Australian Broker Call

Ord Minnett rates AMI as Buy (1) -

A feasibility study for Aurelia Metals's Federation site has confirmed a 600,000 tonnes per annum operation with an initial eight-year mine life. Ord Minnett highlights while resource of 5m tonnes is unchanged, grades are slightly weaker than expected. 

The study detailed a start to operations in FY25, with initial capital expenditure of -$108m better than the -$130m the broker had anticipated.

Currently decline works at the project are on hold given concerns over funding, driving an increase to Ord Minnett's risk weight to 40% from 20%.

The Buy rating is retained and the target price decreases to $0.50 from $0.70.

Target price is $0.50 Current Price is $0.14 Difference: $0.36
If AMI meets the Ord Minnett target it will return approximately 257% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Citi rates AX1 as Neutral (3) -

Given Accent Group has already opened 33 of its 50 new stores target in the first quarter, and has a history of beating rollout targets, Citi sees potential upside to the company's target and estimates 70 new store store adds in the year.

Elsewhere, the broker is concerned about short-term impacts on Accent Group from underperformance of the Vans brand, while earlier than expected easing of supply chain pressures should improve access to inventory from Nike. 

The Neutral rating and target price of $1.61 are retained.

Target price is $1.61 Current Price is $1.32 Difference: $0.29
If AX1 meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $1.74, suggesting upside of 37.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Macquarie rates AZJ as Neutral (3) -

Wet weather and ongoing issues have driven a -26% decline in Aurizon Holdings' New South Wales coal volumes quarter-on-quarter, and a -15% decline in Queensland coal volumes. In Bulk, WA iron ore port volumes declined between -40-50%, while a Townsville decline was largely offset by Newcastle.

Macquarie notes iron ore has been the largest earnings contributor for Aurizon Holdings' legacy business, and soft pricing poses a threat. The broker forecasts full year earnings of $1,465m, slightly below the bottom end of company guidance.

The Neutral rating is retained and the target price decreases to $3.84 from $4.05.

Target price is $3.84 Current Price is $3.53 Difference: $0.31
If AZJ meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.94, suggesting upside of 11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Citi rates BOQ as Buy (1) -

With Bank of Queensland set to release its full year results this week, Citi is anticipating the bank will report earnings of $501m. The broker's forecasts lags consensus by -1.5%, largely on lower net interest income. Citi does assume better bad debt and forecasts an $8m writeback.

The broker will look for detail on Bank of Queensland's net interest margin and trajectory guidance for the coming year.

The Buy rating and target price of $8.75 are retained.

Target price is $8.75 Current Price is $6.81 Difference: $1.94
If BOQ meets the Citi target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $8.66, suggesting upside of 26.5% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Ord Minnett rates BXB as Buy (1) -

Ahead of the release of Brambles' first quarter sales figures next week Ord Minnett has reviewed the company's key regions.

The broker estimates food and beverage sales have increased 4-7% year-to-date across the US and UK, while performance across Europe has been mixed.The broker also estimates a -4% decline in lumber costs, with prices in the US down -30% from a peak in March. 

Brambles' exposure to defensive industries which look to remain resilient continues to underpin Ord Minnett's rating. The Buy rating is retained and the target price decreases to $13.40 from $13.80.

Target price is $13.40 Current Price is $11.46 Difference: $1.94
If BXB meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $13.24, suggesting upside of 14.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.4

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

Citi rates CCX as Neutral (3) -

City Chic Collective has reported another month of website visits growth, with visits to the group's websites up 8% year-on-year in September. Citi notes this comes despite cycling strong website visits growth in the previous comparable period. 

Similarly to last month US web traffic was a key driver, with visits to City Chic US and Avenue up 73% and 12% year-on-year respectively. Visits were up 4% for Australia & New Zealand, but declined for European sites. 

The Neutral rating and $2.09 target price are maintained.

Target price is $2.09 Current Price is $1.39 Difference: $0.7
If CCX meets the Citi target it will return approximately 50% (excluding dividends, fees and charges).

