Australian Broker Call

Macquarie rates AAD as Neutral (3) -

FY17 net profit was well below Macquarie's estimates. Earnings had been pre-announced and the broker had assumed a tax benefit  versus the underlying reported tax expense. This drove the disparity with the broker's net profit forecasts.

Hurricane  Harvey in Huston has resulted in the closure of five Main Event sites. Three of the centres will re-open in seven days and the fourth will be delayed for one-two months as it has sustained some damage. The company is unsure when the fifth will be re-opened. The financial impact is difficult to estimate at this point in time, suggests the broker.

Neutral retained. Target is reduced to $2.10 from $2.19.

Target price is $2.10 Current Price is $1.95 Difference: $0.15
If AAD meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $1.88, suggesting downside of -3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.1

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

Morgans rates AAD as Hold (3) -

Ardent Leisure had pre-released so no surprises in its official result. The company also recently disclosed the detail of its strategic review of Main Event, which involves slowing the planned store rollout.

FY18 should be a year of strong earnings growth, the broker suggests, but off a very low base. It will require execution of the Main Event strategy and a recovery in theme park visitation. The broker sees a stretched valuation but also potential corporate appeal, hence Hold and $1.70 target retained.

Target price is $1.70 Current Price is $1.95 Difference: minus $0.25 (current price is over target).
If AAD meets the Morgans 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 -3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.1

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

Morgans rates CAT as Add (1) -

Catapult's result was in line following a period of disruption featuring two acquisitions and a major reinvestment program. The broker believes the company is now back on track and FY18 will feature a focus on operational performance.

Catapult is a world leader in athletic devices and the market opportunity before the company is large, the broker suggests. Add retained. Target rises to $2.97 from $2.79.

Target price is $2.97 Current Price is $1.61 Difference: $1.36
If CAT meets the Morgans target it will return approximately 84% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Morgan Stanley rates CBA as Underweight (5) -

While the premium to peers has contracted to its lowest level since 2010, Morgan Stanley believes the stock remains overvalued and execution risks have increased.

The broker argues that the outlook for retail banking has become more challenged and the problems at peers ANZ Bank ((ANZ)) and National Australia Bank ((NAB)) have now been largely addressed.

Underweight. Target is $72. Industry view is In-Line.

Target price is $72.00 Current Price is $75.48 Difference: minus $3.48 (current price is over target).
If CBA meets the Morgan Stanley target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $79.48, suggesting upside of 6.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.4

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

Morgans rates EHL as Add (1) -

Emeco posted a complicated result due to the merger with its two largest competitors, and recapitalsation, but the fourth quarter signalled the merged entity's potential, the broker suggests. No formal guidance was offered other than a strong outlook.

The broker retains an Add rating on said potential. Target rises to 20c from 17c.

Target price is $0.20 Current Price is $0.17 Difference: $0.03
If EHL meets the Morgans target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Morgans rates FNP as Hold (3) -

Freedom Food's result came in short, with FY17 a year of significant investment for the company that will provide benefits in coming years. The broker has downgraded earnings forecasts but still expects strong growth in FY18-19.

The broker retains Hold, noting support from the healthy eating trend, new products, new facilities and significant opportunity in the US and China. Target falls to $4.55 from $4.65.

Target price is $4.55 Current Price is $4.70 Difference: minus $0.15 (current price is over target).
If FNP meets the Morgans target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Morgans rates MEB as Add (1) -

Medibio's result fell short of the broker but the company has sufficient cash to fund existing programs, aided by R&D tax relief. There are a number of key catalysts in the year ahead including the release of results of a number of exploratory and pivotal studies.

The broker does not rule out further capital required to accelerate clinical programs but retains Add and a $1.20 target.

Target price is $1.20 Current Price is $0.35 Difference: $0.85
If MEB meets the Morgans target it will return approximately 243% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Morgan Stanley rates MIN as Overweight (1) -

Morgan Stanley expects growth in earnings to continue and nearly double by FY20. The broker has reviewed the company's lithium operations and reaffirms its Overweight rating.

Expansions are outside the broker's base case. The company is looking at a metallurgical coal acquisition and building a logistical solution in Queensland. While the iron ore business remains marginal,  Morgan Stanley observes options exist to improve this segment.

Target is raised to $18.00 from $13.35. Industry view is Attractive.

