Australian Broker Call

Morgans rates APE as Add (1) -

From February new vehicle sales data, Morgans notes volumes remain healthy and ahead of historical averages despite new sales (deliveries) falling by -7.9% on the previous corresponding period.

While industry dynamics remain relatively challenging for auto dealers in the short-term, due to new vehicle margin impacts, scale operators such as Eagers Automotive continue to outperform, explains the broker.

Elsewhere, Auto aftermarket conditions remain mixed (weak retail;trade strong); whilst the Novated sector faces a hurdle as the plug-in Hybrid Electrical Vehicle (PHEV) FBT benefit ends from April, note the analysts.

Post reporting season, Morgans' preferred picks from stocks under coverage in the Auto & Parts sector are Eagers Automotive and Bapcor.

For Eagers Automotive, the $16.20 target and Add rating are maintained.

Target price is $16.20 Current Price is $15.23 Difference: $0.97
If APE meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $15.56, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in December.

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

Citi rates ASB as Neutral (3) -

Austal's outlook has become more positive, suggests Citi, following a speech by former President Trump, where he revealed plans to revive the US shipbuilding industry.

Trump announced the creation of an office of shipbuilding in the White House and tax incentives to bolster both commercial and military shipbuilding, which could benefit Austal's future US Navy contracts.

While Austal maintains a record order book of $14.2 billion as of 1H25, Citi remains cautious due to potential execution risks around new programs like Offshore Patrol Cutter and Tactical Auxiliary General Ocean Surveillance.

Citi has a Neutral rating on Austal, with a target price of $4.30.

Target price is $4.30 Current Price is $4.40 Difference: minus $0.1 (current price is over target).
If ASB meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.83, suggesting downside of -14.8% (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

Morgans rates BAP as Add (1) -

From February new vehicle sales data, Morgans notes volumes remain healthy and ahead of historical averages despite new sales (deliveries) falling by -7.9% on the previous corresponding period.

While industry dynamics remain relatively challenging for auto dealers in the short-term, due to new vehicle margin impacts, scale operators such as Eagers Automotive continue to outperform, explains the broker.

Elsewhere, Auto aftermarket conditions remain mixed (weak retail;trade strong); whilst the Novated sector faces a hurdle as the plug-in Hybrid Electrical Vehicle (PHEV) FBT benefit ends from April, note the analysts.

Post reporting season, Morgans' preferred picks from stocks under coverage in the Auto & Parts sector are Eagers Automotive and Bapcor.

For Bapcor, the $5.95 target and Add rating are maintained.

Target price is $5.95 Current Price is $5.06 Difference: $0.89
If BAP meets the Morgans target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $5.57, suggesting upside of 9.8% (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 CHC as Overweight (1) -

Morgan Stanley believes Australia may be entering the early stages of a multi-year growth cycle, driven by increased inflows into real estate, initially led by offshore groups and later by traditional domestic investors.

The broker suggests Charter Hall is well-positioned to capitalise on this capital flow bounce back, supported by its $66bn of property assets under management (AUM) and established inflows from both wholesale and listed sources.

Overweight rating. Target price $20.00. Industry view: In-Line. 

Target price is $20.00 Current Price is $16.42 Difference: $3.58
If CHC meets the Morgan Stanley target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $17.23, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

Morgans rates CYL as Speculative Buy (1) -

Morgans cites "robust" interim financials and confidence gained from a recent site visit to the Plutonic Gold Mine in Western Australia as reasons to raise the target for Catalyst Metals to $4.56 from $4.04.

The broker highlights management is aiming to double gold production at Plutonic to over 200koz per annum by FY27, funded through existing operations.

The Speculative Buy rating is maintained.

Target price is $4.56 Current Price is $4.14 Difference: $0.42
If CYL meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges).

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

Macquarie rates FCL as Outperform (1) -

Macquarie conducts a read-through for Fineos Corp from Guidewire's 2Q25 update, where revenue rose 20% year-on-year, subscription and support revenue advanced 35%, and annual recurring revenue grew 6%.

Guidewire also achieved a gross profit margin of 61.9%, up 280bps on the prior corresponding period.

Fineos Corp trades at an -85% discount to Guidewire and achieved software growth of 8% for the 12 months ending December, compared to Guidewire at 19%, the analyst explains.

Macquarie retains an Outperform rating and a $2.45 target price.

Target price is $2.45 Current Price is $1.70 Difference: $0.755
If FCL meets the Macquarie target it will return approximately 45% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

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

Market Sentiment: 1.0

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

Macquarie rates LOT as Outperform (1) -

Lotus Resources' board transition is almost finished, Macquarie observes, with the shift to a production company from what the analyst describes as an "entrepreneurial mindset."

The company has also re-confirmed first uranium production in 3Q 2025, with the project fully funded. Lotus had $132m in cash at December end.