Current consensus price target is $2.52, suggesting upside of 98.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Macquarie rates CNU as Neutral (3) -

Connection trends have continued in the first quarter for Chorus, with growth in fibre connections largely offsetting reduced copper connections. Macquarie notes an additional 21,000 fibre connections in the quarter brings fibre to 76% of Chorus' total connections. 

The company's new tier pricing changes are also in effect from October 1, with the company issuing a 5.49% to all fibre services provided from that date. 

The Neutral rating and target price of NZ$7.82 are retained.

Current Price is $6.75. Target price not assessed.

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.0

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

Credit Suisse rates COE as Neutral (3) -

After Credit Suisse refreshes its research (after a hiatus) on Cooper Energy, the target price falls to $0.24 from $0.26. The new forecast now incorporates a capital raise, the Orbost gas processing plant acquisition and recent disclosures.

The broker prefers Beach Energy ((BPT)) in the sector and retains a Neutral rating on Cooper Energy on a range of factors. These include balance sheet risk and the prospect key OP3D exploration catalysts may only occur from FY26.

Target price is $0.24 Current Price is $0.26 Difference: minus $0.02 (current price is over target).
If COE meets the Credit Suisse target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Morgans - Cessation of coverage

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

Macquarie rates GOR as Outperform (1) -

A preliminary third quarter production update from Gold Road Resources demonstrates another steady quarter according to Macquarie, with total gold produced a -3% miss to the broker's forecast.

Year-to-date, the company has achieved 75% of its full year production target, which the broker expects leaves it on track to comfortably meet guidance. Gruyere produced 83,600 ounces in the quarter, and Macquarie continues to anticipate incremental production growth.

The Outperform rating and target price of $1.50 are retained.

Target price is $1.50 Current Price is $1.31 Difference: $0.19
If GOR meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $1.69, suggesting upside of 30.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Citi rates JHG as Sell (5) -

While noting Janus Henderson's flow performance relative to industry may have marginally improved, Citi is anticipating more detail on strategy to be revealed alongside the company's third quarter results. 

The broker doubts Janus Henderson will prove immune to the significant outflows impacting on the industry, and despite some improvement in US equity outflows still considers the current environment challenging.

Marking to market drives earnings per share forecast declines of -5%, -18% and -16% through to FY24. The Sell rating is retained and the target price decreases to $29.25 from $31.60.

Target price is $29.25 Current Price is $32.22 Difference: minus $2.97 (current price is over target).
If JHG meets the Citi target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $30.78, suggesting downside of -5.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: -0.7

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

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

Morgans initiates coverage on integrated building services group Johns Lyng with a $7.50 target. In both the US and Australia, the company specialises in insurance-related restoration services to both residential and commercial building sectors.

As a result of this specialisation, the company is benefitting from record domestic property insurance claims activity and recent extreme weather events, explains the analyst.

The company also delivers commercial building services throughout Australia and the US, with over 2,000 employees and through utilising more than 10,500 subcontractors.

Following recent share price falls, Johns Lyng stock is now trading below its long-term average price/earnings multiple and Morgans begins coverage with an Add rating.

Target price is $7.50 Current Price is $5.63 Difference: $1.87
If JLG meets the Morgans target it will return approximately 33% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Macquarie rates MIN as Outperform (1) -

Mineral Resources has successfully commissioned all three processing trains for its Wodgina site, with two trains already in operation. Key to getting all trains online, as noted by Macquarie, is securing approvals and ramping up Stage 2 operations.

The broker highlights both Stage 2 and 3 are pending approvals, with Stage 2 dependent on environmental permits. Macquarie is anticipating Wodgina will reach full production rates in late 2023.

The Outperform rating and target price of $98.00 are retained.

Target price is $98.00 Current Price is $70.81 Difference: $27.19
If MIN meets the Macquarie target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $82.24, suggesting upside of 12.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

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

An updated resource and reserve statement for Mt Marion and Wodgina has little impact on Morgan Stanley's forecasts for Mineral Resources.

Higher grades at Mt Marion offset the loss of around -12% of lithium tonnes, according to the analyst. While changes at Wodinga were considered minimal, train 4 construction could be completed around two years earlier than originally estimated.

The Equal-weight rating and $78.90 target are unchanged. Industry view: Attractive.

