Australian Broker Call

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June 28, 2022

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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
COL - Coles Group Downgrade to Lighten from Hold Ord Minnett
EVN - Evolution Mining Upgrade to Add from Hold Morgans
HVN - Harvey Norman Upgrade to Buy from Hold Ord Minnett
ILU - Iluka Resources Upgrade to Buy from Sell Citi
JBH - JB Hi-Fi Downgrade to Hold from Buy Ord Minnett
MTS - Metcash Downgrade to Neutral from Outperform Credit Suisse
PMV - Premier Investments Downgrade to Hold from Accumulate Ord Minnett
SKC - SKYCITY Entertainment Upgrade to Outperform from Neutral Credit Suisse
WES - Wesfarmers Downgrade to Lighten from Hold Ord Minnett
WOW - Woolworths Group Downgrade to Hold from Accumulate Ord Minnett
CAR  CARSALES.COM LIMITED

Automobiles & Components

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Overnight Price: $20.76

Credit Suisse rates CAR as Outperform (1) -

Credit Suisse describes Carsales' acquisition of the remaining 51% interest in Trader Interactive as paying a premium, but finds it justifiable given it anticipates the purchase will deliver strong earnings growth over a number of years.

The broker notes the company undertook a $1.2bn equity raising to fully fund the acquisition, and while a higher level of debt could have improved the accretion metrics the raise left the company at a comfortable gearing level. 

The Outperform rating is retained and the target price decreases to $24.00 from $25.80, largely as a result of dilution from equity raising.

Target price is $24.00 Current Price is $20.76 Difference: $3.24
If CAR meets the Credit Suisse target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $23.08, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Credit Suisse forecasts a full year FY22 dividend of 53.50 cents and EPS of 69.03 cents.
At the last closing share price the estimated dividend yield is 2.58%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.07.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 68.7, implying annual growth of 30.5%.

Current consensus DPS estimate is 54.1, implying a prospective dividend yield of 2.6%.

Current consensus EPS estimate suggests the PER is 30.2.

Forecast for FY23:

Credit Suisse forecasts a full year FY23 dividend of 64.00 cents and EPS of 81.10 cents.
At the last closing share price the estimated dividend yield is 3.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.60.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 78.6, implying annual growth of 14.4%.

Current consensus DPS estimate is 64.5, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 26.4.

Market Sentiment: 0.5

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


Macquarie rates CAR as Outperform (1) -

Carsales is set to acquire the remaining 51% stake in Trader Interactive for $1,207m, set to be funded by an equity raising. Macquarie notes the company has largely reaffirmed the strategy case it made when purchasing the original 49% interest, with further outlook clarity.

Company commentary suggests the acquisition can deliver double digit revenue growth, but Macquarie notes it will wait for evidence of execution before adjusting its forecasts. 

The Outperform rating is retained and the target price increases to $21.00 from $20.00.

Target price is $21.00 Current Price is $20.76 Difference: $0.24
If CAR meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $23.08, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 55.50 cents and EPS of 69.10 cents.
At the last closing share price the estimated dividend yield is 2.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 68.7, implying annual growth of 30.5%.

Current consensus DPS estimate is 54.1, implying a prospective dividend yield of 2.6%.

Current consensus EPS estimate suggests the PER is 30.2.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 64.50 cents and EPS of 79.40 cents.
At the last closing share price the estimated dividend yield is 3.11%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 78.6, implying annual growth of 14.4%.

Current consensus DPS estimate is 64.5, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 26.4.

Market Sentiment: 0.5

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


Ord Minnett rates CAR as Lighten (4) -

Carsales is raising US$840m to fully acquire Trader Interactive in the US (remaining 51%) and a cynical Ord Minnett suspects the acquirer wants to avoid a valuation re-rating of its 49% ownership which was only purchased in September last year.

Ord Minnett thinks current consensus forecasts for both acquirer and target are too optimistic and observes yesterday's market announcement did not include any significant outperformance of market expectations.

Lighten rating maintained while the target price falls to $19.75 from $20.60.

Target price is $19.75 Current Price is $20.76 Difference: minus $1.01 (current price is over target).
If CAR meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $23.08, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Ord Minnett forecasts a full year FY22 EPS of 69.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 68.7, implying annual growth of 30.5%.

Current consensus DPS estimate is 54.1, implying a prospective dividend yield of 2.6%.

Current consensus EPS estimate suggests the PER is 30.2.

Forecast for FY23:

Ord Minnett forecasts a full year FY23 EPS of 69.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 78.6, implying annual growth of 14.4%.

Current consensus DPS estimate is 64.5, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 26.4.

Market Sentiment: 0.5

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

COE  COOPER ENERGY LIMITED

Crude Oil

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Overnight Price: $0.24

Morgans rates COE as Add (1) -

Morgans  believes the acquisition by Cooper Energy of the Orbost Gas Plant from current owner/operator APA Group ((APA)) for -$270-$330m makes sense. It's thought gaining control will allow Cooper Energy to apply more funds to debottlenecking.

To fund the acquisition and the abandonment of the Basker Manta Gummy oil development, the company has raised $244m of equity at 24.5c (via a placement and  2-for-1 underwritten rights issue), and added $200m in new debt.

The broker lowers its target price to $0.31 from $0.35 and retains its Add rating.

Target price is $0.31 Current Price is $0.24 Difference: $0.07
If COE meets the Morgans target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $0.28, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Morgans forecasts a full year FY22 dividend of 0.00 cents and EPS of 0.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 40.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -10.7, 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 FY23:

Morgans forecasts a full year FY23 dividend of 0.00 cents and EPS of 2.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.57.

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 N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 2.1.

Market Sentiment: 0.1

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

COL  COLES GROUP LIMITED

Food, Beverages & Tobacco

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Overnight Price: $17.92

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

Following a general re-assessment of the outlook for retailers in Australia, Ord Minnett has cut FY23 and FY24 earnings forecasts by -10-20% for discretionary retailers, and by -5-7% for food and liquor, expecting a softer demand backdrop.

The broker has also come to the conclusion that in numerous cases, the share prices already reflect such an outlook.

Coles has been downgraded to Lighten from Hold. Price target falls to $17 from $18.20.

Target price is $17.00 Current Price is $17.92 Difference: minus $0.92 (current price is over target).
If COL meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.91, suggesting upside of 6.2% (ex-dividends)

Forecast for FY22:

Current consensus EPS estimate is 76.3, implying annual growth of 1.3%.

Current consensus DPS estimate is 61.8, implying a prospective dividend yield of 3.5%.

