Australian Broker Call

Credit Suisse rates ALD as Neutral (3) -

As Viva Energy Group ((VEA)) has relatively greater earnings derived from refining compared to retail, Credit Suisse increases its preference for the company over Ampol. This comes as refining margins strengthen and retail margins weaken.

Nonetheless, the broker lifts its target price for Ampol to $29.53 from $29.42. The Neutral rating is unchanged.

Target price is $29.53 Current Price is $30.25 Difference: minus $0.72 (current price is over target).
If ALD meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $32.36, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Macquarie rates ANZ as Outperform (1) -

In a review of Australian banks, Macquarie sees better relative prospects for ANZ Bank and National Australia Bank ((NAB)) than retail-overweight banks.

Were conditions to improve for ANZ Bank's institutional business, a historical headwind may turn into a tailwind, explains the analyst. Higher cash rates should benefit ahead of peers. The Outperform rating and $30 target price are maintained.

Target price is $30.00 Current Price is $27.30 Difference: $2.7
If ANZ meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $29.46, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Citi rates AX1 as Neutral (3) -

Citi believes favourable rental deals are behind Accent Group's AGM announcement of a revised FY22 rollout of 120 new stores. While markedly up on prior guidance of 65 stores, the broker cautions over the sustainability of current demand and retains its Neutral rating.

Moreover, global footwear manufacturers predict supply shortages into 2022, which may jeapordise the company's 2H22 sales, explains the analyst. The target rises to $2.99 from $2.14 due to to earnings revisions, higher multiples and a roll forward of valuation measures.

Target price is $2.99 Current Price is $2.68 Difference: $0.31
If AX1 meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $2.79, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

UBS rates BHP as Neutral (3) -

The potential merger of BHP Petroleum with Woodside Petroleum ((WPL)) seems to be on track to be approved and complete in the 2Q of 2022, believes UBS.

The broker sees the merger as positive for BHP Group shareholders due to the synergies/value creation, as well as helping the group
avoid being de-rated in the future over ESG concerns. The Neutral rating and $38 target price are retained.

Target price is $38.00 Current Price is $36.45 Difference: $1.55
If BHP meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $43.89, suggesting upside of 20.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.5

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

Citi rates BKL as Sell (5) -

Citi analysts observe Health and Happiness (H&H), the parent company of competitor Swisse, has flagged downside risks in China because of online platforms destocking, declining traffic and a weak domestic consumer.

The obvious parallel to draw is that all of these factors are likely to impact on China operations for Blackmores as well. Citi sees an additional negative for the latter through a weakening Chinese currency, the renminbi.

Plus Citi suggests competition remains intense in Blackmores' home market Australia. Sell rating retained with $71 target price.

Target price is $71.00 Current Price is $101.54 Difference: minus $30.54 (current price is over target).
If BKL meets the Citi target it will return approximately minus 30% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $89.40, suggesting downside of -8.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Macquarie rates BRG as Outperform (1) -

Macquarie sees positive implications for Breville Group from results for Williams-Sonoma (one of the company's leading distribution partners in the US).

This, along with a recent read-through from competitor DeLonghi's results supports the broker's Outperform rating. The target price of $34.37 is maintained.

Target price is $34.37 Current Price is $30.92 Difference: $3.45
If BRG meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $33.59, suggesting upside of 8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Citi rates CBA as Sell (5) -

On a global comparison basis, Citi suggests Commonwealth Bank's current valuation appears extraordinarily full. With mortgage growth set to slow further and strong competition compressing asset spreads, the bank is rated least preferred by the broker.

Moreover, expense growth is set to exceed income growth, while higher anticipated business lending does not play to the bank's strengths, explains the analyst. Citi retains its Sell rating and $94.50 target price.

Target price is $94.50 Current Price is $97.81 Difference: minus $3.31 (current price is over target).
If CBA meets the Citi target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $87.25, suggesting downside of -9.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.8

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

Macquarie rates CBA as Underperform (5) -

In a review of Australian banks, Macquarie sees better relative prospects for ANZ Bank ((ANZ)) and National Australia Bank ((NAB)) than retail overweight banks.

Despite Commonwealth Bank delivering better pre-provision profit growth than peers, the broker believes a price/earnings premium of 20% is more appropriate than the current 40%. The Underperform rating and $86 target price are maintained.

Target price is $86.00 Current Price is $97.81 Difference: minus $11.81 (current price is over target).
If CBA meets the Macquarie target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $87.25, suggesting downside of -9.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.8

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

Ord Minnett rates CWN as Buy (1) -

Crown Resorts has received a third conditional takeover offer from Blackstone at $12.50 per share. Ord Minnett notes share price is well below the bid, implying the market is aware of potential risks. 

Among offer conditions, Blackstone has stipulated that the offer is conditional on receiving approval from casino regulators in Victoria, New South Wales and Western Australia. Ord Minnet's view is that Crown Resorts will likely reject the bid on valuation or regulatory reasons.

The Buy rating and target price of $15.00 are retained.

