Australian Broker Call

Macquarie rates ASB as Outperform (1) -

Macquarie points to a $200m institutional placement and a $20m share purchase plan announced by Austal to fund the final assembly infrastructure expansion of around -US$300m.

The capital raising is priced at $3.80 per share, a -15.8% discount to the March 10 share price, and the placement of around 52.6m shares represents approximately 14.5% of issued share capital, the broker explains.

Management retained guidance for earnings before interest and tax of over $80m. Construction of the infrastructure began in July 2024 and is due to be operational by FY26, with completion in FY27.

Accounting for the increase in shares, Macquarie lowers EPS estimates by -4% for FY25 and -17% for FY26. Target price slips -7% to $4.75 from $5.10.

Target price is $4.75 Current Price is $4.40 Difference: $0.35
If ASB meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $4.58, suggesting upside of 30.6% (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

Citi rates BKW as Buy (1) -

Ahead of the upcoming 1H25 results announcement for Brickworks on March 20, the company outlined a non-cash post-tax impairment of -$55m relating to difficult conditions in its North American operations, Citi highlights.

The North American business experienced a fall in 1H25 revenue of -13% year-on-year, below consensus and the broker's estimates, due to robust competition and loss of market share, which resulted in plant shutdowns, the analyst explains.

Brickworks' earnings update revealed margin pressures at the earnings (EBITDA) level, but property earnings are expected to be higher, and industrial valuations remain essentially flat year-on-year.

The analyst notes Building Products Australia is flat on 1H24 despite a decline in 1H25 sales due to better margins.

Citi views property as the earnings driver for the stock and the current share price as "unwarranted". Buy with a $32.50 target price.

Target price is $32.50 Current Price is $23.85 Difference: $8.65
If BKW meets the Citi target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $29.40, suggesting upside of 27.0% (ex-dividends)

The company's fiscal year ends in July.

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

Macquarie rates BKW as Neutral (3) -

Brickworks' trading update revealed a decline in 1H25 North American revenue of -13% and a substantial decline in earnings (EBITDA), Macquarie highlights, due to tough trading conditions and winter weather.

Management closed plants to manage inventory levels, the analyst explains. The recovery in the market remains uncertain, and a -$74m impairment was announced following a September impairment of around -$66.8m post-tax.

The broker notes property earnings are expected to be higher than in 1H24, and Australian building product volumes were offset by portfolio rationalisation and cost management.

Macquarie lowers EPS forecasts by -8% and -3% for FY25/FY26. Target price slips to $26.90 from $27.30. No change to Neutral rating.

Target price is $26.90 Current Price is $23.85 Difference: $3.05
If BKW meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $29.40, suggesting upside of 27.0% (ex-dividends)

The company's fiscal year ends in July.

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

Morgans rates BKW as Hold (3) -

Brickworks' 1H25 trading update, ahead of March 20 interim results, revealed a decline in earnings for its North American building materials division due to soft market conditions, explains Morgans. A post-tax non-cash impairment of approximately -$55m was booked.

The Australian building materials division was flat versus the previous corresponding period.

Commenting on the "weak" update, the analyst points out property earnings (EBITDA) were relatively low, building products flat to down and investment income uncertain.

Morgans maintains a Hold rating on Brickworks, with a reduced price target of $25.00 from $28.75.

Target price is $25.00 Current Price is $23.85 Difference: $1.15
If BKW meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $29.40, suggesting upside of 27.0% (ex-dividends)

The company's fiscal year ends in July.

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

UBS rates BKW as Buy (1) -

Brickworks' trading update revealed a slowdown in the US, which is expected to be offset by Australia in building materials, UBS explains.

The company announced a non-cash impairment charge of -$55m post-tax on 1H25 earnings, due out on March 20, relating to building products in North America.

Brickworks' property portfolio is viewed as underpinning the company's valuation, the analyst believes. UBS highlights a steadying of industrial rent growth, but rental income remains strong as old lease agreements expire.

UBS lowers EPS estimates by -22% for FY25 and -7% for FY26, largely due to timing assumptions on property development profits.

No change to Buy rating. Target price slips to $29 from $30.50.

