Australian Broker Call

April 12, 2017

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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: 10:51 AM

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
OZL - OZ MINERALS Upgrade to Hold from Reduce Morgans
RRL - REGIS RESOURCES Downgrade to Sell from Neutral UBS
SFR - SANDFIRE Downgrade to Hold from Add Morgans
Downgrade to Neutral from Buy UBS
TLS - TELSTRA CORP Upgrade to Buy from Hold Ord Minnett
AAD  ARDENT LEISURE GROUP

Travel, Leisure & Tourism

Overnight Price: $1.95

UPDATED

Ord Minnett rates AAD as Hold (3) -

The quarterly update signalled constant-centre Main Event sales declined -2.5% in the three months to March, although after a very weak January there was improvement moving into March, which pleased Ord Minnett.

The roll-out plans for new centres have been reduced in FY18 to focus on improving the existing business, which the broker believes is a sensible course as it reduces execution risk. Hold rating and $1.70 target retained.

Target price is $1.70 Current Price is $1.95 Difference: minus $0.245 (current price is over target).
If AAD meets the Ord Minnett target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.88, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Ord Minnett forecasts a full year FY17 dividend of 5.00 cents and EPS of minus 9.00 cents.
At the last closing share price the estimated dividend yield is 2.57%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 21.61.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 2.2, implying annual growth of -76.5%.

Current consensus DPS estimate is 5.8, implying a prospective dividend yield of 3.0%.

Current consensus EPS estimate suggests the PER is 87.8.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 6.00 cents and EPS of 4.00 cents.
At the last closing share price the estimated dividend yield is 3.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 48.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.5, implying annual growth of 195.5%.

Current consensus DPS estimate is 6.3, implying a prospective dividend yield of 3.3%.

Current consensus EPS estimate suggests the PER is 29.7.

Market Sentiment: -0.1

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

BHP  BHP BILLITON LIMITED

Bulks

Overnight Price: $25.41

UBS rates BHP as Neutral (3) -

Elliott Advisors, which owns around 1.6% of shares,  or 4.1% of the plc line, has presented directors with a plan which they believe has the potential to lift and add value to the shares.

The company has responded saying it regularly reviews opportunities to add value and believes the costs and associated risks with the proposal significantly outweigh any benefits. Part of the plan was the unification of the dual listed structure  which the company says has no obvious discount relative to relevant mining and oil & gas peers.

UBS, while considering the proposal is innovative, notes management has made impressive progress with simplifying the group and embedding a disciplined capital allocation process.

Neutral and $28 target retained.

Target price is $28.00 Current Price is $25.41 Difference: $2.59
If BHP meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $27.87, suggesting upside of 9.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 128.85 cents and EPS of 208.56 cents.
At the last closing share price the estimated dividend yield is 5.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.18.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 202.9, implying annual growth of N/A.

Current consensus DPS estimate is 120.9, implying a prospective dividend yield of 4.7%.

Current consensus EPS estimate suggests the PER is 12.6.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 136.82 cents and EPS of 231.14 cents.
At the last closing share price the estimated dividend yield is 5.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.99.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 167.4, implying annual growth of -17.5%.

Current consensus DPS estimate is 96.7, implying a prospective dividend yield of 3.8%.

Current consensus EPS estimate suggests the PER is 15.3.

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

CSL  CSL LIMITED

Pharmaceuticals & Biotech/Lifesciences

Overnight Price: $128.47

UPDATED

Citi rates CSL as Buy (1) -

Competitor Shire is suing CSL in an attempt to prevent CSL from launching HAEGARDA in the US, Citi analysts report. If successful, the move will have a major impact on the analysts' profit growth projections for the years ahead.

Prior to the news, Citi analysts had updated their projections for the years ahead, predominantly to incorporate positive expectations for HAEGARDA, aimed at Hereditary Angioedema (HAE) patients. CSL should generate CAGR EPS growth of 23% from FY16-FY19, on the analysts revised estimates.

The analysts anticipate CSL's robust growth pace will be underpinned by the Behring business plus "exceptional profits" following a successful launch of HAEGARDA in FY18. Citi's positive view on the latter had pushed revised forecasts some 10% above market consensus for FY18 and FY19.

