PER is 18.7.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 4.10 cents and EPS of 5.80 cents.
At the last closing share price the estimated dividend yield is 3.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.66.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.2, implying annual growth of 1.6%.

Current consensus DPS estimate is 4.0, implying a prospective dividend yield of 3.5%.

Current consensus EPS estimate suggests the PER is 18.4.

Market Sentiment: 0.4

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


Deutsche Bank rates FXJ as Hold (3) -

In Deutsche Bank's opinion the revised offer from the TPG Consortium at $1.20 cash per share represents significantly improved terms. Still, the broker cautions that a final bid is far from certain.

Given that REA Group ((REA)) remains the clear leader in real estate classifieds, the broker considers the offer compelling for shareholders and something which will require engagement from the FXJ board, but also believes the offer is timed to disrupt the Domain spin-off process.

Hold retained. Target rises to $1.05 from $0.90.

Target price is $1.05 Current Price is $1.14 Difference: minus $0.09 (current price is over target).
If FXJ meets the Deutsche Bank target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.15, suggesting upside of 0.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Deutsche Bank forecasts a full year FY17 dividend of 4.00 cents and EPS of 6.00 cents.
At the last closing share price the estimated dividend yield is 3.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.1, implying annual growth of N/A.

Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 3.4%.

Current consensus EPS estimate suggests the PER is 18.7.

Forecast for FY18:

Deutsche Bank forecasts a full year FY18 dividend of 4.00 cents and EPS of 6.00 cents.
At the last closing share price the estimated dividend yield is 3.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.2, implying annual growth of 1.6%.

Current consensus DPS estimate is 4.0, implying a prospective dividend yield of 3.5%.

Current consensus EPS estimate suggests the PER is 18.4.

Market Sentiment: 0.4

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


UBS rates FXJ as Neutral (3) -

The broker has lifted its target to $1.20 from 90c to match TPG's new bid for all of the company. On the broker's calculation, with gearing, cost-outs and patience on Domain value growing, TPG could achieve the required internal rate of return and perhaps pay 5c more.

Neutral retained.

Target price is $1.20 Current Price is $1.14 Difference: $0.06
If FXJ meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $1.15, suggesting upside of 0.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 4.00 cents and EPS of 6.00 cents.
At the last closing share price the estimated dividend yield is 3.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.1, implying annual growth of N/A.

Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 3.4%.

Current consensus EPS estimate suggests the PER is 18.7.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 4.00 cents and EPS of 6.00 cents.
At the last closing share price the estimated dividend yield is 3.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.2, implying annual growth of 1.6%.

Current consensus DPS estimate is 4.0, implying a prospective dividend yield of 3.5%.

Current consensus EPS estimate suggests the PER is 18.4.

Market Sentiment: 0.4

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

GNC  GRAINCORP LIMITED

Agriculture

Overnight Price: $9.94

UBS rates GNC as Neutral (3) -

Graincorp posted a very strong first half result thanks to one of the largest crops ever recorded and a normalisation of margins, the broker notes. The broker believes FY guidance is conservative but dependent on the resolution of industrial action against the company's rail service.

Diverting loads to expensive road freight and other ports is costing money. But after a long period of investment, Graincorp is now looking at free cash flow for the first time in six years, the broker notes. Neutral retained, target rises to $9.90 from $9.60.

Target price is $9.90 Current Price is $9.94 Difference: minus $0.04 (current price is over target).
If GNC meets the UBS target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.91, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 20.00 cents and EPS of 68.80 cents.
At the last closing share price the estimated dividend yield is 2.01%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.45.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 67.9, implying annual growth of 403.0%.

Current consensus DPS estimate is 27.9, implying a prospective dividend yield of 2.8%.

Current consensus EPS estimate suggests the PER is 14.6.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 25.00 cents and EPS of 67.00 cents.
At the last closing share price the estimated dividend yield is 2.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 60.0, implying annual growth of -11.6%.

Current consensus DPS estimate is 28.1, implying a prospective dividend yield of 2.8%.

Current consensus EPS estimate suggests the PER is 16.6.

Market Sentiment: 0.2

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

GOR  GOLD ROAD RESOURCES LIMITED

Gold & Silver

Overnight Price: $0.67

Macquarie rates GOR as Outperform (1) -

Thick high-grade gold intersections have been reported from the YAM 14 prospect, south of the Gruyere mine development.

