Australian Broker Call

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December 04, 2020

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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
KGN - Kogan.Com Upgrade to Outperform from Neutral Credit Suisse
APT  AFTERPAY LIMITED

Business & Consumer Credit

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Overnight Price: $96.20

UBS rates APT as Sell (5) -

During November, Afterpay's global sales were $2.1bn, up 112%, UBS observes. Sales in Australia and New Zealand were up 54% while US sales grew by 186%. Active customers in the US increased by circa 1m since September 30.

While November represents a significant milestone for Afterpay, as US sales surpassed that of ANZ for the first time, UBS analysts have a lot of questions.

With no trading update for October, the broker suspects sales may have been potentially pulled forward into November. Other questions are around the selective disclosures by the company, like refraining to provide the exact customer numbers and data on costs and credit performance.

Target remains at $30 with a Sell rating.

Target price is $30.00 Current Price is $96.20 Difference: minus $66.2 (current price is over target).
If APT meets the UBS target it will return approximately minus 69% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $94.09, suggesting downside of -0.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 0.00 cents and EPS of 25.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 384.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.7, implying annual growth of N/A.

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

Current consensus EPS estimate suggests the PER is 744.1.

Forecast for FY22:

UBS forecasts a full year FY22 dividend of 0.00 cents and EPS of 64.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 150.31.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 46.6, implying annual growth of 266.9%.

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

Current consensus EPS estimate suggests the PER is 202.8.

Market Sentiment: 0.2

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

AQZ  ALLIANCE AVIATION SERVICES LIMITED

Transportation & Logistics

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Overnight Price: $3.78

UPDATED

Credit Suisse rates AQZ as Outperform (1) -

Alliance Aviation Services has guided to a first half profit (PBT) of $26m, ahead of the $21m expected by Credit Suisse. The drivers are considered a mix of temporary (social distance flying, sports related charter) and more permanent (charter/fly-in-fly-out) factors.

The company announced the Virgin Australia ((VAH)) wet lease flying has recommenced. The broker notes a mere restoration of this agreement represents material upside to activity levels.

Despite the analyst upgrading EPS forecasts by 9-20%, it's still considered conservative.

The Outperform rating is unchanged and the target increased to $4.15 from $4.05.

Target price is $4.15 Current Price is $3.78 Difference: $0.37
If AQZ meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $4.23, suggesting upside of 8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 10.75 cents and EPS of 21.92 cents.
At the last closing share price the estimated dividend yield is 2.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.24.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.1, implying annual growth of -4.7%.

Current consensus DPS estimate is 13.4, implying a prospective dividend yield of 3.4%.

Current consensus EPS estimate suggests the PER is 19.4.

Forecast for FY22:

Credit Suisse forecasts a full year FY22 dividend of 12.59 cents and EPS of 24.63 cents.
At the last closing share price the estimated dividend yield is 3.33%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.35.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 23.9, implying annual growth of 18.9%.

Current consensus DPS estimate is 14.9, implying a prospective dividend yield of 3.8%.

Current consensus EPS estimate suggests the PER is 16.3.

Market Sentiment: 1.0

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


Morgans rates AQZ as Add (1) -

Morgans assesses the company has provided strong first half guidance, with underlying profit (NPBT) expected to be up 71% on the previous corresponding period. This is also 5% higher than what was considered an extremely strong second half FY20 result.

Given the high degree of near-term earnings certainty, it’s likely the group’s strong trading will continue into the second half, predicts the broker.

Morgans increases profit estimates for FY21-23 by 10.7%, 4.4% and 4.0%, respectively. The broker now forecasts FY21 profit of $47.0m, which implies second half profit of $20.5m.

The Add rating is maintained and the target is increased to $4.40 from $4.

Target price is $4.40 Current Price is $3.78 Difference: $0.62
If AQZ meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $4.23, suggesting upside of 8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 15.00 cents and EPS of 20.00 cents.
At the last closing share price the estimated dividend yield is 3.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.90.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.1, implying annual growth of -4.7%.

Current consensus DPS estimate is 13.4, implying a prospective dividend yield of 3.4%.

Current consensus EPS estimate suggests the PER is 19.4.

Forecast for FY22:

Morgans forecasts a full year FY22 dividend of 14.00 cents and EPS of 24.00 cents.
At the last closing share price the estimated dividend yield is 3.70%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 23.9, implying annual growth of 18.9%.

Current consensus DPS estimate is 14.9, implying a prospective dividend yield of 3.8%.

Current consensus EPS estimate suggests the PER is 16.3.

Market Sentiment: 1.0

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

ARF  ARENA REIT

REITs

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Overnight Price: $2.87

UPDATED

Macquarie rates ARF as Outperform (1) -

Arena REIT has upgraded FY21 DPS guidance to 14.8 cents, which is around 3% above the estimate of Macquarie. The broker considers the beat to be driven by -$33m of net acquisitions.

The REIT also saw re-valuations of 4% across its portfolio, with sale premiums implying to the broker additional upside to valuations.

The analyst continues to note the resilient nature of the REIT’s tenant base, with a 100% collection of November net rent.

The Outperform rating is unchanged and the target price is increased to $2.98 from $2.86.

Target price is $2.98 Current Price is $2.87 Difference: $0.11
If ARF meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $2.86, suggesting downside of -0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Macquarie forecasts a full year FY21 dividend of 14.90 cents and EPS of 15.10 cents.
At the last closing share price the estimated dividend yield is 5.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.01.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.7, implying annual growth of -42.2%.

Current consensus DPS estimate is 14.3, implying a prospective dividend yield of 5.0%.

Current consensus EPS estimate suggests the PER is 19.5.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 16.20 cents and EPS of 16.50 cents.
At the last closing share price the estimated dividend yield is 5.64%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.0, implying annual growth of 8.8%.

Current consensus DPS estimate is 15.5, implying a prospective dividend yield of 5.4%.