Buy rating retained. Price target had risen to $148 (from $136.40) on positive implications from a successful HAEGARDA launch.

Target price is $148.00 Current Price is $128.47 Difference: $19.53
If CSL meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $131.58, suggesting upside of 3.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Citi forecasts a full year FY17 dividend of 179.33 cents and EPS of 399.71 cents.
At the last closing share price the estimated dividend yield is 1.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 403.5, implying annual growth of N/A.

Current consensus DPS estimate is 182.8, implying a prospective dividend yield of 1.4%.

Current consensus EPS estimate suggests the PER is 31.7.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 188.63 cents and EPS of 514.21 cents.
At the last closing share price the estimated dividend yield is 1.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.98.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 478.4, implying annual growth of 18.6%.

Current consensus DPS estimate is 212.5, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 26.7.

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

Market Sentiment: 0.6

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

HGG  HENDERSON GROUP PLC.

Wealth Management & Investments

Overnight Price: $3.83

ADDED

Citi rates HGG as Neutral (3) -

Citi analysts have now shifted their forecasts to US GAAP standard and into USD, while incorporating merger partner Janus. Resultant EPS estimate changes are: FY17: -1%; FY18: +13%; FY19: +15%.

The analysts observe the share price looks undervalued, with management confident cost synergies will be achieved. Citi also notes Janus INTECH outflows and the lack of near term inclusion in the S&P500 are negatives compared to when the deal was first announced.

Given many uncertainties, Citi has set new price target at $4, which is at a discount to its valuation of $4.15. Neutral rating retained.

Target price is $4.00 Current Price is $3.83 Difference: $0.17
If HGG meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.01, suggesting upside of 3.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Citi forecasts a full year FY17 dividend of 18.86 cents and EPS of 25.90 cents.
At the last closing share price the estimated dividend yield is 4.93%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.0, implying annual growth of N/A.

Current consensus DPS estimate is 17.2, implying a prospective dividend yield of 4.4%.

Current consensus EPS estimate suggests the PER is 14.3.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 22.45 cents and EPS of 31.62 cents.
At the last closing share price the estimated dividend yield is 5.86%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.6, implying annual growth of 2.2%.

Current consensus DPS estimate is 18.1, implying a prospective dividend yield of 4.7%.

Current consensus EPS estimate suggests the PER is 14.0.

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

Market Sentiment: 0.0

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

IEL  IDP EDUCATION LIMITED

Education & Tuition

Overnight Price: $4.39

Ord Minnett rates IEL as Initiation of coverage with Hold (3) -

The company is a global provider of English language testing and an international student placement agent as well as an operator of English language schools.

Ord Minnett observes growth in outbound students from Asia and the Middle East has underpinned placement volumes, driving net profit growth of 26% per annum since 2013.

To take advantage of these drivers the company is investing in a digital platform that is capable of delivering more leads and higher conversion rates.

While this investment takes place,  the broker believes that valuation is full and initiates coverage with a Hold recommendation and target of $4.56.

Target price is $4.56 Current Price is $4.39 Difference: $0.17
If IEL meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Ord Minnett forecasts a full year FY17 dividend of 11.80 cents and EPS of 16.40 cents.
At the last closing share price the estimated dividend yield is 2.69%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.77.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 14.10 cents and EPS of 19.60 cents.
At the last closing share price the estimated dividend yield is 3.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.40.

Market Sentiment: 0.5

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

IGO  INDEPENDENCE GROUP NL

Nickel

Overnight Price: $3.57

UBS rates IGO as Neutral (3) -

UBS cuts gold price forecasts by around -5% but, elsewhere, remains positive on copper and nickel.

The broker focuses on company-specific events as a driver of share prices. Weak sentiment towards nickel has been fed by supply problems from The Philippines and Indonesia. Despite these two factors, UBS focuses on the improving stainless steel demand that should support higher prices.

The production delay at Nova appears to have deterred investors but this is not compromising the asset position, the broker asserts. Neutral retained. Target is reduced to $3.81 from $4.17.