Target price is $15.00 Current Price is $11.54 Difference: $3.46
If CWN meets the Ord Minnett target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $11.73, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Credit Suisse rates EVN as Neutral (3) -

Following Evolution Mining's acquisition of Glencore’s interest and operatorship in Ernest Henry for -$1bn, Credit Suisse increases its target price to $4.20 from $3.80. Having consolidated its portfolio, it's thought the company can press ahead with its growth options.

The analyst estimates the company has paid a compelling multiple for the right to operate a well understood asset with copper exposure. The Neutral rating is maintained.

Target price is $4.20 Current Price is $4.42 Difference: minus $0.22 (current price is over target).
If EVN meets the Credit Suisse target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.37, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Macquarie rates IGO as No Rating (-1) -

Macquarie believes strong capacity growth in the downstream battery market will spur solid demand in lithium. The broker also points out realised spodumene prices have reached a record high of US$2,060/t recently, a year-to-date rise of over 400%.

Due to research restrictions, Macquarie cannot provide a valuation at present for IGO.

Current Price is $10.17. Target price not assessed.

Current consensus price target is $8.24, suggesting downside of -20.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.3

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

Credit Suisse rates LFG as Outperform (1) -

Credit Suisse remains comfortable with its FY22 estimate following AGM commentary from Liberty Financial Group and notes the group is not experiencing compression in its net interest margin (NIM). This is in contrast to some recent bank/non-bank updates, points out the analyst.

Despite this, the company's shares have de-rated, indicating wider negative sector sentiment, according to the broker. The target price is lowered to $7.45 from $8.30 based on lower peer multiples. The Outperform rating is maintained.

Target price is $7.45 Current Price is $5.84 Difference: $1.61
If LFG meets the Credit Suisse target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $7.43, suggesting upside of 23.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates LTR as Outperform (1) -

Macquarie believes strong capacity growth in the downstream battery market will spur solid demand in lithium. The broker also points out realised spodumene prices have reached a record high of US$2,060/t recently, a year-to-date rise of over 400%.

The analyst retains its Outperform rating and $2 target price for Liontown Resources and reminds investors the Kathleen Valley Lithium Tantalum project remains one of the largest development projects.

Target price is $2.00 Current Price is $1.70 Difference: $0.3
If LTR meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates MIN as Outperform (1) -

Macquarie believes strong capacity growth in the downstream battery market will spur solid demand in lithium. The broker also points out realised spodumene prices have reached a record high of US$2,060/t recently, a year-to-date rise of over 400%.

Mineral Resources remains one of Macquarie's preferred stocks in the broader resources sector, with potential to capture downstream value via the ramp-up of Wodgina and the conversion of all spodumene to hydroxide. 

The $72 target price and Outperform rating are maintained.

Target price is $72.00 Current Price is $41.38 Difference: $30.62
If MIN meets the Macquarie target it will return approximately 74% (excluding dividends, fees and charges).

Current consensus price target is $53.18, suggesting upside of 26.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Macquarie rates MVF as Outperform (1) -

Macquarie raises FY22-4 EPS forecasts by 2% for Monash IVF Group following a 1Q trading update and 1H22 profit guidance, which was a 5% beat versus the broker's forecast. The target price lifts to $1.15 from $1.10.

Australian fresh cycles growth in the 1Q implies to the analyst share gains of around 190 basis points. The Outperform rating is maintained.

Target price is $1.15 Current Price is $0.93 Difference: $0.22
If MVF meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $1.11, suggesting upside of 16.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Morgans rates MVF as Add (1) -

Trading conditions for Monash IVF remain buoyant so far in FY22, with management noting market share gains and high levels of patient enquiry. Guidance suggests around a 50/50 earnings split between halves which Morgans finds conservative.

Morgans continues to be positive on the IVF sector, foreseeing continuing stability in price and growth. Add and $1.09 target retained.

Target price is $1.09 Current Price is $0.93 Difference: $0.16
If MVF meets the Morgans target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $1.11, suggesting upside of 16.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates NAB as Outperform (1) -

In a review of Australian banks, Macquarie sees better relative prospects for National Australia Bank and ANZ Bank ((ANZ)) than retail overweight banks.

The broker considers the 1H performance of National Australia Bank was the key standout in the recent reporting season.

While cautioning over the bank's past form on delivering, the analyst feels the improved franchise performance is worthy of a premium. The Outperform rating and $30.50 target price are maintained.

Target price is $30.50 Current Price is $28.57 Difference: $1.93
If NAB meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $29.47, suggesting upside of 4.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Macquarie rates ORE as Outperform (1) -

Macquarie believes strong capacity growth in the downstream battery market will spur solid demand in lithium. The broker also points out realised spodumene prices have reached a record high of US$2,060/t recently, a year-to-date rise of over 400%.

The analyst reminds investors of Orocobre's unique exposure to both lithium brine in South America and spodumene production in
Australia. The Outperform rating and $12 target price are maintained.

Target price is $12.00 Current Price is $9.11 Difference: $2.89
If ORE meets the Macquarie target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $10.15, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Macquarie rates PLS as Outperform (1) -

Macquarie believes strong capacity growth in the downstream battery market will spur solid demand in lithium. The broker also points out realised spodumene prices have reached a record high of US$2,060/t recently, a year-to-date rise of over 400%.