Macquarie considers Gruyere one of the most significant greenfield Australian gold discoveries in recent times and the stock remains one of the broker's top international developer picks this year.

Outperform and $1.00 target retained.

Target price is $1.00 Current Price is $0.67 Difference: $0.335
If GOR meets the Macquarie target it will return approximately 50% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 11.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 5.68.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 0.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 110.83.

Market Sentiment: 1.0

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

IAG  INSURANCE AUSTRALIA GROUP LIMITED

Insurance

Overnight Price: $6.33

Morgans rates IAG as Downgrade to Reduce from Hold (5) -

While acknowledging some positive recent news flow, Morgans believes the current valuation of the stock is now extremely stretched. The stock is now trading at an 11% premium to the market, versus its historical discount of -7% to the market on average.

Morgans does not believe the current valuation reflects the inherent risk as an insurance company and downgrades to Reduce from Hold. Target is $5.56.

Target price is $5.56 Current Price is $6.33 Difference: minus $0.77 (current price is over target).
If IAG 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 $6.08, suggesting downside of -4.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgans forecasts a full year FY17 dividend of 24.60 cents and EPS of 32.50 cents.
At the last closing share price the estimated dividend yield is 3.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.48.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 34.0, implying annual growth of 31.8%.

Current consensus DPS estimate is 26.0, implying a prospective dividend yield of 4.1%.

Current consensus EPS estimate suggests the PER is 18.6.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 27.80 cents and EPS of 36.20 cents.
At the last closing share price the estimated dividend yield is 4.39%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.49.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 37.1, implying annual growth of 9.1%.

Current consensus DPS estimate is 28.5, implying a prospective dividend yield of 4.5%.

Current consensus EPS estimate suggests the PER is 17.1.

Market Sentiment: 0.0

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

IGO  INDEPENDENCE GROUP NL

Nickel

Overnight Price: $3.15

UBS rates IGO as Neutral (3) -

The broker had held a positive view on the nickel price due to robust stainless steel production in China, but as China's stainless steel inventories rise and prices fall, Indonesian nickel exports resume and the Philippines plays politics, the broker's view has swung. Nickel price forecasts cut by -16% in 2017 and -20% in 2018.

This results in a cut in Independence forecast earnings. Neutral retained, target falls to $3.36 from $3.81.

Target price is $3.36 Current Price is $3.15 Difference: $0.21
If IGO meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.99, suggesting upside of 26.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 1.00 cents and EPS of 6.00 cents.
At the last closing share price the estimated dividend yield is 0.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 52.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.6, implying annual growth of N/A.

Current consensus DPS estimate is 2.3, implying a prospective dividend yield of 0.7%.

Current consensus EPS estimate suggests the PER is 36.6.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 8.00 cents and EPS of 28.00 cents.
At the last closing share price the estimated dividend yield is 2.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.25.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 34.1, implying annual growth of 296.5%.

Current consensus DPS estimate is 11.2, implying a prospective dividend yield of 3.6%.

Current consensus EPS estimate suggests the PER is 9.2.

Market Sentiment: 0.8

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

LNK  LINK ADMINISTRATION HOLDINGS LIMITED

Wealth Management & Investments

Overnight Price: $7.94

Deutsche Bank rates LNK as Buy (1) -

Link is Deutsche Bank's top pick in the diversified financial sector. The broker believes the integration of SuperPartners offers shareholders relatively low-risk, cost-driven earnings growth potential.

The broker envisages nearly 40% upside to earnings if the company delivers on its targeted margin.

Rating is Buy. Target is $8.70. The downside risk to the broker's target would emerge if the company failed to deliver on its cost reduction program or lost major customers.

Target price is $8.70 Current Price is $7.94 Difference: $0.76
If LNK meets the Deutsche Bank target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $8.30, suggesting upside of 4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Deutsche Bank forecasts a full year FY17 dividend of 13.30 cents and EPS of 28.90 cents.
At the last closing share price the estimated dividend yield is 1.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.47.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 32.5, implying annual growth of 158.1%.

Current consensus DPS estimate is 15.8, implying a prospective dividend yield of 2.0%.

Current consensus EPS estimate suggests the PER is 24.4.

Forecast for FY18:

Deutsche Bank forecasts a full year FY18 dividend of 18.10 cents and EPS of 32.20 cents.
At the last closing share price the estimated dividend yield is 2.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.66.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 37.8, implying annual growth of 16.3%.

