Australian Broker Call

Shaw and Partners rates A1M as Buy (1) -

Following drilling completion in 2024, AIC Mines has reported updated mineral resource estimates for its Eloise, Jericho and Eloise regional projects.

Mineral resources at Jericho increased significantly, with the rise in indicated category suggesting a significant increase when reserves are reported in April, Shaw and Partners notes.

Mineral resources at Eloise decreased slightly but the broker notes the total is still more than in November 2021, when the company acquired the mine.

The combined resource base points to a long life ahead for the Eloise mine, the broker observes. Target price of $1.00 and Buy rating (with high risk) remains. AIC Mines is the broker's preferred copper-producing stock (company).

Target price is $1.00 Current Price is $0.39 Difference: $0.608
If A1M meets the Shaw and Partners target it will return approximately 155% (excluding dividends, fees and charges).

Current consensus price target is $0.74, suggesting upside of 72.9% (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 ANN as Initiate coverage with Equal-weight (3) -

Morgan Stanley initiates coverage on the healthcare sector with an Industry View of In-Line, highlighting the sector has underperformed the ASX200 by around -4% over the past year.

Valuation multiples have contracted despite positive EPS changes. Ansell is rated Equal-weight with a target price of $37.20.

The broker notes improved operational performance in 1H25, supported by healthcare de-stocking in FY24. The Kimberly-Clark PPE acquisition is expected to be EPS accretive.

Recent tariff implementation poses a risk to the company’s end markets, which are more sensitive to macroeconomic conditions, the broker highlights.

Target price set at $37.20.

Target price is $37.20 Current Price is $33.44 Difference: $3.76
If ANN meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $37.21, suggesting upside of 8.7% (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: 0.2

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

Morgan Stanley rates ANZ as Equal-weight (3) -

Morgan Stanley reassesses its preference for bank stocks, adjusting its rankings.

ANZ Bank is ranked first on Equal-weight, followed by National Australia Bank ((NAB)), which is downgraded to Equal-weight from Overweight.

Both Westpac ((WBC)) and CommBank ((CBA)) remain Underweight.

The broker sees ongoing uncertainty around the CEO change later in 2025 and the risk of customer migration in retail banking. However, ANZ's differentiated institutional business and mortgage momentum are viewed positively.

Target price for ANZ is raised to $29.30 from $27.20. Industry View: In-Line.

Target price is $29.30 Current Price is $28.72 Difference: $0.58
If ANZ meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $28.45, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in September.

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 BKW as Buy (1) -

On first take, Citi notes Brickworks reported 1H25 EPS which came in below consensus expectations, with underlying profit of $76m falling short of consensus by -10% due to the pre-announced impairment charge for North America.

The broker notes the North American business generated an EBITDA loss of -$3m, while the Australian division's earnings rose about 4% on a year earlier due to improved margins from cost controls.

Revaluations boosted the earnings for the property business by 32%, and investments produced around 4% growth on the previous year.

Management expects building products to remain challenged in 2025 and improve in 2026.

Buy rated with a $32.50 target price.

Target price is $32.50 Current Price is $23.80 Difference: $8.7
If BKW meets the Citi target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $29.40, suggesting upside of 22.1% (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

Morgan Stanley rates CBA as Underweight (5) -

Morgan Stanley reassesses its preference for bank stocks, adjusting its rankings.

ANZ Bank ((ANZ)) is ranked first on Equal-weight, followed by National Australia Bank, which is downgraded to Equal-weight from Overweight.

Both Westpac ((WBC)) and CommBank ((CBA)) remain Underweight.

The broker believes momentum from CommBank's perceived "safe haven" status has driven its valuation to unwarranted levels in light of a subdued growth profile.

Target price increases to $128 from $127. Industry View: In-Line.

Target price is $128.00 Current Price is $142.77 Difference: minus $14.77 (current price is over target).
If CBA meets the Morgan Stanley target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $107.46, suggesting downside of -26.1% (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

Macquarie rates CDA as Upgrade to Outperform from Neutral (1) -

Macquarie's positive view on Codan remains after "solid" 1H25 results showed communications remains the key driver for the business.

The broker believes market concern about the negative impact around Ukraine is overdone, and the company is well placed to benefit once the conflict ends.

The analyst also believes the balance sheet is supportive of M&A which management continues to pursue.

Target price cut to $17.00 from $17.13 on small working capital revisions. Rating upgraded to Outperform from Neutral.

