Australian Broker Call
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March 21, 2018
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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: 11:24 AM
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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.
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Overnight Price: $1.72
Citi rates AST as Sell (5) -
The company is taking part in a small Australia Energy Regulator trial to allow a group of customers to collectively bargain on tariffs. While at first glance this appears negative Citi envisages two advantages offsetting any revenue risk.
The first is reduced regulatory risk, given the company will be driving more affordable outcomes for consumers, and the second is building trust with the consumer.
Sell rating retained. Target is $1.54.
Target price is $1.54 Current Price is $1.72 Difference: minus $0.18 (current price is over target).
If AST 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 $1.75, suggesting upside of 1.7% (ex-dividends)
The company's fiscal year ends in March.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 9.30 cents and EPS of 8.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 7.8, implying annual growth of 9.1%. Current consensus DPS estimate is 9.3, implying a prospective dividend yield of 5.4%. Current consensus EPS estimate suggests the PER is 22.1. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 9.50 cents and EPS of 6.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.6, implying annual growth of -15.4%. Current consensus DPS estimate is 9.4, implying a prospective dividend yield of 5.5%. Current consensus EPS estimate suggests the PER is 26.1. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates AST as Outperform (1) -
The company has briefed investors on the opportunities and strategic direction. Macquarie observes regulated businesses present opportunities in transmissions, with around 1.8GW of committed renewable projects.
The broker notes RAB growth may have slowed but this is being replaced by contract growth in transmissions over the next 3-4 years. Network evolution through batteries will provide another source of growth in the medium term. Outperform maintained. Target is $1.91.
Target price is $1.91 Current Price is $1.72 Difference: $0.19
If AST meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $1.75, suggesting upside of 1.7% (ex-dividends)
The company's fiscal year ends in March.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 9.30 cents and EPS of 7.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 7.8, implying annual growth of 9.1%. Current consensus DPS estimate is 9.3, implying a prospective dividend yield of 5.4%. Current consensus EPS estimate suggests the PER is 22.1. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 9.40 cents and EPS of 6.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.6, implying annual growth of -15.4%. Current consensus DPS estimate is 9.4, implying a prospective dividend yield of 5.5%. Current consensus EPS estimate suggests the PER is 26.1. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $15.60
Morgan Stanley rates BSL as Re-instate Coverage with Overweight (1) -
Global steel trends are providing a favourable backdrop for the company and Morgan Stanley believes this will provide support for earnings and meaningful cash flow, giving rise to further capital management.
Supply reforms in China have meant that capacity has been removed from the market and this improves the supply and demand dynamics. The broker believes it is too early to form a definitive view on whether product that was previously exported to the US is displaced and there is an increase in exports to either Australia directly or the east Asian markets.
The broker re-instates coverage with an Overweight rating. Industry view is Cautious. Target is $20.
Target price is $20.00 Current Price is $15.60 Difference: $4.4
If BSL meets the Morgan Stanley target it will return approximately 28% (excluding dividends, fees and charges).
Current consensus price target is $18.04, suggesting upside of 15.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 13.00 cents and EPS of 146.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 143.8, implying annual growth of 14.8%. Current consensus DPS estimate is 12.9, implying a prospective dividend yield of 0.8%. Current consensus EPS estimate suggests the PER is 10.8. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 13.00 cents and EPS of 168.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 155.7, implying annual growth of 8.3%. Current consensus DPS estimate is 14.1, implying a prospective dividend yield of 0.9%. Current consensus EPS estimate suggests the PER is 10.0. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.53
Morgans rates CGR as Add (1) -
The company recently raised $13m in equity and the proceeds will be used to strengthen the balance sheet post the acquisition of Thorn Trade and Debtor Finance. Morgans calculates, post settlement, the capital base supports an invoice loan book of $170-250m.
This should provide the company with meaningful scale benefits. The broker maintains an Add rating and raises the target to $0.63 from $0.60.