Current consensus EPS estimate suggests the PER is 17.9.

Market Sentiment: 0.7

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


Morgan Stanley rates ARF as Overweight (1) -

Arena REIT has upgraded its FY21 dividend guidance to 14.8c from 14.4c-14.6c, Morgan Stanley notes. The uplift is driven by the acquisition of seven assets that will contribute around $1m to the REIT's income this year.

The company is also expecting its net tangible assets to lift to $2.33 from $2.22 on the back of positive revaluations for the December half. 100% of rent was collected in the last 5 months with rent relief provided to a very small portion of tenants.

The broker considers the update positive. Overweight retained. Target is $2.75. Industry view is In-Line.

Target price is $2.75 Current Price is $2.87 Difference: minus $0.12 (current price is over target).
If ARF 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 $2.86, suggesting downside of -0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Morgan Stanley forecasts a full year FY21 dividend of 14.00 cents and EPS of 14.10 cents.
At the last closing share price the estimated dividend yield is 4.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.35.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.7, implying annual growth of -42.2%.

Current consensus DPS estimate is 14.3, implying a prospective dividend yield of 5.0%.

Current consensus EPS estimate suggests the PER is 19.5.

Forecast for FY22:

Morgan Stanley forecasts a full year FY22 dividend of 15.20 cents and EPS of 15.40 cents.
At the last closing share price the estimated dividend yield is 5.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.64.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.0, implying annual growth of 8.8%.

Current consensus DPS estimate is 15.5, implying a prospective dividend yield of 5.4%.

Current consensus EPS estimate suggests the PER is 17.9.

Market Sentiment: 0.7

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

COE  COOPER ENERGY LIMITED

Crude Oil

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Overnight Price: $0.38

Morgan Stanley rates COE as Initiation of coverage with Equal-weight (3) -

Morgan Stanley initiates coverage of Cooper Energy with an Equal-Weight rating and a target price of $0.40.

While 2020 has been a challenging year for the company, Morgan Stanley expects a better 2021 as the Sole project reaches higher production. The broker puts Cooper Energy second in its order of preference amongst the mid-cap energy stocks.

The company is well placed to address a tightening gas supply landscape in East Australia over the medium term, believes the broker, with a number of development opportunities setting the platform for medium-term growth.

A key challenge will be the limited free cash available in the next few years combined with an abandonment programme around FY23 that will drive up the capex, the broker notes. Industry view: Cautious.

Target price is $0.40 Current Price is $0.38 Difference: $0.02
If COE meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $0.41, suggesting upside of 8.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Morgan Stanley forecasts a full year FY21 dividend of 0.00 cents and EPS of 0.00 cents.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 0.1, implying annual growth of N/A.

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

Current consensus EPS estimate suggests the PER is 380.0.

Forecast for FY22:

Morgan Stanley forecasts a full year FY22 dividend of 0.00 cents and EPS of 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 2.3, implying annual growth of 2200.0%.

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

Current consensus EPS estimate suggests the PER is 16.5.

Market Sentiment: 0.4

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

CSL  CSL LIMITED

Pharmaceuticals & Biotech/Lifesciences

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Overnight Price: $294.13

UBS rates CSL as Buy (1) -

UBS observes of the 105 plasma collection centres opened over the last 12 months, circa 40% are owned by CSL. In November, the company opened 3 new centres and looks well on track to reach the FY21 target of 20-30 centres.

While new centres may partially mitigate collection pressures due to covid, the inability to catch public transport to plasma centres has been identified as a limiting factor in donor attendance, assesses the broker.

UBS estimates transit activity was down by about -30% during the first two weeks in November versus January levels due to resurgence in covid cases, although this was not as severe as the April/May period which saw mobility declining by -30- 40%.

The Buy rating and target price of $346 are unchanged.

Target price is $346.00 Current Price is $294.13 Difference: $51.87
If CSL meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $316.81, suggesting upside of 7.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 300.47 cents and EPS of 705.95 cents.
At the last closing share price the estimated dividend yield is 1.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 41.66.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 667.6, implying annual growth of N/A.

Current consensus DPS estimate is 295.3, implying a prospective dividend yield of 1.0%.

Current consensus EPS estimate suggests the PER is 44.0.

Forecast for FY22:

UBS forecasts a full year FY22 dividend of 358.81 cents and EPS of 810.97 cents.
At the last closing share price the estimated dividend yield is 1.22%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 36.27.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 738.7, implying annual growth of 10.7%.

Current consensus DPS estimate is 333.9, implying a prospective dividend yield of 1.1%.

Current consensus EPS estimate suggests the PER is 39.8.

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

ELD  ELDERS LIMITED

Agriculture

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Overnight Price: $10.44

Citi rates ELD as Buy (1) -

Citi, backed by preliminary data from the latest wool and sheepmeat survey, expects lamb prices to decline by -5% in 2021 due to increased slaughter supply.

While this is negative for Elders’ livestock agency business, the broker expects the increased sheep volumes will offset the lower prices.  Citi expects 3% growth in sheep commissions in FY21.

Buy rating is maintained with a $13 target.

Target price is $13.00 Current Price is $10.44 Difference: $2.56
If ELD meets the Citi target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $12.89, suggesting upside of 25.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 24.00 cents and EPS of 79.20 cents.
At the last closing share price the estimated dividend yield is 2.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.18.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 79.1, implying annual growth of -0.9%.

Current consensus DPS estimate is 25.8, implying a prospective dividend yield of 2.5%.

Current consensus EPS estimate suggests the PER is 13.0.

Forecast for FY22:

Citi forecasts a full year FY22 dividend of 26.00 cents and EPS of 84.90 cents.
At the last closing share price the estimated dividend yield is 2.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 86.0, implying annual growth of 8.7%.

Current consensus DPS estimate is 28.1, implying a prospective dividend yield of 2.7%.

Current consensus EPS estimate suggests the PER is 12.0.

