WHC – Morgan Stanley rates the stock as Overweight
Morgan Stanley considers the regional skills shortage at Maules Creek is of concern as contract labour costs could affect costs into FY21.
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APT – UBS rates the stock as Sell
Pursuant to yesterday note, in which the broker reiterated its Sell rating for Afterpay Touch based on a perceived high credit risk for the BNPL sector, and higher still for Afterpay individually, the broker has increased its sales forecasts following yesterday’s update from management.
Read MoreFSF – Credit Suisse rates the stock as Neutral
Credit Suisse observes the company has made a solid start to FY20, although an increasing milk price could put pressure on earnings, which remains subject to volatility.
Read MoreOML – Credit Suisse rates the stock as Outperform
Credit Suisse believes a more aggressive sales strategy in the fourth quarter has paid dividends for the company with an earnings upgrade bolstering confidence in its ability to deliver.
Read MoreBBN – Morgan Stanley rates the stock as Overweight
A baby products retailer, Baby and Toddler Town, based in southern New South Wales has gone into administration just eight months after Baby Bunting opened its Shellharbour store 12km away.
Read MoreADH – Morgans rates the stock as Add
The company will acquire Mocka, a vertical online retailer of affordable homewares and furniture. While the multiple is not cheap, Morgans notes it is rare to acquire an online business that is profitable and light on capital expenditure.
Read MoreSTO – Morgan Stanley rates the stock as Equal-weight
Morgan Stanley wonders whether the stock is now pricing in success. While further outperformance in the near term is possible it will depend on cost initiatives, commodity prices or progress at Narrabri.
Read MoreKSL – Morgans rates the stock as Add
Asia Development Bank will invest US$10m in Kina Securities by way of a placement at $1.37 a share. Morgans assesses the deal will strengthen the company’s banking relationships and provide access to ADB expertise.
Read MoreBVS – Macquarie rates the stock as Outperform
The UK regulator has thrown a spanner in the works of Bravura Solutions’ competitor FNZ’s acquisition of GBST, declaring the two entities must continue to operate separately.
Read MoreZ1P – Morgans rates the stock as Hold
The company has announced a $60m capital raising involving a $50m placement and $10m share purchase plan. The funds will be used for growth, investment in products and technology and to strengthen the balance sheet.
Read MoreOSH – UBS rates the stock as Neutral
UBS notes the negotiations over the P’nyang gas agreement are close to finalisation and fiscal terms are expected to mirror the Papua LNG agreement.
Read MoreWOW – Credit Suisse rates the stock as Underperform
Credit Suisse assesses a de-merger of Endeavour Drinks would enable a reinvestment strategy independent of Woolworths. Hotels & liquor retail generate lower returns on capital than the supermarket business.
Read MoreBLD – Morgan Stanley rates the stock as Equal-weight
Morgan Stanley suspects the market is finding it difficult to recognise the inherent asset value in the stock. The broker assesses the stock is currently trading at a meaningful discount to both peers and its historical valuation range.
Read MoreSHV – UBS rates the stock as Buy
FY19 results were ahead of UBS estimates at both the earnings (EBIT) and net profit level. Strong cash flow has allowed the company to pay down all debt and provides for a material future growth option.
Read MoreCCL – Credit Suisse rates the stock as Neutral
Victoria’s parliament has released a final report on the recycling and waste management inquiry. A recommendation to include a container deposit scheme was included.
Read MoreCSL – Credit Suisse rates the stock as Outperform
A tight market in plasma presents an opportunity in Europe, Credit Suisse notes. The broker suspects the US political environment, where CSL generates 55% of its immunoglobulin revenue, is likely to limit any significant price rises.
Read MoreBSL – UBS rates the stock as Sell
BlueScope Steel has set a bold target of reducing its carbon intensity by -1% per annum by 2030, UBS notes. To achieve this, every site has a plan and the majority of the reduction will be led by Port Kembla. Port Kembla is expected to use cleaner coal and higher-grade iron ore.
Read MoreFBU – Citi rates the stock as Neutral
Fletcher Building’s AGM confirmed the company is on track to meet consensus expectations, although trading to date has been a mixture of stronger and weaker results for different businesses.
Read MoreHVN – Morgan Stanley rates the stock as Underweight
Harvey Norman Australian franchisee numbers deteriorated in September/October signalling to Morgan Stanley that the demand backdrop is soft.
Read MoreTLS – Credit Suisse rates the stock as Upgrade to Outperform from Neutral
The company’s investor briefing flagged declines in the near term for mobile revenue per unit amid competition in enterprise. However an improving trend has been noted.
Read MorePPT – UBS rates the stock as Neutral
The investor briefing signalled to UBS that the Perpetual Private and Perpetual Corporate Trust divisions are well-positioned for solid growth. In comparison, prospects in Perpetual Investments remain more mixed, given a softer performance across the key Australian equity franchise.