Current consensus EPS estimate suggests the PER is 23.3.

Forecast for FY23:

Current consensus EPS estimate is 82.3, implying annual growth of 7.9%.

Current consensus DPS estimate is 67.1, implying a prospective dividend yield of 3.8%.

Current consensus EPS estimate suggests the PER is 21.6.

Market Sentiment: 0.3

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

EDV  ENDEAVOUR GROUP LIMITED

Food, Beverages & Tobacco

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Overnight Price: $7.46

Ord Minnett rates EDV as Accumulate (2) -

Following a general re-assessment of the outlook for retailers in Australia, Ord Minnett has cut FY23 and FY24 earnings forecasts by -10-20% for discretionary retailers, and by -5-7% for food and liquor, expecting a softer demand backdrop.

The broker has also come to the conclusion that in numerous cases, the share prices already reflect such an outlook.

Ord Minnett's rating for Endeavour Group remains Accumulate. Price target has lost -10c to $8.40.

Target price is $8.40 Current Price is $7.46 Difference: $0.94
If EDV meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $7.44, suggesting downside of -1.6% (ex-dividends)

Forecast for FY22:

Current consensus EPS estimate is 27.8, implying annual growth of 11.9%.

Current consensus DPS estimate is 20.9, implying a prospective dividend yield of 2.8%.

Current consensus EPS estimate suggests the PER is 27.2.

Forecast for FY23:

Current consensus EPS estimate is 30.2, implying annual growth of 8.6%.

Current consensus DPS estimate is 21.6, implying a prospective dividend yield of 2.9%.

Current consensus EPS estimate suggests the PER is 25.0.

Market Sentiment: 0.1

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

EVN  EVOLUTION MINING LIMITED

Gold & Silver

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Overnight Price: $2.64

Citi rates EVN as Neutral (3) -

Citi points out Evolution Mining's normally hefty valuation premium is now gone after a share price fall in reaction to lower production guidance and higher guidance for costs. 

Management attributed weather and covid-absenteeism for the lower FY22 guidance.

The broker is not expecting the company to make any cash until FY25, and that depends on a good performance from Red Lake. While the rating stays at Neutral, it is overlaid with a new high risk designation. The target price falls to $3.30 from $4.60.

Target price is $3.30 Current Price is $2.64 Difference: $0.66
If EVN meets the Citi target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $3.55, suggesting upside of 36.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Citi forecasts a full year FY22 dividend of 5.00 cents and EPS of 14.90 cents.
At the last closing share price the estimated dividend yield is 1.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.72.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.6, implying annual growth of -17.9%.

Current consensus DPS estimate is 6.6, implying a prospective dividend yield of 2.5%.

Current consensus EPS estimate suggests the PER is 15.7.

Forecast for FY23:

Citi forecasts a full year FY23 dividend of 0.00 cents and EPS of 20.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.1, implying annual growth of 45.2%.

Current consensus DPS estimate is 4.3, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 10.8.

Market Sentiment: 0.1

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


Credit Suisse rates EVN as Underperform (5) -

Evolution Mining has updated the market, highlighting a number of delays across key projects. Credit Suisse notes the Mungari and Bateman mill expansions have been deferred, with the company looking to progress the Mungari expansion when the market improves. 

The company noted recent copper pricing declines are likely to drive all in sustaining costs above guidance in FY22 at $1,250 per ounce, while production remains -10,000 ounces short of expectations as of late April. Evolution Mining increased cost and lowered production guidance through to FY24. 

The Underperform rating is retained and the target price decreases to $2.70 from $3.75.

Target price is $2.70 Current Price is $2.64 Difference: $0.06
If EVN meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.55, suggesting upside of 36.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Credit Suisse forecasts a full year FY22 dividend of 5.00 cents and EPS of 15.66 cents.
At the last closing share price the estimated dividend yield is 1.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.86.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.6, implying annual growth of -17.9%.

Current consensus DPS estimate is 6.6, implying a prospective dividend yield of 2.5%.

Current consensus EPS estimate suggests the PER is 15.7.

Forecast for FY23:

Credit Suisse forecasts a full year FY23 dividend of 0.00 cents and EPS of 14.79 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.1, implying annual growth of 45.2%.

Current consensus DPS estimate is 4.3, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 10.8.

Market Sentiment: 0.1

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


Macquarie rates EVN as Neutral (3) -

A production update from Evolution Mining has the company delivering a softer finish to FY22 than anticipated by Macquarie, and its downgraded production guidance of 170,000 ounces in the fourth quarter is a -7% miss on the broker's previous forecast. 

The company attributed soft output at Red Lake, wet weather impacts at Cowal and labour constraints at Mungari as key drivers. All in sustaining cost guidance also exceeded the broker's expectations by 19% in FY22 and 15% in FY23. The update sees Macquarie downgrade its earnings forecasts -13%, -24% and -49% through to FY24.

The Neutral rating and the target price decreases to $2.60 from $3.60.

Target price is $2.60 Current Price is $2.64 Difference: minus $0.04 (current price is over target).
If EVN meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.55, suggesting upside of 36.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 7.00 cents and EPS of 12.30 cents.
At the last closing share price the estimated dividend yield is 2.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.46.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.6, implying annual growth of -17.9%.

Current consensus DPS estimate is 6.6, implying a prospective dividend yield of 2.5%.

Current consensus EPS estimate suggests the PER is 15.7.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 0.00 cents and EPS of 18.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.35.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.1, implying annual growth of 45.2%.

Current consensus DPS estimate is 4.3, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 10.8.

Market Sentiment: 0.1

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


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

As the transformation at Red Lake has taken a year longer than expected, Evolution Mining has lowered FY23 and FY24 group production by around -10%, estimates Morgan Stanley.

Meanwhile, FY23/24 cost guidance is increased by 34%/22% due to cost inflation and a slower Red Lake ramp up, explains the broker.

Morgan Stanley retains its Equal-weight rating and $4.60 target price. Industry View: Attractive.

Target price is $4.60 Current Price is $2.64 Difference: $1.96
If EVN meets the Morgan Stanley target it will return approximately 74% (excluding dividends, fees and charges).

Current consensus price target is $3.55, suggesting upside of 36.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Morgan Stanley forecasts a full year FY22 dividend of 8.50 cents and EPS of 19.00 cents.
At the last closing share price the estimated dividend yield is 3.22%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.89.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.6, implying annual growth of -17.9%.

Current consensus DPS estimate is 6.6, implying a prospective dividend yield of 2.5%.

Current consensus EPS estimate suggests the PER is 15.7.

