Australian Broker Call

Produced and copyrighted by at www.fnarena.com

March 27, 2018

Access Broker Call Report Archives here

COMPANIES DISCUSSED IN THIS ISSUE

Click on symbol for fast access.

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

Last Updated: 12:39 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
IFL - IOOF HOLDINGS Upgrade to Buy from Neutral UBS
WHC - WHITEHAVEN COAL Upgrade to Overweight from Equal-weight Morgan Stanley
AMP  AMP LIMITED

Insurance

More Research Tools In Stock Analysis - click HERE

Overnight Price: $5.09

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

The resignation of of the CEO Craig Meller has been announced for the end of 2018, a surprise to Morgan Stanley.

This suggests to the broker the optimal path to realising value for shareholders from the strategic review, to be announced on or before May 10, is the separation of AMP into growth and value.

Equal-weight and $5.75 target retained. Industry view: In line.

Target price is $5.75 Current Price is $5.09 Difference: $0.66
If AMP meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $5.62, suggesting upside of 10.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Morgan Stanley forecasts a full year FY18 dividend of 30.00 cents and EPS of 32.00 cents.
At the last closing share price the estimated dividend yield is 5.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.91.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 33.2, implying annual growth of 13.3%.

Current consensus DPS estimate is 29.4, implying a prospective dividend yield of 5.8%.

Current consensus EPS estimate suggests the PER is 15.3.

Forecast for FY19:

Morgan Stanley forecasts a full year FY19 dividend of 32.00 cents and EPS of 36.00 cents.
At the last closing share price the estimated dividend yield is 6.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 35.8, implying annual growth of 7.8%.

Current consensus DPS estimate is 30.6, implying a prospective dividend yield of 6.0%.

Current consensus EPS estimate suggests the PER is 14.2.

Market Sentiment: 0.4

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

CAT  CATAPULT GROUP INTERNATIONAL LTD

Medical Equipment & Devices

More Research Tools In Stock Analysis - click HERE

Overnight Price: $1.21

Morgans rates CAT as Add (1) -

The company has announced a $25m equity raising with funds to be used for expanding revenue growth through higher investment in sales and marketing.

The accelerated level of investment will result in higher operating losses, Morgans notes, particularly in FY19 and FY20, but should lead to a more robust business.

Add rating maintained. Target is reduced to $1.76 from $2.02.

Target price is $1.76 Current Price is $1.21 Difference: $0.55
If CAT meets the Morgans target it will return approximately 45% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Morgans forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 4.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 29.51.

Forecast for FY19:

Morgans forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 5.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 22.83.

Market Sentiment: 1.0

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

CTX  CALTEX AUSTRALIA LIMITED

Crude Oil

More Research Tools In Stock Analysis - click HERE

Overnight Price: $31.23

Deutsche Bank rates CTX as Hold (3) -

Caltex's refiner margin has had a disappointing start to the new calendar year, missing Deutsche Bank's forecast for the full year by quite a margin.

The analysts note CRM has stabilised thus far in March, but at US$11.09/bbl on average, it remains below the December average of US$11.42/bb as well as the broker's full calendar year forecast of US$12.45/bbl.

Earnings estimates have been reduced slightly. Price target falls to $37.65 (-5c). Hold rating retained.

Target price is $37.65 Current Price is $31.23 Difference: $6.42
If CTX meets the Deutsche Bank target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $36.82, suggesting upside of 17.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Deutsche Bank forecasts a full year FY18 dividend of 133.00 cents and EPS of 276.00 cents.
At the last closing share price the estimated dividend yield is 4.26%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.32.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 237.2, implying annual growth of -0.3%.

Current consensus DPS estimate is 117.8, implying a prospective dividend yield of 3.8%.

Current consensus EPS estimate suggests the PER is 13.2.

Forecast for FY19:

Deutsche Bank forecasts a full year FY19 dividend of 135.00 cents and EPS of 287.00 cents.
At the last closing share price the estimated dividend yield is 4.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 240.0, implying annual growth of 1.2%.

Current consensus DPS estimate is 125.3, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 13.0.

