Australian Broker Call

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June 14, 2022

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COMPANIES DISCUSSED IN THIS ISSUE

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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1).

Last Updated: 05:00 PM

Your daily news report on the latest recommendation, valuation, forecast and opinion changes.

This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.

For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE

Today's Upgrades and Downgrades
EDV - Endeavour Group Upgrade to Outperform from Neutral Macquarie
HVN - Harvey Norman Downgrade to Neutral from Outperform Macquarie
JBH - JB Hi-Fi Downgrade to Underperform from Outperform Macquarie
WES - Wesfarmers Downgrade to Underperform from Neutral Macquarie
AGL  AGL ENERGY LIMITED

Infrastructure & Utilities

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Overnight Price: $8.74

Macquarie rates AGL as No Rating (-1) -

The extended outage at Loy Yang A is expected to depress earnings by -$40-50m, with the company reporting a delay in the restart of Loy Yang A2 by six weeks. Macquarie considers the delay disappointing, with most of the 0.5TWh lost during the winter months of August.

The broker also notes the shuffle of the executive committee continues, with Christine Corbett resigning, in the wake of the withdrawal of the de-merger plan.

The broker is currently on research restriction.

Current Price is $8.74. Target price not assessed.

Current consensus price target is $9.25, suggesting upside of 9.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 20.10 cents and EPS of 38.10 cents.
At the last closing share price the estimated dividend yield is 2.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.94.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 37.6, implying annual growth of N/A.

Current consensus DPS estimate is 24.4, implying a prospective dividend yield of 2.9%.

Current consensus EPS estimate suggests the PER is 22.6.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 44.00 cents and EPS of 57.90 cents.
At the last closing share price the estimated dividend yield is 5.03%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 71.1, implying annual growth of 89.1%.

Current consensus DPS estimate is 51.2, implying a prospective dividend yield of 6.0%.

Current consensus EPS estimate suggests the PER is 11.9.

Market Sentiment: 0.4

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


UPDATED

Morgans rates AGL as Add (1) -

Morgans allows for a greater financial impact now that AGL Energy has extended the expected duration of the Loy Yang A unit 2 outage to mid-September from August 1. Some impact from the short duration outages in FY22 is also incorporated into forecasts.

The target price slips to $9.92 from $10.08 though the broker still sees potential for strong earnings growth given tailwinds as higher prices flow through customer contracts. The Add rating is maintained.

Target price is $9.92 Current Price is $8.74 Difference: $1.18
If AGL meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $9.25, suggesting upside of 9.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Morgans forecasts a full year FY22 dividend of 19.00 cents and EPS of 34.00 cents.
At the last closing share price the estimated dividend yield is 2.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 37.6, implying annual growth of N/A.

Current consensus DPS estimate is 24.4, implying a prospective dividend yield of 2.9%.

Current consensus EPS estimate suggests the PER is 22.6.

Forecast for FY23:

Morgans forecasts a full year FY23 dividend of 65.00 cents and EPS of 93.00 cents.
At the last closing share price the estimated dividend yield is 7.44%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.40.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 71.1, implying annual growth of 89.1%.

Current consensus DPS estimate is 51.2, implying a prospective dividend yield of 6.0%.

Current consensus EPS estimate suggests the PER is 11.9.

Market Sentiment: 0.4

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

ALD  AMPOL LIMITED

Crude Oil

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Overnight Price: $35.31

UBS rates ALD as Buy (1) -

UBS is positive regarding the refining industry and prefers Ampol to Viva Energy ((VEA)). This stems from the belief that earnings growth will be greater and separate from the recovery in fuel demand.

As Ampol has acquired Z Energy the broker maintains a Buy rating and lifts estimates for earnings per share by 13-17%, also expecting higher refining margins in the first half.

UBS also expects $30m in EBIT growth in convenience retail as the benefits from initiatives implemented over recent years are realised. Target is raised to $39.40 from $35.65.

Target price is $39.40 Current Price is $35.31 Difference: $4.09
If ALD meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $35.95, suggesting upside of 4.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

UBS forecasts a full year FY22 EPS of 256.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 252.2, implying annual growth of 7.7%.

Current consensus DPS estimate is 132.3, implying a prospective dividend yield of 3.8%.

Current consensus EPS estimate suggests the PER is 13.7.

Forecast for FY23:

UBS forecasts a full year FY23 EPS of 266.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.27.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 239.8, implying annual growth of -4.9%.

