Australian Broker Call

Credit Suisse rates ABP as Outperform (1) -

Abacus Property has raised $402m in an entitlement offer with the intention to deploy funds for acquisitions and developments. Pro forma gearing is 17.5% with Credit Suisse noting there is capacity to fund $911m in investments before gearing hits the 35% target.

The company appears to be exercising its first right of offer over managed storage assets that have been on the market.

While the capital raising is dilutive to estimates, the plan to expand the storage portfolio should increase the appeal to a wider investor base, the broker suggests. Outperform maintained. Target is $3.09.

Target price is $3.09 Current Price is $3.00 Difference: $0.09
If ABP meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $2.91, suggesting downside of -4.7% (ex-dividends)

The company's fiscal year ends in June.

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

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

UBS downgrades AGL Energy to Sell from Neutral with the target falling to $12.25 from $15.60.

The downgrade is driven by margin pressure materially reducing the broker's wholesale electricity price forecast.

The push towards renewables coupled with the fact that about 90% of AGL Energy's electricity generation comes from coal, the broker believes AGL's earnings will decline by -12% CAGR over FY21-24.

Target price is $12.25 Current Price is $13.51 Difference: minus $1.26 (current price is over target).
If AGL meets the UBS target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.84, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates ALD as Hold (3) -

The federal government will be bringing forward its interim refinery production payment of $83.5m, as part of its relief measures for the refining sector. Ampol, which owns the Lytton refinery in Queensland, is yet to indicate its participation.

Ord Minnett considers the step a positive to support the Australian refining industry. The support will be provided via a minimum 1c/litre payment on primary transport fuel from major domestic refineries that operate in Australia.

The government will fund the first six months of the production payment. To receive the payment, refineries must agree to continue to operate for the duration of the program, and must commit to an open-book process and long-term self-help measures.

The broker awaits Ampol's decision on participation. Hold rating is maintained with a target of $30.

Target price is $30.00 Current Price is $30.64 Difference: minus $0.64 (current price is over target).
If ALD meets the Ord Minnett target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $31.84, suggesting upside of 5.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Morgan Stanley rates ALU as Overweight (1) -

The trading environment continues to be challenging because of the pandemic, particularly in the US. Hence, Morgan Stanley finds a reiteration of full year FY21 guidance for revenue growth of 6-12% and operating earnings of US$76-89m a positive development.

The broker's bullish outlook depends on the success of the new cloud platform and the company's positive commentary regarding Altium 365 is also encouraging.

Overweight rating and $40 target retained. Industry view: Attractive.

Target price is $40.00 Current Price is $36.03 Difference: $3.97
If ALU meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $36.46, suggesting upside of 8.6% (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: 0.3

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

UBS rates ALU as Neutral (3) -

Altium has divested its non-core tasking division to the European private equity firm - FSN Capital - for US$110m. The transaction is expected to complete in the third quarter of FY21.

The company reaffirmed its FY21 guidance despite the covid lock-downs in the US and the tasking transaction that will impact the historical revenue split of 45:55.

UBS notes the divestment is consistent with Altium's focus on its Altium 365 platform and realignment to cloud. Post-transaction the company will have more than US$210m in net cash, potentially opening increasing acquisition opportunities. 

Neutral and $36 target retained.

Target price is $36.00 Current Price is $36.03 Difference: minus $0.03 (current price is over target).
If ALU meets the UBS target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $36.46, suggesting upside of 8.6% (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: 0.3

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

Macquarie rates APE as Neutral (3) -

Pre-tax profit guidance has been set at $195-205m for 2020. Macquarie expects margins will remain elevated at the beginning of 2021 but this needs to be sustained in order for more earnings upgrades to occur.

Supply constraints and tight inventory should support earnings in early 2021 and lower bailment expenses support profitability before normalising towards middle of the year.

Macquarie retains a Neutral rating and raises the target to $13.85 from $12.50.

Target price is $13.85 Current Price is $14.22 Difference: minus $0.37 (current price is over target).
If APE meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.88, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Morgan Stanley rates APE as Overweight (1) -

Eagers Automotive will divest the Daimler truck business and property for $108m. The company will continue to have a truck presence post the divestment with 25 Webster, Isuzu, Hino and Iveco dealerships.

Morgan Stanley continues to envisage no shortage of structural growth opportunities for the company and expects proceeds will be reinvested.