Target price is $78.90 Current Price is $70.81 Difference: $8.09
If MIN meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $82.24, suggesting upside of 12.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Credit Suisse rates PTM as Neutral (3) -

September quarter funds under management (FUM) for Platinum Asset Management was a 1% beat versus the forecast by Credit Suisse on fund outperformance.

While the improved performance may be a catalyst for improved flows and a price/earnings multiple rerate, the broker retains its Neutral rating as outflows continue.

The $1.70 target price is unchanged.

Target price is $1.70 Current Price is $1.70 Difference: $0
If PTM meets the Credit Suisse target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $1.73, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.3

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

Morgans rates SFR as Add (1) -

While Morgans lowers its target price for Sandfire Resources to $5.20 from $7.50, there are three catalysts that should support a positive share rerating for assertive investors. Add.

The broker points to de-risking of the Motheo project in time and incremental improvements at the MATSA operations in Spain. In addition, new management should reset the overall strategy.

The analyst also points to a potential tailwind for the Sandfire share price from recycled funds seeking copper exposure, should BHP Group ((BHP)) be successful in acquiring OZ Minerals ((OZL)). 

Target price is $5.20 Current Price is $3.84 Difference: $1.36
If SFR meets the Morgans target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $4.99, suggesting upside of 34.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.6

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

Morgan Stanley rates SGP as Overweight (1) -

As a result of recent dwelling price declines, Morgan Stanley suggests the market will be focusing upon land lots sales (contracted sales) in the Residential business when Stockland presents its 3Q update on October 17.

Should the company report securing 1,000 or more contracted sales in the quarter (still down from recent periods), the analyst anticipates the share price may rally by 3-4%. Share price weakness of -2-4% is considered likely if sales come in at less than 800 lots. 

The Overweight rating and $4.30 target are unchanged. Industry view: In-Line.

Target price is $4.30 Current Price is $3.27 Difference: $1.03
If SGP meets the Morgan Stanley target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $4.11, suggesting upside of 26.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Macquarie rates SKT as Outperform (1) -

SKY Network Television has confirmed a seven-year exclusive rights deal with World Rugby. The agreement grants SKY Network Television rights to premium competitions, including Rugby World Cups, for the duration of the contract, while World Rugby will acquire RugbyPass. 

With exclusive rights to New Zealand and international rugby, NRL, netball, EPL, international cricket and future Olympics, Macquarie expects this is the final piece of the premium sports content suite targeted by SKY Network Television. 

The Outperform rating and target price of NZ$3.41 are retained.

Current Price is $1.87. Target price not assessed.

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Credit Suisse rates SQ2 as Outperform (1) -

While Credit Suisse makes only minor changes to forecasts, its target for Block falls to US$105 from US$125 from the impact of higher interest rates on multiples. It's thought the company is well placed in the longer term across both of its core ecosystems.

The broker expects Square’s medium-term growth will be supported in part by international ramping and Cash App’s growth will benefit
from both lending and commerce.

The Outperform rating is unchanged.

Current Price is $89.07. Target price not assessed.

Current consensus price target is $130.00, suggesting upside of 46.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Ord Minnett rates TLS as Buy (1) -

With the vote to separate Telstra's infrastructure assets to take place following the company's annual general meeting, Ord Minnett predicts a sale in this fiscal year and a subsequent share buyback would drive significant dividend accretion. 

The broker expects the monetisation of Telstra's infrastructure assets would be one of the most significant events for the telco since the creation of the NBN Co, and expects the assets to be appealing, particularly to superannuation and global infrastructure funds.

The Buy rating and $4.60 target are retained.

Target price is $4.60 Current Price is $3.82 Difference: $0.78
If TLS meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $4.41, suggesting upside of 14.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Macquarie rates TYR as Neutral (3) -

Revised earnings guidance from Tyro Payments has lifted $5m, incorporating the impact of a cost reduction program. Macquarie estimates earnings of $30.8m, roughly at the mid-point of company guidance.

The cost reduction program is targeting -$11m in annualised savings, and comes after costs spiked in FY22. Macquarie remains cautious on Tyro Payments' outlook given macro conditions and potential for competition to intensify.

The Neutral rating is retained and the target price increases to $1.50 from $1.20.