Forecast for FY23:

Morgan Stanley forecasts a full year FY23 dividend of 8.00 cents and EPS of 35.00 cents.
At the last closing share price the estimated dividend yield is 3.03%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.54.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.1, implying annual growth of 45.2%.

Current consensus DPS estimate is 4.3, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 10.8.

Market Sentiment: 0.1

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


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

Evolution Mining has downgraded FY22 production guidance and increased all-in sustaining cost (AISC) guidance. In addition, FY23 and FY24 production guidance has been lowered, driven by the slower turn around of Red Lake operations.

Morgans lowers its target to $3.23 from $4.45 on valuation. The rating is raised to Add from Hold due to the recent share price fall, and the broker's view that the market has overreacted on the downside to the lower guidance figures.

After a series of negative updates across the Gold sector, the analyst feels sentiment is negative and may worsen with the upcoming 4Q reporting season.

Target price is $3.23 Current Price is $2.64 Difference: $0.59
If EVN meets the Morgans target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $3.55, suggesting upside of 36.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Morgans forecasts a full year FY22 dividend of 8.00 cents and EPS of 22.00 cents.
At the last closing share price the estimated dividend yield is 3.03%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.6, implying annual growth of -17.9%.

Current consensus DPS estimate is 6.6, implying a prospective dividend yield of 2.5%.

Current consensus EPS estimate suggests the PER is 15.7.

Forecast for FY23:

Morgans forecasts a full year FY23 dividend of 9.00 cents and EPS of 15.00 cents.
At the last closing share price the estimated dividend yield is 3.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.60.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.1, implying annual growth of 45.2%.

Current consensus DPS estimate is 4.3, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 10.8.

Market Sentiment: 0.1

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

GDG  GENERATION DEVELOPMENT GROUP LIMITED

Wealth Management & Investments

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Overnight Price: $1.30

Morgans rates GDG as Add (1) -

As Generation Development's pooled development fund (PDF) status has been revoked by the PDF committee, Morgans applies a -10% discount to its valuation, and its target slips to $1.69 from $1.88. It's also noted some uncertainty still prevails around the revocation.

The analyst estimates potential earnings impacts are about -6%-7% per year over the forecast period. Despite this, it's felt the company can execute a compound growth story over time and the Add rating is retained.

Target price is $1.69 Current Price is $1.30 Difference: $0.39
If GDG meets the Morgans target it will return approximately 30% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Morgans forecasts a full year FY22 dividend of 2.00 cents and EPS of 2.80 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 46.43.

Forecast for FY23:

Morgans forecasts a full year FY23 dividend of 2.30 cents and EPS of 3.60 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 36.11.

Market Sentiment: 1.0

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

HVN  HARVEY NORMAN HOLDINGS LIMITED

Consumer Electronics

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Overnight Price: $3.89

Ord Minnett rates HVN as Upgrade to Buy from Hold (1) -

Following a general re-assessment of the outlook for retailers in Australia, Ord Minnett has cut FY23 and FY24 earnings forecasts by -10-20% for discretionary retailers, and by -5-7% for food and liquor, expecting a softer demand backdrop.

The broker has also come to the conclusion that in numerous cases, the share prices already reflect such an outlook.

Harvey Norman shares have thus been upgraded to Buy from Hold. Target drops to $4.50 from $5.60.

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

Target price is $4.50 Current Price is $3.89 Difference: $0.61
If HVN meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $4.62, suggesting upside of 19.7% (ex-dividends)

Forecast for FY22:

Current consensus EPS estimate is 51.8, implying annual growth of -23.3%.

Current consensus DPS estimate is 35.9, implying a prospective dividend yield of 9.3%.

Current consensus EPS estimate suggests the PER is 7.5.

Forecast for FY23:

Current consensus EPS estimate is 37.1, implying annual growth of -28.4%.

Current consensus DPS estimate is 28.8, implying a prospective dividend yield of 7.5%.

Current consensus EPS estimate suggests the PER is 10.4.

Market Sentiment: 0.4

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

ILU  ILUKA RESOURCES LIMITED

Mineral Sands

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Overnight Price: $9.25

Citi rates ILU as Upgrade to Buy from Sell (1) -

Citi raises its rating to Buy from Sell on Iluka Resources for a number of reasons including a recent share price fall and an updated valuation for the soon to be demerged Sierra Rutile business. It's also estimated property statistics out of China are nearing a low.

In addition, a ramp-up in the company's refinery should lead to Iluka becoming a 50% rare earths company, estimates the analyst, leading to a multiple re-rate. The $10.50 price target is retained.

Target price is $10.50 Current Price is $9.25 Difference: $1.25
If ILU meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $12.02, suggesting upside of 27.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Citi forecasts a full year FY22 dividend of 29.00 cents and EPS of 83.30 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 11.10.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 99.2, implying annual growth of 14.8%.

Current consensus DPS estimate is 29.0, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 9.5.

Forecast for FY23:

Citi forecasts a full year FY23 dividend of 0.00 cents and EPS of 90.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.27.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 99.8, implying annual growth of 0.6%.

Current consensus DPS estimate is 28.4, implying a prospective dividend yield of 3.0%.

Current consensus EPS estimate suggests the PER is 9.4.

Market Sentiment: 0.6

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

JBH  JB HI-FI LIMITED

Consumer Electronics

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Overnight Price: $40.59

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

Following a general re-assessment of the outlook for retailers in Australia, Ord Minnett has cut FY23 and FY24 earnings forecasts by -10-20% for discretionary retailers, and by -5-7% for food and liquor, expecting a softer demand backdrop.

The broker has also come to the conclusion that in numerous cases, the share prices already reflect such an outlook.

JB Hi-Fi has been downgraded to Hold from Buy. Price target drops to $42 from $62.

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

Target price is $42.00 Current Price is $40.59 Difference: $1.41
If JBH meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $48.50, suggesting upside of 24.4% (ex-dividends)

Forecast for FY22:

Current consensus EPS estimate is 414.9, implying annual growth of -5.9%.

Current consensus DPS estimate is 272.8, implying a prospective dividend yield of 7.0%.

Current consensus EPS estimate suggests the PER is 9.4.

Forecast for FY23:

Current consensus EPS estimate is 351.1, implying annual growth of -15.4%.

Current consensus DPS estimate is 228.8, implying a prospective dividend yield of 5.9%.

Current consensus EPS estimate suggests the PER is 11.1.