Current consensus DPS estimate is 19.7, implying a prospective dividend yield of 2.5%.

Current consensus EPS estimate suggests the PER is 21.0.

Market Sentiment: 0.4

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

MIL  MILLENNIUM SERVICES GROUP LIMITED

Jobs & Skilled Labour Services

Overnight Price: $1.65

ADDED

Ord Minnett rates MIL as Buy (1) -

Ord Minnett has identified a need to adjust non-cash forecasts for depreciation & amortisation to better account for the impact of the Airlite acquisition.

This results in normalised net profit forecasts being lowered by -4.8% and -4.1% in FY17 and FY18 in respectively. Buy rating retained. Target rises to $1.85 from $1.83.

Target price is $1.85 Current Price is $1.65 Difference: $0.2
If MIL meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Ord Minnett forecasts a full year FY17 dividend of 8.00 cents and EPS of 18.10 cents.
At the last closing share price the estimated dividend yield is 4.85%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.12.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 10.00 cents and EPS of 21.40 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 7.71.

Market Sentiment: 1.0

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

MTR  MANTRA GROUP LIMITED

Travel, Leisure & Tourism

Overnight Price: $2.97

Morgan Stanley rates MTR as Overweight (1) -

Morgan Stanley met with management on the Gold Coast. The broker observes polarised market conditions continue, with resource-linked cities under intense pressure.

The broker considers FY17 potentially the most challenging year for the company in the domestic hotel market. Ala Moana is continuing to perform strongly versus internal expectations.

Target is $4.20. Overweight rating retained. Industry view is In-Line.

Target price is $4.20 Current Price is $2.97 Difference: $1.23
If MTR meets the Morgan Stanley target it will return approximately 41% (excluding dividends, fees and charges).

Current consensus price target is $3.38, suggesting upside of 13.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgan Stanley forecasts a full year FY17 dividend of 13.00 cents and EPS of 18.00 cents.
At the last closing share price the estimated dividend yield is 4.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.2, implying annual growth of 21.1%.

Current consensus DPS estimate is 10.9, implying a prospective dividend yield of 3.7%.

Current consensus EPS estimate suggests the PER is 17.3.

Forecast for FY18:

Morgan Stanley forecasts a full year FY18 dividend of 15.00 cents and EPS of 19.00 cents.
At the last closing share price the estimated dividend yield is 5.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.8, implying annual growth of 9.3%.

Current consensus DPS estimate is 12.7, implying a prospective dividend yield of 4.3%.

Current consensus EPS estimate suggests the PER is 15.8.

Market Sentiment: 0.5

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

NCM  NEWCREST MINING LIMITED

Gold & Silver

Overnight Price: $20.44

Deutsche Bank rates NCM as Sell (5) -

The update on the Cadia operation post the earthquake confirms Deutsche Bank's view that the panel caves would not re-commence production until the September quarter.

The broker observes the stock has fallen -18% in four weeks but still doesn't screen cheaply. Sell rating maintained.Target falls to $17.50 from $17.60.

Target price is $17.50 Current Price is $20.44 Difference: minus $2.94 (current price is over target).
If NCM meets the Deutsche Bank target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $19.67, suggesting downside of -3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Deutsche Bank forecasts a full year FY17 dividend of 10.00 cents and EPS of 45.00 cents.
At the last closing share price the estimated dividend yield is 0.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 45.42.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 63.2, implying annual growth of 8.4%.

Current consensus DPS estimate is 14.8, implying a prospective dividend yield of 0.7%.

Current consensus EPS estimate suggests the PER is 32.3.

Forecast for FY18:

Deutsche Bank forecasts a full year FY18 dividend of 11.00 cents and EPS of 44.00 cents.
At the last closing share price the estimated dividend yield is 0.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 46.45.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 73.9, implying annual growth of 16.9%.

Current consensus DPS estimate is 21.3, implying a prospective dividend yield of 1.0%.

Current consensus EPS estimate suggests the PER is 27.7.

Market Sentiment: -0.5

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

NXT  NEXTDC LIMITED

Cloud services

Overnight Price: $4.38

Citi rates NXT as Buy (1) -

Citi analysts don't manage to contain their excitement following news that NextDC has raised $300m in new, senior, unsecured notes. The company has a legacy of raising more funds than it initially targets and this time has been no exception, point out the analysts.

The news is considered "exciting", both from a strategic and a financial perspective. It is the analysts' view that organic growth from here onwards will accelerate.