Overweight rating. Target is $17. Industry view: In-Line.

Target price is $17.00 Current Price is $14.22 Difference: $2.78
If APE meets the Morgan Stanley target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $13.88, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

UBS rates APE as Buy (1) -

Eagers Automotive sold its Daimler truck business to Velocity Vehicle Group for $108m. UBS believes the transaction makes strategic and financial sense. The company will continue to operate its other truck businesses within the automotive retailing division.

UBS observers the company also delivered a strong trading update led by rebounding new vehicle sales, strong pricing and cost reduction initiatives. The company has guided to FY20 profit before tax between $195-205m, up 25% versus UBS's forecast.

The broker sees scope for continued outperformance driven by a higher rebound in front-end volumes, improving finance and insurance penetration and execution on its EA123 used-car strategy.

Buy rating with the target rising to $15 from $13.

Target price is $15.00 Current Price is $14.22 Difference: $0.78
If APE meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $13.88, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

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

Appen has guided to second-half operating income of $57-60m, -23-27% below UBS's estimates of $78m. While expecting higher risks to Appen's FY20 guidance, the magnitude and timing of the downgrade surprised the broker.

The company indicated a "reprioritisation" of resources away from mature projects and towards new product areas. USB believes this is primarily driven by covid and a return to normal will see the volume of work to mature projects resume.

Even so, the broker adopts a cautious stance and downgrades its rating to Neutral from Buy with the target falling to $27.50 from $44.

Target price is $27.50 Current Price is $25.25 Difference: $2.25
If APX meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $31.82, suggesting upside of 29.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Macquarie rates AWC as Underperform (5) -

The Portland smelter is expected to receive a government subsidy that will allow it to remain in operation until at least the end of 2024. Macquarie incorporates this into forecasts, which drives a 1-2% increase in estimates.

While distributions from AWAC have benefited from a recent increase in aluminium prices the broker notes alumina prices are still depressed.

Underperform rating and a $1.50 target are unchanged.

Target price is $1.50 Current Price is $1.92 Difference: minus $0.42 (current price is over target).
If AWC meets the Macquarie target it will return approximately minus 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.01, suggesting upside of 8.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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 AWC as Overweight (1) -

According to press speculation the federal government has moved to ensure the Portland aluminium smelter is open beyond mid 2021.

Although Morgan Stanley expected this smelter would remain open there were some concerns around closure and rehabilitation costs.

Whether the amount agreed will be enough to keep Portland open indefinitely is yet to be seen but the broker concludes it is a step in the right direction.

Morgan Stanley retains its Overweight rating. Industry view: Attractive. Target is $2.15.

Target price is $2.15 Current Price is $1.92 Difference: $0.23
If AWC meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $2.01, suggesting upside of 8.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Ord Minnett rates AWC as Downgrade to Hold from Accumulate (3) -

Ord Minnett has marked to market its forward-curve-based commodity forecasts with the result that prices of some key commodities like copper, iron ore and aluminium have been pegged 10-20% higher than the broker's previous estimates.

Going into 2021, the broker is positive on the mining sector in the post-covid era.

Despite this, the recent rally in the share price of Alumina Ltd prompts Ord Minnett to downgrade its recommendation to Hold from Accumulate. A target of $2 is retained.

Target price is $2.00 Current Price is $1.92 Difference: $0.08
If AWC meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $2.01, suggesting upside of 8.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Ord Minnett rates BHP as Buy (1) -

Ord Minnett has marked to market its forward-curve-based commodity forecasts with the result that prices of some key commodities like copper, iron ore and aluminium have been pegged 10-20% higher than the broker's previous estimates.

Going into 2021, the broker is positive on the mining sector in the post-covid era and sees potential upside in the diversified miners including BHP Group.

Buy rating retained with a target of $50.

Target price is $50.00 Current Price is $42.74 Difference: $7.26
If BHP meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $44.75, suggesting upside of 7.1% (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: 0.7

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

Macquarie rates CHN as Outperform (1) -

The completion of a capital raising of $100m should enable Chalice Mining to accelerate drilling activity at Julimar. The company has allocated $41m of the proceeds to the drilling of the resource and a further $10m to a scoping and pre-feasibility study.