Target price is $29.00 Current Price is $23.85 Difference: $5.15
If BKW meets the UBS target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $29.40, suggesting upside of 27.0% (ex-dividends)

The company's fiscal year ends in July.

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 BRG as Neutral (3) -

Citi retains a sanguine tone on the probability of increased competition from SharkNinja's expansion into coffee on Breville Group's sales, following the latest investor presentation, which revealed no change in SharkNinja's market share in 2024 versus 2023.

This is despite the company's move into espresso in July 2024, the analyst highlights, although the overall uptake of espresso remains low in the US coffee market.

The analyst does harbour concerns for the food preparation market, which is more discretionary than coffee, Citi says, and Breville's business has been underperforming SharkNinja.

Citi's current sales forecast of 10% growth for 2025 assumes a slowing in food preparation, offset by coffee.

Neutral rated. Target $38.20.

Target price is $38.20 Current Price is $32.22 Difference: $5.98
If BRG meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $38.36, suggesting upside of 22.2% (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

Morgans rates COG as Speculative Buy (1) -

COG Financial Services' 1H25 result was mixed, according to Morgans, with profit (NPATA) slightly above guidance.

The Novated Leasing business showed strong momentum, benefiting from the FBT incentive for electric vehicles and the Paywise acquisition, explains the broker.

The analyst notes tougher conditions in the Finance Broking and Aggregation division, with a -3% decline in Net Assets Financed and flat revenue.

The Asset Management and Lending division saw robust revenue growth but faced margin compression, notes Morgans, partially due to technology investments.

The broker's target price slips to $1.09 from $1.16 on reduced growth assumptions. Speculative Buy rating is unchanged.

Target price is $1.09 Current Price is $0.95 Difference: $0.14
If COG meets the Morgans target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $1.22, suggesting upside of 37.1% (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

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

Morgan Stanley continues to emphasise exposure to staples over discretionary due to relative valuations, with the former more attractive.

The broker expects Woolworths Group will see a higher margin uplift than Coles Group between now and FY26, but Coles is closing the margin gap on Woolworths, the analyst states.

Coles continues to gain relative market share, which is expected to be an ongoing trend, while Woolworths is generating more revenue from e-commerce.

Losses to non-grocery retail remain a "headwind," Morgan Stanley highlights, but losses are declining. Volumes per capita at an industry level remain under pressure, although some upside risks from inflation exist.

Coles Group is upgraded to Overweight from Equal-weight. Target price is lifted to $21.70 from $18.40. View: In-Line.

The broker retains an Underweight rating on JB Hi-Fi ((JBH)), Harvey Norman ((HVN)), and Super Retail Group ((SUL)).

Target price is $21.70 Current Price is $19.01 Difference: $2.69
If COL meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $21.44, suggesting upside of 13.0% (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

Bell Potter rates CWP as Buy (1) -

Bell Potter believes the sell-off in Cedar Woods Properties following the 1H25 result in February is overdone, and it remains positive on the outlook given record presales and growing margins.

The broker estimates the company requires revenue of around $460m in FY25 at 25% gross margins to meet the 10% net profit growth guidance.

With $195m revenue in 1H and $255m of presales due to settle in 2H, the analyst believes the company has enough scope to beat on revenue or margin to achieve its higher forecast for 11% net profit growth.

The analyst reiterated the stock remains its key pick in the sector. Target price of $7.20 and Buy rating are unchanged.

Target price is $7.20 Current Price is $5.28 Difference: $1.92
If CWP meets the Bell Potter target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $6.97, suggesting upside of 32.4% (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

Morgan Stanley rates MMS as Overweight (1) -

Morgan Stanley continues to highlight key small/mid-cap ideas with high conviction on earnings and outlook post-reporting season.

McMillan Shakespeare is the sixth idea. The analyst details the under-appreciated opportunity from novated leasing, with corporates and the public increasing demand in February.

The broker believes earnings growth has more momentum than currently implied by the stock's valuation, following 1H25 results that were better than feared. Group remuneration services orders are growing over 19% into 2H25.

Overweight rating. Target unchanged at $20. Industry view: In-Line.

