Australian Broker Call

Credit Suisse rates ALL as Neutral (3) -

FY17 results beat Credit Suisse estimates. The company's acquisition of Big Fish has taken centre stage and the broker estimates it to be 4% accretive to FY19 earnings.

Credit Suisse models 12% like-for-like compound digital earnings growth to FY20. Neutral retained. Target is raised to $24.60 from $23.80.

Target price is $24.60 Current Price is $22.38 Difference: $2.22
If ALL meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $25.40, suggesting upside of 13.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

Deutsche Bank rates ALL as Buy (1) -

The FY17 result was slightly above expectations. Underlying net profit of $543m was up 36.5%. The company expects continued growth in FY18.

Deutsche Bank increases FY19 estimates by 4% but reduces FY18 by -2% to reflect the net impact of lower North American and Plarium earnings, partly offset by higher Australasian and international earnings as well as the Big Fish acquisition.

Deutsche Bank retains a Buy rating and raises the target to $29.75 from $28.60.

Target price is $29.75 Current Price is $22.38 Difference: $7.37
If ALL meets the Deutsche Bank target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $25.40, suggesting upside of 13.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

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

Morgan Stanley has questions around the Big Fish acquisition, given a declining revenue performance, as well as the recent move into digital gaming adjacencies.  However, the broker concedes the acquisition fits better than Plarium.

The broker forecasts net profit growth of 18% in FY18, excluding the impact from Big Fish. Equal-weight rating. $25 target. Industry view is Cautious.

Target price is $25.00 Current Price is $22.38 Difference: $2.62
If ALL meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $25.40, suggesting upside of 13.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

Ord Minnett rates ALL as Downgrade to Accumulate from Buy (2) -

FY17 net profit was ahead of board minutes forecasts. The company has also announced the acquisition of game developer Big Fish. Ord Minnett observes the company has significantly increased its digital exposure, with further opportunities available.

The broker considers the risk/reward attractive but, as there's been a strong run up in the share price since September, downgrades to Accumulate from Buy. Target is reduced to $24.20 from $24.60.

Target price is $24.20 Current Price is $22.38 Difference: $1.82
If ALL meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $25.40, suggesting upside of 13.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

UBS rates ALL as Buy (1) -

FY17 result was ahead of UBS estimates. The broker found the result high-quality with few surprises, the exception being a lower-than-expected participation roll-out and slightly lower-than-expected US ship share.

UBS remains a buyer of the stock, given the significant business restructuring that has occurred. The company has also announced an intention to acquire Big Fish for US$990m and the broker incorporates the acquisition into forecasts, assuming minor levels of growth.

Buy rating retained. Target is raised to $25.50 from $23.20.

Target price is $25.50 Current Price is $22.38 Difference: $3.12
If ALL meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $25.40, suggesting upside of 13.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.6

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

Credit Suisse rates AOF as Neutral (3) -

Coming off research restrictions and following the acquisition of 150 Charlotte Street Brisbane, Credit Suisse lifts its target to $2.46 from $2.25.

The broker finds the asset fundamentals attractive and believes the company is well-positioned with low capital expenditure and a strong leasing profile. Neutral rating.

Target price is $2.46 Current Price is $2.32 Difference: $0.14
If AOF meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

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

UBS believes the stage is set for an inflection point in the artificial intelligence industry because of  the advances in enabling technologies such as semiconductors and algorithms.

Appen is a leader in the delivery of high-quality human annotated data sets for machine learning applications.

The broker forecasts continued growth with a three-year compound growth rate in earnings per share of 27%, including the recent Leapforce acquisition, and initiates coverage with a Buy rating and $9.80 target.

Target price is $9.80 Current Price is $7.58 Difference: $2.22
If APX meets the UBS target it will return approximately 29% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Morgans rates AVN as Add (1) -

The company has announced its December portfolio revaluations. The portfolio is valued at $1.91bn across 22 LFR assets with 98.3% occupancy and a weighted average lease expiry of around four years.

FY18 guidance comprises growth of 2-4%. Morgans forecasts distributions per unit of 16.3c based on a pay-out ratio of 90%.

Add. Target rises to $2.47 from $2.46.

Target price is $2.47 Current Price is $2.35 Difference: $0.12
If AVN meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $2.42, suggesting upside of 3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.7

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

Citi rates AWE as Neutral (3) -

AWA has received a non-binding and indicative proposal from China Energy Reserve and Chemical at $0.71 a share. Citi suggests investors will need to judge any offer relative to their view of value, and the time and risk for management to unlock value.

Although uncertainty exists around Waitsia and the Victorian gas price, positive outcomes around these two could still provide upside to the current offer, in Citi's opinion.

Neutral/High Risk rating. Target is raised to $0.72 from $0.59.

Target price is $0.72 Current Price is $0.69 Difference: $0.03
If AWE meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $0.56, suggesting downside of -18.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.2

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

Deutsche Bank rates AWE as Hold (3) -

The company has received a non-binding, indicative and conditional proposal from China Energy Reserve and Chemical to acquire the stock at $0.71 per share.