Target price is $3.81 Current Price is $3.57 Difference: $0.24
If IGO meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $4.11, suggesting upside of 12.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 1.00 cents and EPS of 8.00 cents.
At the last closing share price the estimated dividend yield is 0.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 44.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.4, implying annual growth of N/A.

Current consensus DPS estimate is 3.2, implying a prospective dividend yield of 0.9%.

Current consensus EPS estimate suggests the PER is 38.8.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 12.00 cents and EPS of 38.00 cents.
At the last closing share price the estimated dividend yield is 3.36%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 36.5, implying annual growth of 288.3%.

Current consensus DPS estimate is 11.6, implying a prospective dividend yield of 3.2%.

Current consensus EPS estimate suggests the PER is 10.0.

Market Sentiment: 0.2

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

MTR  MANTRA GROUP LIMITED

Travel, Leisure & Tourism

Overnight Price: $2.92

UPDATED

Macquarie rates MTR as Outperform (1) -

Competitor Airbnb is targeting US$10bn in revenue by 2020. However, Macquarie's analysis finds that a much smaller subset of these listings are available and able to compete with hotels, and experience is winning over price.

The broker continues to believe the company is attractive at around a -30% discount to global hotel peers. Hitting FY17 earnings guidance would be a positive catalyst in the broker's opinion. Outperform and $4.02 target retained.

Target price is $4.02 Current Price is $2.92 Difference: $1.1
If MTR meets the Macquarie target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $3.43, suggesting upside of 18.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 10.10 cents and EPS of 17.60 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 16.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.5, implying annual growth of 23.2%.

Current consensus DPS estimate is 10.9, implying a prospective dividend yield of 3.7%.

Current consensus EPS estimate suggests the PER is 16.6.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 11.50 cents and EPS of 18.90 cents.
At the last closing share price the estimated dividend yield is 3.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.45.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.2, implying annual growth of 9.7%.

Current consensus DPS estimate is 12.7, implying a prospective dividend yield of 4.4%.

Current consensus EPS estimate suggests the PER is 15.2.

Market Sentiment: 0.4

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

ORG  ORIGIN ENERGY LIMITED

NatGas

Overnight Price: $7.46

Credit Suisse rates ORG as Outperform (1) -

With market dynamics playing into the company's hands and the APLNG operations strong, Credit Suisse believes market optimism on the stock is not without merit.

The value of the company's flexible generation portfolio is exposed as the electricity market evolves to higher peak prices and volatility. This suggests to the broker that there is upside available despite the oil price risks. Outperform rating and $7.00 target retained.

Target price is $7.00 Current Price is $7.46 Difference: minus $0.46 (current price is over target).
If ORG meets the Credit Suisse target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.46, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Credit Suisse forecasts a full year FY17 dividend of 0.00 cents and EPS of 33.76 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.10.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.0, 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 41.8.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 0.00 cents and EPS of 63.39 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 58.1, implying annual growth of 222.8%.

Current consensus DPS estimate is 9.3, implying a prospective dividend yield of 1.2%.

Current consensus EPS estimate suggests the PER is 13.0.

Market Sentiment: 0.5

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


Ord Minnett rates ORG as Accumulate (2) -

Ord Minnett believes the market may be overlooking the benefits that the trend in wholesale electricity prices will have on Origin Energy's business.

Generation volumes from the company's flexible assets have already increased materially and there will also be benefit from higher retail prices and reduced competition.

The broker reiterates an Accumulate rating and raises the target to $8.00 from $7.10.

Target price is $8.00 Current Price is $7.46 Difference: $0.54
If ORG meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $7.46, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Ord Minnett forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 74.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 10.08.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.0, 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 41.8.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 10.00 cents and EPS of 60.00 cents.
At the last closing share price the estimated dividend yield is 1.34%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.43.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 58.1, implying annual growth of 222.8%.

Current consensus DPS estimate is 9.3, implying a prospective dividend yield of 1.2%.

Current consensus EPS estimate suggests the PER is 13.0.

Market Sentiment: 0.5

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

OZL  OZ MINERALS LIMITED

Copper

Overnight Price: $8.20

UPDATED

Morgans rates OZL as Upgrade to Hold from Reduce (3) -

The stock has corrected by around -16% from its recent high and now trades roughly in line with Morgans' revised valuation. Hence, the broker upgrades to Hold from Reduce.