Market Sentiment: 0.7

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

FLT  FLIGHT CENTRE LIMITED

Travel, Leisure & Tourism

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Overnight Price: $17.47

UPDATED

Macquarie rates FLT as Neutral (3) -

Macquarie reviews the trading updates of both Qantas Airways ((QAN)) and Serko ((SKO)) as a read-through for Flight Centre.

The broker sees encouraging signs of recovery in domestic travel from an improvement in domestic capacity and transaction booking volumes.

Revenue margins will be lower in a recovery where there is a shift to domestic, cautions the analyst.

Macquarie already forecasts a 30% and 50% total transaction value (TTV) recovery (of precovid-19 levels) for FY21 and FY22, respectively. This is considered to predominantly capture domestic travel.

The Neutral rating and target of $13.50 are maintained.

Target price is $13.50 Current Price is $17.47 Difference: minus $3.97 (current price is over target).
If FLT meets the Macquarie target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.75, suggesting downside of -15.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Macquarie forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 80.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 21.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -111.5, implying annual growth of N/A.

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

Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 0.00 cents and EPS of 19.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 87.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.5, implying annual growth of N/A.

Current consensus DPS estimate is 6.0, implying a prospective dividend yield of 0.3%.

Current consensus EPS estimate suggests the PER is 59.4.

Market Sentiment: 0.1

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

HLS  HEALIUS LIMITED

Healthcare services

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Overnight Price: $3.63

UPDATED

Credit Suisse rates HLS as Outperform (1) -

Healius has completed the sale of its Medical Centres business to BGH Capital, receiving $483m. Credit Suisse believes the company could return up to -$200m to shareholders via a special dividend and increase the ordinary dividend payout ratio.

The broker also expects margin expansion from the collection centre rationalisation that has occurred so far in FY21.

The Outperform rating and target of $4 are maintained.

Target price is $4.00 Current Price is $3.63 Difference: $0.37
If HLS meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $3.86, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 12.57 cents and EPS of 25.14 cents.
At the last closing share price the estimated dividend yield is 3.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.44.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.8, implying annual growth of N/A.

Current consensus DPS estimate is 7.6, implying a prospective dividend yield of 2.1%.

Current consensus EPS estimate suggests the PER is 17.3.

Forecast for FY22:

Credit Suisse forecasts a full year FY22 dividend of 10.96 cents and EPS of 18.27 cents.
At the last closing share price the estimated dividend yield is 3.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.87.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.9, implying annual growth of -18.8%.

Current consensus DPS estimate is 8.7, implying a prospective dividend yield of 2.4%.

Current consensus EPS estimate suggests the PER is 21.3.

Market Sentiment: 0.5

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

HVN  HARVEY NORMAN HOLDINGS LIMITED

Consumer Electronics

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Overnight Price: $4.73

Citi rates HVN as Buy (1) -

Covid has been a tremendous earnings growth driver for housing-related retailers in 2020, observes Citi with the housing cycle expected to be a key tailwind over the next three years.

Rather than earnings normalising in 2021, Citi expects the net effect of the pandemic and housing to be a prolonged period of elevated earnings for housing-exposed retailers.

When it comes to housing leverage, the broker prefers Harvey Norman Holdings since it is the most exposed to the strong housing market. Citi is around 8% ahead of FY22 consensus for Harvey Norman.

Buy rating is retained. The target rises to $5.50 from $5.20.

Target price is $5.50 Current Price is $4.73 Difference: $0.77
If HVN meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $5.14, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 45.00 cents and EPS of 47.40 cents.
At the last closing share price the estimated dividend yield is 9.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.98.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 46.7, implying annual growth of 19.2%.

Current consensus DPS estimate is 33.1, implying a prospective dividend yield of 7.1%.

Current consensus EPS estimate suggests the PER is 10.0.

Forecast for FY22:

Citi forecasts a full year FY22 dividend of 33.00 cents and EPS of 35.80 cents.
At the last closing share price the estimated dividend yield is 6.98%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.21.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 34.2, implying annual growth of -26.8%.

Current consensus DPS estimate is 26.4, implying a prospective dividend yield of 5.7%.

Current consensus EPS estimate suggests the PER is 13.6.

Market Sentiment: 0.8

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

JBH  JB HI-FI LIMITED

Consumer Electronics

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Overnight Price: $45.59

Citi rates JBH as Neutral (3) -

Covid has been a tremendous earnings growth driver for housing-related retailers in 2020, observes Citi with the housing cycle expected to be a key tailwind over the next three years.

Rather than earnings normalising in 2021, Citi expects the net effect of the pandemic and housing to be a prolonged period of elevated earnings for housing-exposed retailers.

Citi is around 6% ahead of FY22 consensus for JB Hi-Fi. The broker highlights focus has shifted to the beneficiaries of a reopening of the Australian economy, leading to a circa 10% de-rating throughout November for JB Hi-Fi which presents opportunities.

Overall, the broker prefers Harvey Norman ((HVN)) and Metcash over JB Hi-Fi ((JBH)).

Neutral rating is retained. The target rises to $50 from $49.30.

Target price is $50.00 Current Price is $45.59 Difference: $4.41
If JBH meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $48.05, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 228.00 cents and EPS of 339.40 cents.
At the last closing share price the estimated dividend yield is 5.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.43.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 313.9, implying annual growth of 19.3%.

Current consensus DPS estimate is 208.0, implying a prospective dividend yield of 4.6%.

Current consensus EPS estimate suggests the PER is 14.3.

Forecast for FY22:

Citi forecasts a full year FY22 dividend of 186.00 cents and EPS of 276.90 cents.
At the last closing share price the estimated dividend yield is 4.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.46.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 257.7, implying annual growth of -17.9%.

Current consensus DPS estimate is 173.6, implying a prospective dividend yield of 3.9%.

Current consensus EPS estimate suggests the PER is 17.5.