Current consensus DPS estimate is 127.3, implying a prospective dividend yield of 3.7%.

Current consensus EPS estimate suggests the PER is 14.4.

Market Sentiment: 0.8

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

APA  APA GROUP

NatGas

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Overnight Price: $11.47

Macquarie rates APA as No Rating (-1) -

Macquarie asserts the current energy crisis is presenting an opportunity for APA Group. There is an immediate desire to increase storage and physical storage outside of Victoria may increase the need for further pipeline expansion.

The government is looking for a broader proposal to resolve peak day supply shortfalls through storage which would provide more effective utilisation of storage and demand management.

Macquarie is on research restrictions and cannot provide a rating or target at present.

Current Price is $11.47. Target price not assessed.

Current consensus price target is $9.93, suggesting downside of -13.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 53.00 cents and EPS of 24.70 cents.
At the last closing share price the estimated dividend yield is 4.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 46.44.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.3, implying annual growth of N/A.

Current consensus DPS estimate is 53.0, implying a prospective dividend yield of 4.6%.

Current consensus EPS estimate suggests the PER is 42.0.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 57.80 cents and EPS of 26.20 cents.
At the last closing share price the estimated dividend yield is 5.04%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 43.78.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.8, implying annual growth of 1.8%.

Current consensus DPS estimate is 56.3, implying a prospective dividend yield of 4.9%.

Current consensus EPS estimate suggests the PER is 41.3.

Market Sentiment: 0.0

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

DMP  DOMINO'S PIZZA ENTERPRISES LIMITED

Food, Beverages & Tobacco

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Overnight Price: $62.41

Citi rates DMP as Buy (1) -

Citi's analysis of high-frequency data signals the website traffic in key markets is under increasing pressure. This will be aggravated by inflationary pressures on labour shortages.

Nevertheless, the broker reiterates a Buy rating for Domino's Pizza Enterprises, envisaging upside from potential M&A. Sales momentum is expected to rebound later in 2022 once the business has cycled the abnormal comparables. Target is $100.95.

Target price is $100.95 Current Price is $62.41 Difference: $38.54
If DMP meets the Citi target it will return approximately 62% (excluding dividends, fees and charges).

Current consensus price target is $91.90, suggesting upside of 45.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Citi forecasts a full year FY22 dividend of 158.32 cents and EPS of 189.90 cents.
At the last closing share price the estimated dividend yield is 2.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.86.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 205.0, implying annual growth of -3.7%.

Current consensus DPS estimate is 165.0, implying a prospective dividend yield of 2.6%.

Current consensus EPS estimate suggests the PER is 30.8.

Forecast for FY23:

Citi forecasts a full year FY23 dividend of 189.70 cents and EPS of 237.10 cents.
At the last closing share price the estimated dividend yield is 3.04%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.32.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 240.3, implying annual growth of 17.2%.

Current consensus DPS estimate is 189.6, implying a prospective dividend yield of 3.0%.

Current consensus EPS estimate suggests the PER is 26.2.

Market Sentiment: 0.7

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

EDV  ENDEAVOUR GROUP LIMITED

Food, Beverages & Tobacco

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Overnight Price: $7.15

Macquarie rates EDV as Upgrade to Outperform from Neutral (1) -

Macquarie envisages significant scope for Endeavour Group to reinvest in its hotel network and if this is initially focused on gaming the 15% return on investment hurdle could be conservative.

The broker suggests retail and hotels in combination offer a natural hedge to consumer confidence and a return to services should mean high-margin hotels growth accelerates.

In the current climate, Macquarie prefers staples over discretionary retailers and upgrades Endeavour Group to Outperform from Neutral. Target is steady at $7.70.

Target price is $7.70 Current Price is $7.15 Difference: $0.55
If EDV meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $7.46, suggesting upside of 4.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 20.00 cents and EPS of 27.40 cents.
At the last closing share price the estimated dividend yield is 2.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.8, implying annual growth of 11.9%.

Current consensus DPS estimate is 20.9, implying a prospective dividend yield of 2.9%.

Current consensus EPS estimate suggests the PER is 25.7.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 21.30 cents and EPS of 29.60 cents.
At the last closing share price the estimated dividend yield is 2.98%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.16.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.7, implying annual growth of 10.4%.

Current consensus DPS estimate is 21.6, implying a prospective dividend yield of 3.0%.