Target price is $18.00 Current Price is $15.00 Difference: $3
If MIN meets the Morgan Stanley target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $16.37, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.7

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

Macquarie rates MLX as Outperform (1) -

FY17 profit was weaker than Macquarie expected. The pending upgrade to reserves at Nifty is expected to underpin a 7-8 year mine life, while near-mine and extension drilling may materially upgrade assumptions for the project.

Another positive catalyst is the securing of funds for the Rentails project. Outperform and $1.10 target retained.

Target price is $1.10 Current Price is $0.85 Difference: $0.25
If MLX meets the Macquarie target it will return approximately 29% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

UBS rates NXT as Buy (1) -

FY17 results were in line with UBS. The broker observes the new buildings are on track.

Not only will fit-out costs be -10-15% cheaper but the new centres will be Australia's first tier IV,  5-star energy efficient certified centres, creating a serious competitive advantage.

The operating environment also remains strong with the biggest tender pipeline the company has seen. Buy rating maintained. Target reduced to $5.15 from $5.20.

Target price is $5.15 Current Price is $4.55 Difference: $0.6
If NXT meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $5.23, suggesting upside of 16.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Macquarie rates ORE as Neutral (3) -

FY17 results were weaker than Macquarie expected. Guidance for FY18 is in line with expectations and the broker expects this should reduce some of the concerns about cash flow.

The broker considers production targets of 14,000 tonnes for FY18 are ambitious, particularly with the custom data to date regarding sales.

Neutral retained. Target rises to $3.78.

Target price is $3.78 Current Price is $3.92 Difference: minus $0.14 (current price is over target).
If ORE meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.17, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Macquarie rates PLS as Outperform (1) -

FY17 results were in line. Macquarie observes Pilgangoora remains on track. First ore shipments are expected in the last quarter of FY18. Successful ramp up and early operating success remain the key risks. Outperform. Target is $0.50.

Target price is $0.50 Current Price is $0.39 Difference: $0.115
If PLS meets the Macquarie target it will return approximately 30% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Morgans rates RAP as Add (1) -

ResApp Health's result beat the broker but it doesn't mean much given the main focus is on when the Smartcough-C trial will start. By carefully controlling costs the company has enough cash to re-run the trial.

The future is uncertain until results are in so for now the broker has deferred its forecasts for 12 months and retains Hold and a 7c target.

Target price is $0.07 Current Price is $0.07 Difference: $0.003
If RAP meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

Macquarie rates SEH as Outperform (1) -

First half net loss was slightly less than Macquarie had expected. The subsidiary loss was slightly larger, driven by higher depreciation and offset by lower costs.

Macquarie expects the second half to be stronger, underpinned by new  agreements with Shanxi GuoHua and helping to reduce risks associated with offtakes.

Outperform rating and $0.20 target retained.

Target price is $0.20 Current Price is $0.08 Difference: $0.12
If SEH meets the Macquarie target it will return approximately 150% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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

UBS rates STO as Neutral (3) -

UBS considers the 2017 capital expenditure target of $700-750m is unsustainable, given drilling activity ramps up in GLNG and the Cooper basin from 2018 to support long-term contractual commitments.

Capital expenditure is set to rise but production costs remain low, the broker suggests. The company is expected to generate positive free cash flow after 2020. UBS increases forecasts for earnings per share for 2018 for higher non-core asset production.

Neutral maintained. Target is raised to $3.95 from $3.50.

Target price is $3.95 Current Price is $3.76 Difference: $0.19
If STO meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $3.99, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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

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

FY17 operating earnings were in line with Morgan Stanley. The broker considers FY18 guidance realistic. The broker envisages two key upside risks for FY18 including a return to double-digit revenue growth for Daniel's and an upgrade to the synergies target.

Equal-weight rating retained. Target is raised to $2.35 from $2.25. Industry view: In-line.

Target price is $2.35 Current Price is $2.42 Difference: minus $0.07 (current price is over target).
If TOX meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.29, suggesting downside of -5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Morgans rates TPE as Add (1) -

TPI's underlying loss was in line with expectation and an improvement on the prior period. Narcotic raw material sales year to date have already surpassed the 2016 total, the broker notes, and TPI has sufficient material to meet targets.

The outlook for raw materials remains strong but the company's recent acquisition means the addition of a higher margin opiates business and upside potential, the broker believes. Add retained. Target falls to $3.06 from $3.54 post capital raising.

Target price is $3.06 Current Price is $2.38 Difference: $0.68
If TPE meets the Morgans target it will return approximately 29% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 1.0

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