Market Sentiment: 0.3

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


UBS rates CTX as Buy (1) -

Refiner margins for January and February were significantly lower than UBS expected. The broker believes the weakness is probably a result of lower global refiner margins which were affected by the oil price rally at a time of seasonally lower demand.

At this point the broker expects the Caltex refiner margin to average US$11.50/bbl for the remainder of 2018. Buy rating maintained. Target is reduced to $38.90 from $39.00.

Target price is $38.90 Current Price is $31.23 Difference: $7.67
If CTX meets the UBS target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $36.82, suggesting upside of 17.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 117.00 cents and EPS of 234.00 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 13.35.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 237.2, implying annual growth of -0.3%.

Current consensus DPS estimate is 117.8, implying a prospective dividend yield of 3.8%.

Current consensus EPS estimate suggests the PER is 13.2.

Forecast for FY19:

UBS forecasts a full year FY19 dividend of 121.00 cents and EPS of 241.00 cents.
At the last closing share price the estimated dividend yield is 3.87%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.96.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 240.0, implying annual growth of 1.2%.

Current consensus DPS estimate is 125.3, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 13.0.

Market Sentiment: 0.3

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

More Research Tools In Stock Analysis - click HERE

Overnight Price: $42.92

Citi rates DMP as Sell (5) -

Now the company has announced it will no longer pursue an enterprise bargaining agreement (too protracted a process, too difficult having to negotiate with unions, etc) Citi analysts have responded by stating the overall impact short term is not significant.

Of much larger importance is the threat of weak sales, the analysts highlight. In addition, there is also the Royal Commission into franchises and that is not without risks either, with Citi analysts suggesting greater transparency on returns and charges for franchisees including cost of goods is not by default a good thing.

Citi is worried margins might be peaking with franchisees demanding a larger slice of the pizza. Sell rating retained. Target $43.60 (unchanged).

Target price is $43.60 Current Price is $42.92 Difference: $0.68
If DMP meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $47.81, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Citi forecasts a full year FY18 dividend of 109.50 cents and EPS of 157.40 cents.
At the last closing share price the estimated dividend yield is 2.55%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.27.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 155.8, implying annual growth of 34.3%.

Current consensus DPS estimate is 116.4, implying a prospective dividend yield of 2.7%.

Current consensus EPS estimate suggests the PER is 27.5.

Forecast for FY19:

Citi forecasts a full year FY19 dividend of 133.80 cents and EPS of 190.00 cents.
At the last closing share price the estimated dividend yield is 3.12%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 191.5, implying annual growth of 22.9%.

Current consensus DPS estimate is 141.8, implying a prospective dividend yield of 3.3%.

Current consensus EPS estimate suggests the PER is 22.4.

Market Sentiment: 0.0

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


Deutsche Bank rates DMP as Sell (5) -

Management has announced it will no longer pursue the approval of an Enterprise Agreement, meaning everybody working for Domino's directly or through franchised stores will continue to be paid according to the Fast Food Industry Award.

The decision lifts costs by 2%, according to the company. Deutsche Bank takes it as a negative, arguing there is less labour flexibility embedded in the move.

The analysts see continued pressure from franchises to get a larger slice of Domino's Pizza's profits. Sell rating retained. Target untouched at $36.

Target price is $36.00 Current Price is $42.92 Difference: minus $6.92 (current price is over target).
If DMP meets the Deutsche Bank target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $47.81, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Deutsche Bank forecasts a full year FY18 dividend of 116.00 cents and EPS of 153.00 cents.
At the last closing share price the estimated dividend yield is 2.70%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.05.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 155.8, implying annual growth of 34.3%.

Current consensus DPS estimate is 116.4, implying a prospective dividend yield of 2.7%.

Current consensus EPS estimate suggests the PER is 27.5.

Forecast for FY19:

Deutsche Bank forecasts a full year FY19 dividend of 139.00 cents and EPS of 184.00 cents.
At the last closing share price the estimated dividend yield is 3.24%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 191.5, implying annual growth of 22.9%.

Current consensus DPS estimate is 141.8, implying a prospective dividend yield of 3.3%.

Current consensus EPS estimate suggests the PER is 22.4.

Market Sentiment: 0.0

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


Morgan Stanley rates DMP as Overweight (1) -

The company has announced its Australian employees will remain on the Fast Food Industry Award rather than pursue approval for a new enterprise bargaining agreement.