Macquarie tweaks EPS forecasts by -0.3c for 1H25 results and lifts FY26 by 2% on slight cost reductions.

Outperform rating and 38c target remain.

Target price is $0.38 Current Price is $0.17 Difference: $0.21
If LOT meets the Macquarie target it will return approximately 124% (excluding dividends, fees and charges).

Current consensus price target is $0.49, suggesting upside of 186.8% (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 MIN as Neutral, High Risk (3) -

The Mineral Resources' share price has underperformed markedly recently due to a combination of factors including concerns over its balance sheet and governance, explains Citi.

The broker notes challenges with refinancing debt and cash flow concerns, particularly with the Onslow project, and suggests it would be premature to push the valuation case. Net debt is not expected to peak until 2H26 at around $5.9bn.

To repay the US$1.3bn in debt maturing in 2027 from cash, and assuming Onslow meets guidance, Citi's forecasts require iron ore prices to stay at spot of circa US$99/t and lithium at US$900/t.

The Neutral, High Risk rating and $30 target are maintained.

Target price is $30.00 Current Price is $21.08 Difference: $8.92
If MIN meets the Citi target it will return approximately 42% (excluding dividends, fees and charges).

Current consensus price target is $35.64, suggesting upside of 64.0% (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

Ord Minnett rates MPL as Buy (1) -

Ord Minnett observes private health insurers received their premium rate approvals from the Federal Government, but focus has now shifted to potential regulatory action on payments to hospitals, the broker highlights.

No changes are expected in the next six months, but longer-term adjustments could be seen positively in alleviating the annual premium rate approval process, the broker states.

A regulated payout ratio under a profit-sharing agreement, similar to the new Compulsory Third Party insurance at an 85% level, is viewed as potentially positive.

The broker highlights innovation potential, noting that anything below the targeted ratio achieved could incentivise insurers to lower expenses and claims costs.

Ord Minnett likes both Medibank Private and nib Holdings. The stock is Buy-rated with a $4.80 target price.

Target price is $4.80 Current Price is $4.28 Difference: $0.52
If MPL meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $4.60, suggesting upside of 7.4% (ex-dividends)

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

Citi rates MQG as Sell (5) -

Citi suggests consensus may need to lower Macquarie Group's commodities revenue growth profile over the medium-term due to less volatility in gas markets.

The broker feels growing supply and reorienting global gas flows have the potential to reduce volatility in gas markets going forward as supply becomes more global.

The Sell rating and $177 target are maintained.

Target price is $177.00 Current Price is $209.08 Difference: minus $32.08 (current price is over target).
If MQG meets the Citi target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $225.71, suggesting upside of 8.5% (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

Ord Minnett rates NHF as Buy (1) -

Ord Minnett observes that private health insurers received their premium rate approvals from the Federal Government, but focus has now shifted to potential regulatory action on payments to hospitals, the broker highlights.

No changes are expected in the next six months, but longer-term adjustments could be seen positively in alleviating the annual premium rate approval process, the broker states.

A regulated payout ratio under a profit-sharing agreement, similar to the new Compulsory Third Party insurance at an 85% level, is viewed as potentially positive.

The broker highlights innovation potential, noting that anything below the targeted ratio achieved could incentivise insurers to lower expenses and claims costs.

Ord Minnett likes both Medibank Private and nib Holdings. The stock is Buy-rated with a $7.65 target price.

Target price is $7.65 Current Price is $6.44 Difference: $1.21
If NHF meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $6.77, suggesting upside of 4.0% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

Citi rates ORI as Neutral (3) -

Following a 1H business update, Citi highlights Orica's core business is showing strong momentum as it heads into 1H FY25 (September year end).

The Blasting Solutions segment remains strong, with a successful turnaround at Kooragang, while carbon credit sales are expected to contribute up to $15m, note the analysts.

By contrast, the Specialty Mining Chemicals segment faces a shortfall in earnings due to maintenance and gas supply issues, potentially lowering FY25 earnings (EBIT) by up to -$20m.

Management also flagged significant items, including an impairment in Orica's Latin American business and restructuring costs in EMEA, leading to a reduction in statutory profit of -$300-$350m.

Citi maintains a Neutral rating, with a target price of $19.00.

Target price is $19.00 Current Price is $17.03 Difference: $1.97
If ORI meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $20.83, suggesting upside of 20.7% (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 ORI as Outperform (1) -

Orica's trading update suggests a slight uplift in 1H25 EBIT, offset by a significant impairment charge of -$250–$300m post-tax, mainly in Latam, Macquarie explains.

Blasting services continue to perform well, with better margins in Australia, Pacific, and Asia, which represent 53% of FY25 EBIT estimate.

The analyst continues to anticipate a share buyback announcement at the Investor Day on March 12.