Target price is $20.00 Current Price is $15.13 Difference: $4.87
If MMS meets the Morgan Stanley target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $18.39, suggesting upside of 26.1% (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

Morgan Stanley rates MQG as Overweight (1) -

On day two of Macquarie Group's EMEA tour, Morgan Stanley highlights the region represents almost 30% of MacCap's fee revenue.

The analyst points to greater opportunities in the EU relative to the UK, with an annual infrastructure investment gap of EUR39bn in the UK versus over EUR1trn in the EU, with energy representing over 70% of the latter.

Adjusting for forex, the EU opportunity is around twenty times greater than the UK's, although the economy is only six times larger.

Morgan Stanley believes private credit is a growth opportunity and that Macquarie should be more "aggressive" in pursuing it.

The Overweight rating and $253 target are retained. The industry view remains In-Line.

Target price is $253.00 Current Price is $201.83 Difference: $51.17
If MQG meets the Morgan Stanley target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $225.71, suggesting upside of 13.9% (ex-dividends)

The company's fiscal year ends in March.

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

Bell Potter rates NEU as Buy (1) -

Acadia Pharmaceuticals (the commercial partner for Neuren Pharmaceuticals' Daybue product) reported FY24 US sales of US$348m and guided to US$380-405m sales in FY25. This compares with Bell Potter's forecast of US$385m.

The broker notes the US-only guidance implies FY25 royalties of US$41-44m. The analyst notes the company ended FY24 with $359m of pro-forma cash which is enough to fund multiple phase 3 trials for NNZ-2591.

The broker lifted revenue forecasts for FY25-27 on forex impact and cut operating expenses forecasts after factoring in lower R&D, resulting in a rise to FY25-27 earnings estimates.

Target price cut to $20 from $25, and Buy maintained.

Target price is $20.00 Current Price is $11.40 Difference: $8.6
If NEU meets the Bell Potter target it will return approximately 75% (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

Bell Potter rates NIC as Buy (1) -

Nickel Industries' share price fell -27% on March 11 following an after-market block trade the day prior after its third-largest shareholder PT Karunia sold 178.9m shares at 69c/share.

Bell Potter notes the block trade equalled 4.2% of Nickel Industries' issued capital and half of PT Karunia's holding. The broker highlights reports PT Karunia has committed to 45-day escrow before possibly selling more.

The analyst also points out that another key strategic shareholder, PT United Tractors, hasn't sold a share since buying them in 2023.

No change to the $1.47 target price and Buy rating. The broker remains positive on the company's major growth milestones in FY25.

Target price is $1.47 Current Price is $0.61 Difference: $0.865
If NIC meets the Bell Potter target it will return approximately 143% (excluding dividends, fees and charges).

Current consensus price target is $1.16, suggesting upside of 78.2% (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: 0.8

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

Citi rates NIC as Buy (1) -

Citi notes the sell-down of PT Harum Energy's 4.16% stake in Nickel Industries, equating to 178m shares at a price of 69c per share.

The analyst believes the remaining 4.4% stake is a potential overhang on the stock. The Indonesian Ministry of Energy and Mineral Resources is also considering changing royalty rates, including on nickel.

Currently, Nickel Industries does not pay royalties on production; the Hengjaya mine pays the royalties. Citi points to a 4% increase to 14% in royalties as a possible -US$1/t estimated impact on mining margins.

The current royalty rate changes are only proposals, and the broker retains current earnings forecasts. Citi maintains a Buy/High Risk rating with a target price of $1.00.

Target price is $1.00 Current Price is $0.61 Difference: $0.395
If NIC meets the Citi target it will return approximately 65% (excluding dividends, fees and charges).

Current consensus price target is $1.16, suggesting upside of 78.2% (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: 0.8

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

Ord Minnett rates NIC as Buy (1) -

Ord Minnett believes the -20% decline in Nickel Industries' share price following the sale of 183m shares by PT Harum Energy is overdone, alongside speculation around increased royalties on Indonesian mining assets.

The broker notes Nickel Industries shares are trading -12% below the placement price due to concerns over an ongoing market overhang from PT Harum's remaining equity stake.

A Buy rating and $1.60 target are retained.

Target price is $1.60 Current Price is $0.61 Difference: $0.995
If NIC meets the Ord Minnett target it will return approximately 164% (excluding dividends, fees and charges).