Target price is $0.63 Current Price is $0.53 Difference: $0.1
If CGR meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 1.50 cents and EPS of 3.00 cents. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 2.50 cents and EPS of 4.80 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
ING INGHAMS GROUP LIMITED
Food, Beverages & Tobacco
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Overnight Price: $3.51
Citi rates ING as Neutral (3) -
Citi finds the pricing outlook for Ingham's encouraging, as price rises of 1.5-2.5% were transmitted smoothly in January via the supermarkets and this suggests a more rational industry.
The main risk is the potential shift in product mix, which can disrupt production costs. Neutral rating and $3.60 target maintained.
Target price is $3.60 Current Price is $3.51 Difference: $0.09
If ING meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $3.88, suggesting upside of 10.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 20.00 cents and EPS of 28.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.5, implying annual growth of 74.2%. Current consensus DPS estimate is 19.7, implying a prospective dividend yield of 5.6%. Current consensus EPS estimate suggests the PER is 11.9. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 21.00 cents and EPS of 29.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.1, implying annual growth of 5.4%. Current consensus DPS estimate is 21.2, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 11.3. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
KDR KIDMAN RESOURCES LIMITED
New Battery Elements
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Overnight Price: $2.29
Ord Minnett rates KDR as Buy (1) -
The company has announced a 54% increase in the mineral resource estimate at the Earl Grey lithium deposit. Importantly, 91% of the resource is in the measured and indicated categories. Ord Minnett increases mine life assumptions to 30 years, which consumes only one third of the resource.
Speculative Buy rating maintained and the target is lifted to $2.80 from $2.50.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $2.80 Current Price is $2.29 Difference: $0.51
If KDR meets the Ord Minnett target it will return approximately 22% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 1.00 cents. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 2.00 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
KMD KATHMANDU HOLDINGS LIMITED
Sports & Recreation
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Overnight Price: $2.22
Credit Suisse rates KMD as Neutral (3) -
First half results were in line with Credit Suisse. The company has announced the acquisition of US-based Oboz Footwear for NZ$107.1m. The transaction will be funded through a combination of debt and a placement.
Credit Suisse upgrades underlying net profit estimates by 12.1% for FY18. Neutral rating maintained. Target rises to NZ$2.35 from NZ$2.15.
Current Price is $2.22. Target price not assessed.
Current consensus price target is $2.47, suggesting upside of 11.0% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 12.00 cents and EPS of 19.38 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 19.6, implying annual growth of N/A. Current consensus DPS estimate is 12.7, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 11.3. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 12.46 cents and EPS of 20.76 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.1, implying annual growth of 7.7%. Current consensus DPS estimate is 13.7, implying a prospective dividend yield of 6.2%. Current consensus EPS estimate suggests the PER is 10.5. |
This company reports in NZD. 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
Deutsche Bank rates KMD as Buy (1) -
The financials had been pre-released but they still seem to have come out slightly better than Deutsche Bank's numbers. Of more importance is the trading update for the 6 weeks to 11 March 2018, suggesting strong sales momentum.
Deutsche Bank welcomes the acquisition of Oboz Footwear, suggesting 3% upside for FY19, and considers Kathmandu as performing well inside a sector that currently has positive momentum.
Buy rating retained. Target lifts to NZ$2.70 from NZ$2.65.
Current Price is $2.22. Target price not assessed.
Current consensus price target is $2.47, suggesting upside of 11.0% (ex-dividends)
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 12.00 cents and EPS of 19.38 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 19.6, implying annual growth of N/A. Current consensus DPS estimate is 12.7, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 11.3. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 12.92 cents and EPS of 21.23 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.1, implying annual growth of 7.7%. Current consensus DPS estimate is 13.7, implying a prospective dividend yield of 6.2%. Current consensus EPS estimate suggests the PER is 10.5. |
This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates KMD as Outperform (1) -
First half results were in line with forecasts. Macquarie observes the second half trading update is positive, reflecting improved sales momentum through the end of the Christmas trading period and into February and March. FY18 and FY19 earnings estimates are raised by 6.2% and 8.6% respectively.
The company has also announced the acquisition of US-based Oboz Footwear. Consideration is NZ$107.1m. Outperform rating maintained. Target is raised to $2.78 from $2.47.
