Australian Broker Call

Bell Potter rates ALQ as Buy (1) -

On the back of an improved outlook for commodity factors, Bell Potter upgrades earnings for ALS Ltd.

The analyst notes junior equity raisings advanced 53% year-on-year in February, representing the fifth consecutive month of annual growth.

Typically, this precedes changes in junior activity by six to nine months and suggests an inflection point for the cycle in mid-2025.

Life sciences updates from global peers indicate strong organic growth in 4Q24 in environmental food testing, notably in the company's markets, the analyst highlights.

Bell Potter lifts EPS estimates by 5% for FY26 and FY27. Target price rises to $18 from $17.30, with no change to the Buy rating.

Target price is $18.00 Current Price is $15.86 Difference: $2.14
If ALQ meets the Bell Potter target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $16.68, suggesting upside of 6.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.9

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

UBS rates ASX as Sell (5) -

UBS analysts have reviewed ASX's latest trading update, highlighting a strong performance in futures volumes and capital raising activity.

No changes have been made to the Sell rating or the $66.00 price target. Forecasts seem to have been slightly increased.

Among the observations shared, the broker notes futures trading saw 34% year-on-year growth in February, with options on futures volumes more than doubling.

Additionally, capital raising activity surged due to the Chemist Warehouse IPO, while equity turnover grew 18.2% year-on-year but remained slightly below expectations.

The analysts maintain concerns over ASX's valuation at 25.2x forward P/E, as well as ongoing execution and regulatory risks tied to the CHESS replacement project.

Target price is $66.00 Current Price is $66.26 Difference: minus $0.26 (current price is over target).
If ASX 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 $64.18, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.5

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

Morgan Stanley rates BHP as Overweight (1) -

Morgan Stanley analysts have maintained an Overweight rating on BHP Group, keeping the price target at $48.50.

The view is the company’s latest update highlights ongoing uncertainty around the Samarco settlement, with only 17 out of 49 municipalities signing the Mariana agreement by the March 6 deadline.

Additionally, a new civil lawsuit seeking R$46bn in compensation has been filed by 21 municipalities in Brazil, while a UK court ruling impacts legal fee disputes tied to the case.

Management remains confident further financial compensation is unlikely, as dual claims may not be permitted. The broker sees potential upside if legal risks are resolved but notes lingering uncertainties.

Target price is $48.50 Current Price is $39.23 Difference: $9.27
If BHP meets the Morgan Stanley target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $44.93, suggesting upside of 15.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

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

Market Sentiment: 0.8

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

Citi rates CAR as Buy (1) -

CAR Group faces challenges within the US recreation vehicle (RV) industry, highlights Citi, although signs of improvement are emerging.

US-based Thor Industries downgraded its full year guidance due to weaker-than-expected margins, explains the broker, but noted mild improvements in retail conditions, expecting stronger RV sales in the second half.

Citi forecasts growth for CAR Group's Trader Interactive will slow in 2H25, but should deliver double-digit growth over the medium-term.

Target of $43.40 and Buy rating are unchanged.

Target price is $43.40 Current Price is $36.68 Difference: $6.72
If CAR meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $41.63, suggesting upside of 17.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.7

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

Macquarie rates CMM as Underperform (5) -

Macquarie notes Capricorn Metals' 1H25 earnings were weaker than both the broker's and consensus forecasts due to a non-cash adjustment to revenue of -$12m and higher cost of goods sold.

Net cash finished the period at $276m, $4m better than expected, driven by a lower closing lease balance.

Management retained FY25 guidance of 110-120koz and all-in sustaining costs of $1,370-$1,470/oz, with year-to-date production at 47% of the midpoint of guidance, the analyst explains.

Macquarie lowers EPS forecasts by -20% for FY25 and -2% for FY26.

No change to the Underperform rating and $7.30 target price.

