Australian Broker Call

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November 12, 2019

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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
DHG - DOMAIN HOLDINGS Upgrade to Outperform from Neutral Macquarie
Upgrade to Accumulate from Hold Ord Minnett
QBE - QBE INSURANCE Downgrade to Neutral from Buy Citi
ANN  ANSELL LIMITED

Commercial Services & Supplies

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Overnight Price: $29.01

Credit Suisse rates ANN as Neutral (3) -

Ansell has guided to FY20 underlying earnings per share of US$1.12-1.22. Credit Suisse expects guidance to be updated at the AGM on November 14 and there is a risk this shifts towards the lower end of the range.

Given there is no sign of improved macro conditions in Europe and there is continued softness in the US, the broker suspects the company will miss its organic sales growth forecast in FY20. Neutral rating and $28 target maintained.

Target price is $28.00 Current Price is $29.01 Difference: minus $1.01 (current price is over target).
If ANN meets the Credit Suisse target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.31, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Credit Suisse forecasts a full year FY20 dividend of 71.41 cents and EPS of 165.67 cents.
At the last closing share price the estimated dividend yield is 2.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.51.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 169.4, implying annual growth of N/A.

Current consensus DPS estimate is 74.9, implying a prospective dividend yield of 2.6%.

Current consensus EPS estimate suggests the PER is 17.1.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 74.26 cents and EPS of 174.24 cents.
At the last closing share price the estimated dividend yield is 2.56%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.65.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 184.8, implying annual growth of 9.1%.

Current consensus DPS estimate is 81.9, implying a prospective dividend yield of 2.8%.

Current consensus EPS estimate suggests the PER is 15.7.

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

Market Sentiment: 0.3

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


Ord Minnett rates ANN as Hold (3) -

Ord Minnett reviews expectations ahead of the AGM on November 14. The broker finds few reasons to lift conservative growth estimates amid subdued economic conditions in key economies.

However, Ansell is considered the best positioned in the healthcare sector to benefit from the rotation away from defensive & momentum stocks to value & cyclical stocks.

This is particularly the case if the transition is supported by the resolution of trade tensions and a resultant lift in economic activity. Hold rating and $27 target maintained.

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

Target price is $27.00 Current Price is $29.01 Difference: minus $2.01 (current price is over target).
If ANN 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 $28.31, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Ord Minnett forecasts a full year FY20 EPS of 161.38 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.98.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 169.4, implying annual growth of N/A.

Current consensus DPS estimate is 74.9, implying a prospective dividend yield of 2.6%.

Current consensus EPS estimate suggests the PER is 17.1.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 EPS of 172.81 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 184.8, implying annual growth of 9.1%.

Current consensus DPS estimate is 81.9, implying a prospective dividend yield of 2.8%.

Current consensus EPS estimate suggests the PER is 15.7.

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

Market Sentiment: 0.3

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

API  AUSTRALIAN PHARMACEUTICAL INDUSTRIES

Health & Nutrition

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Overnight Price: $1.42

Morgan Stanley rates API as Underweight (5) -

Earnings pressure continues, given challenging industry conditions. FY19 results were in line although, adjusting for one-off items, the underlying result missed Morgan Stanley's estimates.

Price deflation and rising input costs continue to affect returns in pharmacy. The company has reiterated a view there is strategic logic with regard to a merger with Sigma Healthcare ((SIG)) and Morgan Stanley assumes the company will continue to hold this position going forward.

Underweight retained. Industry view: In Line. Target is raised to $1.35 from $1.32.

Target price is $1.35 Current Price is $1.42 Difference: minus $0.07 (current price is over target).
If API meets the Morgan Stanley target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.42, suggesting downside of -0.2% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY20:

Morgan Stanley forecasts a full year FY20 dividend of 7.50 cents and EPS of 10.00 cents.
At the last closing share price the estimated dividend yield is 5.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.9, implying annual growth of -11.6%.

Current consensus DPS estimate is 7.7, implying a prospective dividend yield of 5.4%.

Current consensus EPS estimate suggests the PER is 14.3.

Forecast for FY21:

Morgan Stanley forecasts a full year FY21 dividend of 7.90 cents and EPS of 11.00 cents.
At the last closing share price the estimated dividend yield is 5.56%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.91.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 10.8, implying annual growth of 9.1%.

