BROKER ALERTS (5 X BSL, 1 X ERA, 3 X IMD, 1 X PDN, 1 X PRU)
BA-Merrill Lynch rates BSL as Buy, High Risk (1) -
Merrills thinks the adverse share price reaction to BlueScope's results was a function of the cautious management commentary, where the first half is expected to be below the second half of FY13 because of concerns over the domestic volume outlook. The result itself was a solid outcome with the strongest Australian steel (CIPA) result since FY10, in Merrills' view, and improvement in the Nippon JV and NZ operations.
The Buy rating is retained and the price target is reduced to $5.25 from $5.50.
Target price is $5.25 Current Price is $4.70 Difference: $0.55 If BSL meets the BA-Merrill Lynch target it will return approximately 12% (excluding dividends, fees and charges).
The company's fiscal year ends in June. BA-Merrill Lynch forecasts a full year FY14 dividend of 0.00 cents and EPS of 19.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.35.
Market Sentiment: 0.8
CIMB Securities rates BSL as Neutral (3) -
CIMB thinks investors should remain cognisant of the bigger picture here. The result was in line but parts of the busines are in structural decline, in the broker's view. Australia and China are cylically weak and show little sign of near-term improvement and CIMB thinks the stock is more a trading than an investing opportunity.
CIMB has lowered FY14 profit forecasts by 18.7%. The target price is reduced to $4.76 from $4.96 and the Neutral rating is retained.
Target price is $4.76 Current Price is $4.70 Difference: $0.06 If BSL meets the CIMB Securities target it will return approximately 1% (excluding dividends, fees and charges).
The company's fiscal year ends in June. CIMB Securities forecasts a full year FY14 dividend of 5.50 cents and EPS of 23.87 cents. At the last closing share price the estimated dividend yield is 1.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.69.
Market Sentiment: 0.8
Credit Suisse rates BSL as Outperform (1) -
BlueScope is purchasing some assets from Hills Holdings ((HIL)) and CS analysts project these assets should be EPS accretive from FY15 onwards. Otherwise the FY13 report appears to be a disappointment with the analysts suggesting the outlook should be better now but management at the company is keeping expectations low.
Price target tumbles to $5.70 from $6.45 prior. This remains well above the share price, which explains why the rating remains on Outperform.
Target price is $5.70 Current Price is $4.70 Difference: $1 If BSL meets the Credit Suisse target it will return approximately 21% (excluding dividends, fees and charges).
The company's fiscal year ends in June. Credit Suisse forecasts a full year FY14 dividend of 0.00 cents and EPS of 12.15 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 38.68.
Market Sentiment: 0.8
Deutsche Bank rates BSL as Buy (1) -
The results highlight the positive from the recent restructure of CIPA but Deutsche Bank found guidance disappointing. The Buy rating is retained given the Australian housing recovery is underway and there's an expected improvement in US activity, as well as upside from a weaker Australian dollar. The price target is reduced to $5.86 from $6.17.
Target price is $5.86 Current Price is $4.70 Difference: $1.16 If BSL meets the Deutsche Bank target it will return approximately 25% (excluding dividends, fees and charges).
The company's fiscal year ends in June. Deutsche Bank forecasts a full year FY14 dividend of 3.00 cents and EPS of 21.00 cents. At the last closing share price the estimated dividend yield is 0.64%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.38.
Market Sentiment: 0.8
JP Morgan rates BSL as Overweight (1) -
BlueScope's result was broadly in line with the broker but a relatively downbeat first half outlook and weak Global Building Solutions weighed on sentiment. JP Morgan has scaled back forecasts for this year. In the near term, GBS appears to be affected by weakness on the east coast of China. The broker thinks the scale of the market's punishment of the stock is disproportionate to the "crime".
The Overweight rating is retained and the price target is reduced to $5.15 from $5.85.
Target price is $5.15 Current Price is $4.70 Difference: $0.45 If BSL meets the JP Morgan target it will return approximately 10% (excluding dividends, fees and charges).
The company's fiscal year ends in June. JP Morgan forecasts a full year FY14 dividend of 6.50 cents and EPS of 7.00 cents. At the last closing share price the estimated dividend yield is 1.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 67.14.
Market Sentiment: 0.8
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UBS rates ERA as Buy (1) -
Energy Resources reported (2 weeks ago) a better-than-expected loss of $54.5 million in the June half (compared with estimates of $94 million) and up from $99.2 million in the December half. This, and a reclassification of mining costs to the rehabilitation provision, led to a 45% jump in 2013 earnings per share.