Risks have receded the company needs to conduct capital raisings to fund its growth path and this removes potential "overhang", argue the analysts. Buy rating retained. Target $4.40 (unchanged).

Target price is $4.40 Current Price is $4.38 Difference: $0.02
If NXT meets the Citi target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $4.43, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Citi forecasts a full year FY17 dividend of 0.00 cents and EPS of 9.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 48.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 5.9, 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 74.2.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 0.00 cents and EPS of 5.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 76.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 5.3, implying annual growth of -10.2%.

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

Current consensus EPS estimate suggests the PER is 82.6.

Market Sentiment: 1.0

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

OSH  OIL SEARCH LIMITED

NatGas

Overnight Price: $7.33

Citi rates OSH as Neutral (3) -

The Muruk-1ST3 well, designed to delineate the Muruk gas discovery to the south, has not intersected a gas-water contact. Citi welcomes the news, as the well location was chosen to determine the lowest point of gas in the reservoir and the results signal more gas is present.

The company has stated that the reservoir quality is comparable to the Hides field. The result supports Citi's three-train expansion thesis.  Neutral rating and $7.19 target retained.

Target price is $7.19 Current Price is $7.33 Difference: minus $0.14 (current price is over target).
If OSH 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 $8.04, suggesting upside of 9.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Citi forecasts a full year FY17 dividend of 11.31 cents and EPS of 28.33 cents.
At the last closing share price the estimated dividend yield is 1.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.87.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.9, implying annual growth of N/A.

Current consensus DPS estimate is 11.0, implying a prospective dividend yield of 1.5%.

Current consensus EPS estimate suggests the PER is 26.3.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 14.77 cents and EPS of 34.72 cents.
At the last closing share price the estimated dividend yield is 2.01%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 33.0, implying annual growth of 18.3%.

Current consensus DPS estimate is 13.5, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 22.2.

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

RWC  RELIANCE WORLDWIDE CORPORATION LIMITED

Building Products & Services

Overnight Price: $3.27

Deutsche Bank rates RWC as Hold (3) -

The company will acquire Holdrite for US$92.5m. Deutsche Bank questions the benefit of acquiring a business with minimal synergies when the company has significant growth potential in its existing business.

Approximately 80% of Holdrite's products are sold to the plumbing and mechanical contractor market through wholesale distribution channels. This is double the 40% that Reliance sells through the wholesale channels.

Hold rating retained. Target rises to $3.00 from $2.79.

Target price is $3.00 Current Price is $3.27 Difference: minus $0.27 (current price is over target).
If RWC meets the Deutsche Bank target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.40, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Deutsche Bank forecasts a full year FY17 dividend of 6.00 cents and EPS of 12.00 cents.
At the last closing share price the estimated dividend yield is 1.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.25.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.0, implying annual growth of N/A.

Current consensus DPS estimate is 6.0, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 27.3.

Forecast for FY18:

Deutsche Bank forecasts a full year FY18 dividend of 7.00 cents and EPS of 13.00 cents.
At the last closing share price the estimated dividend yield is 2.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.0, implying annual growth of 16.7%.

Current consensus DPS estimate is 7.1, implying a prospective dividend yield of 2.2%.

Current consensus EPS estimate suggests the PER is 23.4.

Market Sentiment: 0.4

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


Macquarie rates RWC as Outperform (1) -

The company has acquired Holdrite, US-based, for US$92.5m. Holdrite will accelerate entry into the residential and commercial new construction markets.

The company produces engineered product solutions to assist plumbers and contractors.

Macquarie believes the deal is a good one, with a solid strategic rationale. Outperform retained. Target rises to $3.70 from $3.60.

Target price is $3.70 Current Price is $3.27 Difference: $0.43
If RWC meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.40, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 6.00 cents and EPS of 12.00 cents.
At the last closing share price the estimated dividend yield is 1.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.25.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.0, implying annual growth of N/A.

Current consensus DPS estimate is 6.0, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 27.3.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 7.00 cents and EPS of 14.80 cents.
At the last closing share price the estimated dividend yield is 2.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.0, implying annual growth of 16.7%.

Current consensus DPS estimate is 7.1, implying a prospective dividend yield of 2.2%.

Current consensus EPS estimate suggests the PER is 23.4.