Current consensus DPS estimate is 8.0, implying a prospective dividend yield of 5.6%.

Current consensus EPS estimate suggests the PER is 13.1.

Market Sentiment: -0.7

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

ASX  ASX LIMITED

Wealth Management & Investments

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Overnight Price: $80.47

Citi rates ASX as Sell (5) -

Citi lifts estimates for earnings per share by 1% based on solid volumes over the year to date. The broker believes ASX has many qualities, including a strong competitive position, commitment to a stable pay-out and positive leverage to higher market volatility.

However, valuation is an obstacle and a Sell rating is maintained. ASX has the third highest PE across key global exchanges, the broker assesses, yet only offers earnings growth in the low mid-single digit range.

The revenue base, at present, also appears less diversified than some of its global peers. Target is raised to $70.10 from $69.10.

Target price is $70.10 Current Price is $80.47 Difference: minus $10.37 (current price is over target).
If ASX meets the Citi target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $70.99, suggesting downside of -11.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Citi forecasts a full year FY20 dividend of 234.40 cents and EPS of 260.50 cents.
At the last closing share price the estimated dividend yield is 2.91%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.89.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 259.7, implying annual growth of 2.2%.

Current consensus DPS estimate is 233.9, implying a prospective dividend yield of 2.9%.

Current consensus EPS estimate suggests the PER is 31.0.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 243.90 cents and EPS of 271.00 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 29.69.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 271.0, implying annual growth of 4.4%.

Current consensus DPS estimate is 243.8, implying a prospective dividend yield of 3.0%.

Current consensus EPS estimate suggests the PER is 29.7.

Market Sentiment: -0.7

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

BHP  BHP GROUP

Bulks

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Overnight Price: $37.07

Credit Suisse rates BHP as Neutral (3) -

The investor briefing on the petroleum division provided a compelling case for growth, although Credit Suisse believes, of the 150mmboe opportunity outlined, there is some "blue sky" which requires for capital approval and capabilities being developed.

Even in a bear case scenario, the company does not envisage peak oil demand until the mid 2020s. The broker found little to move the dial in regard to Scarborough and Bass Strait.

Credit Suisse assesses the extra detail reinforces the view that the petroleum business is a worthy differentiator for BHP Group. Neutral rating and $37 target maintained.

Target price is $37.00 Current Price is $37.07 Difference: minus $0.07 (current price is over target).
If BHP meets the Credit Suisse target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $37.30, suggesting upside of 0.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Credit Suisse forecasts a full year FY20 dividend of 155.27 cents and EPS of 307.69 cents.
At the last closing share price the estimated dividend yield is 4.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.05.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 313.8, implying annual growth of N/A.

Current consensus DPS estimate is 206.9, implying a prospective dividend yield of 5.6%.

Current consensus EPS estimate suggests the PER is 11.8.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 108.54 cents and EPS of 215.65 cents.
At the last closing share price the estimated dividend yield is 2.93%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.19.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 269.6, implying annual growth of -14.1%.

Current consensus DPS estimate is 180.8, implying a prospective dividend yield of 4.9%.

Current consensus EPS estimate suggests the PER is 13.8.

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

Market Sentiment: 0.1

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


Ord Minnett rates BHP as Hold (3) -

Ord Minnett notes, following the briefing on the petroleum division, that the US$5bn Trion project, along with the expansion of the Trinidad and Tobago operations could support around 20% higher production by FY30 vs FY19.

While these two projects will help maintain petroleum exposure in the long term the division is not a material contributor to group earnings in the medium term. In the near term the division faces steeper volume declines than previously expected.

Ord Minnett maintains a Hold rating and $37 target.

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

Target price is $37.00 Current Price is $37.07 Difference: minus $0.07 (current price is over target).
If BHP meets the Ord Minnett target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $37.30, suggesting upside of 0.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Ord Minnett forecasts a full year FY20 EPS of 296.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.51.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 313.8, implying annual growth of N/A.

Current consensus DPS estimate is 206.9, implying a prospective dividend yield of 5.6%.

Current consensus EPS estimate suggests the PER is 11.8.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 EPS of 267.07 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 269.6, implying annual growth of -14.1%.