Current consensus price target is $1.16, suggesting upside of 78.2% (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: 0.8

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

Macquarie rates RMS as Neutral (3) -

Ramelius Resources announced a weaker-than-anticipated outlook for the Mt Magnet mine, with a 10-year production rate below Macquarie's forecast by -23% and below consensus by -19%, while all-in-sustaining-cost guidance remains broadly in line with estimates.

Capex growth of -$823m was twice the broker's previous estimate, with plant expansion to 3mtpa as expected, but the long-term milling rate is lower at 2.5mtpa.

Macquarie lowers EPS forecasts by -4% for FY25 and -37% for FY26, with higher downgrades further out. Target price falls -19% to $2.10, the Neutral rating is retained.

Target price is $2.10 Current Price is $2.31 Difference: minus $0.21 (current price is over target).
If RMS 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 $2.63, suggesting upside of 23.5% (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

Shaw and Partners rates RMS as Buy (1) -

Ramelius Resources' updated plan for Mt Magnet mine has resulted in Shaw and Partners lowering production estimates and increasing cost forecasts in the earlier years of production.

This is due to the plan to replace higher-grade Eridanus underground ore in FY26 with the larger Eridanus open pit cutback in FY27.

The broker lowered group production forecast by -9% for FY26 and lifted costs by 31% and 13% for FY26 and FY27 respectively. The broker expects production to increase significantly in the FY32-35 period.

Target price drops to $2.89 from $2.98. Buy retained.

Target price is $2.89 Current Price is $2.31 Difference: $0.58
If RMS meets the Shaw and Partners target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $2.63, suggesting upside of 23.5% (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

Bell Potter rates RPL as Buy (1) -

Bell Potter believes the -24% year-to-date fall in Regal Partners' share price is excessive even in the context of the fall in equity markets on President Trump's policies and recession risks.

The broker reckons Regal's strategy puts it in a better position to deal with the current environment, noting 37% of funds under management are in credit and royalties which usually perform well during a mild to moderate recession.

The broker also expects net inflows to continue, albeit not at the same pace as last year. No change to forecasts at this stage. Target price of $5 and Buy rating are retained.

Target price is $5.00 Current Price is $2.83 Difference: $2.17
If RPL meets the Bell Potter target it will return approximately 77% (excluding dividends, fees and charges).

Current consensus price target is $4.60, suggesting upside of 55.4% (ex-dividends)

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

Citi rates TWE as Buy (1) -

The 4Q 2024 results from Treasury Wine Estates' competitor Concha y Toro suggest to Citi that Concha seems to be outperforming, while the latest Nielsen data infers short-term risks remain high for Treasury Wine, the broker explains.

Concha y Toro's China sales for the quarter fell at a faster pace than in the September quarter, attributed to soft macro conditions. The analyst notes the weakness may reflect a ramp-up by Treasury Wine post the removal of tariffs.

Slightly better results were achieved by Concha y Toro in South Korea and Japan, the analyst notes.

Buy rating retained, with US weakness already considered discounted into earnings expectations. Target price $13.85.

Target price is $13.85 Current Price is $9.99 Difference: $3.86
If TWE meets the Citi target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $13.26, suggesting upside of 36.5% (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

Morgan Stanley rates WOW as Overweight (1) -

Morgan Stanley continues to emphasise exposure to staples over discretionary due to relative valuations, with the former more attractive.

The broker expects Woolworths Group will see a higher margin uplift than Coles Group between now and FY26, but Coles is closing the margin gap on Woolworths, the analyst states.

Coles continues to gain relative market share, which is expected to be an ongoing trend, while Woolworths is generating more revenue from e-commerce.

Losses to non-grocery retail remain a "headwind," Morgan Stanley highlights, but losses are declining. Volumes per capita at an industry level remain under pressure, although some upside risks from inflation exist.

Morgan Stanley retains an Overweight rating. Target price is lowered to $33 from $34. View: In-Line.

The broker retains an Underweight rating on JB Hi-Fi ((JBH)), Harvey Norman ((HVN)), and Super Retail Group ((SUL)).

Target price is $33.00 Current Price is $28.60 Difference: $4.4
If WOW meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $32.15, suggesting upside of 14.4% (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