Australian Broker Call

Macquarie rates AZJ as Outperform (1) -

Ports data for the March quarter suggests volumes will be at the lower end of the company's guidance. Macquarie finds haulage guidance of 210-220mt challenging in the light of this data.

The Hunter Valley remains weak, offsetting some of the new contract growth. The broker revises down FY18 net profit estimates by -4% and moderates the ramp-up expectations for FY19. Profitability per tonne is also flattened which lowers FY19/FY20 expectations.

Target is reduced to $4.84 from $4.91. Outperform rating maintained.

Target price is $4.84 Current Price is $4.34 Difference: $0.5
If AZJ meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $4.67, suggesting upside of 7.6% (ex-dividends)

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

Citi rates BBN as Sell (5) -

Administrators have been called in by competitors Baby Bounce and Baby Savings and Citi believes this maintains downside risk to Baby Bunting's guidance for the current financial year. Think: clearing of inventory at cheap prices.

While the future of Babies R US remains in the balance, Citi does note operational momentum irmprove din Q3. Longer term, sector consolidation is seen as a positive.

Sell rating retained. Target price unchanged at $1.20. No changes made to forecasts.

Target price is $1.20 Current Price is $1.31 Difference: minus $0.11 (current price is over target).
If BBN meets the Citi target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.58, suggesting upside of 20.8% (ex-dividends)

The company's fiscal year ends in July.

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 BBN as Neutral (3) -

While the risks in the specialty baby goods sector continue to manifest, Macquarie concludes that further consolidation has revealed the importance of scale, improved the market structure and strengthened Baby Bunting's competitive position.

Nevertheless, the rolling out of Amazon's "Prime" is likely to mean the category comes into focus and competition increases. A sustained improvement in performance and market conditions is required and the broker retains a Neutral rating. Target is reduced to $1.35 from $1.60.

Target price is $1.35 Current Price is $1.31 Difference: $0.04
If BBN meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $1.58, suggesting upside of 20.8% (ex-dividends)

The company's fiscal year ends in July.

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

Morgan Stanley rates BBN as Overweight (1) -

Morgan Stanley believes the long-term competitive position is strengthening as two of the top four baby retailers by store numbers enter administration.

Meanwhile, the broker considers Baby Bunting's third quarter trading is solid, with same store sales growth of 4.7%.

Overweight and $2.00 target retained. Industry view: In Line.

Target price is $2.00 Current Price is $1.31 Difference: $0.69
If BBN meets the Morgan Stanley target it will return approximately 53% (excluding dividends, fees and charges).

Current consensus price target is $1.58, suggesting upside of 20.8% (ex-dividends)

The company's fiscal year ends in July.

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

Morgan Stanley rates CCL as Underweight (5) -

Morgan Stanley observes the stock's valuation now looks stretched. A visit to Indonesia has caused the broker to suspect that there has been little improvement in weak consumer trends so far in 2018.

Specifically, beverages competition remains fierce. While an earlier Ramadan will pull profit forward to the first half from the second Morgan Stanley expects underlying volume/pricing to remain soft.

Target is $8. Underweight. Cautious industry view.

Target price is $8.00 Current Price is $8.99 Difference: minus $0.99 (current price is over target).
If CCL meets the Morgan Stanley target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.82, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in December.

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 CHC as Outperform (1) -

Macquarie investigates the implications of the company launching a real estate debt fund. Charter Hall has recently indicated it is considering alternatives to growing its business.

Macquarie believes the opportunity is clearly large and, while it may take some time to reach critical mass, estimates the creation of a $1.5bn debt fund would be around 2.1% accretive to earnings on a full year basis.

With the earnings upside risk from the creation of new products Macquarie retains an Outperform rating. Target is $6.25.

Target price is $6.25 Current Price is $5.81 Difference: $0.44
If CHC meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $6.08, suggesting upside of 4.6% (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 COE as Initiation of coverage with Add (1) -

Morgans notes a significant catalyst for the company is approaching, with development of production wells Sole-3 and Sole-4 the last major de-risking event for the company's flagship asset.

The broker acknowledges there is more growth in the portfolio beyond Sole that could ultimately exceed valuation. Morgans initiates coverage with an Add rating and $0.44 target. Longer term, successful appraisal drilling and the sanctioning of Manta and exploration in the Otway Basin creates further upside potential.