Current consensus DPS estimate is 180.8, implying a prospective dividend yield of 4.9%.

Current consensus EPS estimate suggests the PER is 13.8.

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

Market Sentiment: 0.1

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

CTD  CORPORATE TRAVEL MANAGEMENT LIMITED

Travel, Leisure & Tourism

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Overnight Price: $19.51

Ord Minnett rates CTD as Buy (1) -

Corporate Travel has responded to recent market scrutiny by confirming guidance at the AGM. Ord Minnett assesses the business has some hurdles to overcome but has the tools to do the job.

The main issue for the broker is the ability of the company to prove it can deliver sustainable long-term growth in the US.

While the technology and clients are evident, Ord Minnett would like this to translate into tangible earnings growth. Buy rating and $27.40 target maintained.

Target price is $27.40 Current Price is $19.51 Difference: $7.89
If CTD meets the Ord Minnett target it will return approximately 40% (excluding dividends, fees and charges).

Current consensus price target is $26.65, suggesting upside of 36.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Ord Minnett forecasts a full year FY20 dividend of 43.60 cents and EPS of 96.90 cents.
At the last closing share price the estimated dividend yield is 2.23%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 99.9, implying annual growth of 25.5%.

Current consensus DPS estimate is 44.1, implying a prospective dividend yield of 2.3%.

Current consensus EPS estimate suggests the PER is 19.5.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 dividend of 52.20 cents and EPS of 115.90 cents.
At the last closing share price the estimated dividend yield is 2.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.83.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 116.4, implying annual growth of 16.5%.

Current consensus DPS estimate is 53.3, implying a prospective dividend yield of 2.7%.

Current consensus EPS estimate suggests the PER is 16.8.

Market Sentiment: 0.8

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

DHG  DOMAIN HOLDINGS AUSTRALIA LIMITED

Real Estate

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Overnight Price: $3.40

Credit Suisse rates DHG as Underperform (5) -

The AGM update flagged weakness in residential listing volumes with underlying revenue down -12% and digital revenue down -8% in the first four months of FY20.

Some offset has been provided by an increased focus on cost reductions. A new pricing structure was also confirmed, expected to drive a weighted average price increase of 5-7% into 2020.

Credit Suisse maintains an Underperform rating and raises the target to $2.40 from $2.35.

Target price is $2.40 Current Price is $3.40 Difference: minus $1 (current price is over target).
If DHG meets the Credit Suisse target it will return approximately minus 29% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.16, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Credit Suisse forecasts a full year FY20 dividend of 8.00 cents and EPS of 6.83 cents.
At the last closing share price the estimated dividend yield is 2.35%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 49.78.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.7, implying annual growth of N/A.

Current consensus DPS estimate is 6.3, implying a prospective dividend yield of 1.9%.

Current consensus EPS estimate suggests the PER is 44.2.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 6.96 cents and EPS of 8.70 cents.
At the last closing share price the estimated dividend yield is 2.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 39.08.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 10.0, implying annual growth of 29.9%.

Current consensus DPS estimate is 7.4, implying a prospective dividend yield of 2.2%.

Current consensus EPS estimate suggests the PER is 34.0.

Market Sentiment: 0.1

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


Macquarie rates DHG as Upgrade to Outperform from Neutral (1) -

Macquarie observes cost management has offered more protection than previously expected against the headwinds to volume. Trading was slightly weaker than expected in July to October but offset by strong cost-cutting.

While some of the costs will return, the broker assesses the business has significant operating leverage. Trends are expected to improve in December.

Rating is upgraded to Outperform from Neutral. Target is raised to $3.60 from $3.20.

Target price is $3.60 Current Price is $3.40 Difference: $0.2
If DHG meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $3.16, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Macquarie forecasts a full year FY20 dividend of 8.00 cents and EPS of 7.40 cents.
At the last closing share price the estimated dividend yield is 2.35%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 45.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.7, implying annual growth of N/A.

Current consensus DPS estimate is 6.3, implying a prospective dividend yield of 1.9%.

Current consensus EPS estimate suggests the PER is 44.2.