Target price is $7.30 Current Price is $8.01 Difference: minus $0.71 (current price is over target).
If CMM meets the Macquarie target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.15, suggesting upside of 8.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.2

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

Citi rates DXS as Neutral (3) -

Dexus management highlighted its strong execution on portfolio performance, particularly in the office and industrial sectors, at Citi’s 2025 Global Property CEO Conference.

Management noted the REIT is well-positioned for a rebound in capital markets, with valuations stabilising and investor sentiment improving, observes Citi.

The diversified portfolio includes high-quality office and logistics assets, highlights the broker, noting a strong performance in logistics and growing interest in specialist asset classes. 

Neutral rating and $7.80 target unchanged.

Target price is $7.80 Current Price is $7.52 Difference: $0.28
If DXS meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $7.95, suggesting upside of 8.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.4

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

Morgan Stanley rates GDG as Overweight (1) -

Morgan Stanley analysts have maintained an Overweight rating on Generation Development Group, keeping the price target at $6.30.

The company’s latest update highlights strong near-term momentum across key segments, the broker comments, with FY25 EBITDA for Lonsec expected to reach $30.2m, implying potential upside to earn-out hurdles.

Investment Bonds continue to gain market share, benefiting from regulatory uncertainty around superannuation, while Managed Accounts are positioned for structural growth as adviser adoption increases.

Management sees further revenue synergies from recent acquisitions, including cross-selling opportunities between Investment Bonds and Lonsec.

The broker views Generation Development as well placed for ASX300 inclusion and remains positive on its long-term growth outlook.

Target price is $6.30 Current Price is $4.94 Difference: $1.36
If GDG meets the Morgan Stanley target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $5.62, suggesting upside of 15.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Citi rates GOZ as Buy (1) -

At the 2025 Citi Global Property CEO Conference, Growthpoint Properties Australia’s management discussed its market outlook, expecting medium to long-term recovery in office demand, driven by return-to-work trends and supply constraints.

Industrial demand remains robust, noted management, with ongoing rental growth, while funds management growth
is expected to drive higher return on equity (ROE) and valuation upside, observes Citi.

The broker highlights Growthpoint benefits from Australia’s strong macro backdrop, with population growth and net migration fueling real estate demand.

Currently, the REIT trades at a significant discount to net tangible assets (NTA), providing an attractive investment opportunity, suggest the analysts.

The $2.60 target and Buy rating are maintained.

Target price is $2.60 Current Price is $2.35 Difference: $0.25
If GOZ meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $2.59, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Ord Minnett rates NEU as Buy (1) -

Ord Minnett explains Neuren Pharmaceuticals' upcoming April Type C meeting with the FDA will focus on defining endpoints for its Phase III trial in Phelan McDermid syndrome.

The base case assumes a 150-patient trial over 15 months at a cost of -$90m, though endpoint scenarios suggest this may be conservative. A Phase III initiation in 2Q25 would be a key milestone, de-risking the investment case, the broker says.

Phase II results showed 10 of 14 efficacy endpoints achieved statistical significance after 13 weeks of NNZ-2591 treatment.

Regulatory flexibility is expected, informed by recent FDA-reviewed trials. Caregiver feedback emphasised communication, behaviour, and social interaction as primary concerns.

Buy rated with an unchanged $29.30 target price.

Target price is $29.30 Current Price is $12.59 Difference: $16.71
If NEU meets the Ord Minnett target it will return approximately 133% (excluding dividends, fees and charges).

Market Sentiment: 1.0

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

Citi rates NSR as Buy (1) -

At Citi's 2025 Global Property conference, management at National Storage REIT emphasised the company’s competitive positioning, strong financial fundamentals, and significant growth opportunities.

The broker highlights the REIT's strong incremental revenue growth potential from new capacity, noting management's revenue per available metre (REVPAM) growth strategy balances rental rate increases with occupancy management

It's felt National Storage is well-positioned to continue expanding its revenue with new capacity and a development pipeline targeting high yields. 

The $2.70 target and Buy rating are maintained.