Target price is $17.00 Current Price is $15.28 Difference: $1.72
If CDA meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $17.58, suggesting upside of 12.6% (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

Ord Minnett rates CGF as Upgrade to Buy from Hold (1) -

Ord Minnett notes the Australian Prudential Regulation Authority's review of illiquidity premiums will likely lower capital requirements for annuity providers.

For Challenger an estimated $500m buyback due to capital release would be 7% accretive, the broker estimates. The broker also sees potential for Challenger to alter its asset mix which could release an additional $1bn.

The broker believes reduced capital volatility justifies a higher PE and has lifted the price target to $7.00 from $6.65. Rating is upgraded to Buy from Hold.

Target price is $7.00 Current Price is $5.60 Difference: $1.4
If CGF meets the Ord Minnett target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $6.95, suggesting upside of 17.2% (ex-dividends)

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

Macquarie rates CMM as Neutral (3) -

Capricorn Metals issued 17.7m of new ordinary shares at a -6% discount to the prior closing price of $8.37/share to fund the cash component of the closure of forward gold hedges and purchase of put options. The total cost was -$147m.

Macquarie notes the hedge book cancellation lifts its revenue forecast for FY26 and FY27 by 6% and 2% respectively.

Overall, the EPS forecast for FY25 was cut by -3% and for FY26 lifted by 7% to account for the replacement of the hedge book with puts, and equity dilution.

Target price rises to $8.20 (was $7.30 in early March) on operating cash flow improvement. Neutral rating.

Target price is $8.20 Current Price is $8.02 Difference: $0.18
If CMM meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $8.45, suggesting upside of 3.1% (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

Morgan Stanley rates COH as Initiate coverage with Underweight (5) -

Morgan Stanley initiates coverage on the healthcare sector with an Industry View of In-Line, highlighting the sector has underperformed the ASX200 by around -4% over the past year.

Valuation multiples have contracted despite positive EPS changes. Cochlear is rated Underweight with a target price of $267.

The broker sees rising competition despite potential market share gains from the launch of a new Cochlear implant.

Opportunities exist for expanding market share in adults and seniors with moderate to profound hearing loss, the broker explains, though barriers to entry remain.

Morgan Stanley believes the stock's valuation remains high.

Target price is $267.00 Current Price is $269.46 Difference: minus $2.46 (current price is over target).
If COH meets the Morgan Stanley target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $284.12, suggesting upside of 5.0% (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

Morgan Stanley rates CSL as Initiate coverage with Overweight (1) -

Morgan Stanley initiates coverage on the healthcare sector with an Industry View of In-Line, highlighting the sector has underperformed the ASX200 by around -4% over the past year.

Valuation multiples have contracted despite positive EPS changes. CSL and ResMed ((RMD)) are rated as Overweight.

The analyst expects "solid" revenue growth for CSL, with Behring's margin recovery driving EPS growth of around 13% over the next three years.

The valuation ascribed to the stock is currently below the 10-year average by one standard deviation, with the price-to-earnings premium at a 10-year low relative to ASX200 Industrials.

Target price set at $313.

Target price is $313.00 Current Price is $250.29 Difference: $62.71
If CSL meets the Morgan Stanley target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $327.51, suggesting upside of 28.2% (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: 1.0

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

Morgan Stanley rates FPH as Initiate coverage with Equal-weight (3) -

Morgan Stanley initiates coverage on the healthcare sector with an Industry View of In-Line, highlighting the sector has underperformed the ASX200 by around -4% over the past year.

Valuation multiples have contracted despite positive EPS changes. Fisher & Paykel Healthcare is rated Equal-weight with a target price of $36.30.

The analyst expects a robust EPS outlook over the next three years, driven by new applications in the hospital segment and recent mask launches in the OSA sector.

Commentary highlights US tariffs could delay the company reaching margin targets included in the broker's estimates, limiting the stock’s appeal at current valuation.

Target price is $36.30 Current Price is $29.60 Difference: $6.7
If FPH meets the Morgan Stanley target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $36.30, suggesting upside of 21.4% (ex-dividends)

The company's fiscal year ends in March.

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

Citi rates GPT as Buy (1) -

In an initial update, Citi notes GPT Group has secured management rights for two Lendlease ((LLC)) shopping malls, valued at $1bn and held in the APPF Retail shopping centre fund as part of GPT.