Forecast for FY21:

Macquarie forecasts a full year FY21 dividend of 11.20 cents and EPS of 10.40 cents.
At the last closing share price the estimated dividend yield is 3.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.69.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 10.0, implying annual growth of 29.9%.

Current consensus DPS estimate is 7.4, implying a prospective dividend yield of 2.2%.

Current consensus EPS estimate suggests the PER is 34.0.

Market Sentiment: 0.1

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


Ord Minnett rates DHG as Upgrade to Accumulate from Hold (2) -

FY20 trading was stronger than Ord Minnett expected and a new pricing structure to be rolled out on January 1 should help improve yields and depth penetration.

Ord Minnett expects a recovery in the real estate listings environment in the second half of FY20 and prefers Domain to REA Group ((REA)) , as the former is more leveraged to improvements in Sydney and Melbourne.

Rating is upgraded to Accumulate from Hold and the target raised to $3.65 from $3.15.

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

Target price is $3.65 Current Price is $3.40 Difference: $0.25
If DHG meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.16, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Ord Minnett forecasts a full year FY20 EPS of 7.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 48.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.7, implying annual growth of N/A.

Current consensus DPS estimate is 6.3, implying a prospective dividend yield of 1.9%.

Current consensus EPS estimate suggests the PER is 44.2.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 EPS of 10.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 34.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 10.0, implying annual growth of 29.9%.

Current consensus DPS estimate is 7.4, implying a prospective dividend yield of 2.2%.

Current consensus EPS estimate suggests the PER is 34.0.

Market Sentiment: 0.1

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


UBS rates DHG as Neutral (3) -

Domain's trading update was softer than feared, with revenues down -12% year on year in the first four month's of FY20. The broker notes this includes some deferrals, and that the company is cycling tough comparables, but beyond that, a -7% reduction in costs means the broker's earnings forecasts are little changed.

The broker acknowledges the acquisition of the Real Time Agent platform, but provides no qualification. Neutral retained, target rises to $3.20 from $3.00.

Target price is $3.20 Current Price is $3.40 Difference: minus $0.2 (current price is over target).
If DHG meets the UBS target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.16, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

UBS forecasts a full year FY20 dividend of 4.00 cents and EPS of 7.00 cents.
At the last closing share price the estimated dividend yield is 1.18%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 48.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.7, implying annual growth of N/A.

Current consensus DPS estimate is 6.3, implying a prospective dividend yield of 1.9%.

Current consensus EPS estimate suggests the PER is 44.2.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 5.00 cents and EPS of 9.00 cents.
At the last closing share price the estimated dividend yield is 1.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 37.78.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 10.0, implying annual growth of 29.9%.

Current consensus DPS estimate is 7.4, implying a prospective dividend yield of 2.2%.

Current consensus EPS estimate suggests the PER is 34.0.

Market Sentiment: 0.1

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

ELD  ELDERS LIMITED

Agriculture

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Overnight Price: $6.54

Morgans rates ELD as Add (1) -

Morgans found the FY19 result commendable, given the challenging operating environment. No formal FY20 guidance was provided but the company expects a below-average summer cropping season.

As a result, Morgans reduces FY20 forecasts for net profit by -3.6%. Relative to peers, the broker considers Elders best placed to withstand the current environment.

The business is also highly leveraged to a rising cattle price, which will occur once it rains and farmers need to re-stock. Add rating maintained. Target is reduced to $7.10 from $7.30.

Target price is $7.10 Current Price is $6.54 Difference: $0.56
If ELD meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in September.

Forecast for FY20:

Morgans forecasts a full year FY20 dividend of 19.00 cents and EPS of 55.00 cents.
At the last closing share price the estimated dividend yield is 2.91%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.89.

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 22.00 cents and EPS of 64.00 cents.
At the last closing share price the estimated dividend yield is 3.36%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.22.

Market Sentiment: 1.0

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

IDX  INTEGRAL DIAGNOSTICS LIMITED

Medical Equipment & Devices

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Overnight Price: $3.55

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

The company has completed the acquisition of Imaging Queensland for consideration up front of $104m. Morgan Stanley already includes the associated capital raising in forecasts and now includes the earnings associated with the acquisition.

Target is raised to $3.40 from $3.12. Equal-weight rating maintained as the PE multiple looks full.  Industry view: In-Line.