Target price is $2.78 Current Price is $2.22 Difference: $0.56
If KMD meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges).
Current consensus price target is $2.47, suggesting upside of 11.0% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 13.01 cents and EPS of 19.75 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 19.6, implying annual growth of N/A. Current consensus DPS estimate is 12.7, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 11.3. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 14.49 cents and EPS of 20.67 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.1, implying annual growth of 7.7%. Current consensus DPS estimate is 13.7, implying a prospective dividend yield of 6.2%. Current consensus EPS estimate suggests the PER is 10.5. |
This company reports in NZD. 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
Morgan Stanley rates KMD as Equal-weight (3) -
First half net profit was in line with the recent trading update, Morgan Stanley observes.
The company has announced the acquisition of US-based Oboz Footwear, which operates a wholesale-only model. The deal is expected to be accretive in mid single digits.
The broker retains an Equal-weight rating. Target is $2.15. Industry view is In-Line.
Target price is $2.15 Current Price is $2.22 Difference: minus $0.07 (current price is over target).
If KMD meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $2.47, suggesting upside of 11.0% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 13.60 cents and EPS of 19.69 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 19.6, implying annual growth of N/A. Current consensus DPS estimate is 12.7, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 11.3. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 14.81 cents and EPS of 21.56 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.1, implying annual growth of 7.7%. Current consensus DPS estimate is 13.7, implying a prospective dividend yield of 6.2%. Current consensus EPS estimate suggests the PER is 10.5. |
This company reports in NZD. 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
Overnight Price: $29.42
Morgan Stanley rates NAB as Underweight (5) -
Upon further analysis, Morgan Stanley believes management can deliver on its cost targets while keeping loan loss rates below peers in Australia. However, the analysts also see earnings risks and this leads to the conclusion that "too much optimism" is surrounding the share price.
Morgan Stanley believes the pay out ratio is likely heading higher in the years ahead, even with NAB likely to keep the dividend unchanged. An elevated pay out ratio increases the chance for an eventual dividend cut.
Underweight rating retained. Price target has lifted to $28.20 from $27.70. The broker's base line assumption is that shareholders will receive 198c in dividends for as long as the eye can see.
Target price is $28.20 Current Price is $29.42 Difference: minus $1.22 (current price is over target).
If NAB 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 $31.68, suggesting upside of 7.7% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 198.00 cents and EPS of 222.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 226.1, implying annual growth of -0.9%. Current consensus DPS estimate is 198.0, implying a prospective dividend yield of 6.7%. Current consensus EPS estimate suggests the PER is 13.0. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 198.00 cents and EPS of 237.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 242.3, implying annual growth of 7.2%. Current consensus DPS estimate is 194.1, implying a prospective dividend yield of 6.6%. Current consensus EPS estimate suggests the PER is 12.1. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $2.11
Credit Suisse rates NHC as Neutral (3) -
First half results were weaker than Credit Suisse expected, primarily because of lower realised pricing at Bengalla. Cash generation was strong.
The catalyst remains the stage 3 approval of Acland and, in the interim, the company continues to work on the extension at stage 2. Credit Suisse makes earnings changes related to pricing adjustments and modelling of Bengalla. Neutral rating and $2.25 target maintained.
Target price is $2.25 Current Price is $2.11 Difference: $0.14
If NHC meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $2.49, suggesting upside of 18.2% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 11.00 cents and EPS of 26.47 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.5, implying annual growth of 74.6%. Current consensus DPS estimate is 15.0, implying a prospective dividend yield of 7.1%. Current consensus EPS estimate suggests the PER is 7.2. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 10.00 cents and EPS of 26.05 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.7, implying annual growth of -2.7%. Current consensus DPS estimate is 15.8, implying a prospective dividend yield of 7.5%. Current consensus EPS estimate suggests the PER is 7.4. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates NHC as Hold (3) -
First half cash flow and dividends were a positive surprise to Morgans. Regardless of the focus on the judicial review and the risk that the Acland operations wind down beyond FY20, the broker expects the company to enjoy solid cash flow and significant growth options.
Hold rating maintained. Target is raised to $2.23 from $2.21.