Morgans believes the market is now valuing the company's inherent risks, particularly around the Carrapateena development, more appropriately.Target is raised to $8.30 from $8.20.

Target price is $8.30 Current Price is $8.20 Difference: $0.1
If OZL meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $8.81, suggesting upside of 6.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Morgans forecasts a full year FY17 dividend of 12.00 cents and EPS of 44.00 cents.
At the last closing share price the estimated dividend yield is 1.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.64.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 55.1, implying annual growth of N/A.

Current consensus DPS estimate is 14.9, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 15.1.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 10.00 cents and EPS of 39.00 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 21.03.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 38.3, implying annual growth of -30.5%.

Current consensus DPS estimate is 13.1, implying a prospective dividend yield of 1.6%.

Current consensus EPS estimate suggests the PER is 21.7.

Market Sentiment: 0.0

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


UBS rates OZL as Buy (1) -

UBS cuts gold price forecast by around -5% and believes the sector is looking expensive. Elsewhere, the broker remains positive on copper and nickel.

The broker remains cautious on the direction of gold and focuses on company-specific events as a driver of share prices.

Gold represents around 20% of the company's revenues on the broker's numbers. Despite the short-term headwinds the stock remains the broker's pick in the copper space. Buy rating retained. Target is reduced to $10.50 from $11.00.

Target price is $10.50 Current Price is $8.20 Difference: $2.3
If OZL meets the UBS target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $8.81, suggesting upside of 6.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 13.00 cents and EPS of 91.00 cents.
At the last closing share price the estimated dividend yield is 1.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.01.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 55.1, implying annual growth of N/A.

Current consensus DPS estimate is 14.9, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 15.1.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 0.00 cents and EPS of 73.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.23.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 38.3, implying annual growth of -30.5%.

Current consensus DPS estimate is 13.1, implying a prospective dividend yield of 1.6%.

Current consensus EPS estimate suggests the PER is 21.7.

Market Sentiment: 0.0

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

RRL  REGIS RESOURCES LIMITED

Gold & Silver

Overnight Price: $3.52

UBS rates RRL as Downgrade to Sell from Neutral (5) -

UBS cuts gold price forecast by around -5% and believes the sector is looking expensive. Elsewhere, the broker remains positive on copper and nickel.

The broker remains cautious on the direction of gold and focuses on company-specific events as a driver of share prices.

The stock has performed strongly in 2017 and the broker believes there is  better risk/reward elsewhere. Rating downgraded to Sell from Neutral. Target is reduced to $3.13 from $3.36.

Target price is $3.13 Current Price is $3.52 Difference: minus $0.39 (current price is over target).
If RRL meets the UBS target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.14, suggesting downside of -12.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 15.00 cents and EPS of 26.00 cents.
At the last closing share price the estimated dividend yield is 4.26%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.54.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.0, implying annual growth of 11.8%.

Current consensus DPS estimate is 15.9, implying a prospective dividend yield of 4.4%.

Current consensus EPS estimate suggests the PER is 14.3.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 19.00 cents and EPS of 32.00 cents.
At the last closing share price the estimated dividend yield is 5.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.9, implying annual growth of 23.6%.

Current consensus DPS estimate is 19.1, implying a prospective dividend yield of 5.3%.

Current consensus EPS estimate suggests the PER is 11.6.

Market Sentiment: -0.1

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

SAR  SARACEN MINERAL HOLDINGS LIMITED

Gold & Silver

Overnight Price: $1.03

Macquarie rates SAR as Neutral (3) -

The company has reported soft gold production in the March quarter as operations were adversely affected by rain. Cash and bullion declined in the quarter, in line with guidance. Exploration continues to provide encouraging drill results.

Delivery of a stronger quarter in June will be key to achieving the company's goal of 300,000 ounces per annum and this is factored into Macquarie's target price. Neutral and a $1.10 target are retained.

Target price is $1.10 Current Price is $1.03 Difference: $0.07
If SAR meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 1.00 cents and EPS of 6.30 cents.
At the last closing share price the estimated dividend yield is 0.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.35.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 1.00 cents and EPS of 7.70 cents.
At the last closing share price the estimated dividend yield is 0.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.38.