The broker suspects the market will continue to pay a premium for the stock given the upside risk associated with reduced balance sheet leverage and a track record of accretive acquisitions.

Target price is $3.40 Current Price is $3.55 Difference: minus $0.15 (current price is over target).
If IDX meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.40, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Morgan Stanley forecasts a full year FY20 dividend of 10.10 cents and EPS of 16.50 cents.
At the last closing share price the estimated dividend yield is 2.85%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.52.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.2, implying annual growth of 28.7%.

Current consensus DPS estimate is 11.1, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 20.6.

Forecast for FY21:

Morgan Stanley forecasts a full year FY21 dividend of 11.60 cents and EPS of 19.00 cents.
At the last closing share price the estimated dividend yield is 3.27%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.68.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.7, implying annual growth of 14.5%.

Current consensus DPS estimate is 12.6, implying a prospective dividend yield of 3.5%.

Current consensus EPS estimate suggests the PER is 18.0.

Market Sentiment: 0.5

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: $9.01

UBS rates ILU as Neutral (3) -

Following a review due early next year, it is possible Iluka Resources will separate its MAC royalty stream from its mineral sands business. The market is debating whether Mining Area C royalties make an overweight contribution relative to mineral sands given BHP Group's ((BHP)) South Flank project in the area and current iron ore prices.

On the possibility of separation, the broker has moved to a sum of the parts valuation model from a discounted cash flow model. This results in a target price increase to $10.00 from $8.10. Neutral retained.

Target price is $10.00 Current Price is $9.01 Difference: $0.99
If ILU meets the UBS target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $9.51, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

UBS forecasts a full year FY19 dividend of 20.00 cents and EPS of 59.00 cents.
At the last closing share price the estimated dividend yield is 2.22%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.27.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 72.6, implying annual growth of 0.6%.

Current consensus DPS estimate is 16.4, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 12.4.

Forecast for FY20:

UBS forecasts a full year FY20 dividend of 7.00 cents and EPS of 78.00 cents.
At the last closing share price the estimated dividend yield is 0.78%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.55.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 81.3, implying annual growth of 12.0%.

Current consensus DPS estimate is 15.8, implying a prospective dividend yield of 1.8%.

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

MGR  MIRVAC GROUP

Infra & Property Developers

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Overnight Price: $3.21

Citi rates MGR as Buy (1) -

Citi suspects the concerns over an earnings hole in FY21 could be overdone. The perception is largely because of a reduction in forecast residential and commercial development profits.

However, the broker believes Mirvac could grow in FY21, supported by an 11% increase in office income, 50% growth in MPC settlements and a potential 50% sell down of locomotive.

Buy rating maintained. Target is raised to $3.60 from $3.50.

Target price is $3.60 Current Price is $3.21 Difference: $0.39
If MGR meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $3.27, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Citi forecasts a full year FY20 dividend of 12.20 cents and EPS of 17.90 cents.
At the last closing share price the estimated dividend yield is 3.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.93.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.5, implying annual growth of -36.6%.

Current consensus DPS estimate is 12.1, implying a prospective dividend yield of 3.8%.

Current consensus EPS estimate suggests the PER is 18.3.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 12.90 cents and EPS of 18.40 cents.
At the last closing share price the estimated dividend yield is 4.02%.
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 17.3, implying annual growth of -1.1%.

Current consensus DPS estimate is 12.9, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 18.6.

Market Sentiment: 0.0

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

NUF  NUFARM LIMITED

Agriculture

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Overnight Price: $6.24

Morgan Stanley rates NUF as Overweight (1) -

Morgan Stanley notes, in the case of Omega-3 patented infringements, the judge has made a royalty determination. Remedies relate to Group A patents which expire in 2025.

The court found an appropriate royalty to be a lump sum of US$3.7m plus 3.5% of ongoing sales. The broker expects the royalty will be shared by Nufarm, CSIRO and Grains Research and Development Corp.

Overweight rating and Cautious industry view. Target is $7.20.

Target price is $7.20 Current Price is $6.24 Difference: $0.96
If NUF meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $6.58, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY20:

Morgan Stanley forecasts a full year FY20 dividend of 9.00 cents and EPS of 29.00 cents.
At the last closing share price the estimated dividend yield is 1.44%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.52.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.0, implying annual growth of 278.4%.