Market Sentiment: 0.2

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

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Overnight Price: $3.84

Ord Minnett rates LNK as Accumulate (2) -

Upon news that suitor Dye & Durham has reneged on its previous offer for the whole of the company, and now wants to pay a lower price, Ord Minnett thinks the board will not accept the revised terms and will seek alternative strategic options, or choose to close the current M&A process.

The broker maintains its Accumulate rating, with a target of $4.80 (unchanged).

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

Target price is $4.80 Current Price is $3.84 Difference: $0.96
If LNK meets the Ord Minnett target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $4.96, suggesting upside of 29.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Ord Minnett forecasts a full year FY22 dividend of 10.00 cents and EPS of 22.00 cents.
At the last closing share price the estimated dividend yield is 2.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.45.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.1, implying annual growth of N/A.

Current consensus DPS estimate is 9.7, implying a prospective dividend yield of 2.5%.

Current consensus EPS estimate suggests the PER is 20.1.

Forecast for FY23:

Ord Minnett forecasts a full year FY23 dividend of 13.00 cents and EPS of 26.00 cents.
At the last closing share price the estimated dividend yield is 3.39%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.5, implying annual growth of 33.5%.

Current consensus DPS estimate is 13.2, implying a prospective dividend yield of 3.4%.

Current consensus EPS estimate suggests the PER is 15.0.

Market Sentiment: 0.5

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: $4.30

Citi rates MTS as Neutral (3) -

Citi raises its target price for Metcash to $4.40 from $4.20 following FY22 results which showed the retention of market share gains in Food and increasing sales across each segment due to inflation.

However as Food market share normalises and Hardware slows into FY23 (given the weakening housing cycle), the broker feels prospects for further earnings upgrades are more limited. The Neutral rating is maintained.

Target price is $4.40 Current Price is $4.30 Difference: $0.1
If MTS meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $4.69, suggesting upside of 11.8% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY23:

Citi forecasts a full year FY23 dividend of 21.00 cents and EPS of 31.30 cents.
At the last closing share price the estimated dividend yield is 4.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.3, implying annual growth of N/A.

Current consensus DPS estimate is 21.0, implying a prospective dividend yield of 5.0%.

Current consensus EPS estimate suggests the PER is 13.9.

Forecast for FY24:

Citi forecasts a full year FY24 dividend of 21.00 cents and EPS of 30.10 cents.
At the last closing share price the estimated dividend yield is 4.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.29.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.9, implying annual growth of -1.3%.

Current consensus DPS estimate is 21.7, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 14.0.

Market Sentiment: 0.5

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


Credit Suisse rates MTS as Downgrade to Neutral from Outperform (3) -

Credit Suisse has been surprised by the extent to which Metcash outperformed in the second half, particularly noting an acceleration in market share gains by IGA during the fourth quarter was in opposition of market expectations that the brand would lose market share post-covid.

The broker does expect IGA to lose some ground to competitors as inflation drives an increase in value consciousness from consumers, but notes the company is more leveraged to food inflation than peers and inflation should benefit the company's profit line. 

The rating is downgraded to Neutral from Outperform and the target price decreases to $4.67 from $4.70, largely on a reduction to the multiple used in the Hardware pillar.

Target price is $4.67 Current Price is $4.30 Difference: $0.37
If MTS meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $4.69, suggesting upside of 11.8% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY23:

Credit Suisse forecasts a full year FY23 dividend of 19.78 cents and EPS of 27.37 cents.
At the last closing share price the estimated dividend yield is 4.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.3, implying annual growth of N/A.

Current consensus DPS estimate is 21.0, implying a prospective dividend yield of 5.0%.

Current consensus EPS estimate suggests the PER is 13.9.

Forecast for FY24:

Current consensus EPS estimate is 29.9, implying annual growth of -1.3%.

Current consensus DPS estimate is 21.7, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 14.0.

Market Sentiment: 0.5

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


Macquarie rates MTS as Outperform (1) -

Metcash has delivered a beat to consensus with its FY22 results, with Macquarie noting trading appears to have remained strong moving into FY23. The broker highlighted Food sales growth of 5.0% in the first seven weeks of the new financial year, suggesting consumers are looking to continue shopping local post-covid. 

A 20.5% increase in Hardware sales in FY22, and following the Total Tools acquisition, was a notable driver of the full year result, and the company expects the construction activity pipeline is extending as market conditions delay projects.

Looking forward, the broker anticipates capital expenditure to increase to $190-220m in FY23, from $122m in FY22, driven by acquisition activity. The Outperform rating is retained and the target price increases to $4.60 from $4.50.

Target price is $4.60 Current Price is $4.30 Difference: $0.3
If MTS meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $4.69, suggesting upside of 11.8% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 22.10 cents and EPS of 30.00 cents.
At the last closing share price the estimated dividend yield is 5.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.3, implying annual growth of N/A.

Current consensus DPS estimate is 21.0, implying a prospective dividend yield of 5.0%.

Current consensus EPS estimate suggests the PER is 13.9.

Forecast for FY24:

Macquarie forecasts a full year FY24 dividend of 22.40 cents and EPS of 30.50 cents.
At the last closing share price the estimated dividend yield is 5.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.10.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.9, implying annual growth of -1.3%.

Current consensus DPS estimate is 21.7, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 14.0.

Market Sentiment: 0.5

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


Ord Minnett rates MTS as Accumulate (2) -

Ord Minnett saw Metcash reporting a "very strong" set of financial numbers for FY22. The better-than-expected performance was predominantly driven by the food and liquor divisions, while hardware performed in line with expectations.

The additional seven-week trading update is labeled "upbeat". The analysts suggest positive momentum is likely to continue for longer, but 2023 looks a lot tougher (as the cycle is turning for the worse).

Ord Minnett reported a Buy rating on Friday but today maintains its Accumulate rating (yes, we have questions too) with a price target of $4.80, supposedly down, but Friday had $2.35 as target. Someone needs to be looked after (or receive a decent spanking).

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

Target price is $4.80 Current Price is $4.30 Difference: $0.5
If MTS meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $4.69, suggesting upside of 11.8% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY23:

Ord Minnett forecasts a full year FY23 EPS of 30.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.3, implying annual growth of N/A.

Current consensus DPS estimate is 21.0, implying a prospective dividend yield of 5.0%.

Current consensus EPS estimate suggests the PER is 13.9.

Forecast for FY24:

Ord Minnett forecasts a full year FY24 EPS of 29.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.83.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.9, implying annual growth of -1.3%.

Current consensus DPS estimate is 21.7, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 14.0.