On the basis of near-term growth potential, the broker retains Pilbara Minerals as its preferred exposure to Australian producers. The Outperform rating and $2.80 target are retained.

Target price is $2.80 Current Price is $2.36 Difference: $0.44
If PLS meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $2.34, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Macquarie rates PXA as No Rating (-1) -

Following a volume update at Pexa Group's AGM, Macquarie increases its EPS forecasts for FY22 and FY23 by 9.6% and 6.1%. Apart from changed volume assumptions, the broker also adjusts for a delay to the start of market share losses from 1H23 to 1H24.

The analyst notes volumes are tracking ahead of prospectus expectations and the company has processed 1.36m billable transactions in the four months to October 21, up 40% year-on-year. The UK expansion is also considered to be tracking well.

Due to current research restrictions, Macquarie doesn't provide a target price or rating.

Current Price is $17.69. Target price not assessed.

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Macquarie rates SDF as Outperform (1) -

Macquarie notes Steadfast Group's FY22 earnings (EBITA) guidance and the broker's own FY23 estimates do not include any contribution from executing on transactions that utilise it's new debt capacity of $315m.

Management intends to use this debt, along with available cash, to fund the previously announced Trapped Capital Project pipeline and other acquisitions in FY22. The Outperform rating and $5.40 target price are retained.

Target price is $5.40 Current Price is $5.12 Difference: $0.28
If SDF meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $5.28, suggesting upside of 1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Credit Suisse rates SHL as Outperform (1) -

While there has been no comment by management, Sonic Healthcare is rumoured (press reports) to be bidding for European testing firm Unilabs, one of the largest diagnostic providers in Europe.

The broker sees the logic and also notes management has been clear on pursuing M&A opportunities in multiple markets. It's thought an acquisition of this size and nature could provide significant synergies on the cost and revenue front.

The Outperform rating and target price of $46.50 are retained.

Target price is $46.50 Current Price is $41.02 Difference: $5.48
If SHL meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $44.71, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Credit Suisse rates VEA as Outperform (1) -

As Viva Energy Group has relatively greater earnings derived from refining compared to retail, Credit Suisse increases its preference for the company over Ampol ((ALD)). This comes as refining margins strengthen and retail margins weaken.

The broker lifts its target price to $2.59 from $2.58 and maintains its Outperform rating.

Target price is $2.59 Current Price is $2.25 Difference: $0.34
If VEA meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $2.55, suggesting upside of 13.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

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

Veem designs and manufactures stabilisation and propulsion technology and provides products and services to the marine, defence and mining industries. Morgans initiates coverage with an Add rating and $1.25 target.

Veem has recently seen strong growth in its innovative gyro product, the broker notes, with enquiry levels doubling from 12 months ago. Management estimates the global gyro market is worth  around US$14.6bn and competition is limited.

The longer term outlook is strong, aided by the federal government’s commitment to higher defence spending over the next decade.

Target price is $1.25 Current Price is $0.91 Difference: $0.34
If VEE meets the Morgans target it will return approximately 37% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates WBC as Neutral (3) -

In a review of Australian banks, Macquarie sees better relative prospects for National Australia Bank ((NAB)) and ANZ Bank ((ANZ)) than retail overweight banks. 

The broker believes the current valuation discount for Westpac will likely remain while there is a lack of clarity on earnings and ongoing problems in the core franchise. The Neutral rating and $25.50 target price are maintained.

Target price is $25.50 Current Price is $22.14 Difference: $3.36
If WBC meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $26.33, suggesting upside of 21.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

UBS rates WPL as Buy (1) -

The potential merger of BHP Group's ((BHP)) BHP Petroleum with Woodside Petroleum seems to be on track to be approved and complete in the 2Q of 2022, believes UBS.

The broker feels the transaction de-risks Woodside Petroleum, allowing the company to self-fund Scarborough/other growth. Moreover, the transaction provides exposure to more diversified growth options and results in material deleveraging.

The Buy rating and $26.90 target price are maintained.

Target price is $26.90 Current Price is $22.11 Difference: $4.79
If WPL meets the UBS target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $26.39, suggesting upside of 21.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Morgans rates WPR as Add (1) -

Waypoint REIT has now completed its capital management initiatives, Morgans notes, which included a $150m buyback, 17cps capital return and a 0.9382 for one share consolidation which neutralises the impact on net tangible asset value.

A new buyback of around $50m will begin on December 1.

Nearly all of Waypoint's fuel income is contacted to 2026, the broker points out, nearly all leases have fixed rent increases and nearly all of that income comes from Viva Energy ((VEA)), which spun off the REIT, which sells under the Shell brand and it operated by Coles ((COL)).

Waypoint remains suited to income investors with distributions paid quarterly, suggests Morgans. Add and $3.00 target retained.

Target price is $3.00 Current Price is $2.66 Difference: $0.34
If WPR meets the Morgans target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $2.87, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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