Australian Broker Call

Morgan Stanley rates ABY as Overweight (1) -

After an acquisition and a guidance upgrade by British peer THG, Morgan Stanley assesses if THG were to become a stronger competitor, it could be negative for Adore Beauty Group. However, it's considered a potential positive if industry consolidation continues. 

The analyst suggests the group could use M&A to accelerate growth. The broker retains its Buy rating and $5 target. industry view: In-line.

Target price is $5.00 Current Price is $5.10 Difference: minus $0.1 (current price is over target).
If ABY meets the Morgan Stanley target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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

UBS rates ALL as Buy (1) -

In a read-through from results of international gaming peer IGT, UBS finds trends within participation are positive, and should reflect a strong period for all operators, particularly Aristocrat Leisure.

The broker notes trends within outright sales are positive though may be company specific. Buy rating and $44.40 target retained.

Target price is $44.40 Current Price is $41.15 Difference: $3.25
If ALL meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $43.52, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Citi rates BWP as Sell (5) -

The second half distribution was in line with the company's preliminary estimate at 9.27c per security. FY21 earnings were slightly below Citi's estimates. FY22 guidance is for a similar distribution to FY21.

Citi found operating trends generally solid and consistent with the prior half. Sell maintained. Accretive acquisitions may be a source of upside risk in time, the broker adds. Target edges up to $2.90 from $2.89.

Target price is $2.90 Current Price is $4.01 Difference: minus $1.11 (current price is over target).
If BWP meets the Citi target it will return approximately minus 28% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.65, suggesting downside of -8.0% (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

Morgan Stanley rates BWP as Underweight (5) -

BWP Trust's FY21 result and FY22 DPS guidance of 18.3 cents were in-line with Morgan Stanley's forecast. Vacating tenants across various locations means that underlying earnings have been under pressure, notes the broker.

As a result, any earnings shortfall in FY22 will be supplemented by capital distributions, says management. Morgan Stanley's Underweight rating and $3.65 are target retained. Industry view: In Line.

The analyst estimates there may be no growth in distribution until FY24, when underlying earnings can fully support payments to
shareholders. Even from that point, there are considered downside risks, given 30% of the portfolio's leases expire in FY26.

Target price is $3.65 Current Price is $4.01 Difference: minus $0.36 (current price is over target).
If BWP meets the Morgan Stanley target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.65, suggesting downside of -8.0% (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 BWP as Hold (3) -

BWP Trust's FY21 distributable profit of $114m was in line with Ord Minnett's forecasts. FY22 distribution guidance is in line with FY21, with capital profit again likely to support the distribution.

Ord Minnett continues to believe the core Bunnings ((WES)) assets are conservatively valued relative to strong transaction data, while many assets will benefit from the re-rating of infill industrial assets although this is largely reflected in the implied 4.8% capitalisation rate.

Hold rating and $4.20 target maintained.

Target price is $4.20 Current Price is $4.01 Difference: $0.19
If BWP meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $3.65, suggesting downside of -8.0% (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

UBS rates BWP as Sell (5) -

BWP Trust delivered FY21 funds from operations (FFO) largely in-line with the estimate of UBS. The DPS of 18.29 cents was aided by
$3.5m of support from capital. 

The trust also provided guidance for a ‘similar’ distribution to FY21, with the proviso that capital profits may again be used to help support DPS. UBS retains its Sell rating and $3.86 target price.

Occupancy is 97.8% and the analyst suggests this will continue to remain under pressure as lease expiries average 10% per year, for the next five years. It's assumed 1 in 6 leases will not be renewed and there will be 12 months of downtime, which holds back rent growth.

Target price is $3.86 Current Price is $4.01 Difference: minus $0.15 (current price is over target).
If BWP meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.65, suggesting downside of -8.0% (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

Credit Suisse rates CWN as Neutral (3) -

Credit Suisse assumes Crown Resorts retains its Melbourne casino licence, under supervision. Yet, having been asked to present a break-apart valuation the broker arrives at a downside-case valuation of $7.50 a share, which assumes licences are retained in Western Australia and NSW.

One complexity in Melbourne is that the casino building is on leased government land while separately Crown Resorts has adjacent wholly-owned operations. Neutral rating and $10.10 target maintained.

Target price is $10.10 Current Price is $8.95 Difference: $1.15
If CWN meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $11.74, suggesting upside of 34.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Macquarie rates DHG as Neutral (3) -

Macquarie believes the cost outlook at the upcoming results on August 17 will be a critical catalyst for further upgrades to earnings estimates. Meanwhile, near-term listing volumes appear solid and the broker suspects there is upside risk to consensus views.