Should access to the state forest be granted Macquarie expects Chalice Gold to quickly accelerate early-stage exploration to define targets. Outperform retained. Target is $5.30.

Target price is $5.30 Current Price is $3.89 Difference: $1.41
If CHN meets the Macquarie target it will return approximately 36% (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

Ord Minnett rates EVN as Sell (5) -

Ord Minnett has marked to market its forward-curve-based commodity forecasts with the result that prices of some key commodities like copper, iron ore and aluminium have been pegged 10-20% higher than the broker's previous estimates.

Gold looks like it has peaked but with near-term prices recovering about 3% since the last update, Ord Minnett believes value has resurfaced.

Sell rating is maintained with the target rising to $4.30 from $4.20.

Target price is $4.30 Current Price is $4.80 Difference: minus $0.5 (current price is over target).
If EVN meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.13, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.2

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

Ord Minnett rates GOR as Buy (1) -

Ord Minnett has marked to market its forward-curve-based commodity forecasts with the result that prices of some key commodities like copper, iron ore and aluminium have been pegged 10-20% higher than the broker's previous estimates.

Gold looks like it has peaked but with near-term prices recovering about 3% since the last update, Ord Minnett believes value has resurfaced. Gold Road Resources is the broker's preferred pick in the small-cap stocks.

Buy rating retained with the target rising to $2.15 from $2.10.

Target price is $2.15 Current Price is $1.22 Difference: $0.93
If GOR meets the Ord Minnett target it will return approximately 76% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Ord Minnett rates HMC as Hold (3) -

Home Consortium has successfully listed the HomeCo Daily Needs REIT ((HDN)). The company is planning to launch a health, wellness and government-focused fund in early 2021 with a target of $5bn-plus in assets under management.

This strategy will see Home Consortium pivot from being a large format retailing landlord to a fund manager, suggests Ord Minnett. The broker also believes the company can deliver a strong five-year funds from operations growth of 14%.

The Hold rating is maintained. The target price is increased to $3.70 from $3.50.

Target price is $3.70 Current Price is $3.87 Difference: minus $0.17 (current price is over target).
If HMC meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.72, suggesting downside of -4.3% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates ILU as Buy (1) -

Citi has raised its rutile price assumptions by 5% for 2021-23 to US$1150/t.

The broker estimates lower zircon prices since zircon is tied to a China housing market where Citi expects weaker sales and starts in 2021.

This is somewhat offset by an expectation of improved ex-China demand. As a result, 2020-22 earnings estimates are revised up by 2-3%.

Buy rating is retained with the target price rising to $6.60 from $6.20.

Target price is $6.60 Current Price is $5.83 Difference: $0.77
If ILU meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $5.78, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Morgans rates KPG as Add (1) -

Kelly Partners recently announced a partnership with AUB Group ((AUB)) to provide insurance broking, accounting and tax services to clients of both parties. Business will be conducted via a new 50%/50% owned venture named ‘Austbrokers Kelly and Partners’.

This JV will provide general and life insurance broking services to KPG clients. In time (circa five years), KPG expects to achieve penetration of around 30% of its 8,000 clients, which would result in around $2m earnings (EBIT) to the JV.

Further opportunity exists via potential acquisitions (in the JV) and potential referral agreements.

Morgans highlights Kelly Partners recently announced strong first quarter result. This was considered driven by a combination of increased profit share of operating businesses and a reduction in parent operating expenses.

The broker makes material (circa15%) EPS upgrades across the forecast period.

The Add rating is maintained. The target price is increased to $1.88 from $1.26.

Target price is $1.88 Current Price is $1.65 Difference: $0.23
If KPG meets the Morgans target it will return approximately 14% (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

Ord Minnett rates NCM as Accumulate (2) -

Ord Minnett has marked to market its forward-curve-based commodity forecasts with the result that prices of some key commodities like copper, iron ore and aluminium have been pegged 10-20% higher than the broker's previous estimates.

Gold looks like it has peaked but with near-term prices recovering about 3% since the last update, Ord Minnett believes value has resurfaced. With moderate upside from its copper exposure, the broker prefers Newcrest Mining among the large-caps.

Ord Minnett maintains its Accumulate recommendation on Newcrest with the target price rising to $34.70 from $34.10.