Market Sentiment: 0.0

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

KGN  KOGAN.COM LTD

Retailing

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Overnight Price: $17.35

UPDATED

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

In the opinion of Credit Suisse, the acquisition of New Zealand based online retailer Mighty Ape represents a material step-change in the Kogan.com business.

The broker considers Mighty Ape is a quality business and management is being retained. They are considered to have strong incentives to deliver financial objectives.

There is opportunity to grow the acquired company's private label offer and leverage the marketplace of Kogan.com, in the analyst's view. Also, there is considered a number of potential synergies across the merged group.

The target price is increased to $20.60 from $19.49. The rating is increased to Outperform from Neutral.

Target price is $20.60 Current Price is $17.35 Difference: $3.25
If KGN meets the Credit Suisse target it will return approximately 19% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 43.07 cents and EPS of 57.42 cents.
At the last closing share price the estimated dividend yield is 2.48%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.22.

Forecast for FY22:

Credit Suisse forecasts a full year FY22 dividend of 41.37 cents and EPS of 55.16 cents.
At the last closing share price the estimated dividend yield is 2.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.45.

Market Sentiment: 0.5

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


UBS rates KGN as Neutral (3) -

Kogan.Com has acquired Mighty Ape, an Australian and New Zealand online retailer with a broad product mix and a loyal customer base. With the rationale of the deal including access to more than 690k customers along with synergies, UBS considers the acquisition sound.

While FY20 was soft with operating margins falling to circa 3%, Kogan expects about 44% sales growth in FY21 with margins of around 10%.

Earnings growth forecasts have been revised upwards by 6-10%. Neutral retained. Target rises to $18.80 from $18.00.

Target price is $18.80 Current Price is $17.35 Difference: $1.45
If KGN meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 40.00 cents and EPS of 53.00 cents.
At the last closing share price the estimated dividend yield is 2.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.74.

Forecast for FY22:

UBS forecasts a full year FY22 dividend of 42.00 cents and EPS of 57.00 cents.
At the last closing share price the estimated dividend yield is 2.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.44.

Market Sentiment: 0.5

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

MQG  MACQUARIE GROUP LIMITED

Wealth Management & Investments

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Overnight Price: $138.60

Citi rates MQG as Neutral (3) -

Armed with excess capital, Macquarie Group has bolstered its asset management division with the purchase of NYSE-listed asset and wealth manager, Waddell & Reed for US$1.7bn, Citi observes.

Once acquired, Macquarie plans to strip the excess cash of circa US$100m, sell down Waddell & Reed's investment securities and offload its wealth management division to LPL Financial for US$300m.

The broker upgrades its earnings forecasts for FY22-23 by circa 3%-5% with ongoing declines in the asset under management to be more than offset by the cost synergies.

Neutral rating retained with a target price of $125.

Target price is $125.00 Current Price is $138.60 Difference: minus $13.6 (current price is over target).
If MQG meets the Citi target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $137.83, suggesting downside of -2.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 365.00 cents and EPS of 576.60 cents.
At the last closing share price the estimated dividend yield is 2.63%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 616.0, implying annual growth of -22.1%.

Current consensus DPS estimate is 380.8, implying a prospective dividend yield of 2.7%.

Current consensus EPS estimate suggests the PER is 23.0.

Forecast for FY22:

Citi forecasts a full year FY22 dividend of 490.00 cents and EPS of 704.20 cents.
At the last closing share price the estimated dividend yield is 3.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.68.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 786.8, implying annual growth of 27.7%.

Current consensus DPS estimate is 544.3, implying a prospective dividend yield of 3.8%.

Current consensus EPS estimate suggests the PER is 18.0.

Market Sentiment: 0.4

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


Morgan Stanley rates MQG as Overweight (1) -

Macquarie Group is buying the asset manager business of Waddell & Reed for US$1.4bn. Morgan Stanley sees the deal as financially compelling but remains reserved on its strategic rationale.

The broker believes this may indicate the group is ready to deploy excess capital. The deal is expected to be circa 2.5-3.5% FY22E earnings accretive for the group, before any potential synergies.

The deal is expected to close by mid-2021.

Overweight rating and In-Line industry view maintained. Target is unchanged at $148.

Target price is $148.00 Current Price is $138.60 Difference: $9.4
If MQG meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $137.83, suggesting downside of -2.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Morgan Stanley forecasts a full year FY21 dividend of 370.00 cents and EPS of 615.00 cents.
At the last closing share price the estimated dividend yield is 2.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.54.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 616.0, implying annual growth of -22.1%.

Current consensus DPS estimate is 380.8, implying a prospective dividend yield of 2.7%.

Current consensus EPS estimate suggests the PER is 23.0.

Forecast for FY22:

Morgan Stanley forecasts a full year FY22 dividend of 555.00 cents and EPS of 781.00 cents.
At the last closing share price the estimated dividend yield is 4.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 786.8, implying annual growth of 27.7%.

Current consensus DPS estimate is 544.3, implying a prospective dividend yield of 3.8%.

Current consensus EPS estimate suggests the PER is 18.0.

Market Sentiment: 0.4

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


Morgans rates MQG as Add (1) -

Macquarie Group has announced the acquisition of Waddell & Reed Financial (WRF), a US-listed Asset Management (AM) and Wealth Management (WM) business.

Strategically the acquisition makes sense to Morgans, adding significant scale and AM diversity. The area of concern is considered WRF’s declining funds under management (FUM) profile over time, meaning the business will have to be reinvigorated.

The broker leaves the FY21 EPS forecast unchanged and lifts the FY22 EPS estimate by around 3%.

The Add rating is unchanged and the target price increased to $147 from $141.20, after the forecast earnings change and an increase in long-term growth assumptions.

Target price is $147.00 Current Price is $138.60 Difference: $8.4
If MQG meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $137.83, suggesting downside of -2.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 392.00 cents and EPS of 612.40 cents.
At the last closing share price the estimated dividend yield is 2.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 616.0, implying annual growth of -22.1%.