The board has not formally disclosed a recommendation but the company notes, on first impressions, the offer is not attractive enough to warrant access to due diligence.

The indicative offer represents around a 29% control premium versus the share price close on November 29. Deutsche Bank notes its valuation does not factor in much upside from Waitsia and Ande Ande Lumut.

Hold rating retained. Target is $0.45.

Target price is $0.45 Current Price is $0.69 Difference: minus $0.24 (current price is over target).
If AWE meets the Deutsche Bank target it will return approximately minus 35% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.56, suggesting downside of -18.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.2

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

Morgan Stanley rates AWE as Underweight (5) -

The company has received an indicative proposal from China Energy Reserve and Chemical at $0.71 per share. Morgan Stanley observes this is the third approach to the company in four years.

Both the previous two were positive for the share price in the short term, but ultimately unwound as it became evident the transactions would not progress.

Morgan Stanley continues to believe that the recent equity raising is not sufficient to fully remove the risk to the balance sheet and believes there is better value elsewhere.

Underweight. Target is $0.45. Industry view: In-Line.

Target price is $0.45 Current Price is $0.69 Difference: minus $0.24 (current price is over target).
If AWE meets the Morgan Stanley target it will return approximately minus 35% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.56, suggesting downside of -18.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.2

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

UBS rates AWE as Sell (5) -

The company has received an unsolicited, non-binding and indicative offer from a local subsidiary of China Energy Reserve and Chemical at $0.71 per share. AWE has suggested the takeover proposal is not sufficiently attractive to provide access to due diligence.

The offer is 39% above UBS' valuation which assumes development and sale of 2P reserves, Waitsia stage 2 gas sold at $5/GJ and no value for the interest in Ande Ande Lumut.

UBS maintains a Sell rating and $0.51 target.

Target price is $0.51 Current Price is $0.69 Difference: minus $0.18 (current price is over target).
If AWE meets the UBS target it will return approximately minus 26% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.56, suggesting downside of -18.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.2

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

Ord Minnett rates DXS as Accumulate (2) -

Ord Minnett reviews its investment case based on a comparison with global peers to determine relative value. The broker concludes an $11 share price could be justified.

Although this exceeds fundamental valuation, Ord Minnett considers it realistic because of a lack of value among the office REITs globally.

The broker retains an Accumulate rating and $10.50 target.

Target price is $10.50 Current Price is $10.36 Difference: $0.14
If DXS meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $9.61, suggesting downside of -7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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

Citi rates ECX as Buy (1) -

Citi has updated on the Australian automotive fleet industry recommending investors switch out of Smartgroup and McMillan Shakespeare and into EclipX (preferred) and SG Fleet.

The analysts anticipate ongoing consolidation of the sector with both SG Fleet and EclipX expected to lead the move. To support the shift in preference, and in reference to elevated valuations, both Smartgroup and McMillan Shakespeare have received downgrades to Neutral.

Target price is $4.82 Current Price is $4.08 Difference: $0.74
If ECX meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $4.65, suggesting upside of 13.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Citi rates FMG as Neutral (3) -

The new CEO will be Elizabeth Gaines, currently the CFO after joining the company in January. Julie Shuttleworth will be Deputy CEO and Ian Wells will be CFO.

The company has also created a new leadership team that will have active board support to address a lack of mining operations experience in the new CEO.

Citi observes one of the challenges for the new leadership team will be to address widening discounts for low-grade ores.

Citi retains a Neutral rating and $5.10 target.

Target price is $5.10 Current Price is $4.57 Difference: $0.53
If FMG meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $5.41, suggesting upside of 18.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.2

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

Credit Suisse rates FMG as Outperform (1) -

A new core leadership team has been announced along with current CFO Elizabeth Gaines taking the CEO role and Ian Wells becoming CFO. Credit Suisse suggests this is not necessarily a step change in how the company is run but more a segregation of responsibilities.

The broker also notes the company will target a majority of production above 60% iron through the Firetail replacement project. The implication appears to be that Eliwana product will be significantly above 60% and lift the Fortescue blend.

Outperform rating. Target is $6.10.

Target price is $6.10 Current Price is $4.57 Difference: $1.53
If FMG meets the Credit Suisse target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $5.41, suggesting upside of 18.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.2

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

Macquarie rates FMG as Outperform (1) -

The company has appointed Elizabeth Gaines as the new CEO. Her role as CFO is being filled by Ian Wells.

Macquarie is not surprised by the selection. The broker believes it demonstrates a strong internal culture and ability to develop leadership from within.

Outperform retained. Target is $6.00.

Target price is $6.00 Current Price is $4.57 Difference: $1.43
If FMG meets the Macquarie target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $5.41, suggesting upside of 18.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.2

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

Ord Minnett rates HUO as Buy (1) -

The company has guided to FY18 volumes of 24,500 tonnes, in line with Ord Minnett's estimates. The broker finds this reaffirmation of tonnage reassuring in the light of weak international prices that have weighed on the salmon sector.