Current consensus EPS estimate suggests the PER is 23.3.

Market Sentiment: 0.1

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

FBU  FLETCHER BUILDING LIMITED

Building Products & Services

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Overnight Price: $4.66

Citi rates FBU as Buy (1) -

The NZ government has published data showing the current construction backlog in the industry. Citi observes, with the elongation of the cycle, the data implies the time required to clear the backlog might be longer than previously expected.

The main issue, the broker contends, is whether house prices have stabilised by the time the backlog has been addressed.

Buy rating maintained. Target is NZ$7.76.

Current Price is $4.66. Target price not assessed.

Current consensus price target is $9.30, suggesting upside of 108.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Citi forecasts a full year FY22 dividend of 37.55 cents and EPS of 52.66 cents.
At the last closing share price the estimated dividend yield is 8.06%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 50.3, implying annual growth of N/A.

Current consensus DPS estimate is 35.7, implying a prospective dividend yield of 8.0%.

Current consensus EPS estimate suggests the PER is 8.9.

Forecast for FY23:

Citi forecasts a full year FY23 dividend of 43.18 cents and EPS of 59.70 cents.
At the last closing share price the estimated dividend yield is 9.27%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.81.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 54.2, implying annual growth of 7.8%.

Current consensus DPS estimate is 37.9, implying a prospective dividend yield of 8.5%.

Current consensus EPS estimate suggests the PER is 8.2.

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

Market Sentiment: 1.0

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

HLS  HEALIUS LIMITED

Healthcare services

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Overnight Price: $3.84

UPDATED

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

Morgan Stanley again lowers its EPS forecasts for Healius due to a faster than expected decline in PCR testing and a slower recovery in the base pathology business, in-line with the industry decline. In addition, volumes for diagnostic imaging have disappointed.

Moreover, the cost-out program and the sustainable improvement program (SIP) targets are uncertain, explains the analyst.

The broker keeps the Equal-weight rating as there is only a small risk to FY22 expectations and the outlook is expected to improve in FY23. Target price reduced to $3.75 from $4.40. Industry view: In line.

Target price is $3.75 Current Price is $3.84 Difference: minus $0.09 (current price is over target).
If HLS meets the Morgan Stanley target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.36, suggesting upside of 15.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Morgan Stanley forecasts a full year FY22 dividend of 13.20 cents and EPS of 52.00 cents.
At the last closing share price the estimated dividend yield is 3.44%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.38.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 52.0, implying annual growth of 519.0%.

Current consensus DPS estimate is 15.6, implying a prospective dividend yield of 4.1%.

Current consensus EPS estimate suggests the PER is 7.3.

Forecast for FY23:

Morgan Stanley forecasts a full year FY23 dividend of 11.70 cents and EPS of 19.00 cents.
At the last closing share price the estimated dividend yield is 3.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.21.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 23.3, implying annual growth of -55.2%.

Current consensus DPS estimate is 14.2, implying a prospective dividend yield of 3.8%.

Current consensus EPS estimate suggests the PER is 16.2.

Market Sentiment: 0.6

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

HVN  HARVEY NORMAN HOLDINGS LIMITED

Consumer Electronics

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Overnight Price: $4.08

Macquarie rates HVN as Downgrade to Neutral from Outperform (3) -

Macquarie has a more bearish outlook on consumer expenditure amid rising inflation and interest rates and a rebound in service consumption.

While the broker likes Harvey Norman's asset backing and proven business model that is resilient during downturns it remains concerned about the macro outlook for the short term.

The likely over-consumption of goods over the past two years is a key risk to near-term performance, the broker adds. Rating is downgraded to Neutral from Outperform and the target lowered to $4.40 from $6.40.

Target price is $4.40 Current Price is $4.08 Difference: $0.32
If HVN meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $5.47, suggesting upside of 42.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 32.70 cents and EPS of 48.40 cents.
At the last closing share price the estimated dividend yield is 8.01%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.43.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 52.9, implying annual growth of -21.7%.

Current consensus DPS estimate is 35.9, implying a prospective dividend yield of 9.3%.

Current consensus EPS estimate suggests the PER is 7.3.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 27.20 cents and EPS of 40.60 cents.
At the last closing share price the estimated dividend yield is 6.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.05.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 42.5, implying annual growth of -19.7%.

Current consensus DPS estimate is 32.6, implying a prospective dividend yield of 8.5%.

Current consensus EPS estimate suggests the PER is 9.1.