Market Sentiment: 0.4

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


Morgans rates RWC as Hold (3) -

The company will acquire Holdrite for US$92.5m. Morgans believes the transaction compliments the existing business and provides a strong foundation from which to grow in the North American new construction market as well as diversifying the product range.

Incorporating Holdrite into forecasts lifts FY18 estimates for EBITDA by 11%.  Hold rating retained. Target rises to $3.43 from $2.94.

Target price is $3.43 Current Price is $3.27 Difference: $0.16
If RWC meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $3.40, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgans forecasts a full year FY17 dividend of 5.80 cents and EPS of 12.00 cents.
At the last closing share price the estimated dividend yield is 1.77%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.25.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.0, implying annual growth of N/A.

Current consensus DPS estimate is 6.0, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 27.3.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 7.40 cents and EPS of 15.00 cents.
At the last closing share price the estimated dividend yield is 2.26%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.0, implying annual growth of 16.7%.

Current consensus DPS estimate is 7.1, implying a prospective dividend yield of 2.2%.

Current consensus EPS estimate suggests the PER is 23.4.

Market Sentiment: 0.4

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


ADDED

Ord Minnett rates RWC as Accumulate (2) -

The company will buy Holdrite for US$92.5m with the consideration to be funded through existing lenders. Management expects the acquisition to drive mid to high single-digit accretion to earnings per share in the first full year.

Ord Minnett believes the transaction is in line with the company's acquisition strategy, providing complementary products to the current portfolio, and there is also scope for cross selling opportunities.  Accumulate rating retained. Target is $3.45.

Target price is $3.45 Current Price is $3.27 Difference: $0.18
If RWC meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $3.40, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Ord Minnett forecasts a full year FY17 dividend of 6.00 cents and EPS of 12.00 cents.
At the last closing share price the estimated dividend yield is 1.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.25.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.0, implying annual growth of N/A.

Current consensus DPS estimate is 6.0, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 27.3.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 7.00 cents and EPS of 13.00 cents.
At the last closing share price the estimated dividend yield is 2.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.0, implying annual growth of 16.7%.

Current consensus DPS estimate is 7.1, implying a prospective dividend yield of 2.2%.

Current consensus EPS estimate suggests the PER is 23.4.

Market Sentiment: 0.4

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

S32  SOUTH32 LIMITED

Mining

Overnight Price: $2.68

UBS rates S32 as Buy (1) -

The broker had held a positive view on the nickel price due to robust stainless steel production in China, but as China's stainless steel inventories rise and prices fall, Indonesian nickel exports resume and the Philippines plays politics, the broker's view has swung. Nickel price forecasts cut by -16% in 2017 and -20% in 2018.

This, and the closure of Illawarra Coal due to ventilation issues, lead the broker to cut South32 forecast earnings by -5%. Buy and $2.80 target nevertheless retained.

Target price is $2.80 Current Price is $2.68 Difference: $0.12
If S32 meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $3.01, suggesting upside of 12.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 11.97 cents and EPS of 30.59 cents.
At the last closing share price the estimated dividend yield is 4.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.9, implying annual growth of N/A.

Current consensus DPS estimate is 12.0, implying a prospective dividend yield of 4.5%.

Current consensus EPS estimate suggests the PER is 9.3.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 10.64 cents and EPS of 27.93 cents.
At the last closing share price the estimated dividend yield is 3.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 26.2, implying annual growth of -9.3%.

Current consensus DPS estimate is 12.5, implying a prospective dividend yield of 4.7%.

Current consensus EPS estimate suggests the PER is 10.2.

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

TCL  TRANSURBAN GROUP

Infrastructure & Utilities

Overnight Price: $11.99

UBS rates TCL as Buy (1) -

Financial close on the West Gate Tunnel is due late this year and would commit Transurban to $3.8bn of capex, the broker notes. The sale process for 50% of WestConnex will likely play out over the next 12 months, and could be worth $3.2bn, the broker estimates.

Investment in both would place pressure on Transurban's distributions and a $3.5bn capital raising would be needed, the broker believes. West Gate ads $1.1 5to valuation and WestConnex could be accretive at the right price. Target rises to $13.30 from $12.40 and Buy retained.

Target price is $13.30 Current Price is $11.99 Difference: $1.31
If TCL meets the UBS target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $12.00, suggesting upside of 0.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 51.50 cents and EPS of 8.90 cents.
At the last closing share price the estimated dividend yield is 4.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 134.72.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.6, implying annual growth of 312.0%.