Market Sentiment: 0.5

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


UBS rates MTS as Buy (1) -

Metcash's FY22 sales and profits rose by 4% and 1% to exceed UBS's expectations across all divisions. Food has enjoyed covid tailwinds yet the boost from local is continuing and arguably entrenched, the broker suggests, solidified by store investment by independent retailers.

Food inflation is rising yet market share gains are driving sales. Hardware sales remained strong across trade and DIY, still well above pre-covid levels, with sales somewhat understated given wet weather and tight supply of labour and product, UBS notes.

Buy and $5.00 target retained.

Target price is $5.00 Current Price is $4.30 Difference: $0.7
If MTS meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $4.69, suggesting upside of 11.8% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY23:

UBS forecasts a full year FY23 EPS of 33.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.03.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.3, implying annual growth of N/A.

Current consensus DPS estimate is 21.0, implying a prospective dividend yield of 5.0%.

Current consensus EPS estimate suggests the PER is 13.9.

Forecast for FY24:

Current consensus EPS estimate is 29.9, implying annual growth of -1.3%.

Current consensus DPS estimate is 21.7, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 14.0.

Market Sentiment: 0.5

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

OZL  OZ MINERALS LIMITED

Copper

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Overnight Price: $18.46

Citi rates OZL as Buy (1) -

Following a guidance update by OZ Minerals, Citi raises all-in sustaining cost (ASIC) estimates by 17%.

Management lowered group copper production guidance following equipment failure and equipment availability issues, as well as absenteeism at Carrapateena.

The broker lowers its target price to $27.80 from $28.20 and retains its Buy rating.

Target price is $27.80 Current Price is $18.46 Difference: $9.34
If OZL meets the Citi target it will return approximately 51% (excluding dividends, fees and charges).

Current consensus price target is $23.18, suggesting upside of 24.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Citi forecasts a full year FY22 dividend of 16.00 cents and EPS of 132.80 cents.
At the last closing share price the estimated dividend yield is 0.87%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.90.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 140.8, implying annual growth of -11.8%.

Current consensus DPS estimate is 24.2, implying a prospective dividend yield of 1.3%.

Current consensus EPS estimate suggests the PER is 13.3.

Forecast for FY23:

Citi forecasts a full year FY23 dividend of 0.00 cents and EPS of 157.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 132.6, implying annual growth of -5.8%.

Current consensus DPS estimate is 24.0, implying a prospective dividend yield of 1.3%.

Current consensus EPS estimate suggests the PER is 14.1.

Market Sentiment: 0.0

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


Credit Suisse rates OZL as Neutral (3) -

With OZ Minerals' Australian assets missing the mark on cost and production, the company has downgraded its 2022 guidance. Credit Suisse notes Prominent Hill production declines to 55-62,000 tonnes, with the lower end likely, and Carrapateena to 55-61,000 tonnes. 

All in sustaining costs were lifted 17% to US$1.60-1.80 per pound, but the broker notes 8% of the increase was attributed to inflationary impacts, and while consistent with industry-wide inflationary pressures the broker warns not to expect significant easing in the near-term.

The Neutral rating is retained and the target price decreases to $20.00 from $21.00.

Target price is $20.00 Current Price is $18.46 Difference: $1.54
If OZL meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $23.18, suggesting upside of 24.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Credit Suisse forecasts a full year FY22 dividend of 23.00 cents and EPS of 131.00 cents.
At the last closing share price the estimated dividend yield is 1.25%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 140.8, implying annual growth of -11.8%.

Current consensus DPS estimate is 24.2, implying a prospective dividend yield of 1.3%.

Current consensus EPS estimate suggests the PER is 13.3.

Forecast for FY23:

Credit Suisse forecasts a full year FY23 dividend of 23.00 cents and EPS of 64.00 cents.
At the last closing share price the estimated dividend yield is 1.25%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 132.6, implying annual growth of -5.8%.

Current consensus DPS estimate is 24.0, implying a prospective dividend yield of 1.3%.

Current consensus EPS estimate suggests the PER is 14.1.

Market Sentiment: 0.0

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


Macquarie rates OZL as Neutral (3) -

OZ Minerals has issued production guidance downgrades of -2.5% and -12.0% for Prominent Hill and Carrapateena respectively, while increasing all in sustaining costs guidance. Macquarie now sits at the bottom end of production guidance range, and above costs guidance.

The company has attributed a soft start to 2022 to covid driven labour constraints and weather impacts, while Carrapatenna has also been impacted by belt damage to the material handling system.

The Neutral rating is retained and the target price decreases to $20.00 from $22.00.

Target price is $20.00 Current Price is $18.46 Difference: $1.54
If OZL meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $23.18, suggesting upside of 24.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 17.00 cents and EPS of 151.80 cents.
At the last closing share price the estimated dividend yield is 0.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.16.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 140.8, implying annual growth of -11.8%.

Current consensus DPS estimate is 24.2, implying a prospective dividend yield of 1.3%.

Current consensus EPS estimate suggests the PER is 13.3.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 14.00 cents and EPS of 136.10 cents.
At the last closing share price the estimated dividend yield is 0.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.56.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 132.6, implying annual growth of -5.8%.

Current consensus DPS estimate is 24.0, implying a prospective dividend yield of 1.3%.

Current consensus EPS estimate suggests the PER is 14.1.

Market Sentiment: 0.0

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


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

OZ Minerals' 2022 group copper production guidance was a -9% miss versus Morgan Stanley's forecast. Group cost guidance was also a -9% miss (largely due to lower production and cost inflation) while gold production guidance is estimated to be in-line.

Both Prominent Hill and Carrapateena 1Q production rates were impacted by covid absenteeism and flooding, explains the broker. Carrapateena was also impacted by equipment failure and lack of equipment availability.

The Equal-weight rating and $23.20 target are maintained. Industry View: Attractive.

Target price is $23.20 Current Price is $18.46 Difference: $4.74
If OZL meets the Morgan Stanley target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $23.18, suggesting upside of 24.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Morgan Stanley forecasts a full year FY22 dividend of 37.00 cents and EPS of 151.00 cents.
At the last closing share price the estimated dividend yield is 2.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.23.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 140.8, implying annual growth of -11.8%.

Current consensus DPS estimate is 24.2, implying a prospective dividend yield of 1.3%.

Current consensus EPS estimate suggests the PER is 13.3.

Forecast for FY23:

Morgan Stanley forecasts a full year FY23 dividend of 39.00 cents and EPS of 153.00 cents.
At the last closing share price the estimated dividend yield is 2.11%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.07.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 132.6, implying annual growth of -5.8%.