While differences in hourly rates of pay are negligible the greater flexibility that the EBA would have provided has signalled to Morgan Stanley this was a preferred option.

The broker suspects the industry will follow suit and move to the award. Fears that the award modernisation would be an earnings risk look overplayed to Morgan Stanley, as the company has indicated that labour costs versus sales have risen by less than existing guidance.

Overweight rating and Cautious industry view. Target is $55.

Target price is $55.00 Current Price is $42.92 Difference: $12.08
If DMP meets the Morgan Stanley target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $47.81, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Morgan Stanley forecasts a full year FY18 dividend of 121.00 cents and EPS of 156.00 cents.
At the last closing share price the estimated dividend yield is 2.82%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.51.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 155.8, implying annual growth of 34.3%.

Current consensus DPS estimate is 116.4, implying a prospective dividend yield of 2.7%.

Current consensus EPS estimate suggests the PER is 27.5.

Forecast for FY19:

Morgan Stanley forecasts a full year FY19 dividend of 146.00 cents and EPS of 197.00 cents.
At the last closing share price the estimated dividend yield is 3.40%.
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 191.5, implying annual growth of 22.9%.

Current consensus DPS estimate is 141.8, implying a prospective dividend yield of 3.3%.

Current consensus EPS estimate suggests the PER is 22.4.

Market Sentiment: 0.0

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

GXY  GALAXY RESOURCES LIMITED

New Battery Elements

More Research Tools In Stock Analysis - click HERE

Overnight Price: $3.21

Ord Minnett rates GXY as Buy (1) -

Galaxy's result came in weaker than the broker expected on lower revenues, which may well be a timing issue. The key news was the Mt Cattlin reserve upgrade, albeit that was already factored into the broker's numbers.

There was no new news on Sal de Vida, but the broker retains Buy on valuation. Target falls to $3.90 from $4.00.

This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.

Target price is $3.90 Current Price is $3.21 Difference: $0.69
If GXY meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $3.58, suggesting upside of 11.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 0.00 cents and EPS of 16.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.06.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.3, implying annual growth of 45852.4%.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 16.6.

Forecast for FY19:

Ord Minnett forecasts a full year FY19 dividend of 0.00 cents and EPS of 17.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.1, implying annual growth of -16.6%.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 19.9.

Market Sentiment: 0.2

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


UBS rates GXY as Neutral (3) -

2017 results were mixed relative to UBS estimates. The main issue to address at Mount Cattlin is the lift required in recoveries, to the 70-75% targeted post the June quarter, from a December quarter average of 58%.

UBS expects to hear regarding the capital required to develop Sal de Vida this year, with the company hopeful of committing to the project before the end of 2018. Neutral rating maintained. Target is reduced to $3.30 from $3.60.

Target price is $3.30 Current Price is $3.21 Difference: $0.09
If GXY meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $3.58, suggesting upside of 11.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 0.00 cents and EPS of 9.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 35.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.3, implying annual growth of 45852.4%.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 16.6.

Forecast for FY19:

UBS forecasts a full year FY19 dividend of 0.00 cents and EPS of 11.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.18.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.1, implying annual growth of -16.6%.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 19.9.

Market Sentiment: 0.2

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

HVN  HARVEY NORMAN HOLDINGS LIMITED

Consumer Electronics

More Research Tools In Stock Analysis - click HERE

Overnight Price: $3.67

UPDATED

Deutsche Bank rates HVN as Buy (1) -

National Australia Bank ((NAB)) has called in its loan to Harvey Norman's Coomboona JV and Deutsche Bank analysts would not exclude Harvey Norman, or Gerry Harvey himself, putting more capital in the failed dairy JV.

All in all, this remains a marginal event in the bigger scheme of things, but for the analysts this event symbolises why many investors don't like investing in the company.

Deutsche Bank likes Harvey Norman as its analysis suggests the share price implies a low multiple for the retail operations ex-real estate. Hence Buy rating retained. Target $5.