Target price is $2.23 Current Price is $2.11 Difference: $0.12
If NHC meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $2.49, suggesting upside of 18.2% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 13.00 cents and EPS of 28.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.5, implying annual growth of 74.6%. Current consensus DPS estimate is 15.0, implying a prospective dividend yield of 7.1%. Current consensus EPS estimate suggests the PER is 7.2. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 11.00 cents and EPS of 22.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.7, implying annual growth of -2.7%. Current consensus DPS estimate is 15.8, implying a prospective dividend yield of 7.5%. Current consensus EPS estimate suggests the PER is 7.4. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $7.22
Macquarie rates OSH as Outperform (1) -
Macquarie has become more confident about the re-start in PNG after a site trip following the earthquake. PNG LNG is expected to recommence in the first week of May. Management will update 2018 guidance at the first quarter result.
The broker believes Oil Search is unlikely to require a capital raising for its expansion projects. Outperform maintained. Target is $8.10.
Target price is $8.10 Current Price is $7.22 Difference: $0.88
If OSH meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $8.16, suggesting upside of 13.0% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 9.95 cents and EPS of 20.55 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 32.5, implying annual growth of N/A. Current consensus DPS estimate is 13.5, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 22.2. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 8.92 cents and EPS of 18.36 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 33.4, implying annual growth of 2.8%. Current consensus DPS estimate is 14.8, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 21.6. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $76.31
Citi rates RIO as Buy (1) -
The company will sell its 82% interest in Hail Creek mine to Glencore as well as a 71.2% interest in the undeveloped Valeria project for US$1.7bn.
Citi observes this is another step in the company's plans to divest its entire coal portfolio. After this transaction the Kestrel mine remains, which is expected to be sold in due course.
Target price is $82. Buy.
Target price is $82.00 Current Price is $76.31 Difference: $5.69
If RIO meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $82.66, suggesting upside of 8.3% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 398.14 cents and EPS of 666.75 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 632.2, implying annual growth of N/A. Current consensus DPS estimate is 373.4, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 12.1. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 363.24 cents and EPS of 607.68 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 597.7, implying annual growth of -5.5%. Current consensus DPS estimate is 359.8, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 12.8. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates RIO as Outperform (1) -
The company has announced a binding agreement for the sale to Glencore of its 82% interest in the Hail Creek operating mine and a 71.2% interest in the Valeria development for US$1.7bn.
Macquarie observes this deal continues the company's recent track record of achieving solid results from asset sales. The broker expects the board will wait until a further agreement is reached on the divestment of Kestrel before announcing plans to return capital to shareholders.
Outperform rating and $94 target maintained.
Target price is $94.00 Current Price is $76.31 Difference: $17.69
If RIO meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $82.66, suggesting upside of 8.3% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 398.14 cents and EPS of 671.15 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 632.2, implying annual growth of N/A. Current consensus DPS estimate is 373.4, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 12.1. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 358.07 cents and EPS of 597.73 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 597.7, implying annual growth of -5.5%. Current consensus DPS estimate is 359.8, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 12.8. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $4.43
Macquarie rates TAH as Outperform (1) -
Macquarie remains relaxed about the longer-term profitability of the Australian wagering industry, despite the current headwinds and the potential for an unprofitable period for corporate bookmakers.
Tabcorp's recent share price decline now suggests its wagering business is trading at a significant discount to the recent William Hill transaction, despite the attractive growth outlook.
Outperform maintained. Target is reduced to $5.13 from $5.60.
Target price is $5.13 Current Price is $4.43 Difference: $0.7
If TAH meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $5.26, suggesting upside of 18.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 20.00 cents and EPS of 17.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 16.3, implying annual growth of N/A. Current consensus DPS estimate is 20.7, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 27.2. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 20.50 cents and EPS of 20.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.5, implying annual growth of 31.9%. Current consensus DPS estimate is 22.1, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 20.6. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $5.85
Citi rates TPM as Sell (5) -
The company has upgraded FY18 guidance, enabled by the temporary delay in the NBN roll out and reduced overheads. Citi believes this boosts current earnings at the expense of future profit. Yet, given the poor margin outlook for the NBN this is considered to be the right choice as it will help fund the mobile network.