Current consensus DPS estimate is 51.6, implying a prospective dividend yield of 4.3%.

Current consensus EPS estimate suggests the PER is 58.2.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 56.00 cents and EPS of 12.50 cents.
At the last closing share price the estimated dividend yield is 4.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 95.92.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 26.9, implying annual growth of 30.6%.

Current consensus DPS estimate is 55.9, implying a prospective dividend yield of 4.7%.

Current consensus EPS estimate suggests the PER is 44.6.

Market Sentiment: 0.6

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

WSA  WESTERN AREAS NL

Nickel

Overnight Price: $2.13

UBS rates WSA as Downgrade to Sell from Neutral (5) -

UBS had held a positive view on the nickel price due to robust stainless steel production in China, but as China's stainless steel inventories rise and prices fall, Indonesian nickel exports resume and the Philippines plays politics, the broker's view has swung. Nickel price forecasts cut by -16% in 2017 and -20% in 2018.

While Western Areas' free cash flow is weak at the spot nickel price, the balance sheet is strong, UBS notes. But the broker remains cautious given the company's strong leverage to the nickel price. Downgrade to Sell. Target falls to $2.04 from $2.41.

Target price is $2.04 Current Price is $2.13 Difference: minus $0.09 (current price is over target).
If WSA meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.43, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 106.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 1.7, implying annual growth of N/A.

Current consensus DPS estimate is 0.3, implying a prospective dividend yield of 0.1%.

Current consensus EPS estimate suggests the PER is 125.3.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 1.00 cents and EPS of 0.00 cents.
At the last closing share price the estimated dividend yield is 0.47%.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 10.4, implying annual growth of 511.8%.

Current consensus DPS estimate is 2.7, implying a prospective dividend yield of 1.3%.

Current consensus EPS estimate suggests the PER is 20.5.

Market Sentiment: -0.1

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

Summaries
AHY - ASALEO CARE Downgrade to Neutral from Outperform - Macquarie Overnight Price $1.59
ALL - ARISTOCRAT LEISURE Buy - Citi Overnight Price $19.97
AQZ - ALLIANCE AVIATION Outperform - Credit Suisse Overnight Price $0.85
BHP - BHP BILLITON Neutral - UBS Overnight Price $23.82
CL1 - CLASS Buy - Ord Minnett Overnight Price $3.03
CPU - COMPUTERSHARE Hold - Deutsche Bank Overnight Price $15.04
CYB - CYBG Upgrade to Hold from Reduce - Morgans Overnight Price $5.03
DCN - DACIAN GOLD Outperform - Macquarie Overnight Price $1.70
ELD - ELDERS Add - Morgans Overnight Price $4.46
FXJ - FAIRFAX MEDIA Upgrade to Neutral from Sell - Citi Overnight Price $1.14
Hold - Deutsche Bank Overnight Price $1.14
Neutral - UBS Overnight Price $1.14
GNC - GRAINCORP Neutral - UBS Overnight Price $9.94
GOR - GOLD ROAD RESOURCES Outperform - Macquarie Overnight Price $0.67
IAG - INSURANCE AUSTRALIA Downgrade to Reduce from Hold - Morgans Overnight Price $6.33
IGO - INDEPENDENCE GROUP Neutral - UBS Overnight Price $3.15
LNK - LINK ADMINISTRATION Buy - Deutsche Bank Overnight Price $7.94
MIL - MILLENNIUM SERVICES Buy - Ord Minnett Overnight Price $1.65
MTR - MANTRA GROUP Overweight - Morgan Stanley Overnight Price $2.97
NCM - NEWCREST MINING Sell - Deutsche Bank Overnight Price $20.44
NXT - NEXTDC Buy - Citi Overnight Price $4.38
OSH - OIL SEARCH Neutral - Citi Overnight Price $7.33
RWC - RELIANCE WORLDWIDE Hold - Deutsche Bank Overnight Price $3.27
Outperform - Macquarie Overnight Price $3.27
Hold - Morgans Overnight Price $3.27
Accumulate - Ord Minnett Overnight Price $3.27
S32 - SOUTH32 Buy - UBS Overnight Price $2.68
TCL - TRANSURBAN GROUP Buy - UBS Overnight Price $11.99
WSA - WESTERN AREAS Downgrade to Sell from Neutral - UBS Overnight Price $2.13
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

13

2. Accumulate

1

3. Hold

12

5. Sell

3

Tuesday 16 May 2017

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