Current consensus DPS estimate is 7.9, implying a prospective dividend yield of 1.3%.

Current consensus EPS estimate suggests the PER is 22.3.

Forecast for FY21:

Morgan Stanley forecasts a full year FY21 dividend of 12.00 cents and EPS of 38.00 cents.
At the last closing share price the estimated dividend yield is 1.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.42.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 37.0, implying annual growth of 32.1%.

Current consensus DPS estimate is 11.2, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 16.9.

Market Sentiment: 0.6

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

NWS  NEWS CORPORATION

Print, Radio & TV

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Overnight Price: $19.58

Macquarie rates NWS as Outperform (1) -

First quarter revenue was down -7%. Macquarie notes a combination of structural, cyclical and one-off headwinds. Momentum is expected to improve in the second half as the company undergoes a simplification of its News and Information Services division.

This division is also expected to benefit from the recent deal with Facebook. An improvement in the trend at REA Group ((REA)) is also envisaged on the assumption market volumes return to growth. Outperform rating maintained. Target is $25.37.

Target price is $25.37 Current Price is $19.58 Difference: $5.79
If NWS meets the Macquarie target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $23.71, suggesting upside of 21.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Macquarie forecasts a full year FY20 dividend of 28.56 cents and EPS of 55.98 cents.
At the last closing share price the estimated dividend yield is 1.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 34.97.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 62.4, implying annual growth of N/A.

Current consensus DPS estimate is 27.8, implying a prospective dividend yield of 1.4%.

Current consensus EPS estimate suggests the PER is 31.4.

Forecast for FY21:

Macquarie forecasts a full year FY21 dividend of 28.56 cents and EPS of 63.27 cents.
At the last closing share price the estimated dividend yield is 1.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 70.9, implying annual growth of 13.6%.

Current consensus DPS estimate is 29.2, implying a prospective dividend yield of 1.5%.

Current consensus EPS estimate suggests the PER is 27.6.

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

Market Sentiment: 0.5

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

PAN  PANORAMIC RESOURCES LIMITED

Nickel

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Overnight Price: $0.44

Morgans rates PAN as Speculative Buy (1) -

Morgans observes higher nickel prices have helped cushion the dilutive and disappointing impact of the recent capital raisings. The hostile takeover offer by Independence Group ((IGO)) endorses the company's potential, but the broker suspects the bid has limited chance of proceeding in its current form.

Morgans now believes the stock warrants a Speculative Buy rating, as opposed to Add, because of the ongoing risks in ramping up Savannah. The December quarter is expected to mark an important inflection point. Target is reduced to $0.51 from $0.70.

Target price is $0.51 Current Price is $0.44 Difference: $0.07
If PAN meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Morgans forecasts a full year FY20 EPS of 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 44.00.

Forecast for FY21:

Morgans forecasts a full year FY21 EPS of 7.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.29.

Market Sentiment: 1.0

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

QBE  QBE INSURANCE GROUP LIMITED

Insurance

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Overnight Price: $12.73

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

Citi downgrades to Neutral from Buy, maintaining a $13.45 target. The broker now believes it highly likely that US crop insurance will endure an adverse outcome in 2019. Both Chubb and Zurich have hinted at adverse outcomes.

The broker also notes a significant second half vs first half headwind for QBE's claims ratio. Potential volatility is envisaged in the stock price as the market assesses the issues, which Citi suspects may lead to a better opportunity.

Target price is $13.45 Current Price is $12.73 Difference: $0.72
If QBE meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $13.16, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Citi forecasts a full year FY19 dividend of 55.98 cents and EPS of 89.55 cents.
At the last closing share price the estimated dividend yield is 4.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.22.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 93.7, implying annual growth of N/A.

Current consensus DPS estimate is 74.7, implying a prospective dividend yield of 5.9%.

Current consensus EPS estimate suggests the PER is 13.6.

Forecast for FY20:

Citi forecasts a full year FY20 dividend of 64.70 cents and EPS of 97.26 cents.
At the last closing share price the estimated dividend yield is 5.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 93.7, implying annual growth of N/A.