Target price is $34.70 Current Price is $26.81 Difference: $7.89
If NCM meets the Ord Minnett target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $33.60, suggesting upside of 25.8% (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: 0.6

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

Ord Minnett rates NST as Hold (3) -

Ord Minnett has marked to market its forward-curve-based commodity forecasts with the result that prices of some key commodities like copper, iron ore and aluminium have been pegged 10-20% higher than the broker's previous estimates.

Gold looks like it has peaked but with near-term prices recovering about 3% since the last update, Ord Minnett believes value has resurfaced.

The broker retains its Hold rating with the target rising to $13.40 from $13.20.

Target price is $13.40 Current Price is $12.17 Difference: $1.23
If NST meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $14.38, suggesting upside of 22.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Morgan Stanley rates NWS as Underweight (5) -

The Australian government has introduced to parliament a mandatory code of conduct to address the bargaining power imbalance between Australian news media businesses and global digital platforms, such as Google and Facebook.

The government wishes to pass legislation early in 2021. News Corp is reported to be in negotiations with the parties to agree on global content licensing deals and the broker suspects it is possible the company could start receiving a new content fee from 2021 onwards.

Morgan Stanley does not allow for the code in its estimates but acknowledges potential for it to be meaningful for the company's shares. Underweight rating and US$15 target maintained. Industry view: Attractive.

Current Price is $23.51. Target price not assessed.

Current consensus price target is $27.22, suggesting upside of 17.0% (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

Ord Minnett rates OGC as Accumulate (2) -

Ord Minnett has marked to market its forward-curve-based commodity forecasts with the result that prices of some key commodities like copper, iron ore and aluminium have been pegged 10-20% higher than the broker's previous estimates.

Gold looks like it has peaked but with near-term prices recovering about 3% since the last update, Ord Minnett believes value has resurfaced.

Accumulate retained. Target rises to $3.25 from $3.15.

Target price is $3.25 Current Price is $2.34 Difference: $0.91
If OGC meets the Ord Minnett target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $2.98, suggesting upside of 31.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.4

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

Ord Minnett rates ORE as Hold (3) -

Ord Minnett has marked to market its forward-curve-based commodity forecasts with the result that prices of some key commodities like copper, iron ore and aluminium have been pegged 10-20% higher than the broker's previous estimates.

The broker believes lithium prices have bottomed out and has upgraded its long-term lithium price estimates. With demand for electric vehicle growing, the broker likes the medium-to-long-term outlook but also notes significant latent supply in the short term.

Hold rating is retained with the target rising to $3.45 from $3.40.

Target price is $3.45 Current Price is $4.11 Difference: minus $0.66 (current price is over target).
If ORE meets the Ord Minnett target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.56, suggesting downside of -16.5% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates ORG as Buy (1) -

UBS notes Origin Energy's portfolio of gas power stations is well placed in an increasingly volatile electricity market. Even so, the company still sources half its energy from relatively fixed-costs. As a result, UBS believes Origin's electricity margins will be negatively impacted by the lower wholesale electricity prices.

Despite the softer outlook, the broker highlights Origin is on track to reduce its cost to serve by more than $100m by FY21 and extract further cost reductions from implementing the Kraken CRM over FY22-24.

The Buy rating is unchanged with the target falling to $6.60 from $7.50.

Target price is $6.60 Current Price is $5.05 Difference: $1.55
If ORG meets the UBS target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $6.11, suggesting upside of 23.5% (ex-dividends)

The company's fiscal year ends in June.

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

Morgan Stanley rates PSQ as Overweight (1) -

Morgan Stanley upgrades FY21 estimates to the mid point of the guidance range of 35-40% growth in operating earnings (EBITDA).

The broker considers patient acquisition will allow for solid growth even after cycling a very strong FY21.

Moreover, the critical mass and exceptional comparable sales are likely to deliver meaningful earnings leverage. The broker retains an Overweight rating and raises the target to $3.00 from $2.65. Industry view: In-line.

Target price is $3.00 Current Price is $2.39 Difference: $0.61
If PSQ meets the Morgan Stanley target it will return approximately 26% (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

Ord Minnett rates RIO as Buy (1) -

Ord Minnett has marked to market its forward-curve-based commodity forecasts with the result that prices of some key commodities like copper, iron ore and aluminium have been pegged 10-20% higher than the broker's previous estimates.

Going into 2021, the broker is positive on the mining sector in the post-covid era and sees potential upside in the diversified miners including Rio Tinto.