Target price is $5.00 Current Price is $3.67 Difference: $1.33
If HVN meets the Deutsche Bank target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $4.04, suggesting upside of 10.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Deutsche Bank forecasts a full year FY18 dividend of 24.00 cents and EPS of 32.00 cents.
At the last closing share price the estimated dividend yield is 6.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.47.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 33.9, implying annual growth of -16.0%.

Current consensus DPS estimate is 24.5, implying a prospective dividend yield of 6.7%.

Current consensus EPS estimate suggests the PER is 10.8.

Forecast for FY19:

Deutsche Bank forecasts a full year FY19 dividend of 26.00 cents and EPS of 34.00 cents.
At the last closing share price the estimated dividend yield is 7.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 33.6, implying annual growth of -0.9%.

Current consensus DPS estimate is 24.3, implying a prospective dividend yield of 6.6%.

Current consensus EPS estimate suggests the PER is 10.9.

Market Sentiment: -0.3

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

IFL  IOOF HOLDINGS LIMITED

Wealth Management & Investments

More Research Tools In Stock Analysis - click HERE

Overnight Price: $10.37

UBS rates IFL as Upgrade to Buy from Neutral (1) -

UBS notes the shares have fallen -11% since the October announcement of the acquisition of ANZ Wealth and suggests this reflects concerns regarding earnings attrition from the acquisition.

Nevertheless, the broker expects earnings prospects are better going forward, supported by re-pricing opportunities.

Rating is upgraded to Buy from Neutral, as the broker considers the stock trading at an unwarranted -12% discount to the market by FY21, with an average dividend yield of 6.4% over the interim. Target is raised to $11.50 from $10.75.

Target price is $11.50 Current Price is $10.37 Difference: $1.13
If IFL meets the UBS target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $12.16, suggesting upside of 17.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 54.00 cents and EPS of 56.00 cents.
At the last closing share price the estimated dividend yield is 5.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.52.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 57.3, implying annual growth of 48.1%.

Current consensus DPS estimate is 53.8, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 18.1.

Forecast for FY19:

UBS forecasts a full year FY19 dividend of 59.00 cents and EPS of 65.00 cents.
At the last closing share price the estimated dividend yield is 5.69%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 68.9, implying annual growth of 20.2%.

Current consensus DPS estimate is 62.5, implying a prospective dividend yield of 6.0%.

Current consensus EPS estimate suggests the PER is 15.1.

Market Sentiment: 1.0

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

IGO  INDEPENDENCE GROUP NL

Nickel

More Research Tools In Stock Analysis - click HERE

Overnight Price: $4.84

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

Morgan Stanley upgrades FY18 earnings estimates, driven by better-than-expected first half financials and upgrades to nickel price forecasts.

The broker maintains a Equal-weight rating, Attractive industry view and raises the target to $4.45 from $4.20.

Target price is $4.45 Current Price is $4.84 Difference: minus $0.39 (current price is over target).
If IGO 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 $4.50, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Morgan Stanley forecasts a full year FY18 dividend of 8.00 cents and EPS of 23.00 cents.
At the last closing share price the estimated dividend yield is 1.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.4, implying annual growth of 459.7%.

Current consensus DPS estimate is 5.7, implying a prospective dividend yield of 1.2%.

Current consensus EPS estimate suggests the PER is 29.5.

Forecast for FY19:

Morgan Stanley forecasts a full year FY19 dividend of 14.00 cents and EPS of 52.00 cents.
At the last closing share price the estimated dividend yield is 2.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.31.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 35.5, implying annual growth of 116.5%.

Current consensus DPS estimate is 10.6, implying a prospective dividend yield of 2.2%.

Current consensus EPS estimate suggests the PER is 13.6.

Market Sentiment: -0.3

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

JHC  JAPARA HEALTHCARE LIMITED

Aged Care & Seniors

More Research Tools In Stock Analysis - click HERE

Overnight Price: $1.95

UBS rates JHC as Neutral (3) -

The company has acquired Riviera Health, a residential aged care provider that currently operates four facilities across New South Wales. Japara has paid around $39m net of bonds for the acquisition, funded from existing cash and debt.

UBS believes this is a reasonable purchase price. Numbers are updated to reflect the acquisition. Neutral rating and $1.90 target maintained.