The broker suggests the balance sheet will become stretched and, if spectrum auctions are highly competitive, the company may be forced to raise more capital.
Sell rating and $5.20 target maintained.
Target price is $5.20 Current Price is $5.85 Difference: minus $0.65 (current price is over target).
If TPM meets the Citi target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $5.68, suggesting downside of -2.9% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 4.30 cents and EPS of 43.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 43.7, implying annual growth of -8.8%. Current consensus DPS estimate is 4.1, implying a prospective dividend yield of 0.7%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 6.30 cents and EPS of 31.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.4, implying annual growth of -30.4%. Current consensus DPS estimate is 4.5, implying a prospective dividend yield of 0.8%. Current consensus EPS estimate suggests the PER is 19.2. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates TPM as Underperform (5) -
First half results were slightly ahead of forecasts. The company has raised FY18 guidance by 2-3% to a range of $820-830m. Credit Suisse calculates this is mainly a result of fewer customers moving to the NBN this year because of the delays in the roll out.
The broker calculates that the company's market share in broadband reduced to -24.3% at the end of 2017, reflecting ongoing intense competition.
Underperform retained. Target is $4.55.
Target price is $4.55 Current Price is $5.85 Difference: minus $1.3 (current price is over target).
If TPM meets the Credit Suisse target it will return approximately minus 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $5.68, suggesting downside of -2.9% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 4.00 cents and EPS of 43.62 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 43.7, implying annual growth of -8.8%. Current consensus DPS estimate is 4.1, implying a prospective dividend yield of 0.7%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 4.00 cents and EPS of 24.92 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.4, implying annual growth of -30.4%. Current consensus DPS estimate is 4.5, implying a prospective dividend yield of 0.8%. Current consensus EPS estimate suggests the PER is 19.2. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates TPM as Hold (3) -
Lots of changes post the interim results release with Deutsche Bank lifting FY18 EPS estimate by 24%, FY19 by 8%, but reducing FY20 by -13% and FY21 by -20%.
In essence, earnings headwinds from the NBN migration have been pushed into outer year forecasts, in line with management's approach which allowed the company to slightly upgrade its guidance.
Deutsche Bank maintains the earnings growth profile, post the present year, looks challenging. Valuation has increased by 10c to $5.90. Hold rating retained.
Target price is $5.90 Current Price is $5.85 Difference: $0.05
If TPM meets the Deutsche Bank target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $5.68, suggesting downside of -2.9% (ex-dividends)
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 4.00 cents and EPS of 46.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 43.7, implying annual growth of -8.8%. Current consensus DPS estimate is 4.1, implying a prospective dividend yield of 0.7%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY19:
Deutsche Bank forecasts a full year FY19 dividend of 4.00 cents and EPS of 27.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.4, implying annual growth of -30.4%. Current consensus DPS estimate is 4.5, implying a prospective dividend yield of 0.8%. Current consensus EPS estimate suggests the PER is 19.2. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates TPM as Neutral (3) -
Macquarie found subscriber trends disappointing in the first half results, although efficiency gains provided a financial offset.
The broker observes positive progress on the mobile roll out, but retains the view that investors are unlikely to price in material upside from mobile strategies in the near term. Neutral rating maintained. Target is $6.50.
Target price is $6.50 Current Price is $5.85 Difference: $0.65
If TPM meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $5.68, suggesting downside of -2.9% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 4.00 cents and EPS of 43.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 43.7, implying annual growth of -8.8%. Current consensus DPS estimate is 4.1, implying a prospective dividend yield of 0.7%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 4.00 cents and EPS of 34.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.4, implying annual growth of -30.4%. Current consensus DPS estimate is 4.5, implying a prospective dividend yield of 0.8%. Current consensus EPS estimate suggests the PER is 19.2. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates TPM as Overweight (1) -
First half results modestly beat Morgan Stanley's estimates. FY18 underlying operating earnings guidance is increased to $825-830m. Capital expenditure for existing operations is unchanged.