Current consensus DPS estimate is 380.8, implying a prospective dividend yield of 2.7%.

Current consensus EPS estimate suggests the PER is 23.0.

Forecast for FY22:

Morgans forecasts a full year FY22 dividend of 563.00 cents and EPS of 843.50 cents.
At the last closing share price the estimated dividend yield is 4.06%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.43.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 786.8, implying annual growth of 27.7%.

Current consensus DPS estimate is 544.3, implying a prospective dividend yield of 3.8%.

Current consensus EPS estimate suggests the PER is 18.0.

Market Sentiment: 0.4

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


Ord Minnett rates MQG as Accumulate (2) -

Macquarie Group has acquired the US-listed fund manager Waddell & Reed Financial for US$1.7bn or A$2.3bn. The group plans to retain the asset management business but on-sell the wealth management business to LPL Financial Holdings for US$300m along with excess net assets.

Ord Minnett notes the transaction will be earnings-accretive to Macquarie given deployment of US$650m of surplus capital, which stood at $9.4bn as at 30 September.

The broker believes investors are happy with the idea of the group deploying capital into the asset management segment since Macquarie Asset Management accounts for more than 40% of the group's divisional pre-tax profit.

Accumulate rating retained with a price target of $144.

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

Target price is $144.00 Current Price is $138.60 Difference: $5.4
If MQG meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $137.83, suggesting downside of -2.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 dividend of 385.00 cents and EPS of 625.00 cents.
At the last closing share price the estimated dividend yield is 2.78%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.18.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 616.0, implying annual growth of -22.1%.

Current consensus DPS estimate is 380.8, implying a prospective dividend yield of 2.7%.

Current consensus EPS estimate suggests the PER is 23.0.

Forecast for FY22:

Ord Minnett forecasts a full year FY22 dividend of 580.00 cents and EPS of 806.00 cents.
At the last closing share price the estimated dividend yield is 4.18%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 786.8, implying annual growth of 27.7%.

Current consensus DPS estimate is 544.3, implying a prospective dividend yield of 3.8%.

Current consensus EPS estimate suggests the PER is 18.0.

Market Sentiment: 0.4

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


UBS rates MQG as Neutral (3) -

Macquarie Group has acquired US-based asset manager Waddell & Reed for US$1.7bn. The group will also be selling Waddell & Reed Financial Services to LPL Financial Holdings.

UBS notes the acquisition will increase Macquarie's funds under management to circa $650bn from $556bn. The group believes the acquisition will increase its scale and diversification, and the tie-up with LPL may attract new flows. Synergy benefits are also anticipated.

The Neutral rating is unchanged with a target price of $135.

Target price is $135.00 Current Price is $138.60 Difference: minus $3.6 (current price is over target).
If MQG meets the UBS target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $137.83, suggesting downside of -2.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 380.00 cents and EPS of 620.00 cents.
At the last closing share price the estimated dividend yield is 2.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.35.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 616.0, implying annual growth of -22.1%.

Current consensus DPS estimate is 380.8, implying a prospective dividend yield of 2.7%.

Current consensus EPS estimate suggests the PER is 23.0.

Forecast for FY22:

UBS forecasts a full year FY22 dividend of 550.00 cents and EPS of 831.00 cents.
At the last closing share price the estimated dividend yield is 3.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.68.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 786.8, implying annual growth of 27.7%.

Current consensus DPS estimate is 544.3, implying a prospective dividend yield of 3.8%.

Current consensus EPS estimate suggests the PER is 18.0.

Market Sentiment: 0.4

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

MTS  METCASH LIMITED

Food, Beverages & Tobacco

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Overnight Price: $3.10

Citi rates MTS as Buy (1) -

Covid has been a tremendous earnings growth driver for housing-related retailers in 2020, observes Citi with the housing cycle expected to be a key tailwind over the next three years.

Rather than earnings normalising in 2021, Citi expects the net effect of the pandemic and housing to be a prolonged period of elevated earnings for housing-exposed retailers.

The broker prefers grocery and housing-related retailers for now and likes Metcash more than JB Hi-Fi ((JBH)) and Wesfarmers ((WES)).

Buy rating is retained. The target rises to $3.70 from $3.50.

Target price is $3.70 Current Price is $3.10 Difference: $0.6
If MTS meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $3.52, suggesting upside of 9.7% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 12.50 cents and EPS of 22.40 cents.
At the last closing share price the estimated dividend yield is 4.03%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.1, implying annual growth of N/A.

Current consensus DPS estimate is 12.7, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 15.2.

Forecast for FY22:

Citi forecasts a full year FY22 dividend of 15.00 cents and EPS of 21.10 cents.
At the last closing share price the estimated dividend yield is 4.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.69.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.6, implying annual growth of -2.4%.

Current consensus DPS estimate is 13.2, implying a prospective dividend yield of 4.1%.

Current consensus EPS estimate suggests the PER is 15.6.

Market Sentiment: 0.9

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

MYD  MYDEAL.COM.AU LIMITED

Retailing

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Overnight Price: $1.26

UPDATED

Morgans rates MYD as Add (1) -

Morgans highlights the recent strength of MyDeal.com.au's growth momentum has continued, with the November gross transaction value (GTV) up 192%.

The marketplace take-rate is in-line with the FY20 average and private label sales reached $1.2m in November ($14m run-rate), tracking ahead of the broker's expectation.

Having recently initiated coverage, Morgans sees the November data lends upside to the broker's current forecasts.

The Add rating and $1.70 target are unchanged at this stage. 

Target price is $1.70 Current Price is $1.26 Difference: $0.44
If MYD meets the Morgans target it will return approximately 35% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 1.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 105.00.