Target price is $1.90 Current Price is $1.95 Difference: minus $0.05 (current price is over target).
If JHC meets the UBS target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.92, suggesting downside of -1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 8.00 cents and EPS of 8.10 cents.
At the last closing share price the estimated dividend yield is 4.10%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.07.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.0, implying annual growth of -28.7%.

Current consensus DPS estimate is 8.9, implying a prospective dividend yield of 4.6%.

Current consensus EPS estimate suggests the PER is 24.4.

Forecast for FY19:

UBS forecasts a full year FY19 dividend of 9.00 cents and EPS of 9.20 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 21.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 10.1, implying annual growth of 26.2%.

Current consensus DPS estimate is 10.2, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 19.3.

Market Sentiment: 0.0

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

JHX  JAMES HARDIE INDUSTRIES N.V.

Building Products & Services

More Research Tools In Stock Analysis - click HERE

Overnight Price: $22.85

Ord Minnett rates JHX as Lighten (4) -

James Hardie's acquisition of German gypsum fibre board producer Fermacell will now be completed in April, not in the March Q as first suggested. The broker views the acquisition positively and expects a modest uplift in European sales from FY20.

There is also longer term upside potential if James Hardie can establish a manufacturing footprint in Europe. In the meantime, however, the broker sees the stock as overvalued. Lighten retained, target falls to $21.00 from $21.25.

This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.

Target price is $21.00 Current Price is $22.85 Difference: minus $1.85 (current price is over target).
If JHX meets the Ord Minnett target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $24.50, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Ord Minnett forecasts a full year FY18 dividend of 53.17 cents and EPS of 84.30 cents.
At the last closing share price the estimated dividend yield is 2.33%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 81.2, implying annual growth of N/A.

Current consensus DPS estimate is 50.5, implying a prospective dividend yield of 2.2%.

Current consensus EPS estimate suggests the PER is 28.1.

Forecast for FY19:

Ord Minnett forecasts a full year FY19 dividend of 66.14 cents and EPS of 103.75 cents.
At the last closing share price the estimated dividend yield is 2.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.02.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 99.7, implying annual growth of 22.8%.

Current consensus DPS estimate is 60.2, implying a prospective dividend yield of 2.6%.

Current consensus EPS estimate suggests the PER is 22.9.

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

RFF  RURAL FUNDS GROUP

REITs

More Research Tools In Stock Analysis - click HERE

Overnight Price: $2.25

UBS rates RFF as Buy (1) -

UBS is increasingly comfortable regarding the value creation opportunity that lies in the sale and leaseback transactions in the Queensland cattle sector. The broker upgrades estimates for FY20-21.

As the manager builds out its record in cattle and cotton the broker envisages a competitive advantage in its ability to move successfully into different segments. Buy rating and $2.39 target maintained.

Target price is $2.39 Current Price is $2.25 Difference: $0.14
If RFF meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

UBS forecasts a full year FY18 dividend of 10.00 cents and EPS of 13.00 cents.
At the last closing share price the estimated dividend yield is 4.44%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.31.

Forecast for FY19:

UBS forecasts a full year FY19 dividend of 11.00 cents and EPS of 14.00 cents.
At the last closing share price the estimated dividend yield is 4.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.07.

Market Sentiment: 1.0

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

TAH  TABCORP HOLDINGS LIMITED

Gaming

More Research Tools In Stock Analysis - click HERE

Overnight Price: $4.34

Credit Suisse rates TAH as Outperform (1) -

Tabcorp has made changes to the Powerball game so that larger jackpots build. Powerball accounted for 21.8% of FY17 lotteries product revenue and around 9% of total revenue.

Credit Suisse believes the price adjustment could deliver around 20% additional revenue for Powerball. Not all customers will reduce game volumes and fringe customers may be attracted to the bigger-more frequent jackpots.

Outperform maintained. Target is $5.20.

Target price is $5.20 Current Price is $4.34 Difference: $0.86
If TAH meets the Credit Suisse target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $5.26, suggesting upside of 21.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 19.00 cents and EPS of 16.68 cents.
At the last closing share price the estimated dividend yield is 4.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.02.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.2, implying annual growth of N/A.

Current consensus DPS estimate is 20.5, implying a prospective dividend yield of 4.7%.