Domain Holdings is considered a solid business with strong yield growth yet with limited valuation support. Macquarie retains a Neutral rating. Target is reduced to $4.80 from $4.83.

Target price is $4.80 Current Price is $4.89 Difference: minus $0.09 (current price is over target).
If DHG 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 $5.02, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in May.

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

Morgans rates FCT as Add (1) -

As KPI's were re-released, Morgans found fourth quarter results were largely as expected. The broker retains its Speculative Buy rating and $0.16 target price, after making no changes to medium-term forecasts.

Key points for the analyst included an impressive 7 times year-on-year and 50% quarter-on-quarter increase in International annualised recurring revenue. There was also considered to be tight cost control.

Morgans anticipates sales growth will be muted over the next six months, as priority is being given to de-bottlenecking technical obstacles to customer adoption/sales acceleration. Sales growth is expected to re-accelerate thereafter.

Target price is $0.16 Current Price is $0.07 Difference: $0.09
If FCT meets the Morgans target it will return approximately 129% (excluding dividends, fees and charges).

Market Sentiment: 1.0

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

Macquarie rates GMA as Outperform (1) -

First half results, which were substantially ahead of Macquarie's forecasts, included exceptionally low claims, as the moratorium on foreclosures continued. Dividends have resumed based upon a more favourable economic outlook.

The broker suspects investors will be cautious for the next few months until there is clarity on the outcome of the Commonwealth Bank ((CBA)) tender. Still, Macquarie believes the stock is undervalued and maintains an Outperform rating. Target is raised to $3.40 from $3.35.

Target price is $3.40 Current Price is $2.28 Difference: $1.12
If GMA meets the Macquarie target it will return approximately 49% (excluding dividends, fees and charges).

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

Citi rates GUD as Neutral (3) -

FY21 underlying net profit was broadly in line with Citi's estimates. The broker believes the shares are fairly priced, asserting the company may be challenged to generate more than single-digit growth over the medium term without acquisitions or a significant export strategy.

Acquisitions remain on the agenda and the company believes it can still complete due diligence in lockdowns. The broker's analysis suggests an acquisition with an enterprise value of $120-150m can be acquired without leverage increasing above 2x.

Citi retains a Neutral rating and reduces the target to $12.30 from $14.20.

Target price is $12.30 Current Price is $11.70 Difference: $0.6
If GUD meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $12.96, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Credit Suisse rates GUD as Outperform (1) -

Industry tailwinds are ongoing, Credit Suisse observes, with FY21 results in line with expectations. The broker believes the cost increases are transient although freight costs may take time to normalise.

Credit Suisse upgrades revenue forecasts, largely to reflect the flow-through of higher base estimates. Although the lockdowns warrant caution, the broker assesses a 5.2% revenue growth forecast for the automotive segment in FY22 is not overly ambitious.

Outperform rating maintained. Target is reduced to $13.90 from $14.00.

Target price is $13.90 Current Price is $11.70 Difference: $2.2
If GUD meets the Credit Suisse target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $12.96, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Macquarie rates GUD as Outperform (1) -

Underlying FY21 results were broadly in line with Macquarie's expectations. The automotive result was solid, the broker notes, with revenue up 34%.

Volatile trading conditions have returned yet the broker assesses the automotive aftermarket trade is defensive and should recover quickly as mobility normalises.

Incremental contributions from M&A should also help growth in FY22. Outperform maintained. Target is reduced to $13.60 from $14.15.

Target price is $13.60 Current Price is $11.70 Difference: $1.9
If GUD meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $12.96, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Ord Minnett rates GUD as Hold (3) -

GUD Holdings reported FY21 EBIT of $101.2m, slightly ahead of Ord Minnett's forecasts. The broker notes margin pressure in the automotive business in the second half and the contribution from the recently acquired G4CVA business underwhelmed.

The broker also points out anticipated benefits from the company's currency hedging have dissipated, likely to be absorbed by supplier cost inflation and business reinvestment. Hold maintained. Target is reduced to $12.00 from $12.50.

Target price is $12.00 Current Price is $11.70 Difference: $0.3
If GUD meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $12.96, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Morgan Stanley rates KAR as Overweight (1) -

Morgan Stanley ponders whether Karoon Energy's recent share price weakness is due to market concerns regarding possible funding for acquisitions. This near-term risk is thought to be overstated and the current share price looks compelling.

In what the analyst considers a strengthening of the management team, Mr Antonio Guimaraes has been appointed as the President of the Brazilian operations. He has over 30 years global oil and gas experience, including various roles at Shell.

Overweight maintained. Attractive industry view. Target is $1.85.