The broker raises FY25 EPS estimates by 3% on strength in the blasting business and $15m in carbon credits, offset by outage impacts for mining chemicals. FY26 EPS estimate rises 1%.

Target price lifts to $20.91 from $20.78, with no change to the Outperform rating.

Target price is $20.91 Current Price is $17.03 Difference: $3.88
If ORI meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $20.83, suggesting upside of 20.7% (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

Morgan Stanley rates ORI as Overweight (1) -

In a potential re-rating catalyst, according to Morgan Stanley, Orica will host an investor day and Digital Solutions showcase this Wednesday. A capital management announcement is anticipated.

Orica's recent acquisitions have strengthened its Digital Solutions and Specialty Mining Chemicals divisions, note the analysts, who have confidence in higher growth and margins from the Digital Solutions segment.

The broker expects improved industry dynamics, including stronger demand in mining markets and increased pricing for ammonium nitrate.

Despite similarities with industrial peer Brambles ((BXB)), Orica currently trades at a discount, which the broker sees as an opportunity for re-rating.

Morgan Stanley maintains an Overweight rating with a price target of $22.50. Industry View: In-Line.

Target price is $22.50 Current Price is $17.03 Difference: $5.47
If ORI meets the Morgan Stanley target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $20.83, suggesting upside of 20.7% (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

Morgan Stanley rates SLC as Overweight (1) -

Despite risks related to competition, Superloop is well-positioned for long-term growth, according to Morgan Stanley.

The company is included among key small/mid-cap ideas where the broker has conviction on earnings and outlook post reporting season.

The broker forecasts a 32% organic earnings (EBITDA) compound annual growth rate (CAGR) across FY24-27, with earnings upside risk from the consumer and wholesale segments.

The analysts see upside risk to FY25 earnings guidance of $83-88m from the Origin Energy ((ORG)) contract. Benefits from the recent acquisition of the Uecomm fibre network are also highlighted, helping to reduce impact from future capital expenditure. 

Morgan Stanley maintains an Overweight rating with a target price of $2.65. Industry view: In-line.

Target price is $2.65 Current Price is $2.09 Difference: $0.56
If SLC meets the Morgan Stanley target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $2.61, suggesting upside of 24.4% (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

Bell Potter rates SM1 as Hold (3) -

Bell Potter casts an eye over what to expect for Synlait Milk's upcoming 1H25 results.

Following management's 1H25 earnings (EBITDA) guidance in January, which revealed a notable lift on 1H24 due to a better ingredients business, cost controls, and new business development for nutrition products, the broker expects increased demand for infant bulk-grade ingredients due to IMF China landed volumes rising 39% year-on-year.

Recent trade data concur with the company's guidance upgrade, and the analyst raises earnings (EBITDA) forecasts by 30% in FY25 and 17% in FY26.

Hold rating maintained. Target price rises to 90c from 42.5c.

Target price is $0.90 Current Price is $0.81 Difference: $0.09
If SM1 meets the Bell Potter target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $0.90, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in July.

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: -0.3

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

Bell Potter rates SX2 as Speculative Buy (1) -

Bell Potter highlights the updated exploration target for Southern Cross Gold's Sunday Creek gold-antimony project in Victoria, increasing it to 8.1–9.6Mt at 8.3–10.6g/t gold equivalent (AuEq), containing 2.2–3.2Moz AuEq.

The broker notes this is an 86% rise in tonnes and 108% more gold-equivalent metal from January 2024 estimates. 

The exploration target covers 67% of drilled areas and excludes the Christina prospect, where recent discoveries were made.

Bell Potter explains drilling continues with six rigs, expanding to eight. 

Speculative Buy rating retained. Target price rises to $4.80 from $4.

Target price is $4.80 Current Price is $3.60 Difference: $1.2
If SX2 meets the Bell Potter target it will return approximately 33% (excluding dividends, fees and charges).

The company's fiscal year ends in May.

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 WAF as Buy (1) -

Ord Minnett explains West African Resources' 2024 result exceeded consensus, with net profit of $246m versus expectations of $196m, driven by lower cost of sales, capitalised interest costs, and reduced exploration expenses.

Production and capital expenditure guidance remain unchanged.

The Kiaka project is expected to more than double production to 460koz in 2026 from 211koz in 2024 by September 2025, the analyst notes, with the company generating an estimated cash low of $280m, limiting construction and funding risks.

Despite recent share price gains, the stock's valuation remains attractive, the broker believes. Ord Minnett raises net profit after tax forecasts by 17% for 2025 and by 11% for 2026.

Target price rises to $2.65 from $2.55, with a Buy rating maintained.

Target price is $2.65 Current Price is $2.21 Difference: $0.44
If WAF meets the Ord Minnett target it will return approximately 20% (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