Sunshine Plaza, Qld, and Macarthur Square, Sydney, will generate income for GPT's funds management business, the broker highlights, adding to the group's retail exposure following the acquisition of two of Perth's largest shopping centres.

Citi believes the update reflects management's ongoing strategic shift to enhance overall equity returns through funds management.

Buy rated with a $5 target price.

Target price is $5.00 Current Price is $4.28 Difference: $0.72
If GPT meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $5.27, suggesting upside of 20.3% (ex-dividends)

The company's fiscal year ends in December.

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 HLO as Buy (1) -

Shaw and Partners highlights the Australian Bureau of Statistics' travel data for January is positive for the travel sector with total arrivals rising 12.3% y/y.

Provisional February data showed total arrivals rose 5.2%, the broker notes.

No change to Helloworld Travel's $2.70 target price and Buy (high risk) rating. The broker notes the stock is trading at a material discount to its target price.

Target price is $2.70 Current Price is $1.48 Difference: $1.22
If HLO meets the Shaw and Partners target it will return approximately 82% (excluding dividends, fees and charges).

Current consensus price target is $2.30, suggesting upside of 51.1% (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

Ord Minnett rates LAU as Buy (1) -

A privately-owned transport group took an 8.89% stake in Lindsay Australia for $17.36m recently, which Ord Minnett sees as a validation of the company's value.

The broker has factored in less than -$1m impact from recent Brisbane weather events and believes the share price will be supported in the near term by further interest in the company.

Target price of $1.02 and Buy rating are unchanged.

Target price is $1.02 Current Price is $0.70 Difference: $0.32
If LAU meets the Ord Minnett target it will return approximately 46% (excluding dividends, fees and charges).

Current consensus price target is $0.94, suggesting upside of 32.4% (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 MYR as Overweight (1) -

Myer delivered slightly better-than-expected 1H25 revenue and EBIT, beating Morgan Stanley's forecasts by 1% and 5%, respectively.

Gross margins slipped -53bps to 35.8%, improving from the five-month trading update at -66bps. Comparable sales rose 0.8%, online sales increased 5% year-on-year, and loyalty active members grew 6% to 4.6m, the broker states.

The first five weeks of 2H25 show sales down -2.6%, but commentary explains adjusting for major events, promotion timing, and the leap year, sales would have been flat.

The analyst highlights Myer Specialty Brands' restructuring is underway, with an expected FY26 earnings benefit of $10m before tax and interest.

Morgan Stanley notes trading remains volatile which has been complicated by distribution problems. Further updates may come at the May 28 Investor Day.

Overweight rating and target is lowered to $1.05 from $1.10. Industry view: In-Line. The broker's EPS forecasts are lowered by -5% to -12% for FY25-FY27.

Target price is $1.05 Current Price is $0.75 Difference: $0.3
If MYR meets the Morgan Stanley target it will return approximately 40% (excluding dividends, fees and charges).

The company's fiscal year ends in July.

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

Ord Minnett rates MYR as Accumulate (2) -

Myer's 1H25 result was largely in line with Ord Minnett's expectations but the outlook is described as "mixed", with like-for-like sales starting stronger in 2025 but weakening in February/March.

The broker notes the delays from the national distribution centre will impact FY25 earnings, though this would become a tailwind in FY26.

The broker cut the FY25 EPS forecast by -16% on lower sales and distribution centre impact. Target price cut to 86c from 95c.

Accumulate maintained.

Target price is $0.86 Current Price is $0.75 Difference: $0.11
If MYR meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

Market Sentiment: 0.8

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

Morgan Stanley rates NAB as Downgrade to Equal-weight from Overweight (3) -

Morgan Stanley reassesses its preference for bank stocks, adjusting its rankings.

ANZ Bank ((ANZ)) is ranked first on Equal-weight, followed by National Australia Bank, which is downgraded to Equal-weight from Overweight.

Both Westpac ((WBC)) and CommBank ((CBA)) remain Underweight.

The broker sees higher execution risks due to management changes, margin pressure from competition in business banking, and a shift in the deposit mix, along with sub-industry growth in mortgages.

Target price for National Australia Bank is lowered to $34.80 from $37.40. Industry View: In-Line.

Target price is $34.80 Current Price is $32.65 Difference: $2.15
If NAB meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $32.65, suggesting downside of -1.2% (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

Morgan Stanley rates RHC as Initiate coverage with Equal-weight (-1) -

Morgan Stanley initiates coverage on the healthcare sector with an Industry View of In-Line, highlighting the sector has underperformed the ASX200 by around -4% over the past year.