Target price is $2.70 Current Price is $2.13 Difference: $0.57
If NSR meets the Citi target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $2.52, suggesting upside of 19.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Morgan Stanley rates ORI as Overweight (1) -

Morgan Stanley comments Orica's latest update suggests a strong start to FY25, with 1H25 EBIT guided to be higher than planned across all three segments.

Management expects improved earnings from Blasting Solutions, with the Kooragang Island turnaround on track and strong demand in Specialty Mining Chemicals.

The broker suggests capital management initiatives could be announced at the upcoming Investor Day or 1H25 result in May.

Morgan Stanley remains positive on Orica’s earnings growth trajectory but notes restructuring costs in LATAM and EMEA as key watchpoints.

Overweight, price target $22.50.

Target price is $22.50 Current Price is $16.94 Difference: $5.56
If ORI meets the Morgan Stanley target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $20.80, suggesting upside of 22.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.8

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

Macquarie rates PPT as Neutral (3) -

Perpetual's 1H25 net profit after tax was ahead of Macquarie's forecast, rising 2% year-on-year.

Annualised cost savings have been increased to -$70m to -$80m by FY27, the broker highlights.

Cash flow for 1H25 was negative due to separation activities, while net debt rose 23% to $569m. Management aims to reduce debt by -$750m-$770m by the end of FY25.

Macquarie lifts EPS forecasts by 9.9% for FY25 and 2.8% for FY26.

No change to the Neutral rating. Target price falls -6% to $19.74 from $21.05 due to valuation changes in Perpetual Corporate Trust and Perpetual Private.

Target price is $19.74 Current Price is $19.43 Difference: $0.31
If PPT meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $23.17, suggesting upside of 17.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.6

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

Citi rates RGN as Buy (1) -

Region Group's management highlighted the REIT's growth potential at the 2025 Citi Global Property CEO Conference.

Management noted Region is well-positioned for an earnings recovery in FY26, driven by top-line growth and improved capital recycling into higher-yielding assets.

The portfolio benefits from strong supermarket demand, highlights the broker, a stable retail sector with high tenant retention rates, and strong demand from non-discretionary tenants. 

The Buy rating an $2.40 target are retained.

Target price is $2.40 Current Price is $2.07 Difference: $0.33
If RGN meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $2.37, suggesting upside of 14.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.1

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

Citi rates RIO as Neutral (3) -

Citi's analysis suggests Rio Tinto does not need to raise equity, noting the balance sheet remains solid even under stressed commodity price scenarios.

The broker was responding to the CEO's comments on a possible equity raise, which surprised the market.

Citi retains a Neutral rating and a $130 target.

Target price is $130.00 Current Price is $114.92 Difference: $15.08
If RIO meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $126.42, suggesting upside of 9.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

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 RIO as Overweight (1) -

Rio Tinto announced a -US$1.8bn investment in the Brockman Syncline mine project (BS1), which is now expected to deliver first ore in 2027, a year earlier than planned.

While the early delivery is positive, two other key replacement projects, West Angeles and Nammuldi, remain behind schedule, Morgan Stanley highlights.

Management continues to expect SP10 iron ore sales to remain elevated, representing 21%, 16%, and 13% of total sales in 2025, 2026, and 2027, respectively.

The broker remains constructive on Rio’s long-term outlook but highlights the need for timely execution of all replacement projects.

Overweight rating retained, price target $130.50.

Target price is $130.50 Current Price is $114.92 Difference: $15.58
If RIO meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $126.42, suggesting upside of 9.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

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 RIO as Buy (1) -

Rio Tinto has announced a -US$1.8bn investment for the development of the Brockman Syncline 1 iron ore project as part of the Pilbara replacement, Ord Minnett details.

Capital intensity is estimated at US$53/tonne, aligning with previous guidance, with production expected to start in 2027, 12 months earlier than scheduled.

Ord Minnett believes Rio is on track to achieve its production targets. The broker retains a Buy rating and $132 target price.