Target price is $1.50 Current Price is $1.51 Difference: minus $0.01 (current price is over target).
If TYR meets the Macquarie target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.68, suggesting upside of 17.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

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

Morgan Stanley feels Tyro Payments new cost-out intitiative (-$11m/year) will be applauded by the market, given a prior overemphasis by management on total transaction volume (TTV) and revenue growth.

The broker keeps its Equal-weight rating given some M&A premium remains in the share price, after the recently knocked back bid. Industry consolidation remains an integral part of the analyst's investment thesis and bull case $2.50 share price target.

The base case $1.40 target is maintained. Industry view: Attractive.

Target price is $1.40 Current Price is $1.51 Difference: minus $0.11 (current price is over target).
If TYR meets the Morgan Stanley target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.68, suggesting upside of 17.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Morgans rates TYR as Add (1) -

Morgans likes the tone set by new CEO Jon Davey, following a 1Q update announcing a new cost-out plan and raising FY23 earnings (EBITDA) guidance by around 19%.

As a result of this update, the broker raises its target to $1.99 from $1.70 after increasing EPS forecasts by more than 20% across the forecast years.

The analyst retains an Add rating and sees improved business momentum and a greater focus by management on driving profitability.

Target price is $1.99 Current Price is $1.51 Difference: $0.48
If TYR meets the Morgans target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $1.68, suggesting upside of 17.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Ord Minnett rates TYR as Accumulate (2) -

Alongside a positive trading update, Tyro Payments has detailed a new cost reduction program that aims to deliver an annualised -$11m cost base reduction by FY24. 

Ord Minnett highlights decreased employee costs and a shifting employee mix are expected to provide a $5m lift to earnings in FY23, driving the company to increase guidance to $28-34m. The broker expects Tyro Payments can continue to win market share moving forward.

The Accumulate rating is retained and the target price increases to $1.70 from $1.40.

Target price is $1.70 Current Price is $1.51 Difference: $0.19
If TYR meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $1.68, suggesting upside of 17.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Morgans rates UNI as Add (1) -

By acquiring youth apparel business Thrills for -$50m, Universal Store will have ownership of its largest third party brand and will gain meaningful exposure to the wholesale channel, explains Morgans. Around 80% of Thrills' sales are via wholesale.

The analyst estimates the transaction will be earnings accretive in the short term and notes the youth demographic will likely be more resilient in weaker overall trading conditions for retail.

The Add rating is unchanged, while the target slips to $6.70 from $7.00.

Target price is $6.70 Current Price is $4.80 Difference: $1.9
If UNI meets the Morgans target it will return approximately 40% (excluding dividends, fees and charges).

Current consensus price target is $5.90, suggesting upside of 31.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Morgan Stanley rates WBC as Overweight (1) -

Morgan Stanley anticipates first time guidance for FY23 expenses, to be issued alongside 2H results on November 7, will have a material influence on the direction for Westpac shares in coming months.

Should there be no change to the FY24 'ongoing' cost base target of $8bn, the analyst feels investors will think the target unrealistic, whereas a revised target of around 8.5bn would be credible.

However, the broker feels a target of around $9bn or above would suggest cost savings are not on-track, while removal of the target altogether would impact credibility.

The Overweight rating and $23 target are unchanged.Industry view: In-line.

Target price is $23.00 Current Price is $21.58 Difference: $1.42
If WBC meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $24.76, suggesting upside of 14.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Macquarie rates WDS as Neutral (3) -

Woodside Energy has reportedly confirmed it will review its pre-emptive right to purchase a 5% stake in Pluto LNG from Tokyo Gas following Tokyo Gas' announcement it will divest its interests in four Australian LNG projects. 

With Tokyo Gas looking to reinvest proceeds in hydrogen and renewable assets, Macquarie sees possibility that other Japanese companies may also look to divest Australian LNG stakes, which could leave Woodside Energy with acquisition options at both Pluto and the North West Shelf. 

The Neutral rating is retained and the target price decreases to $30.45 from $30.50.

Target price is $30.45 Current Price is $34.58 Difference: minus $4.13 (current price is over target).
If WDS meets the Macquarie target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $35.35, suggesting upside of 4.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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