Valuation multiples have contracted despite positive EPS changes. Ramsay Health Care is rated Equal-weight with a target price of $36.10.

The analyst notes Ramsay is positioned to benefit from long-term volume growth driven by population and aging demographics and the private hospitals operator holds a "solid" position in the Australian market.

Concerns remain around hospital funding and margin pressures in both Australia and overseas markets. While the stock’s valuation has de-rated, the variation in consensus EPS expectations is high, the broker observes.

Target price is $36.10 Current Price is $34.78 Difference: $1.32
If RHC meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $39.67, suggesting upside of 13.1% (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

Ord Minnett rates RHC as Hold (3) -

Ord Minnett notes the 2% sequential rise in public hospital elective surgery waitlists in NSW, Victoria, Queensland and WA in the December quarter is positive for Ramsay Health Care.

Higher public hospital waitlists could lead to more demand for private health insurance participation, thus benefitting private hospitals.

This is in addition to the prospect of outsourcing from public to private, though this is a minor portion of Ramsay's surgeries, the broker notes.

Target price of $37.50 and Hold rating retained.

Target price is $37.50 Current Price is $34.78 Difference: $2.72
If RHC meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $39.67, suggesting upside of 13.1% (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

Morgan Stanley rates RMD as Initiate coverage with Overweight (1) -

Morgan Stanley initiates coverage on the healthcare sector with an Industry View of In-Line, highlighting the sector has underperformed the ASX200 by around -4% over the past year.

Valuation multiples have contracted despite positive EPS changes. CSL ((CSL)) and ResMed are rated as Overweight.

Morgan Stanley reminds investors ResMed holds a leading market position in the obstructive sleep apnoea (OSA) market and views the approval of Zepbound (GLP-1) for treating OSA in obese patients as positive, supporting increased awareness and diagnosis rates.

The broker considers the stock's valuation at current levels attractive, with a robust balance sheet and the highest return on capital employed across the sector.

Target price set at US$280.

Current Price is $34.54. Target price not assessed.

Current consensus price target is $44.38, suggesting upside of 25.6% (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: 1.0

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

Morgan Stanley rates SHL as Initiate coverage with Equal-weight (-1) -

Morgan Stanley initiates coverage on the healthcare sector with an Industry View of In-Line, highlighting the sector has underperformed the ASX200 by around -4% over the past year.

Valuation multiples have contracted despite positive EPS changes. Sonic Healthcare is rated Equal-weight with a target price of $28.10.

The broker expects mid-single-digit organic revenue growth, potentially supplemented by recent acquisitions. However, EPS growth has been "modest" due to declining margins both post-covid and prior, the analyst explains.

Sonic generates the lowest return on capital invested across the sector, with Morgan Stanley seeing "limited" appeal at the stock's current valuation.

Target price is $28.10 Current Price is $25.54 Difference: $2.56
If SHL meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $28.50, suggesting upside of 10.2% (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

Citi rates SIG as Neutral (3) -

In an initial response to Sigma Healthcare's FY25 result, Citi notes the EBIT of $68m was in line with February's guidance of $64-70m.

The broker notes the company's new supply contract with Chemist Warehouse that came into effect on 1 July 2024 helped, along with wholesale growth in Amcal and Discount drug stories.

This was Sigma Healthcare's final result before the Chemist Warehouse (reverse) acquisition.

Target price of $2.90 and Neutral rating are unchanged.

Target price is $2.90 Current Price is $2.91 Difference: minus $0.01 (current price is over target).
If SIG meets the Citi target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.68, suggesting downside of -8.4% (ex-dividends)

The company's fiscal year ends in January.

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 WJL as Downgrade to Hold from Add (3) -

Webjet Group reiterated FY25 guidance, but FY26 is now a year of investment rather than growth acceleration, Morgans highlights.

Management outlined a 5-year growth plan aiming to double total transaction value by FY30, above consensus.

The strategy focuses on increasing wallet share through higher-margin ancillary product sales, which the analyst views as high risk.

Morgans lowers EBITDA forecasts by -1.8% for FY25 and -14.5% for FY26. Net profit after tax downgrades are more pronounced due to higher depreciation and amortisation charges.

The stock is downgraded to Hold from Add. Target price cut to 65c from $1.05.

Target price is $0.65 Current Price is $0.56 Difference: $0.09
If WJL meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

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