Current consensus EPS estimate suggests the PER is 26.8.

Forecast for FY19:

Credit Suisse forecasts a full year FY19 dividend of 22.00 cents and EPS of 22.52 cents.
At the last closing share price the estimated dividend yield is 5.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.27.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.5, implying annual growth of 32.7%.

Current consensus DPS estimate is 22.1, implying a prospective dividend yield of 5.1%.

Current consensus EPS estimate suggests the PER is 20.2.

Market Sentiment: 0.7

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

TWE  TREASURY WINE ESTATES LIMITED

Food, Beverages & Tobacco

More Research Tools In Stock Analysis - click HERE

Overnight Price: $17.19

Credit Suisse rates TWE as Underperform (5) -

The Chinese government has imposed a 15% tariff on US wines. Credit Suisse suggests poor US/China relations will make it more difficult for Treasury Wine to develop positive consumer attitudes towards American-made wine. The broker suggests long-term value is there should Chinese consumers accept US wines.

In FY19 the company's Chinese earnings are likely to be driven by the release of the 2016 Penfolds Vintage rather than Californian wines and the broker estimates Treasury Wine has a 25-30% increase in luxury wine available in FY19.

Underperform rating and $15.35 target maintained.

Target price is $15.35 Current Price is $17.19 Difference: minus $1.84 (current price is over target).
If TWE meets the Credit Suisse target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.51, suggesting downside of -4.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 33.00 cents and EPS of 51.31 cents.
At the last closing share price the estimated dividend yield is 1.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 33.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 48.8, implying annual growth of 33.7%.

Current consensus DPS estimate is 31.5, implying a prospective dividend yield of 1.8%.

Current consensus EPS estimate suggests the PER is 35.2.

Forecast for FY19:

Credit Suisse forecasts a full year FY19 dividend of 40.00 cents and EPS of 61.81 cents.
At the last closing share price the estimated dividend yield is 2.33%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.81.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 61.7, implying annual growth of 26.4%.

Current consensus DPS estimate is 40.8, implying a prospective dividend yield of 2.4%.

Current consensus EPS estimate suggests the PER is 27.9.

Market Sentiment: 0.1

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

WES  WESFARMERS LIMITED

Food, Beverages & Tobacco

More Research Tools In Stock Analysis - click HERE

Overnight Price: $41.74

Credit Suisse rates WES as Outperform (1) -

Credit Suisse finds no significant constraints on the funding of an independent Coles under scenarios where there is more significant price competition and higher requirements for capital expenditure.

A preliminary assessment suggests that 27-37% of the current equity value of Wesfarmers would reside in a de-merged Coles. The broker estimates Coles will have an equity value of between $15-18bn, implying a free cash flow yield of 4.8-5.7%. Outperform rating and $44.98 target maintained.

Target price is $44.98 Current Price is $41.74 Difference: $3.24
If WES meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $43.06, suggesting upside of 3.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Credit Suisse forecasts a full year FY18 dividend of 195.00 cents and EPS of 250.00 cents.
At the last closing share price the estimated dividend yield is 4.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 231.7, implying annual growth of -9.0%.

Current consensus DPS estimate is 216.6, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 18.0.

Forecast for FY19:

Credit Suisse forecasts a full year FY19 dividend of 175.00 cents and EPS of 244.00 cents.
At the last closing share price the estimated dividend yield is 4.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 250.9, implying annual growth of 8.3%.

Current consensus DPS estimate is 219.0, implying a prospective dividend yield of 5.2%.

Current consensus EPS estimate suggests the PER is 16.6.

Market Sentiment: 0.1

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

WHC  WHITEHAVEN COAL LIMITED

Coal

More Research Tools In Stock Analysis - click HERE

Overnight Price: $4.49

Morgan Stanley rates WHC as Upgrade to Overweight from Equal-weight (1) -

The company is benefiting from higher coal prices and Morgan Stanley finds value in the equity, despite the rally on repairs to the balance sheet having run its course.

The broker upgrades to Overweight from Equal-weight and raises the target to $5.70 from $5.05. Morgan Stanley believes the company's cash flow and future growth potential underpin compelling value.