Ord Minnett maintains a Buy rating and reduces the target to $5.83 from $6.00.

Target price is $5.83 Current Price is $4.36 Difference: $1.47
If HUO meets the Ord Minnett target it will return approximately 34% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Morgans rates IFN as Initiation of coverage with Reduce (5) -

Morgans initiates coverage with a Reduce rating, on valuation grounds, and a target of $0.59. The target takes into account the present value of future cash flow.

Potential catalysts include developments in energy policy, an update on refinancing and final investment decisions on wind farms as well as the commencement of distributions.

Target price is $0.59 Current Price is $0.67 Difference: minus $0.08 (current price is over target).
If IFN meets the Morgans target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.5

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

Citi rates MMS as Downgrade to Neutral from Buy (3) -

Citi has updated on the Australian automotive fleet industry recommending investors switch out of Smartgroup and McMillan Shakespeare and into EclipX (preferred) and SG Fleet.

The analysts anticipate ongoing consolidation of the sector with both SG Fleet and EclipX expected to lead the move. To support the shift in preference, and in reference to elevated valuations, both Smartgroup and McMillan Shakespeare have received downgrades to Neutral. Target $16.87.

Target price is $16.87 Current Price is $17.65 Difference: minus $0.78 (current price is over target).
If MMS meets the Citi target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $15.68, suggesting downside of -11.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

UBS rates MYX as Buy (1) -

UBS downgrades FY18 operating earnings estimates by -22.6%. Nevertheless, momentum appears to be improving in the second quarter and cost initiatives are underway.

The broker suggests the company is not yet out of the woods on US generic pricing. Buy rating retained. Target is reduced to $1.03 from $1.55.

Target price is $1.03 Current Price is $0.63 Difference: $0.4
If MYX meets the UBS target it will return approximately 63% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

Morgans rates RBL as Add (1) -

Morgans upgrades forecasts to reflect the recent trends in consumer visits and average order value.  The company reported strong sales over the Thanksgiving week, with gross transaction value up 42% year-on-year.

Add rating retained and target is raised to $1.33 from $1.27.

Target price is $1.33 Current Price is $1.08 Difference: $0.25
If RBL meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Ord Minnett rates REA as Hold (3) -

Ord Minnett updates the model following the first quarter trading update, which was better-than-expected.

However, the first quarter may prove to be the high water mark for the year as new real estate listings have been declining year-on-year since September.

The broker increases estimates for first half revenue and operating earnings and raises the target to $72.00 from $68.50. Hold rating retained.

Target price is $72.00 Current Price is $80.13 Difference: minus $8.13 (current price is over target).
If REA meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $73.38, suggesting downside of -8.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Citi rates SGF as Buy (1) -

Citi has updated on the Australian automotive fleet industry recommending investors switch out of Smartgroup and McMillan Shakespeare and into EclipX (preferred) and SG Fleet.

The analysts anticipate ongoing consolidation of the sector with both SG Fleet and EclipX expected to lead the move. To support the shift in preference, and in reference to elevated valuations, both Smartgroup and McMillan Shakespeare have received downgrades to Neutral.

Target price is $4.85 Current Price is $4.09 Difference: $0.76
If SGF meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $4.45, suggesting upside of 8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.7

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

Citi rates SIQ as Downgrade to Neutral from Buy (3) -

Citi has updated on the Australian automotive fleet industry recommending investors switch out of Smartgroup and McMillan Shakespeare and into EclipX (preferred) and SG Fleet.

The analysts anticipate ongoing consolidation of the sector with both SG Fleet and EclipX expected to lead the move. To support the shift in preference, and in reference to elevated valuations, both Smartgroup and McMillan Shakespeare have received downgrades to Neutral. Target $10.11.

Target price is $10.11 Current Price is $10.21 Difference: minus $0.1 (current price is over target).
If SIQ meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.27, suggesting downside of -9.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.6

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

Ord Minnett rates TAH as Lighten (4) -

The company and CrownBet ((CWN)) have reached agreement regarding the licensing of Sky 1 and 2 vision rights as well as Crown Resorts not commencing core proceedings in relation to the Clubs NSW arrangement.

While specific terms and conditions are unknown, Ord Minnett considers the development a positive for the Tabcorp/Tatts ((TTS)) merger to proceed.

Lighten rating and $4.10 target retained.

Target price is $4.10 Current Price is $4.93 Difference: minus $0.83 (current price is over target).
If TAH meets the Ord Minnett target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.84, suggesting downside of -1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

Macquarie rates WAF as Outperform (1) -

Drilling results from Sanbrado in Burkina Faso impressed Macquarie. High-grade has been confirmed at depth and there is abundance of visible gold, with a further five assays still pending.

The broker retains Outperform and a 50c target.

Target price is $0.50 Current Price is $0.43 Difference: $0.07
If WAF meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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