Target price is $0.44 Current Price is $0.31 Difference: $0.13
If COE meets the Morgans target it will return approximately 42% (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 FDV as Add (1) -

The company expects three of its portfolio businesses will turn positive for cash flow this year, followed by another six in 2019. Morgans observes the company's online marketplace is monetising leading market positions rapidly, mostly through transaction related fees.

The broker retains a positive view on the stock as it offers investors exposure to the growth in online advertising in emerging economies with large populations amid growing smartphone usage.

The broker maintains an Add rating and $0.92 target.

Target price is $0.92 Current Price is $0.64 Difference: $0.28
If FDV meets the Morgans target it will return approximately 44% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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

Citi rates FNP as Initiation of coverage with Buy (1) -

Citi has initiated coverage with a Buy rating and $6.70 price target. The positive view is based upon significant margin expansion prospects in the years ahead, supported by operating leverage, protein fractionation and a market shift towards branded products.

One of the company's key export markets is China, considered a strong growth opportunity. Citi describes Freedom Foods as a "healthy disruptor", predicting its focus on healthy foods and beverages makes Freedom Foods ideally positioned to disrupt much larger fast moving consumer goods (FMCG) companies.

Note: the company has just launched its own A2 protein UHT milk product.

Target price is $6.70 Current Price is $5.41 Difference: $1.29
If FNP meets the Citi target it will return approximately 24% (excluding dividends, fees and charges).

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

UBS rates GMA as Upgrade to Neutral from Sell (3) -

UBS remains cautious about a gradual housing market correction but believes operating challenges that were posed by the decline in net earned premium have now played out and are widely appreciated. The broker now regards a Sell thesis as less compelling and upgrades to Neutral.

UBS acknowledges that sentiment could push the stock's value well below fundamentals if key housing data deteriorates. The surplus capital remains a positive and the broker renews expectations of capital returns. Target is reduced to $2.30 from $2.50.

Target price is $2.30 Current Price is $2.29 Difference: $0.01
If GMA meets the UBS target it will return approximately 0% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

Credit Suisse rates GTN as Outperform (1) -

Credit Suisse suggests the company will become a cleaner and simpler business now it has exited the loss-making US. GTN will be disposing of USTN to management for a nominal sum after being unable to reduce its expenditure to manageable levels.

Nevertheless, the broker considers it a much less interesting business now the potential upside of the US market is forgone. The broker upgrades FY18 and FY19 estimates because of the absence of USTN losses.

Target is reduced to $2.20 from $2.70 on the removal of the upside from the US. Outperform maintained given the undemanding valuation.

Target price is $2.20 Current Price is $1.78 Difference: $0.42
If GTN meets the Credit Suisse target it will return approximately 24% (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

Credit Suisse rates NVT as Underperform (5) -

Australasian enrolment growth has slowed to 4% in the first semester. The company has indicated that the simplified student visa framework is contributing to a bias towards the highest ranking universities, i.e. those that do not partner with Navitas.

This compares with 30% growth in higher education commencements by international students in the second half of 2017 on government estimates. The company has confirmed it expects a -$14m adverse impact in FY18 from the loss of some AMEP contract regions.

Despite expecting a return to growth in FY19, Credit Suisse believes the stock is fully valued and retains and Underperform rating. Catalysts for an upgrade would include rationalisation of the portfolio within careers & industry and a re-weighting of student visas towards lower-tier institutions. Target is $4.

Target price is $4.00 Current Price is $4.63 Difference: minus $0.63 (current price is over target).
If NVT meets the Credit Suisse target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.55, suggesting downside of -1.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.2

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

Credit Suisse rates WSA as Outperform (1) -

The company has made a $32m capital commitment to Odysseus over 18 months to commence and complete early works so the mine is ready for development. This is slightly more than the initial guidance as some work programs have been brought forward.

Flexibility has been maintained in order to suspend staged works at any time, if market conditions dictate. Credit Suisse maintains an Outperform rating and $3.40 target.

Target price is $3.40 Current Price is $3.21 Difference: $0.19
If WSA meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $2.94, suggesting downside of -8.5% (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