The announcement was coupled with the resignation of chief executive Rob Atkinson but the broker believes the risks associated with the changeover are slim.
The broker remains positive on the uranium outlook and has retained its Buy rating and lifted its target price to $1.75 from $1.65.
Target price is $1.75 Current Price is $1.46 Difference: $0.295 If ERA meets the UBS target it will return approximately 20% (excluding dividends, fees and charges).
The company's fiscal year ends in December. UBS forecasts a full year FY13 dividend of 0.00 cents and EPS of minus 20.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 7.28.
Market Sentiment: 0.5
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BA-Merrill Lynch rates IMD as Underperform, High Risk (5) -
Industry conditions continue to deteriorate in minerals exploration and present significant headwinds for Imdex in FY14. Management's outlook for oil and gas FY14 also appears optimistic in Merrills' view considering the track record and stretched targets.
The Underperform rating is retained. The price target is raised to 50c from 45c.
Target price is $0.50 Current Price is $0.69 Difference: minus $0.185 (current price is over target). If IMD meets the BA-Merrill Lynch target it will return approximately minus 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June. BA-Merrill Lynch forecasts a full year FY14 dividend of 1.00 cents and EPS of 5.00 cents. At the last closing share price the estimated dividend yield is 1.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.70.
Market Sentiment: -0.3
CIMB Securities rates IMD as Neutral (3) -
FY14 will be challenging but this was always expected. What did surprise CIMB in the FY13 result was the cost escalation in the oil and gas business. The broker has cut FY14-15 estimates by 31-36% to account for a more sober assessment of key end markets.
Valuation looks undemanding at 7.3 times FY14 forecasts but the broker thinks visibility of volumes is low and there is further pricing risk. A Neutral rating is retained and the price target is reduced to 75c from 90c.
Target price is $0.75 Current Price is $0.69 Difference: $0.065 If IMD meets the CIMB Securities target it will return approximately 9% (excluding dividends, fees and charges).
The company's fiscal year ends in June. CIMB Securities forecasts a full year FY14 dividend of 2.00 cents and EPS of 5.89 cents. At the last closing share price the estimated dividend yield is 2.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.63.
Market Sentiment: -0.3
Deutsche Bank rates IMD as Hold (3) -
Operating results met expectations but the outlook is subdued with risks to the downside. Deutsche Bank has reduced medium-term earnings forecasts for minerals. In contrast, the outlook for oil and gas sector earnings is positive although the company needs to be seen delivering on earnings expectations.
The Hold rating is retained and the price target is reduced to 75c from $1.05.
Target price is $0.75 Current Price is $0.69 Difference: $0.065 If IMD meets the Deutsche Bank target it will return approximately 9% (excluding dividends, fees and charges).
The company's fiscal year ends in June. Deutsche Bank forecasts a full year FY14 dividend of 2.00 cents and EPS of 9.00 cents. At the last closing share price the estimated dividend yield is 2.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.61.
Market Sentiment: -0.3
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UBS rates PDN as Downgrade to Neutral from Buy (3) -
UBS has downgraded its rating of Paladin Energy to Neutral from Buy to account for the dilution of the share price arising from its announcement to raise 15% of its capital in an issuance.
The brokers full valuation of Paladin drops 10% to $2 per share.
The broker has slashed its price target to 70c from $1.20 - a 30% discount to net present value - believing a rise in uranium demand will be needed before the company stages a turnaround.
Target price is $0.70 Current Price is $0.62 Difference: $0.085 If PDN meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).
The company's fiscal year ends in June. UBS forecasts a full year FY13 dividend of 0.00 cents and EPS of minus 13.86 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.44.
Market Sentiment: -0.4
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Macquarie rates PRU as Upgrade to Outperform from Underperform (1) -
Perseus is busy completing a mine life optimisation plan due in September. The broker sees significant upside if the strip ratio is lowered and grades increased and suggests PRU should be able to deliver operationally now that the crusher problems have been resolved. By delaying Sissingue, PRU is also protecting its balance sheet.
Target rises to $1.00 from 60c. Double-upgrade to Outperform from Underperform.
Target price is $1.00 Current Price is $0.88 Difference: $0.12 If PRU meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).
The company's fiscal year ends in June. Macquarie forecasts a full year FY13 dividend of 0.00 cents and EPS of 8.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.35.