Market Sentiment: 0.6

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

JBH  JB HI-FI LIMITED

Consumer Electronics

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Overnight Price: $41.69

Macquarie rates JBH as Downgrade to Underperform from Outperform (5) -

Macquarie has a more bearish outlook on consumer expenditure amid rising inflation and interest rates and a rebound in service consumption.

JB Hi-Fi is a best-in-class operator, in the broker's view, but the macro environment is making life challenging. Macquarie downgrades to Underperform from Outperform, expecting reduced discretionary spending going forward.

The broker observes increased numbers of electronics and appliances being purchased for the home over the last two years will lead to a longer replacement cycle. Target is reduced to $40.90 from $57.80.

Target price is $40.90 Current Price is $41.69 Difference: minus $0.79 (current price is over target).
If JBH meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $54.50, suggesting upside of 38.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 264.00 cents and EPS of 404.00 cents.
At the last closing share price the estimated dividend yield is 6.33%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.32.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 416.4, implying annual growth of -5.5%.

Current consensus DPS estimate is 270.8, implying a prospective dividend yield of 6.9%.

Current consensus EPS estimate suggests the PER is 9.4.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 228.00 cents and EPS of 350.30 cents.
At the last closing share price the estimated dividend yield is 5.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.90.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 372.8, implying annual growth of -10.5%.

Current consensus DPS estimate is 239.4, implying a prospective dividend yield of 6.1%.

Current consensus EPS estimate suggests the PER is 10.5.

Market Sentiment: 0.3

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

MAF  MA FINANCIAL GROUP LIMITED

Wealth Management & Investments

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Overnight Price: $5.33

Ord Minnett rates MAF as Buy (1) -

MA Financial provided a positive update regarding fund flows and loans on platform and Ord Minnett notes some "interesting insights" into development initiatives within Finsure.

Loans on that platform are up 20% to $80bn and a number of other initiatives are underway within lending, including a re-launch of MKM.

FY22 earnings guidance of 10-20% growth has been affirmed. The broker reiterates a Buy rating and reduces the target to $10.00 from $12.50.

Target price is $10.00 Current Price is $5.33 Difference: $4.67
If MAF meets the Ord Minnett target it will return approximately 88% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY22:

Ord Minnett forecasts a full year FY22 dividend of 18.50 cents and EPS of 40.80 cents.
At the last closing share price the estimated dividend yield is 3.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.06.

Forecast for FY23:

Ord Minnett forecasts a full year FY23 dividend of 20.00 cents and EPS of 44.50 cents.
At the last closing share price the estimated dividend yield is 3.75%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.98.

Market Sentiment: 1.0

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

PAN  PANORAMIC RESOURCES LIMITED

Nickel

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Overnight Price: $0.26

Macquarie rates PAN as Outperform (1) -

Panoramic Resources has completed its fourth shipment from Savannah and indicated the fifth will be shipped from June to early July.

Macquarie makes adjustments to its concentrate shipping schedule, reducing estimates for earnings in FY22 and FY23 by -89% and -17%, respectively. An additional shipment drives a 38% increase to FY24 earnings.

Strong positive cash flow is now considered unlikely until the second half of FY23. Outperform maintained. Target is reduced to $0.35 from $0.40.

Target price is $0.35 Current Price is $0.26 Difference: $0.09
If PAN meets the Macquarie target it will return approximately 35% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 0.00 cents and EPS of 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 260.00.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 0.00 cents and EPS of 2.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.83.

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

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Overnight Price: $8.53

Macquarie rates STO as Outperform (1) -

Macquarie asserts Santos is a key operator for adding spare capacity to the east coast gas market with Narrabri expected to take 2-3 years and requiring a new pipeline.

There is only minor flexibility, the broker acknowledges, to raise east coast gas supply as, by the time Narrabri is on board, some of the coal issues will be resolved.

Meanwhile, the company will add a fifth rig in the Cooper Basin and has committed to the next phase of Fairview for GLNG.

Macquarie maintains an Outperform rating and $10.30 target and raises estimates for earnings per share over 2022-23 by 4-6% because of near-term oil/LNG prices. The broker asserts the shares could re-rate more if a precise dividend policy were provided.

Target price is $10.30 Current Price is $8.53 Difference: $1.77
If STO meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $9.77, suggesting upside of 20.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 38.13 cents and EPS of 99.03 cents.
At the last closing share price the estimated dividend yield is 4.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.61.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 124.8, implying annual growth of N/A.