Market Sentiment: 0.5

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

SFR  SANDFIRE RESOURCES NL

Copper

Overnight Price: $6.49

Morgans rates SFR as Downgrade to Hold from Add (3) -

After the release of feasibility metrics for Monty that were slightly worse than Morgans expected, attention is now on the company's ability to add incremental mine life via exploration.

This is required  to justify the valuation/price upside, in the broker's opinion. Rating is downgraded to Hold from Add. Target is reduced to $7.02 from $7.10.

Target price is $7.02 Current Price is $6.49 Difference: $0.53
If SFR meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $6.84, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Morgans forecasts a full year FY17 dividend of 15.00 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 12.25.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 56.2, implying annual growth of 84.0%.

Current consensus DPS estimate is 16.8, implying a prospective dividend yield of 2.6%.

Current consensus EPS estimate suggests the PER is 11.4.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 17.00 cents and EPS of 62.00 cents.
At the last closing share price the estimated dividend yield is 2.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.47.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 70.3, implying annual growth of 25.1%.

Current consensus DPS estimate is 20.1, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 9.1.

Market Sentiment: 0.3

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


UBS rates SFR as Downgrade to Neutral from Buy (3) -

UBS cuts gold price forecast by around -5% and believes the sector is looking expensive. Elsewhere, the broker remains positive on copper and nickel.

The broker remains cautious on the direction of gold and focuses on company-specific events as a driver of share prices.

UBS believes  the company is offering heightened risk/reward and subsequently downgrades to Neutral from Buy. Over the next 12 months the shorter mine life is likely to add pressure to find ways to extend mine life further, and this could prompt caution among investors, the broker believes.

Target is reduced to $6.81 from $7.43.

Target price is $6.81 Current Price is $6.49 Difference: $0.32
If SFR meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $6.84, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

UBS forecasts a full year FY17 dividend of 14.00 cents and EPS of 58.00 cents.
At the last closing share price the estimated dividend yield is 2.16%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.19.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 56.2, implying annual growth of 84.0%.

Current consensus DPS estimate is 16.8, implying a prospective dividend yield of 2.6%.

Current consensus EPS estimate suggests the PER is 11.4.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 28.00 cents and EPS of 113.00 cents.
At the last closing share price the estimated dividend yield is 4.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 70.3, implying annual growth of 25.1%.

Current consensus DPS estimate is 20.1, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 9.1.

Market Sentiment: 0.3

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

SGR  THE STAR ENTERTAINMENT GROUP LIMITED

Gaming

Overnight Price: $5.52

Citi rates SGR as Buy (1) -

Citi analysts remain of the view Star Entertainment shares are attractively valued at present level. This latest update sees earnings estimates being raised, further supporting their Buy rating.

The analysts see positive operational momentum providing catalysts in the short and medium term. Price target lifts to $6.75 from $6.

Target price is $6.75 Current Price is $5.52 Difference: $1.23
If SGR meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $6.11, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Citi forecasts a full year FY17 dividend of 15.50 cents and EPS of 27.50 cents.
At the last closing share price the estimated dividend yield is 2.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.07.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.0, implying annual growth of 14.4%.

Current consensus DPS estimate is 14.8, implying a prospective dividend yield of 2.7%.

Current consensus EPS estimate suggests the PER is 20.4.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 17.00 cents and EPS of 32.40 cents.
At the last closing share price the estimated dividend yield is 3.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.4, implying annual growth of 12.6%.

Current consensus DPS estimate is 15.9, implying a prospective dividend yield of 2.9%.

Current consensus EPS estimate suggests the PER is 18.2.

Market Sentiment: 1.0

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

STO  SANTOS LIMITED

NatGas

Overnight Price: $3.87

Macquarie rates STO as Outperform (1) -

The company has announced the early repayment of US$250m of its US$1.2bn 2019 facility and the extension of an undrawn US$810m bilateral bank loan. Macquarie believes the early partial repayment is delivering on the promise at the 2016 result to re-finance and term maturities.