Current consensus DPS estimate is 24.0, implying a prospective dividend yield of 1.3%.

Current consensus EPS estimate suggests the PER is 14.1.

Market Sentiment: 0.0

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


Ord Minnett rates OZL as Lighten (4) -

OZ Minerals' downgrade to previous guidance for production and costs in FY22 has triggered a rather humorous response from Ord Minnett; Dr Copper looks unwell.

Target price declines by -18% to $18.10. Lighten rating retained with the broker noting OZ Minerals shares look expensive vis-a-vis peers.

Regarding the price of copper, Ord Minnett states it remains somewhat unfazed by bearishness given inventory levels remain at low levels and with subdued scrap supply.

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

Target price is $18.10 Current Price is $18.46 Difference: minus $0.36 (current price is over target).
If OZL meets the Ord Minnett target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $23.18, suggesting upside of 24.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Ord Minnett forecasts a full year FY22 dividend of 22.00 cents and EPS of 73.80 cents.
At the last closing share price the estimated dividend yield is 1.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.01.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 140.8, implying annual growth of -11.8%.

Current consensus DPS estimate is 24.2, implying a prospective dividend yield of 1.3%.

Current consensus EPS estimate suggests the PER is 13.3.

Forecast for FY23:

Ord Minnett forecasts a full year FY23 dividend of 38.00 cents and EPS of 93.00 cents.
At the last closing share price the estimated dividend yield is 2.06%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 132.6, implying annual growth of -5.8%.

Current consensus DPS estimate is 24.0, implying a prospective dividend yield of 1.3%.

Current consensus EPS estimate suggests the PER is 14.1.

Market Sentiment: 0.0

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

PMV  PREMIER INVESTMENTS LIMITED

Apparel & Footwear

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Overnight Price: $20.22

Ord Minnett rates PMV as Downgrade to Hold from Accumulate (3) -

Following a general re-assessment of the outlook for retailers in Australia, Ord Minnett has cut FY23 and FY24 earnings forecasts by -10-20% for discretionary retailers, and by -5-7% for food and liquor, expecting a softer demand backdrop.

The broker has also come to the conclusion that in numerous cases, the share prices already reflect such an outlook.

Premier Investments has been downgraded to Hold from Accumulate. Price target drops to $20.50 from $33.40.

Target price is $20.50 Current Price is $20.22 Difference: $0.28
If PMV meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $26.35, suggesting upside of 31.5% (ex-dividends)

Forecast for FY22:

Current consensus EPS estimate is 155.7, implying annual growth of -9.0%.

Current consensus DPS estimate is 102.2, implying a prospective dividend yield of 5.1%.

Current consensus EPS estimate suggests the PER is 12.9.

Forecast for FY23:

Current consensus EPS estimate is 137.9, implying annual growth of -11.4%.

Current consensus DPS estimate is 101.3, implying a prospective dividend yield of 5.1%.

Current consensus EPS estimate suggests the PER is 14.5.

Market Sentiment: 0.7

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

QAN  QANTAS AIRWAYS LIMITED

Transportation & Logistics

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Overnight Price: $4.64

UBS rates QAN as Buy (1) -

While Qantas Airways maintained underlying earnings (EBITDA) guidance for the 2H22, UBS points out the inclusion of the one-off -$87m (to be paid during FY23 regarding new enterprise agreements) makes it a high quality outcome.

In addition, the implied cash flow performance is tracking better than the analyst expected, resulting in lower guidance for net debt.

The Buy rating is maintained though the target slips to $6.55 from $6.75 partly due to capacity adjustments and higher fuel prices partially offset by higher yields from FY24.

Target price is $6.55 Current Price is $4.64 Difference: $1.91
If QAN meets the UBS target it will return approximately 41% (excluding dividends, fees and charges).

Current consensus price target is $6.16, suggesting upside of 36.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

UBS forecasts a full year FY22 EPS of minus 69.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 6.72.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -66.2, 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 FY23:

UBS forecasts a full year FY23 EPS of 31.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.97.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 35.3, implying annual growth of N/A.

Current consensus DPS estimate is 6.2, implying a prospective dividend yield of 1.4%.

Current consensus EPS estimate suggests the PER is 12.8.

Market Sentiment: 0.4

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

SGR  STAR ENTERTAINMENT GROUP LIMITED

Gaming

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Overnight Price: $2.73

UBS rates SGR as Buy (1) -

UBS is not surprised Star Entertainment will not be receiving approval for incremental pokies in the near-term with the NSW government
advising timing was not appropriate. The broker does nevertheless see potential for a similar proposal to be revisited at a later date.

The final report from the Sydney licence review is due end-August, but regulatory headwinds remain with Queensland recently announcing its own independent review regarding suitability. Further AUSTRAC investigations remain ongoing with no specific timeframe on findings.

The broker has trimmed earnings expectations but on a 9-10% free cah flow yield retains Buy. Target falls to $3.85 from $4.25.

Target price is $3.85 Current Price is $2.73 Difference: $1.12
If SGR meets the UBS target it will return approximately 41% (excluding dividends, fees and charges).

Current consensus price target is $3.86, suggesting upside of 41.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

UBS forecasts a full year FY22 EPS of minus 5.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 54.60.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -2.0, 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 FY23:

UBS forecasts a full year FY23 EPS of 17.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.06.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.1, implying annual growth of N/A.

Current consensus DPS estimate is 12.9, implying a prospective dividend yield of 4.7%.

Current consensus EPS estimate suggests the PER is 14.2.

Market Sentiment: 0.7

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

SKC  SKYCITY ENTERTAINMENT GROUP LIMITED

Gaming

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Overnight Price: $2.57

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

Following strong trading in the June quarter, Credit Suisse has lifted its full year earnings forecast for SKYCITY Entertainment, but notes looking forward it anticipates weaker consumer demand to impact on the second half of 2023.

The broker notes it does anticipate SKYCITY to face material regulatory fines, and notes strong cash flow generation expected in FY23 should drive a decline in net debt.  

Finding the stock now undervalued, Credit Suisse upgrades its rating to Outperform from Neutral while the target price increases to $2.95 from $2.75.

Target price is $2.95 Current Price is $2.57 Difference: $0.38
If SKC meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Credit Suisse forecasts a full year FY22 dividend of 0.00 cents and EPS of 0.94 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 273.99.

Forecast for FY23:

Credit Suisse forecasts a full year FY23 dividend of 12.19 cents and EPS of 16.88 cents.
At the last closing share price the estimated dividend yield is 4.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.23.