Market Sentiment: 1.0

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

QAN  QANTAS AIRWAYS LIMITED

Transportation & Logistics

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Overnight Price: $5.49

Citi rates QAN as Neutral (3) -

In its latest update, Qantas pointed towards an improving domestic outlook with capacity expected to improve to 68% in December and to about 80% in the third quarter, a far cry from the circa 30% seen recently, Citi comments. The optimism is based on the opening of state borders over the last few weeks.

Qantas gained a number of business customers from Virgin and expects its domestic market share of more than 70% to be maintained. No material international travel recovery is expected until July 2021.

The airline's expectation of reaching breakeven (on an operating income basis) in the first half has led the broker to adjust its near term estimates downwards, anticipating a slower domestic recovery. Longer-term forecasts remain intact.

Neutral (High Risk) rating retained. Target rises to $5.70 from $4.40.

Target price is $5.70 Current Price is $5.49 Difference: $0.21
If QAN meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.83, suggesting downside of -8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 52.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 10.40.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -45.5, implying annual growth of N/A.

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

Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY22:

Citi forecasts a full year FY22 dividend of 0.00 cents and EPS of 22.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.62.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 26.0, implying annual growth of N/A.

Current consensus DPS estimate is 1.8, implying a prospective dividend yield of 0.3%.

Current consensus EPS estimate suggests the PER is 20.4.

Market Sentiment: 0.3

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


UPDATED

Morgan Stanley rates QAN as Overweight (1) -

Liquidity declined to $3.6bn in November from $4.5bn in June. Qantas Airways expects to be net free cash flow positive by the second half of FY21. Net debt has increased to $5.9bn as at 30 November from $4.7bn on 30 June.

The airline has advised the first-half operating income is likely to break-even versus Morgan Stanley's expectation of circa $440m, implying a pre-tax loss of about -$1.1bn versus the broker's estimated -$690m.

Overweight rating is retained. Target is $4.90. Industry view: In-line.

Target price is $4.90 Current Price is $5.49 Difference: minus $0.59 (current price is over target).
If QAN meets the Morgan Stanley target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.83, suggesting downside of -8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Morgan Stanley forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 42.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 13.07.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -45.5, implying annual growth of N/A.

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

Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY22:

Morgan Stanley forecasts a full year FY22 dividend of 11.00 cents and EPS of 32.00 cents.
At the last closing share price the estimated dividend yield is 2.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.16.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 26.0, implying annual growth of N/A.

Current consensus DPS estimate is 1.8, implying a prospective dividend yield of 0.3%.

Current consensus EPS estimate suggests the PER is 20.4.

Market Sentiment: 0.3

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


Ord Minnett rates QAN as Hold (3) -

Qantas Airways' market update indicates domestic capacity recovering to 68% for December, up from 20% in the first quarter and 40% in the second quarter.

With net debt rising to $5.9bn by November-end from $4.7bn in June, and liquidity down to $3.6bn, the company will look to increase its debt facility limit by a further $500m in the short-term.

Ord Minnett notes domestic recovery is tracking ahead of its forecasts although the balance sheet appears to be slightly worse than expected.

Hold rating maintained. The target price rises to $5.20 from $4.20.

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

Target price is $5.20 Current Price is $5.49 Difference: minus $0.29 (current price is over target).
If QAN meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.83, suggesting downside of -8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 51.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 10.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -45.5, implying annual growth of N/A.

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

Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY22:

Ord Minnett forecasts a full year FY22 dividend of 0.00 cents and EPS of 10.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 54.90.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 26.0, implying annual growth of N/A.

Current consensus DPS estimate is 1.8, implying a prospective dividend yield of 0.3%.

Current consensus EPS estimate suggests the PER is 20.4.

Market Sentiment: 0.3

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

SEK  SEEK LIMITED

Jobs & Skilled Labour Services

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Overnight Price: $25.92

UBS rates SEK as Neutral (3) -

Seek's announcement in early November on phasing out job ad templates will help the company lift depth penetration, suggests UBS, and reminds the broker of the strategy followed by REA Group ((REA)) and Domain Holdings Australia ((DHG)).

The broker highlights circa 40%-45% of Seek's Australia and New Zealand job ads are on StandOut, currently priced at about $65 per ad. Every additional 10% of standout penetration could be worth circa $10m of job revenues every year, calculates UBS.

Neutral rating is retained with a target of $26.

Target price is $26.00 Current Price is $25.92 Difference: $0.08
If SEK meets the UBS target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $23.67, suggesting downside of -8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 0.00 cents and EPS of 19.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 136.42.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.8, implying annual growth of N/A.

Current consensus DPS estimate is 5.8, implying a prospective dividend yield of 0.2%.

Current consensus EPS estimate suggests the PER is 138.0.

Forecast for FY22:

UBS forecasts a full year FY22 dividend of 19.00 cents and EPS of 36.00 cents.
At the last closing share price the estimated dividend yield is 0.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 72.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 41.9, implying annual growth of 122.9%.

Current consensus DPS estimate is 26.4, implying a prospective dividend yield of 1.0%.

Current consensus EPS estimate suggests the PER is 61.9.

Market Sentiment: 0.3

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

SXY  SENEX ENERGY LIMITED

Crude Oil

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Overnight Price: $0.34

UPDATED

Macquarie rates SXY as Outperform (1) -

Following the announced divestment of the company’s Cooper Basin business and upgraded Surat CSG growth targets, Macquarie updates forecasts.

The broker was impressed with the $87.5m price achieved for divestment (25% above Macquarie's valuation). Importantly, it's considered this transaction will enable Senex Energy to accelerate the Surat CSG development.

The company has outlined a plan to triple Surat CSG production by FY23. The analyst considers the company will be able to lock-in more contracts as the East Coast market tightens (and contract prices rise), prior to future drilling campaigns.

Macquarie raises FY21-23 EPS estimates by 38%, 20% and 40%,respectively, which raises the target price to $0.45 from $0.42.

The Outperform rating is maintained.