Current consensus DPS estimate is 82.6, implying a prospective dividend yield of 6.5%.

Current consensus EPS estimate suggests the PER is 13.6.

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

Market Sentiment: 0.5

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


Macquarie rates QBE as Neutral (3) -

Macquarie notes the company's peers are resigned to worse-than-average US crop earnings over 2019. While the pricing outlook continues to improve, casualty losses in the US are a major concern.

Macquarie maintains a Neutral rating and $13 target.

Target price is $13.00 Current Price is $12.73 Difference: $0.27
If QBE meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $13.16, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Macquarie forecasts a full year FY19 dividend of 64.55 cents and EPS of 91.12 cents.
At the last closing share price the estimated dividend yield is 5.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.97.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 93.7, implying annual growth of N/A.

Current consensus DPS estimate is 74.7, implying a prospective dividend yield of 5.9%.

Current consensus EPS estimate suggests the PER is 13.6.

Forecast for FY20:

Macquarie forecasts a full year FY20 dividend of 61.27 cents and EPS of 91.40 cents.
At the last closing share price the estimated dividend yield is 4.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.93.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 93.7, implying annual growth of N/A.

Current consensus DPS estimate is 82.6, implying a prospective dividend yield of 6.5%.

Current consensus EPS estimate suggests the PER is 13.6.

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

Market Sentiment: 0.5

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

Today's Price Target Changes
Company Last Price Broker New Target Prev Target Change
API AUS PHARMACEUTICAL IND $1.42 Morgan Stanley 1.35 1.32 2.27%
ASX ASX $80.47 Citi 70.10 69.10 1.45%
DHG DOMAIN HOLDINGS $3.40 Credit Suisse 2.40 2.35 2.13%
Macquarie 3.60 3.20 12.50%
Ord Minnett 3.65 3.15 15.87%
UBS 3.20 3.00 6.67%
ELD ELDERS $6.54 Morgans 7.10 7.30 -2.74%
IDX INTEGRAL DIAGNOSTICS $3.55 Morgan Stanley 3.40 3.36 1.19%
ILU ILUKA RESOURCES $9.01 UBS 10.00 8.10 23.46%
MGR MIRVAC $3.21 Citi 3.60 3.50 2.86%
NWS NEWS CORP $19.58 Macquarie 25.37 24.79 2.34%
PAN PANORAMIC RESOURCES $0.44 Morgans 0.51 0.70 -27.14%
QBE QBE INSURANCE $12.73 Macquarie 13.00 11.80 10.17%
Summaries
ANN ANSELL Neutral - Credit Suisse Overnight Price $29.01
Hold - Ord Minnett Overnight Price $29.01
API AUS PHARMACEUTICAL IND Underweight - Morgan Stanley Overnight Price $1.42
ASX ASX Sell - Citi Overnight Price $80.47
BHP BHP Neutral - Credit Suisse Overnight Price $37.07
Hold - Ord Minnett Overnight Price $37.07
CTD CORPORATE TRAVEL Buy - Ord Minnett Overnight Price $19.51
DHG DOMAIN HOLDINGS Underperform - Credit Suisse Overnight Price $3.40
Upgrade to Outperform from Neutral - Macquarie Overnight Price $3.40
Upgrade to Accumulate from Hold - Ord Minnett Overnight Price $3.40
Neutral - UBS Overnight Price $3.40
ELD ELDERS Add - Morgans Overnight Price $6.54
IDX INTEGRAL DIAGNOSTICS Equal-weight - Morgan Stanley Overnight Price $3.55
ILU ILUKA RESOURCES Neutral - UBS Overnight Price $9.01
MGR MIRVAC Buy - Citi Overnight Price $3.21
NUF NUFARM Overweight - Morgan Stanley Overnight Price $6.24
NWS NEWS CORP Outperform - Macquarie Overnight Price $19.58
PAN PANORAMIC RESOURCES Speculative Buy - Morgans Overnight Price $0.44
QBE QBE INSURANCE Downgrade to Neutral from Buy - Citi Overnight Price $12.73
Neutral - Macquarie Overnight Price $12.73
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

7

2. Accumulate

1

3. Hold

9

5. Sell

3

Tuesday 12 November 2019

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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.