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

Market Sentiment: 1.0

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

SUL  SUPER RETAIL GROUP LIMITED

Automobiles & Components

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Overnight Price: $8.87

Ord Minnett rates SUL as Buy (1) -

Following a general re-assessment of the outlook for retailers in Australia, Ord Minnett has cut FY23 and FY24 earnings forecasts by -10-20% for discretionary retailers, and by -5-7% for food and liquor, expecting a softer demand backdrop.

The broker has also come to the conclusion that in numerous cases, the share prices already reflect such an outlook.

Super Retail retains its Buy rating with a revised price target of $10.50, down from $13.50 previously.

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

Target price is $10.50 Current Price is $8.87 Difference: $1.63
If SUL meets the Ord Minnett target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $12.00, suggesting upside of 36.8% (ex-dividends)

Forecast for FY22:

Current consensus EPS estimate is 99.7, implying annual growth of -25.3%.

Current consensus DPS estimate is 67.3, implying a prospective dividend yield of 7.7%.

Current consensus EPS estimate suggests the PER is 8.8.

Forecast for FY23:

Current consensus EPS estimate is 86.9, implying annual growth of -12.8%.

Current consensus DPS estimate is 58.8, implying a prospective dividend yield of 6.7%.

Current consensus EPS estimate suggests the PER is 10.1.

Market Sentiment: 0.8

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

SUN  SUNCORP GROUP LIMITED

Banks

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Overnight Price: $11.23

Credit Suisse rates SUN as Outperform (1) -

With Suncorp Group neither confirming or denying speculation of a bank disposal, Credit Suisse notes strong investor interest in the company as a pure play insurer with the share price rising. 

Credit Suisse finds a sale of Suncorp Group's bank asset to be more compelling than a demerger, and expects the asset could be sold on a 13-14x multiple and would be appealing to any of the local banks given it is a primarily retail bank with conservative credit exposure. 

The Outperform rating and target price of $14.04 are retained.

Target price is $14.04 Current Price is $11.23 Difference: $2.81
If SUN meets the Credit Suisse target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $13.49, suggesting upside of 22.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Credit Suisse forecasts a full year FY22 dividend of 62.00 cents and EPS of 67.00 cents.
At the last closing share price the estimated dividend yield is 5.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 66.2, implying annual growth of -18.1%.

Current consensus DPS estimate is 56.3, implying a prospective dividend yield of 5.1%.

Current consensus EPS estimate suggests the PER is 16.7.

Forecast for FY23:

Credit Suisse forecasts a full year FY23 dividend of 76.00 cents and EPS of 92.00 cents.
At the last closing share price the estimated dividend yield is 6.77%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.21.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 89.5, implying annual growth of 35.2%.

Current consensus DPS estimate is 70.3, implying a prospective dividend yield of 6.4%.

Current consensus EPS estimate suggests the PER is 12.3.

Market Sentiment: 0.7

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


Ord Minnett rates SUN as Buy (1) -

In response to media reports that Suncorp Group is considering splitting insurance from banking operations and grant the latter an independent life, Ord Minnett shows very little enthusiasm for the plan.

The broker argues a spin-off of the bank from the insurer would be "a suboptimal outcome" because it would affect funding for the bank as well as expenses.

An outright sale of the bank could be an optimal outcome, suggests the broker. Buy rating retained, alongside a $14 price target.

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

Target price is $14.00 Current Price is $11.23 Difference: $2.77
If SUN meets the Ord Minnett target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $13.49, suggesting upside of 22.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Ord Minnett forecasts a full year FY22 dividend of 50.00 cents and EPS of 61.00 cents.
At the last closing share price the estimated dividend yield is 4.45%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.41.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 66.2, implying annual growth of -18.1%.

Current consensus DPS estimate is 56.3, implying a prospective dividend yield of 5.1%.

Current consensus EPS estimate suggests the PER is 16.7.

Forecast for FY23:

Ord Minnett forecasts a full year FY23 dividend of 60.00 cents and EPS of 82.00 cents.
At the last closing share price the estimated dividend yield is 5.34%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 89.5, implying annual growth of 35.2%.

Current consensus DPS estimate is 70.3, implying a prospective dividend yield of 6.4%.

Current consensus EPS estimate suggests the PER is 12.3.

Market Sentiment: 0.7

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

VCX  VICINITY CENTRES

REITs

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Overnight Price: $1.86

Macquarie rates VCX as Outperform (1) -

Vicinity Centres has announced a $2.9bn mixed-use development pipeline across six key assets, with Macquarie noting the pipeline should support core earnings and has potential to deliver 6% earnings upside and 4% valuation upside. 

The company anticipates it will complete the project by FY28, and Macquarie notes earnings impact is unlikely to gain momentum until beyond FY25. The broker expects funding will be required to complete, noting use of third party capital could see gearing increase to 34%. 

The Outperform rating and target price of $2.01 are retained.

Target price is $2.01 Current Price is $1.86 Difference: $0.15
If VCX meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $1.91, suggesting downside of -0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 9.80 cents and EPS of 11.40 cents.
At the last closing share price the estimated dividend yield is 5.27%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.32.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.5, implying annual growth of N/A.

Current consensus DPS estimate is 9.7, implying a prospective dividend yield of 5.1%.

Current consensus EPS estimate suggests the PER is 16.7.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 10.90 cents and EPS of 12.40 cents.
At the last closing share price the estimated dividend yield is 5.86%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.6, implying annual growth of 9.6%.

Current consensus DPS estimate is 10.6, implying a prospective dividend yield of 5.5%.

Current consensus EPS estimate suggests the PER is 15.2.

Market Sentiment: 0.0

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

WES  WESFARMERS LIMITED

Consumer Products & Services

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Overnight Price: $44.15

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

Following a general re-assessment of the outlook for retailers in Australia, Ord Minnett has cut FY23 and FY24 earnings forecasts by -10-20% for discretionary retailers, and by -5-7% for food and liquor, expecting a softer demand backdrop.

The broker has also come to the conclusion that in numerous cases, the share prices already reflect such an outlook.

The rating for Wesfarmers has been downgraded to Lighten from Hold, with a price target of $41.20, down from $51.80 previously.

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

Target price is $41.20 Current Price is $44.15 Difference: minus $2.95 (current price is over target).
If WES meets the Ord Minnett target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $48.43, suggesting upside of 12.8% (ex-dividends)

Forecast for FY22:

Current consensus EPS estimate is 192.8, implying annual growth of -8.4%.

Current consensus DPS estimate is 161.3, implying a prospective dividend yield of 3.8%.