Target price is $0.45 Current Price is $0.34 Difference: $0.11
If SXY meets the Macquarie target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $0.43, suggesting upside of 27.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Macquarie forecasts a full year FY21 dividend of 0.00 cents and EPS of 1.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 0.6, implying annual growth of N/A.

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

Current consensus EPS estimate suggests the PER is 56.7.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 0.30 cents and EPS of 4.50 cents.
At the last closing share price the estimated dividend yield is 0.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.56.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 2.9, implying annual growth of 383.3%.

Current consensus DPS estimate is 0.2, implying a prospective dividend yield of 0.6%.

Current consensus EPS estimate suggests the PER is 11.7.

Market Sentiment: 0.8

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

SYD  SYDNEY AIRPORT HOLDINGS LIMITED

Infrastructure & Utilities

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Overnight Price: $6.70

UPDATED

Macquarie rates SYD as Neutral (3) -

Macquarie considers the quarterly statement for Qantas Airways ((QAN)) is encouraging for a domestic travel rebound for Sydney Airport in FY21.

The arline indicated capacity is at 70% of pre covid-19 levels and should manage 80% in the first quarter 2021. Qantas also indicated leisure and visiting friends and relatives (VFR) bookings are bouncing back to pre-covid levels.

The broker cautions domestic has lower leverage than international to the recovery at around 30% of earnings (EBITDA), as terminal fees and retail are materially lower. International recovery is considered likely to be a second half 2021 opportunity.

The Neutral rating and $7.09 target are unchanged.

Target price is $7.09 Current Price is $6.70 Difference: $0.39
If SYD meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $6.08, suggesting downside of -8.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Macquarie forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 9.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 72.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -7.5, implying annual growth of N/A.

Current consensus DPS estimate is 1.0, implying a prospective dividend yield of 0.2%.

Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY21:

Macquarie forecasts a full year FY21 dividend of 16.00 cents and EPS of 4.80 cents.
At the last closing share price the estimated dividend yield is 2.39%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 139.58.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 2.1, implying annual growth of N/A.

Current consensus DPS estimate is 13.0, implying a prospective dividend yield of 2.0%.

Current consensus EPS estimate suggests the PER is 317.1.

Market Sentiment: 0.1

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

WBC  WESTPAC BANKING CORPORATION

Banks

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Overnight Price: $20.20

Morgan Stanley rates WBC as Overweight (1) -

Westpac Bank and APRA have agreed to a court enforceable undertaking (CEU) that requires the bank to develop an integrated plan for all of its risk governance remediation programs and assign accountabilities for delivery of the plan.

This comes one year after AUSTRAC first launched civil action against the bank and APRA announced a program to review Westpac's risk governance. APRA concluded the bank has failed to deliver the expected improvements in risk governance.

Morgan Stanley believes the CEU will add to Westpac's expenses in FY21.

Overweight rating and target of $20.40 are unchanged. Industry view: In-line.

Target price is $20.40 Current Price is $20.20 Difference: $0.2
If WBC meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $21.39, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Morgan Stanley forecasts a full year FY21 dividend of 90.00 cents and EPS of 131.00 cents.
At the last closing share price the estimated dividend yield is 4.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.42.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 147.5, implying annual growth of 103.4%.

Current consensus DPS estimate is 85.6, implying a prospective dividend yield of 4.2%.

Current consensus EPS estimate suggests the PER is 13.8.

Forecast for FY22:

Morgan Stanley forecasts a full year FY22 dividend of 105.00 cents and EPS of 159.00 cents.
At the last closing share price the estimated dividend yield is 5.20%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 158.0, implying annual growth of 7.1%.

Current consensus DPS estimate is 112.0, implying a prospective dividend yield of 5.5%.

Current consensus EPS estimate suggests the PER is 12.9.

Market Sentiment: 0.9

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


Ord Minnett rates WBC as Hold (3) -

Westpac Banking Corporation has agreed to a court enforceable undertaking (CEU) with the Australian Prudential Regulation Authority (APRA) and has pledged to lift its efforts to address risk governance deficiencies.

This comes as a response to concerns from APRA about the progress made by the bank in remediating its risk management practices and structures. Westpac’s undertakings include the development of an integrated risk management plan with independent third-party assurance on implementation.

In Ord Minnett’s view, the undertaking is likely to involve higher and more immediate costs for the bank. The broker also believes other banks will see capital normalisation in a more timely fashion than Westpac.

Hold recommendation is retained with a $20.20 target price.

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

Target price is $20.20 Current Price is $20.20 Difference: $0
If WBC meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $21.39, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 dividend of 90.00 cents and EPS of 136.00 cents.
At the last closing share price the estimated dividend yield is 4.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 147.5, implying annual growth of 103.4%.

Current consensus DPS estimate is 85.6, implying a prospective dividend yield of 4.2%.

Current consensus EPS estimate suggests the PER is 13.8.

Forecast for FY22:

Ord Minnett forecasts a full year FY22 dividend of 110.00 cents and EPS of 153.00 cents.
At the last closing share price the estimated dividend yield is 5.45%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 158.0, implying annual growth of 7.1%.

Current consensus DPS estimate is 112.0, implying a prospective dividend yield of 5.5%.

Current consensus EPS estimate suggests the PER is 12.9.

Market Sentiment: 0.9

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


UBS rates WBC as Buy (1) -

Australian Prudential Regulation Authority (APRA) has voiced its concerns with respect to Westpac Bank's progress in dealing with risk governance-related issues.

The regulator finds the bank's measures are not far-reaching enough to effectively address the gaps in risk governance, with the bank failing to deliver the expected risk governance improvements despite almost two years of remediation.

UBS is disappointed and notes the issues are having a detrimental impact on the bank's returns with costs rising 6% in FY20 as spend on risk and compliance continues to accelerate.

While Westpac has flagged a three-year plan to address its cost base, the broker believes the bank will find it challenging to substantially reduce its cost base while addressing its risk and compliance deficiencies without compromising spend on technology.