The broker remains confident in the balance sheet following the capital raising and a strong quarter of sustained oil prices.

The broker believes the underperformance relative to peers in recent weeks highlights the risking of GLNG. Santos has the gas to meet exported volumes and the broker envisages little risk of reserve issues at Roma.

Outperform retained. Target is $4.70.

Target price is $4.70 Current Price is $3.87 Difference: $0.83
If STO meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $4.56, suggesting upside of 17.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Macquarie forecasts a full year FY17 dividend of 1.20 cents and EPS of 3.06 cents.
At the last closing share price the estimated dividend yield is 0.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 126.68.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.9, implying annual growth of N/A.

Current consensus DPS estimate is 4.0, implying a prospective dividend yield of 1.0%.

Current consensus EPS estimate suggests the PER is 20.5.

Forecast for FY18:

Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 2.39 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 161.86.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.9, implying annual growth of 31.7%.

Current consensus DPS estimate is 9.3, implying a prospective dividend yield of 2.4%.

Current consensus EPS estimate suggests the PER is 15.6.

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

Market Sentiment: 0.5

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

TLS  TELSTRA CORPORATION LIMITED

Telecommunication

Overnight Price: $4.56

UPDATED

Ord Minnett rates TLS as Upgrade to Buy from Hold (1) -

Recent share price weakness has elevated the stock to a Buy rating from Hold, Ord Minnett believes. Target is $5.35.

The stock is now suggesting a 6.8% dividend yield and offering significant value, in the broker's opinion, and the shares are trading at a level that implies a -20% reduction to the dividend.

Nevertheless, Ord Minnett expects the dividend to be sustained as the company goes about its strategic transformation.

Target price is $5.35 Current Price is $4.56 Difference: $0.79
If TLS meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $4.79, suggesting upside of 11.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Ord Minnett forecasts a full year FY17 dividend of 31.00 cents and EPS of 31.00 cents.
At the last closing share price the estimated dividend yield is 6.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 31.6, implying annual growth of -33.3%.

Current consensus DPS estimate is 31.1, implying a prospective dividend yield of 7.3%.

Current consensus EPS estimate suggests the PER is 13.5.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 31.00 cents and EPS of 38.00 cents.
At the last closing share price the estimated dividend yield is 6.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 33.9, implying annual growth of 7.3%.

Current consensus DPS estimate is 31.1, implying a prospective dividend yield of 7.3%.

Current consensus EPS estimate suggests the PER is 12.6.

Market Sentiment: -0.3

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

Summaries
AAD - ARDENT LEISURE Hold - Ord Minnett Overnight Price $1.95
BHP - BHP BILLITON Neutral - UBS Overnight Price $25.41
CSL - CSL Buy - Citi Overnight Price $128.47
HGG - HENDERSON GROUP Neutral - Citi Overnight Price $3.83
IEL - IDP EDUCATION Initiation of coverage with Hold - Ord Minnett Overnight Price $4.39
IGO - INDEPENDENCE GROUP Neutral - UBS Overnight Price $3.57
MTR - MANTRA GROUP Outperform - Macquarie Overnight Price $2.92
ORG - ORIGIN ENERGY Outperform - Credit Suisse Overnight Price $7.46
Accumulate - Ord Minnett Overnight Price $7.46
OZL - OZ MINERALS Upgrade to Hold from Reduce - Morgans Overnight Price $8.20
Buy - UBS Overnight Price $8.20
RRL - REGIS RESOURCES Downgrade to Sell from Neutral - UBS Overnight Price $3.52
SAR - SARACEN MINERAL Neutral - Macquarie Overnight Price $1.03
SFR - SANDFIRE Downgrade to Hold from Add - Morgans Overnight Price $6.49
Downgrade to Neutral from Buy - UBS Overnight Price $6.49
SGR - STAR ENTERTAINMENT Buy - Citi Overnight Price $5.52
STO - SANTOS Outperform - Macquarie Overnight Price $3.87
TLS - TELSTRA CORP Upgrade to Buy from Hold - Ord Minnett Overnight Price $4.56
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

7

2. Accumulate

1

3. Hold

9

5. Sell

1

Wednesday 12 April 2017

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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.