Target price is $132.00 Current Price is $114.92 Difference: $17.08
If RIO meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $126.42, suggesting upside of 9.9% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

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

Citi rates SGP as Buy (1) -

At Citi's 2025 Global Property conference, management noted Stockland is well-positioned for its execution phase, with a pipeline now ready to deliver. Strategic execution across residential, logistics, retail and alternatives such as data centers were highlighted.

The broker believes the market will be focused on execution quality and ongoing growth momentum, noting existing market confidence in Stockland's capital partnerships and disciplined strategy.

The $5.80 target and Buy rating are maintained.

Target price is $5.80 Current Price is $5.10 Difference: $0.7
If SGP meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $5.59, suggesting upside of 11.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.2

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

Macquarie rates TYR as Downgrade to Neutral from Outperform (3) -

Macquarie observes Tyro Payments' 1H25 result was slightly above the broker's expectations, with gross profit exceeding by 2.3% and earnings (EBITDA) by 5%.

The analyst believes the company can achieve FY25 guidance, and management reiterated the Rule of 40 target for FY26.

Macquarie lifts EPS forecasts by 18% for FY25 and 11% for FY26, but medium-term earnings are downgraded by -15% to -20% due to higher customer loss assumptions and competitive pressure on margins.

The stock is downgraded to Neutral from Outperform. Target price falls to 82c from $1.40.

Target price is $0.82 Current Price is $0.81 Difference: $0.015
If TYR meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $1.23, suggesting upside of 56.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.4

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

Macquarie rates WAF as Outperform (1) -

West African Resources' 2024 underlying earnings (EBITDA) were slightly above Macquarie's and consensus estimates by 2% and 6%, respectively. Net profit after tax also exceeded the broker's expectation.

The company's net debt position was $28m at the end of 2024, better than the analyst's forecast of $50m.

Management retained 2025 guidance of 290-360koz at an all-in sustaining cost of around US$1,350/oz.

Macquarie lifts the 2025 EPS forecast by 5% and around 1% thereafter due to lower interest charge assumptions.

No change to the Outperform rating. Target price increases to $2.30 from $2.20.

Target price is $2.30 Current Price is $2.11 Difference: $0.19
If WAF meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Morgan Stanley rates WBC as Underweight (5) -

Morgan Stanley retains its Underweight rating on Westpac Banking, keeping the price target at $29.20.

As per the broker's observation, the latest update from the bank highlights ongoing management turnover, with Chief Executive of Consumer Jason Yetton departing, marking the fourth major leadership change since 2023.

Consumer Banking, which accounted for approximately 30% of group profit in FY24, showed improvement under Yetton’s leadership, the broker highlights, raising execution risk amid elevated investor expectations.

The bank is also searching for a new CFO, while its Project UNITE transformation is ramping up. Morgan Stanley remains cautious, noting increased leadership uncertainty could impact Westpac’s strategic execution in 2025.

Target price is $29.20 Current Price is $31.26 Difference: minus $2.06 (current price is over target).
If WBC meets the Morgan Stanley target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.70, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.7

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

Ord Minnett rates XRO as Hold (3) -

Ord Minnett has updated financial forecasts for Xero to account for the CEO's new remuneration package, estimated at NZ$35m, and the impact of the new CFO's package at NZ$15m-NZ$20m.

The analyst highlights revenue growth but expects higher costs and lower earnings before interest, tax, depreciation, and amortisation, which sit below consensus.

Increased investment in the US is also noted, adding NZ$20m-NZ$30m, though FY25 revenue growth is forecast at 23%-24% and maintained at 21% for FY26.

Ord Minnett flags the main discrepancy in FY26 forecasts with consensus is the latter’s cost-to-sales assumption ratio of 68.5%.

Hold rating and $180 target price unchanged.

Target price is $180.00 Current Price is $171.98 Difference: $8.02
If XRO meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $196.15, suggesting upside of 18.0% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

This company reports in NZD. 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