Buy rating is maintained with a target price of $22.

Target price is $22.00 Current Price is $20.20 Difference: $1.8
If WBC meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $21.39, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 100.00 cents and EPS of 133.00 cents.
At the last closing share price the estimated dividend yield is 4.95%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.19.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 147.5, implying annual growth of 103.4%.

Current consensus DPS estimate is 85.6, implying a prospective dividend yield of 4.2%.

Current consensus EPS estimate suggests the PER is 13.8.

Forecast for FY22:

UBS forecasts a full year FY22 dividend of 120.00 cents and EPS of 139.00 cents.
At the last closing share price the estimated dividend yield is 5.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.53.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 158.0, implying annual growth of 7.1%.

Current consensus DPS estimate is 112.0, implying a prospective dividend yield of 5.5%.

Current consensus EPS estimate suggests the PER is 12.9.

Market Sentiment: 0.9

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

WES  WESFARMERS LIMITED

Apparel & Footwear

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Overnight Price: $49.76

UPDATED

Citi rates WES as Sell (5) -

Covid has been a tremendous earnings growth driver for housing-related retailers in 2020, observes Citi, with the housing cycle expected to be a key tailwind over the next three years.

Rather than earnings normalising in 2021, Citi expects the net effect of the pandemic and housing to be a prolonged period of elevated earnings for housing-exposed retailers. Given the non-housing exposure, Citi's estimates are about 3% ahead of consensus for Wesfarmers.

Citi has a strong preference for grocery and housing-related retailers currently and prefers Harvey Norman Holdings ((HVN)) and Metcash ((MTS)) over Wesfarmers ((WES)).

Sell rating retained. Target rises to $44 from $43.

Target price is $44.00 Current Price is $49.76 Difference: minus $5.76 (current price is over target).
If WES meets the Citi target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $47.14, suggesting downside of -4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 176.00 cents and EPS of 197.70 cents.
At the last closing share price the estimated dividend yield is 3.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.17.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 181.3, implying annual growth of 26.4%.

Current consensus DPS estimate is 161.0, implying a prospective dividend yield of 3.3%.

Current consensus EPS estimate suggests the PER is 27.3.

Forecast for FY22:

Citi forecasts a full year FY22 dividend of 172.00 cents and EPS of 191.60 cents.
At the last closing share price the estimated dividend yield is 3.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.97.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 185.5, implying annual growth of 2.3%.

Current consensus DPS estimate is 163.3, implying a prospective dividend yield of 3.3%.

Current consensus EPS estimate suggests the PER is 26.7.

Market Sentiment: -0.1

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
AQZ Alliance Aviation $3.90 Credit Suisse 4.15 4.05 2.47%
Morgans 4.40 4.00 10.00%
ARF Arena Reit $2.87 Macquarie 2.98 2.86 4.20%
Morgan Stanley 2.75 2.68 2.61%
HVN Harvey Norman Holdings $4.66 Citi 5.50 5.20 5.77%
JBH JB Hi-Fi $45.00 Citi 50.00 49.30 1.42%
KGN Kogan.Com $17.31 Credit Suisse 20.60 19.49 5.70%
UBS 18.80 18.00 4.44%
MQG Macquarie Group $141.82 Morgans 147.00 141.20 4.11%
MTS Metcash $3.21 Citi 3.70 3.50 5.71%
QAN Qantas Airways $5.30 Citi 5.70 4.40 29.55%
Ord Minnett 5.20 4.20 23.81%
SXY Senex Energy $0.34 Macquarie 0.45 0.42 7.14%
WBC Westpac Banking $20.31 UBS 22.00 20.50 7.32%
WES Wesfarmers $49.44 Citi 44.00 43.00 2.33%
Summaries
APT Afterpay Sell - UBS Overnight Price $96.20
AQZ Alliance Aviation Outperform - Credit Suisse Overnight Price $3.78
Add - Morgans Overnight Price $3.78
ARF Arena Reit Outperform - Macquarie Overnight Price $2.87
Overweight - Morgan Stanley Overnight Price $2.87
COE Cooper Energy Initiation of coverage with Equal-weight - Morgan Stanley Overnight Price $0.38
CSL CSL Buy - UBS Overnight Price $294.13
ELD Elders Buy - Citi Overnight Price $10.44
FLT Flight Centre Neutral - Macquarie Overnight Price $17.47
HLS Healius Outperform - Credit Suisse Overnight Price $3.63
HVN Harvey Norman Holdings Buy - Citi Overnight Price $4.73
JBH JB Hi-Fi Neutral - Citi Overnight Price $45.59
KGN Kogan.Com Upgrade to Outperform from Neutral - Credit Suisse Overnight Price $17.35
Neutral - UBS Overnight Price $17.35
MQG Macquarie Group Neutral - Citi Overnight Price $138.60
Overweight - Morgan Stanley Overnight Price $138.60
Add - Morgans Overnight Price $138.60
Accumulate - Ord Minnett Overnight Price $138.60
Neutral - UBS Overnight Price $138.60
MTS Metcash Buy - Citi Overnight Price $3.10
MYD MYDEAL.COM.AU Add - Morgans Overnight Price $1.26
QAN Qantas Airways Neutral - Citi Overnight Price $5.49
Overweight - Morgan Stanley Overnight Price $5.49
Hold - Ord Minnett Overnight Price $5.49
SEK Seek Ltd Neutral - UBS Overnight Price $25.92
SXY Senex Energy Outperform - Macquarie Overnight Price $0.34
SYD Sydney Airport Neutral - Macquarie Overnight Price $6.70
WBC Westpac Banking Overweight - Morgan Stanley Overnight Price $20.20
Hold - Ord Minnett Overnight Price $20.20
Buy - UBS Overnight Price $20.20
WES Wesfarmers Sell - Citi Overnight Price $49.76
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

17

2. Accumulate

1

3. Hold

11

5. Sell

2

Friday 04 December 2020

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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.