Read MoreEVN – Morgan Stanley rates the stock as Underweight
Evolution Mining will acquire Red Lake from Newmont for US$375m plus a contingent consideration of up to US$100m.
Read MoreCTX – Credit Suisse rates the stock as Neutral
Caltex has received a conditional proposal from Alimentation Couche-Tard. The proposal permits Caltex to pay a special dividend, neutralising the attractiveness of alternative strategies further distributing franking credits, Credit Suisse observes.
Read MoreBKW – Macquarie rates the stock as Neutral
At its AGM, Brickworks noted it expects a short down-cycle for building products locally, with order intake improving in the first half next year. Property should perform well in FY20 from further development completions.
Read MoreAPT – Morgans rates the stock as Add
While a young Afterpay Touch failed to comply fully with compliance legislation, those issues have been addressed and the independent auditor has found the company’s monitoring “effective, efficient and intelligent”.
Read MoreCTX – Credit Suisse rates the stock as Neutral
Caltex proposes to sell a 49% interest in 250 freehold fuel retail sites, representing most of its freehold retail holdings. Superficially, the proposed divestment of the freehold retail sites is attractive and from an economic perspective Credit Suisse is favourably disposed to monetising the assets.
Read MoreSGM – UBS rates the stock as Sell
The company has sold its European e-recycling asset, its most profitable asset in this division, to Remondis for EUR83.5m. This leaves the key-recycling assets in the US and Australia.
Read MoreWGN – Morgans rates the stock as Hold
The near-term outlook may be challenging but Morgans notes the focus has shifted to the possible winning of significant major projects. FY20 is expected to be the cyclical low point in earnings.
Read MoreMYX – UBS rates the stock as Neutral
The company has indicated that gross revenue for the first four months of FY20 is down -16%. Key products in generics, liothyronine, and dofetilide, continue to lose share to competitors. Specialty revenue was broadly flat. Contract services revenue increased by 16%.
Read MoreMTS – Citi rates the stock as Upgrade to Neutral from Sell
Metcash has confirmed the loss of one of its largest customers, 7-Eleven. While the $800m in wholesale sales is much larger than that of the Drakes contract loss, Citi calculates a similar earnings impact.
Read MoreLLC – Citi rates the stock as Buy
Citi believes Lendlease has the potential for a multi-year re-rating as it evolves into a global real estate developer and fund manager. Critical to this is the sale of the engineering & services business.
Read MoreNWS – UBS rates the stock as Buy
UBS updates forecasts to account for the first quarter. First-quarter operating earnings (EBITDA) fell -38% to $221m, well below forecasts. The company highlighted a particularly sluggish Australian economy and property market.
Read MoreBSL – Credit Suisse rates the stock as Outperform
BlueScope Steel has confirmed first half guidance for earnings (EBIT) around $275m. Earnings drivers, including US and Asian steel spreads, are in line with assumptions provided in the original guidance.
Read MoreTNE – UBS rates the stock as Sell
FY19 results were ahead of UBS estimates. The quality was below expectations, although the outlook is considered positive.
Read MoreWEB – Credit Suisse rates the stock as Neutral
FY20 operating earnings (EBITDA) are expected to be between $157-167m with the first half registering at least $80m. Credit Suisse revises up estimates for earnings per share by 4.4%.
Read MoreWBC – Morgan Stanley rates the stock as Equal-weight
AUSTRAC has launched a civil action against Westpac for systemic non-compliance with anti-money laundering and counter-terrorism financing laws. Morgan Stanley notes investors are aware of the issue but the new allegations could create an overhang for the stock.
Read MoreCRN – Credit Suisse rates the stock as Outperform
The company has indicated 2019 operating earnings (EBITDA) will now be below the guidance range of US$687-737m. Softer metallurgical coal prices in the fourth quarter are being blamed along with a -3% reduction in saleable production.
Read MoreQAN – UBS rates the stock as Buy
UBS considers the most material disclosure at the company’s investor briefing was a five-year target for Qantas domestic earnings (EBIT) growth of 18% and 22% for Jetstar domestic.
Read MoreA2M – Macquarie rates the stock as Outperform
a2 Milk provided solid revenue guidance and margin upgrades at its AGM, thanks to price increases, product launches and benefits from the Synlait Milk ((SM1)) contract renegotiation. Improved disclosure addressed a number of market concerns, Macquarie notes.
Read MoreSUN – UBS rates the stock as Buy
Suncorp’s lending portfolio contracted -0.6% over the first quarter, resulting in a -0.1% decline on the prior corresponding quarter. UBS notes the larger housing book declined -0.6% reflecting increased competition and a subdued market backdrop.
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