Target price is $1.85 Current Price is $1.24 Difference: $0.61
If KAR meets the Morgan Stanley target it will return approximately 49% (excluding dividends, fees and charges).

Current consensus price target is $1.82, suggesting upside of 46.5% (ex-dividends)

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 LEP as Neutral (3) -

FY21 earnings and distribution guidance were in line with Macquarie's estimates. Following completion of the rental determination process the company has divested six assets and an additional two are being held for sale.

While the portfolio is 36% under-rented, Macquarie expects divested assets would have experienced negative rental reversions. Therefore, the sale of these assets improves the quality of the portfolio. The broker retains a Neutral rating and raises the target to $4.78 from $4.72.

Target price is $4.78 Current Price is $4.82 Difference: minus $0.04 (current price is over target).
If LEP meets the Macquarie target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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

Ord Minnett rates LEP as Lighten (4) -

FY21 distributable profit of $34.4m was below Ord Minnett's forecast, because of higher management and interest expenses.

Guidance for FY22 of $0.22 per security in distributions is up 2.3%, and reflects management's expectations for a material uplift in rent from the 2028 uncapped market rent reviews.

Ord Minnett considers the portfolio high-quality and stable and it should benefit from demand for the long WALE assets. The critical issue is the level of under-renting. The broker retains a Lighten rating and increases the target to $4.50 from $4.30.

Target price is $4.50 Current Price is $4.82 Difference: minus $0.32 (current price is over target).
If LEP meets the Ord Minnett target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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 LNK as Upgrade to Outperform from Neutral (1) -

Link Administration, ex PEXA, is assessed is assessed to be trading at around $2.50 a share. Hence, Credit Suisse believes value has emerged and raises the target to $5.55 from $5.40, while upgrading to Outperform from Neutral.

Not only is there better value, the broker also believes tailwinds are emerging and there are several areas of potential upside. Catalysts could include a buyback announcement at the results and a stronger-than-expected outlook.

Target price is $5.55 Current Price is $4.91 Difference: $0.64
If LNK meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $5.63, suggesting upside of 13.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Credit Suisse rates OML as Downgrade to Neutral from Outperform (3) -

Given the uncertainty around second half bookings, Credit Suisse lowers its FY21 estimates for oOh!media by -9% at the EBITDA level.

A delayed recovery to the sector along with the cyclical nature of the advertising market and, specifically, the uncertainty around the Sydney Trains contract leads the broker to downgrade to Neutral from Outperform.

The company will report its first half result on August 23. Target is reduced to $1.80 from $2.35.

Target price is $1.80 Current Price is $1.63 Difference: $0.17
If OML meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $1.92, suggesting upside of 22.9% (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

Macquarie rates PNI as Outperform (1) -

Despite upgrading forecasts by more than 80% during the second half, FY21 results were still ahead of Macquarie's expectations.

The FY22 outlook is also attractive to the broker, supported by closing funds under management being 28% above the FY21 average.

Macquarie retains an Outperform rating and raises the target to $15.33 from $12.28.

Target price is $15.33 Current Price is $13.63 Difference: $1.7
If PNI meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $13.23, suggesting downside of -10.9% (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

Ord Minnett rates QBE as Accumulate (2) -

Ahead of the first half results on August 12, Ord Minnett assesses the underlying combined operating ratio should show meaningful improvement from the 95% exit run rate the company signalled for 2020.

Catastrophe costs were elevated in the first half and the broker notes most peers have been surprisingly favourable on reserve releases. Ord Minnett retains an Accumulate rating and raises the target to $13.50 from $12.11.

Target price is $13.50 Current Price is $11.03 Difference: $2.47
If QBE meets the Ord Minnett target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $12.20, suggesting upside of 10.2% (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: 0.8

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

Morgan Stanley rates REH as Initiation of coverage with Underweight (5) -

Morgan Stanley initiates coverage on Reece with an Underweight rating and $16.40 target price. While a quality business with an impressive track record, it's thought the current share price is at an unsustainable premium to peers, and the company's own historical averages.

The broker believes the US expansion will provide the next leg of growth, and sees opportunities to grow market share and increase margins, which lag the A&NZ business. 

Risk to the analyst's Underweight rating is greater-than-anticipated upside from sustained repair and renovation growth, or accelerated store rollout in the US.

Target price is $16.40 Current Price is $24.15 Difference: minus $7.75 (current price is over target).
If REH meets the Morgan Stanley target it will return approximately minus 32% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $15.76, suggesting downside of -34.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.8

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

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

Following the second quarter result from competitor Philips, Morgan Stanley assesses the market share opportunity from the DreamStation recall could be larger than first impressions. FY22 and FY23 EPS estimates are increased by 14% and 2%.