Current consensus EPS estimate suggests the PER is 22.3.

Forecast for FY23:

Current consensus EPS estimate is 205.5, implying annual growth of 6.6%.

Current consensus DPS estimate is 172.3, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 20.9.

Market Sentiment: -0.2

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

WOW  WOOLWORTHS GROUP LIMITED

Food, Beverages & Tobacco

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Overnight Price: $36.07

UPDATED

Ord Minnett rates WOW as Downgrade to Hold from Accumulate (3) -

Following a general re-assessment of the outlook for retailers in Australia, Ord Minnett has cut FY23 and FY24 earnings forecasts by -10-20% for discretionary retailers, and by -5-7% for food and liquor, expecting a softer demand backdrop.

The broker has also come to the conclusion that in numerous cases, the share prices already reflect such an outlook.

Woolworths has been downgraded to Hold from Accumulate. Price target falls to $35.40 from $40.

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

Target price is $35.40 Current Price is $36.07 Difference: minus $0.67 (current price is over target).
If WOW meets the Ord Minnett target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $37.06, suggesting upside of 2.8% (ex-dividends)

Forecast for FY22:

Current consensus EPS estimate is 121.3, implying annual growth of -26.5%.

Current consensus DPS estimate is 87.8, implying a prospective dividend yield of 2.4%.

Current consensus EPS estimate suggests the PER is 29.7.

Forecast for FY23:

Current consensus EPS estimate is 137.2, implying annual growth of 13.1%.

Current consensus DPS estimate is 98.6, implying a prospective dividend yield of 2.7%.

Current consensus EPS estimate suggests the PER is 26.3.

Market Sentiment: -0.2

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
CAR Carsales $20.76 Credit Suisse 24.00 25.80 -6.98%
Macquarie 21.00 20.00 5.00%
Ord Minnett 19.75 20.60 -4.13%
COE Cooper Energy $0.25 Morgans 0.31 0.35 -11.43%
COL Coles Group $17.80 Ord Minnett 17.00 18.20 -6.59%
EDV Endeavour Group $7.56 Ord Minnett 8.40 8.50 -1.18%
EVN Evolution Mining $2.60 Citi 3.30 4.60 -28.26%
Credit Suisse 2.70 3.75 -28.00%
Macquarie 2.60 3.60 -27.78%
Morgans 3.23 4.45 -27.42%
GDG Generation Development $1.26 Morgans 1.69 1.88 -10.11%
HVN Harvey Norman $3.86 Ord Minnett 4.50 5.60 -19.64%
JBH JB Hi-Fi $39.00 Ord Minnett 42.00 62.00 -32.26%
MTS Metcash $4.20 Citi 4.40 4.20 4.76%
Credit Suisse 4.67 4.70 -0.64%
Macquarie 4.60 4.70 -2.13%
Ord Minnett 4.80 2.35 104.26%
OZL OZ Minerals $18.66 Citi 27.80 28.20 -1.42%
Credit Suisse 20.00 21.00 -4.76%
Macquarie 20.00 22.00 -9.09%
Ord Minnett 18.10 22.20 -18.47%
PMV Premier Investments $20.04 Ord Minnett 20.50 33.40 -38.62%
QAN Qantas Airways $4.53 UBS 6.55 6.75 -2.96%
SGR Star Entertainment $2.72 UBS 3.85 4.25 -9.41%
SKC SKYCITY Entertainment $2.57 Credit Suisse 2.95 2.75 7.27%
SUL Super Retail $8.77 Ord Minnett 10.50 13.50 -22.22%
WES Wesfarmers $42.93 Ord Minnett 41.20 51.80 -20.46%
WOW Woolworths Group $36.04 Ord Minnett 35.40 40.00 -11.50%
Summaries
CAR Carsales Outperform - Credit Suisse Overnight Price $20.76
Outperform - Macquarie Overnight Price $20.76
Lighten - Ord Minnett Overnight Price $20.76
COE Cooper Energy Add - Morgans Overnight Price $0.24
COL Coles Group Downgrade to Lighten from Hold - Ord Minnett Overnight Price $17.92
EDV Endeavour Group Accumulate - Ord Minnett Overnight Price $7.46
EVN Evolution Mining Neutral - Citi Overnight Price $2.64
Underperform - Credit Suisse Overnight Price $2.64
Neutral - Macquarie Overnight Price $2.64
Equal-weight - Morgan Stanley Overnight Price $2.64
Upgrade to Add from Hold - Morgans Overnight Price $2.64
GDG Generation Development Add - Morgans Overnight Price $1.30
HVN Harvey Norman Upgrade to Buy from Hold - Ord Minnett Overnight Price $3.89
ILU Iluka Resources Upgrade to Buy from Sell - Citi Overnight Price $9.25
JBH JB Hi-Fi Downgrade to Hold from Buy - Ord Minnett Overnight Price $40.59
LNK Link Administration Accumulate - Ord Minnett Overnight Price $3.84
MTS Metcash Neutral - Citi Overnight Price $4.30
Downgrade to Neutral from Outperform - Credit Suisse Overnight Price $4.30
Outperform - Macquarie Overnight Price $4.30
Accumulate - Ord Minnett Overnight Price $4.30
Buy - UBS Overnight Price $4.30
OZL OZ Minerals Buy - Citi Overnight Price $18.46
Neutral - Credit Suisse Overnight Price $18.46
Neutral - Macquarie Overnight Price $18.46
Equal-weight - Morgan Stanley Overnight Price $18.46
Lighten - Ord Minnett Overnight Price $18.46
PMV Premier Investments Downgrade to Hold from Accumulate - Ord Minnett Overnight Price $20.22
QAN Qantas Airways Buy - UBS Overnight Price $4.64
SGR Star Entertainment Buy - UBS Overnight Price $2.73
SKC SKYCITY Entertainment Upgrade to Outperform from Neutral - Credit Suisse Overnight Price $2.57
SUL Super Retail Buy - Ord Minnett Overnight Price $8.87
SUN Suncorp Group Outperform - Credit Suisse Overnight Price $11.23
Buy - Ord Minnett Overnight Price $11.23
VCX Vicinity Centres Outperform - Macquarie Overnight Price $1.86
WES Wesfarmers Downgrade to Lighten from Hold - Ord Minnett Overnight Price $44.15
WOW Woolworths Group Downgrade to Hold from Accumulate - Ord Minnett Overnight Price $36.07
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

17

2. Accumulate

3

3. Hold

11

4. Reduce

4

5. Sell

1

Tuesday 28 June 2022

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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.