Morgan Stanley expects the shares to trade higher on the result. Overweight rating and In-Line industry view. Target is $7.
Target price is $7.00 Current Price is $5.85 Difference: $1.15
If TPM meets the Morgan Stanley target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $5.68, suggesting downside of -2.9% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 4.10 cents and EPS of 41.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 43.7, implying annual growth of -8.8%. Current consensus DPS estimate is 4.1, implying a prospective dividend yield of 0.7%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 EPS of 32.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.4, implying annual growth of -30.4%. Current consensus DPS estimate is 4.5, implying a prospective dividend yield of 0.8%. Current consensus EPS estimate suggests the PER is 19.2. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates TPM as Hold (3) -
First half results were in line with expectations. Morgans upgrades FY18 operating earnings estimates by 1.5% and downgrades FY19 by -0.3%.
The company is on track and fully committed to its Singapore and Australian mobile roll out. Morgans considers this a medium-term upside opportunity but believes the outlook at present remains challenging.
Hold rating maintained. Target is reduced to $5.74 from $5.95.
Target price is $5.74 Current Price is $5.85 Difference: minus $0.11 (current price is over target).
If TPM meets the Morgans target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $5.68, suggesting downside of -2.9% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 4.00 cents and EPS of 46.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 43.7, implying annual growth of -8.8%. Current consensus DPS estimate is 4.1, implying a prospective dividend yield of 0.7%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 4.00 cents and EPS of 33.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.4, implying annual growth of -30.4%. Current consensus DPS estimate is 4.5, implying a prospective dividend yield of 0.8%. Current consensus EPS estimate suggests the PER is 19.2. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates TPM as Lighten (4) -
First half underlying operating earnings were better than Ord Minnett estimated. While margins were encouraging, albeit helped by the migration delay to the NBN, broadband subscriber metrics disappointed the broker.
Ord Minnett maintains a long-term margin estimate of 20% for the consumer segment once the NBN migration is complete. The broker lowers future growth estimates.
Lighten rating and target raised $5.25 from $4.90.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $5.25 Current Price is $5.85 Difference: minus $0.6 (current price is over target).
If TPM meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $5.68, suggesting downside of -2.9% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 4.00 cents and EPS of 41.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 43.7, implying annual growth of -8.8%. Current consensus DPS estimate is 4.1, implying a prospective dividend yield of 0.7%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 4.00 cents and EPS of 29.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.4, implying annual growth of -30.4%. Current consensus DPS estimate is 4.5, implying a prospective dividend yield of 0.8%. Current consensus EPS estimate suggests the PER is 19.2. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates TPM as Sell (5) -
UBS found the first half results strong from a financial perspective. The company has upgraded FY18 guidance by 2.5% on the back of a slowing in the rate of the NBN roll out. While making commensurate upgrades to its forecasts the broker emphasises the migration lag is not a permanent benefit to TPG.
Operationally, the broker considers the consumer results soft. Broadband subscribers fell by -8,000, the first time this has occurred at group level.
UBS maintains a Sell rating and reduces the target to $5.30 from $6.00.
Target price is $5.30 Current Price is $5.85 Difference: minus $0.55 (current price is over target).
If TPM meets the UBS target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $5.68, suggesting downside of -2.9% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 4.00 cents and EPS of 45.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 43.7, implying annual growth of -8.8%. Current consensus DPS estimate is 4.1, implying a prospective dividend yield of 0.7%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 5.00 cents and EPS of 32.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.4, implying annual growth of -30.4%. Current consensus DPS estimate is 4.5, implying a prospective dividend yield of 0.8%. Current consensus EPS estimate suggests the PER is 19.2. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
TWE TREASURY WINE ESTATES LIMITED
Food, Beverages & Tobacco
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Overnight Price: $17.69
Citi rates TWE as Sell (5) -
Citi reviews recent data to assess the company's competitive position in the US wine segment, which is its largest volume market. The broker notes the market's fragmentation and the focus on premium wine. Treasury Wine is also leveraging its international retail customers out of the US.