Hence, the broker's price target also rises to $33.78 from $30.10. It's estimated around 44 weeks will be required to execute the full repair/replace program, and while Philips is not taking orders for new devices, it continues to sell masks and consumables.

Morgan Stanley retains its Equal-weight rating. Industry view: In-Line.

Target price is $33.78 Current Price is $36.78 Difference: minus $3 (current price is over target).
If RMD meets the Morgan Stanley target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $33.46, suggesting downside of -9.6% (ex-dividends)

The company's fiscal year ends in June.

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: 0.5

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

Morgan Stanley rates RMS as Overweight (1) -

Morgan Stanley forecasts increases to life of mine (LOM) for Edna May to FY31 from FY25, and for Mt Magnet to FY31 from FY29, with increased outer-year production. It's felt greater baseload ore visibility allows ongoing high-grade additions and boosts investor confidence.

The broker's Overweight rating is maintained, with the company looking cheap by comparison to peers. The target price increases to $2.40 from $2.30. Industry View: Attractive.

Target price is $2.40 Current Price is $1.79 Difference: $0.61
If RMS meets the Morgan Stanley target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $2.18, suggesting upside of 22.5% (ex-dividends)

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

Ord Minnett rates SHL as Hold (3) -

Ahead of the results on August 23, Ord Minnett lifts forecasts for FY22 to reflect the sharp lift in coronavirus testing in Australia, offset by slower routine demand across the rest of the operations.

The broker expects the board will consider capital management at the results and tentatively forecasts a $0.20 per share special dividend for the second half. Hold maintained. Target rises to $40.00 from $36.40.

Target price is $40.00 Current Price is $40.40 Difference: minus $0.4 (current price is over target).
If SHL meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $38.67, suggesting downside of -5.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

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

Morgans initiates coverage on Silk Logistics Holdings with an Add rating and $2.76 target price. It's an Australia-wide, founder-led logistics business, generating its earnings from Port Logistics and Contract Logistics (warehousing and distribution).

The company employs an asset-light, tech-enabled business model, with a highly variable direct cost base. The broker notes it provides investors with exposure to growth in economic activity, trade volumes, e-commerce and logistics outsourcing.

Morgans thinks the share price could lift to the target price, as a track record of delivering on its growth prospects is built. Furthermore, based on a 40-60% dividend payout ratio, the return is enhanced by an estimated FY22 dividend yield of circa 3%.

The company reports its FY21 result on 26 August.

Target price is $2.76 Current Price is $2.55 Difference: $0.21
If SLH meets the Morgans target it will return approximately 8% (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

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

An around 5% increase in forecast capex for Scarborough is at the lower end of Morgan Stanley's expectations. The break-even cut off has not fallen, despite upstream capacity increasing to 8mtpa, notes the analyst.

Morgan Stanley expects the next catalysts include a sell-down of Pluto Train 2 and partial divestment of Senegal.The Equal-weight rating and target price of $27 are retained. Industry view: Attractive. 

Target price is $27.00 Current Price is $22.04 Difference: $4.96
If WPL meets the Morgan Stanley target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $27.38, suggesting upside of 26.2% (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: 0.7

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

UBS rates WPL as Buy (1) -

Total capex for the development of Scarborough & Pluto T2 has increased 5% to $12.0bn, largely in-line with UBS' expectation. The broker's Buy rating and $26.10 target are maintained, as the company trades with an implied oil price of US$54/bbl versus spot of US$72/bbl.

The analyst believes the company could re-rate following the appointment of a permanent CEO and successful sell-down of Scarborough and Pluto T2. 

A formal process has commenced to sell down Scarborough to around 60% from 73.5%, and Pluto T2 to 50% from 100%.

Target price is $26.10 Current Price is $22.04 Difference: $4.06
If WPL meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $27.38, suggesting upside of 26.2% (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: 0.7

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

Citi rates XRO as Neutral (3) -

Xero has launched the next stage in its app marketplace which allows customers to purchase and pay for the apps using a centralised subscription.

Citi considers this a positive step in the monetisation of the platform but does not expect it will be completely incremental to forecasts, as it may already be accounted for in average revenue per user (ARPU) growth assumptions.

The broker remains positive on the stock and retains a Neutral rating based on valuation. Target is $135.70.

Target price is $135.70 Current Price is $145.88 Difference: minus $10.18 (current price is over target).
If XRO meets the Citi target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $124.45, suggesting downside of -16.5% (ex-dividends)

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: -0.2

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