The stock also looks cheap versus global thermal coal peers. Industry view: Attractive.

Target price is $5.70 Current Price is $4.49 Difference: $1.21
If WHC meets the Morgan Stanley target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $4.59, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Morgan Stanley forecasts a full year FY18 dividend of 22.00 cents and EPS of 66.00 cents.
At the last closing share price the estimated dividend yield is 4.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 53.9, implying annual growth of 30.8%.

Current consensus DPS estimate is 27.9, implying a prospective dividend yield of 6.2%.

Current consensus EPS estimate suggests the PER is 8.3.

Forecast for FY19:

Morgan Stanley forecasts a full year FY19 dividend of 15.00 cents and EPS of 45.00 cents.
At the last closing share price the estimated dividend yield is 3.34%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.98.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 46.3, implying annual growth of -14.1%.

Current consensus DPS estimate is 21.6, implying a prospective dividend yield of 4.8%.

Current consensus EPS estimate suggests the PER is 9.7.

Market Sentiment: 0.3

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

WSA  WESTERN AREAS NL

Nickel

More Research Tools In Stock Analysis - click HERE

Overnight Price: $3.25

Morgan Stanley rates WSA as Underweight (5) -

Morgan Stanley upgrades its nickel price forecasts and currency which leads to earnings upgrades across FY19-20 for Western Areas.

Underweight rating, Attractive industry view and target raised to $2.45 from $2.35.

Target price is $2.45 Current Price is $3.25 Difference: minus $0.8 (current price is over target).
If WSA meets the Morgan Stanley target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.89, suggesting downside of -11.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Morgan Stanley forecasts a full year FY18 EPS of 6.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 54.17.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.4, implying annual growth of 18.5%.

Current consensus DPS estimate is 1.0, implying a prospective dividend yield of 0.3%.

Current consensus EPS estimate suggests the PER is 38.7.

Forecast for FY19:

Morgan Stanley forecasts a full year FY19 EPS of 10.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.6, implying annual growth of 97.6%.

Current consensus DPS estimate is 1.8, implying a prospective dividend yield of 0.6%.

Current consensus EPS estimate suggests the PER is 19.6.

Market Sentiment: -0.4

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

Summaries
AMP AMP Equal-weight - Morgan Stanley Overnight Price $5.09
CAT CATAPULT GROUP Add - Morgans Overnight Price $1.21
CTX CALTEX AUSTRALIA Hold - Deutsche Bank Overnight Price $31.23
Buy - UBS Overnight Price $31.23
DMP DOMINO'S PIZZA Sell - Citi Overnight Price $42.92
Sell - Deutsche Bank Overnight Price $42.92
Overweight - Morgan Stanley Overnight Price $42.92
GXY GALAXY RESOURCES Buy - Ord Minnett Overnight Price $3.21
Neutral - UBS Overnight Price $3.21
HVN HARVEY NORMAN HOLDINGS Buy - Deutsche Bank Overnight Price $3.67
IFL IOOF HOLDINGS Upgrade to Buy from Neutral - UBS Overnight Price $10.37
IGO INDEPENDENCE GROUP Equal-weight - Morgan Stanley Overnight Price $4.84
JHC JAPARA HEALTHCARE Neutral - UBS Overnight Price $1.95
JHX JAMES HARDIE Lighten - Ord Minnett Overnight Price $22.85
RFF RURAL FUNDS GROUP Buy - UBS Overnight Price $2.25
TAH TABCORP HOLDINGS Outperform - Credit Suisse Overnight Price $4.34
TWE TREASURY WINE ESTATES Underperform - Credit Suisse Overnight Price $17.19
WES WESFARMERS Outperform - Credit Suisse Overnight Price $41.74
WHC WHITEHAVEN COAL Upgrade to Overweight from Equal-weight - Morgan Stanley Overnight Price $4.49
WSA WESTERN AREAS Underweight - Morgan Stanley Overnight Price $3.25
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

10

3. Hold

5

4. Reduce

1

5. Sell

4

Tuesday 27 March 2018

Access Broker Call Report Archives here

Disclaimer:
The content of this information does in no way reflect the opinions of FNArena, or of its journalists. In fact we don't have any opinion about the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface. This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FNArena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.