Yet, the broker notes Australian wines are falling behind in the premiumisation stakes and there has been a spike in bulk wine exports. The share price is tied to momentum in Asia and Citi, while happy to pay a premium for that segment, considers the market elsewhere is low growth.
Sell rating and $13.30 target maintained.
Target price is $13.30 Current Price is $17.69 Difference: minus $4.39 (current price is over target).
If TWE meets the Citi target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $16.51, suggesting downside of -6.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 32.00 cents and EPS of 47.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 49.0, implying annual growth of 34.2%. Current consensus DPS estimate is 31.5, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 36.1. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 41.00 cents and EPS of 61.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 61.6, implying annual growth of 25.7%. Current consensus DPS estimate is 40.8, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 28.7. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $43.40
Ord Minnett rates WES as Hold (3) -
Ord Minnett continues to believe an exit of the UK is the most appropriate course of action for Wesfarmers. The industry is facing challenges, including competition from online, discounters and mini-box operators such as Tool Station and Screwfix.
The broker suggests the loyal customer has left Homebase and this is no longer a viable retail operation in the absence of massive reinvestment. Only half of the Bunnings stores in the UK are profitable and therefore lack scale.
Hold rating. Target is $42.50.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $42.50 Current Price is $43.40 Difference: minus $0.9 (current price is over target).
If WES meets the Ord Minnett target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $43.06, suggesting downside of -0.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 225.00 cents and EPS of 121.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 231.7, implying annual growth of -9.0%. Current consensus DPS estimate is 216.6, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 18.7. |
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 225.00 cents and EPS of 241.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 250.9, implying annual growth of 8.3%. Current consensus DPS estimate is 219.0, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 17.3. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| AST | AUSNET SERVICES | Sell - Citi | Overnight Price $1.72 |
| Outperform - Macquarie | Overnight Price $1.72 | ||
| BSL | BLUESCOPE STEEL | Re-instate Coverage with Overweight - Morgan Stanley | Overnight Price $15.60 |
| CGR | CML GROUP | Add - Morgans | Overnight Price $0.53 |
| ING | INGHAMS GROUP | Neutral - Citi | Overnight Price $3.51 |
| KDR | KIDMAN RESOURCES | Buy - Ord Minnett | Overnight Price $2.29 |
| KMD | KATHMANDU | Neutral - Credit Suisse | Overnight Price $2.22 |
| Buy - Deutsche Bank | Overnight Price $2.22 | ||
| Outperform - Macquarie | Overnight Price $2.22 | ||
| Equal-weight - Morgan Stanley | Overnight Price $2.22 | ||
| NAB | NATIONAL AUSTRALIA BANK | Underweight - Morgan Stanley | Overnight Price $29.42 |
| NHC | NEW HOPE CORP | Neutral - Credit Suisse | Overnight Price $2.11 |
| Hold - Morgans | Overnight Price $2.11 | ||
| OSH | OIL SEARCH | Outperform - Macquarie | Overnight Price $7.22 |
| RIO | RIO TINTO | Buy - Citi | Overnight Price $76.31 |
| Outperform - Macquarie | Overnight Price $76.31 | ||
| TAH | TABCORP HOLDINGS | Outperform - Macquarie | Overnight Price $4.43 |
| TPM | TPG TELECOM | Sell - Citi | Overnight Price $5.85 |
| Underperform - Credit Suisse | Overnight Price $5.85 | ||
| Hold - Deutsche Bank | Overnight Price $5.85 | ||
| Neutral - Macquarie | Overnight Price $5.85 | ||
| Overweight - Morgan Stanley | Overnight Price $5.85 | ||
| Hold - Morgans | Overnight Price $5.85 | ||
| Lighten - Ord Minnett | Overnight Price $5.85 | ||
| Sell - UBS | Overnight Price $5.85 | ||
| TWE | TREASURY WINE ESTATES | Sell - Citi | Overnight Price $17.69 |
| WES | WESFARMERS | Hold - Ord Minnett | Overnight Price $43.40 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 11 |
| 3. Hold | 9 |
| 4. Reduce | 1 |
| 5. Sell | 6 |
Wednesday 21 March 2018
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