Current consensus DPS estimate is 33.6, implying a prospective dividend yield of 4.1%.

Current consensus EPS estimate suggests the PER is 6.5.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 33.05 cents and EPS of 64.05 cents.
At the last closing share price the estimated dividend yield is 3.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.32.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 99.0, implying annual growth of -20.7%.

Current consensus DPS estimate is 33.2, implying a prospective dividend yield of 4.1%.

Current consensus EPS estimate suggests the PER is 8.2.

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

Market Sentiment: 0.9

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

WES  WESFARMERS LIMITED

Consumer Products & Services

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Overnight Price: $43.67

Macquarie rates WES as Downgrade to Underperform from Neutral (5) -

Macquarie has a more bearish outlook on consumer expenditure amid rising inflation and interest rates and a rebound in service consumption.

While the Wesfarmers portfolio is well-placed in a downturn, the broker believes rising interest rates will pressure its customer base more than most. The broker updates its forecasts to reflect increased economic uncertainty over the next 12 months, with the US entering a recession and Australia slowing significantly.

Over consumption of goods over the last two years is the key risk to the near-term performance of the Wesfarmers retail businesses. Rating is downgraded to Underperform from Neutral. Target is reduced to $43.30 from $47.50.

Target price is $43.30 Current Price is $43.67 Difference: minus $0.37 (current price is over target).
If WES meets the Macquarie target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $50.20, suggesting upside of 19.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Macquarie forecasts a full year FY22 dividend of 142.60 cents and EPS of 190.10 cents.
At the last closing share price the estimated dividend yield is 3.27%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.97.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 194.4, implying annual growth of -7.6%.

Current consensus DPS estimate is 162.6, implying a prospective dividend yield of 3.9%.

Current consensus EPS estimate suggests the PER is 21.6.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 150.30 cents and EPS of 200.40 cents.
At the last closing share price the estimated dividend yield is 3.44%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 205.7, implying annual growth of 5.8%.

Current consensus DPS estimate is 173.2, implying a prospective dividend yield of 4.1%.

Current consensus EPS estimate suggests the PER is 20.4.

Market Sentiment: 0.0

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

Today's Price Target Changes
Company Last Price Broker New Target Prev Target Change
AGL AGL Energy $8.49 Morgans 9.92 10.08 -1.59%
ALD Ampol $34.44 UBS 39.40 35.65 10.52%
DMP Domino's Pizza Enterprises $63.06 Citi 100.95 108.42 -6.89%
HLS Healius $3.77 Morgan Stanley 3.75 4.40 -14.77%
HVN Harvey Norman $3.85 Macquarie 4.40 6.40 -31.25%
JBH JB Hi-Fi $39.31 Macquarie 40.90 57.80 -29.24%
MAF MA Financial $4.90 Ord Minnett 10.00 12.50 -20.00%
PAN Panoramic Resources $0.23 Macquarie 0.35 0.40 -12.50%
STO Santos $8.10 Macquarie 10.30 10.00 3.00%
WES Wesfarmers $41.90 Macquarie 43.30 47.50 -8.84%
Summaries
AGL AGL Energy No Rating - Macquarie Overnight Price $8.74
Add - Morgans Overnight Price $8.74
ALD Ampol Buy - UBS Overnight Price $35.31
APA APA Group No Rating - Macquarie Overnight Price $11.47
DMP Domino's Pizza Enterprises Buy - Citi Overnight Price $62.41
EDV Endeavour Group Upgrade to Outperform from Neutral - Macquarie Overnight Price $7.15
FBU Fletcher Building Buy - Citi Overnight Price $4.66
HLS Healius Equal-weight - Morgan Stanley Overnight Price $3.84
HVN Harvey Norman Downgrade to Neutral from Outperform - Macquarie Overnight Price $4.08
JBH JB Hi-Fi Downgrade to Underperform from Outperform - Macquarie Overnight Price $41.69
MAF MA Financial Buy - Ord Minnett Overnight Price $5.33
PAN Panoramic Resources Outperform - Macquarie Overnight Price $0.26
STO Santos Outperform - Macquarie Overnight Price $8.53
WES Wesfarmers Downgrade to Underperform from Neutral - Macquarie Overnight Price $43.67
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

8

3. Hold

2

5. Sell

2

Tuesday 14 June 2022

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