Buy rating retained with a target price of $150.

Target price is $150.00 Current Price is $113.94 Difference: $36.06
If RIO meets the Ord Minnett target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $117.64, suggesting upside of 4.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.4

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

Macquarie rates RRL as Upgrade to Neutral from Underperform (3) -

The board has approved the development of a new underground mine below Garden Well pit. Macquarie incorporates the new resource into estimates, noting this is a continuation of the strategy to unlock higher-grade underground projects.

The recent weakness in the stock price means the broker upgrades to Neutral from Underperform. Macquarie highlights approval and subsequent development of McPhillamys remain key to the outlook. Target is $3.90.

Target price is $3.90 Current Price is $3.73 Difference: $0.17
If RRL meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $5.06, suggesting upside of 37.1% (ex-dividends)

The company's fiscal year ends in June.

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

Morgan Stanley rates RRL as Overweight (1) -

Approval for the Garden Well underground mine has occurred ahead of Morgan Stanley's expectations. This is likely to add significant gold production to Duketon to the tune of 36,000ozpa.

Despite the high percentage of inferred resources in the mine plan, the broker believes geological confidence should increase with ongoing drilling and the project already justifies the low production expenditure.

Overweight rating. The target price is $5.45. Industry view: Attractive.

Target price is $5.45 Current Price is $3.73 Difference: $1.72
If RRL meets the Morgan Stanley target it will return approximately 46% (excluding dividends, fees and charges).

Current consensus price target is $5.06, suggesting upside of 37.1% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates S32 as Buy (1) -

Ord Minnett has marked to market its forward-curve-based commodity forecasts with the result that prices of some key commodities like copper, iron ore and aluminium have been pegged 10-20% higher than the broker's previous estimates.

Going into 2021, the broker is positive on the mining sector in the post-covid era and sees potential upside in the diversified miners including South32.

Ord Minnett maintains its Buy recommendation with the target rising to $3.10 from $3.

Target price is $3.10 Current Price is $2.60 Difference: $0.5
If S32 meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $2.79, suggesting upside of 8.8% (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: 0.7

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

Credit Suisse rates VEA as Neutral (3) -

Viva Energy will participate in an interim refinery production payment program provided by the Commonwealth government.

While the specifics of a longer-term commitment are yet to be fleshed out, Credit Suisse assumes the Geelong refinery remains open and incorporates an ongoing subsidy into its forecasts.

The broker retains a Neutral rating and raises the target to $2.03 from $1.78.

Target price is $2.03 Current Price is $2.05 Difference: minus $0.02 (current price is over target).
If VEA meets the Credit Suisse target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.20, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Ord Minnett rates VEA as Accumulate (2) -

The federal government will be bringing forward its interim refinery production payment of $83.5m, as part of its relief measures for the refining sector.

Viva Energy Group has confirmed its participation and has estimated a $30m benefit to first-half FY21 refining operating earnings.

Ord Minnett considers the step a positive to support the Australian refining industry. For now, the broker leaves its earnings forecasts for Viva Energy unchanged but notes the support will help reduce the group's operating losses.

Ord Minnett retains an Accumulate rating and $2.20 target.

Target price is $2.20 Current Price is $2.05 Difference: $0.15
If VEA meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $2.20, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

UBS rates VEA as Buy (1) -

Viva Energy Group's Geelong Refinery will be participating in the federal government's interim refinery production payment. The group will receive 1c for each litre of transport fuel produced from its Geelong Refinery from January 1, 2021, translating to around $60m per annum.

Both capital management in the near term and earnings recovery over the medium-term are expected to support the share price.

UBS maintains a Buy rating with the target rising to $2.25 from $2.15.

Target price is $2.25 Current Price is $2.05 Difference: $0.2
If VEA meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $2.20, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Ord Minnett rates WSA as Buy (1) -

Ord Minnett has marked to market its forward-curve-based commodity forecasts with the result that prices of some key commodities like copper, iron ore and aluminium have been pegged 10-20% higher than the broker's previous estimates.

Going into 2021, the broker is positive on the mining sector in the post-covid era.

The broker maintains its Buy rating on Western Areas with a target price of $3.

Target price is $3.00 Current Price is $2.50 Difference: $0.5
If WSA meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $2.69, suggesting upside of 8.1% (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