Fortescue Metals Group
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- Clementine Nichols
- 5 years ago
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1 AUSTRALIA FMG AU Price (at 5:1, 17 Feb 217 GMT) Outperform A$6.88 Valuation A$ - DCF (WACC 8.5%, beta 1.3, ERP 5.%, RFR 3.3%) month target A$ month TSR % Volatility Index High GICS sector Materials Market cap A$m 21,423 3-day avg turnover A$m Number shares on issue m 3,114 Investment fundamentals Year end 3 Jun 216A 217E 218E 219E Revenue m 7,83. 8, , ,633.6 EBIT m 1,815. 3, ,434. 1,88.8 Reported profit m , Adjusted profit m , Gross cashflow m 2,173. 3, ,81.7 1,842.6 CFPS CFPS growth % PGCFPS x PGCFPS rel x EPS adj EPS adj growth % PER adj x PER rel x Total DPS Total div yield % Franking % ROA % ROE % EV/EBITDA x Net debt/equity % P/BV x FMG AU vs ASX 1, & rec history Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period. Source: FactSet, Macquarie Research, February 217 (all figures in USD unless noted, TP in AUD) 2 February 217 Macquarie Securities (Australia) Limited A dividend surprise possible Event FMG is set to report its 1HFY17 earnings on 22 February. We expect a strong comparable result, although we note that net debt of US$4.bn was already released with the 2QFY17 production result. FMG has been stepping up its dividend payout ratio in recent periods and we believe the interim dividend could be a positive surprise given gearing is now down to 3%. Impact Strong comparable earnings result: We expect FMG to report a strong 1HFY17 earnings result, with EBITDA of US$2.5bn up +1% YoY and +3% higher than the preceding period. Cash generation should also be strong, although is largely known given FMG announced its net debt position with the 2QFY17 production result. Focus likely to be on the dividend: FMG is generating strong cash flow at current iron-ore prices and with gearing now down at 3% we believe there is an increased likelihood that the company will declare a higher dividend. We have lifted our payout ratio to 45%, implying an interim dividend of A$.22 and lifting our FY17 payout ratio to ~5%. Debt free in six months at spot prices: Iron-ore prices have traded above US$9/t for the past three weeks and have now averaged US$83/t in 217. Under a spot price scenario we estimate FMG could become debt free in around six months with gearing below 1% at the end of June 217. Earnings and target price revision We have made some modest changes to our earnings forecasts after upgrading our payout ratio for FY17 to 54%, increasing our FY17 dividend forecast from A$.23 to A$.44. The higher dividend payout drives <1% cuts to forward earnings due to lower interest revenue. Our A$7.6 price target remains unchanged. Price catalyst 12-month price target: A$7.6 based on a 5/5 NPV and 6.x EV/Ebitda methodology. Catalyst: FMG is scheduled to report its 1HFY17 earnings result on 22 February and its 3QFY17 production result on 13 April. Action and recommendation Maintain Outperform: We expect FMG to report a strong 1HFY17 earnings result with underlying EBITDA and NPAT up 16% and 265% YoY, respectively. EBITDA margins are forecast to be a record 55%, an impressive result given iron-ore prices are 4% lower than the last time FMG reported a similar margin. Net debt and gearing have fallen to US$4.bn and 3%, respectively, and we believe FMG could step up its dividend payout as a result. We have lifted our FY17 dividend forecast to A$.44, implying a payout ratio of 54%. Spot prices continue to trade well above our forecasts. We note that at spot prices FMG is trading on forward free cash flow yields of +3% and would become debt free within six months. Please refer to page 7 for important disclosures and analyst certification, or on our website
2 Macquarie Wealth Management 1HFY17 result should be comparably strong FMG is expected to report a strong 1HFY17 result. Our US$2.5bn EBITDA forecast is 16% higher on a YoY basis and 32% up on the preceding period. EBIT and NPAT are expected to be +2% higher on a YoY basis and increases of 47% and 75% on the preceding period, respectively. The strong earnings result is not expected to fully translate through to cash flow, due to the unwinding of iron-ore prepayments and some provisional pricing adjustments in the revenue line that did not flow through to cash flow until January. The solid cash flow result has driven net debt down to US$4bn and gearing to 3%, which FMG disclosed at its 2QFY17 production result. Fig 1 FMG s 1HFY17 earnings result forecast to beat FY17 Y/E June 1H16a 2H16a 1H17e YoY PcP Revenue (US$m) 3,344 3,739 4,448 33% 19% EBITDA (US$m) 1,195 1,864 2,456 16% 32% EBIT (US$m) 568 1,247 1, % 47% NPAT (US$m) , % 75% Operating cash flow (US$m) 1,92 1,321 1,876 72% 42% Free cash flow (US$m) 969 1,86 1,466 51% 35% Net cash / (debt) (US$m) (6,13) (5,188) (3,928) (36%) (24%) Gearing 44% 38% 3% (33%) (23%) DPS (Ac) % 83% Source: FMG, Macquarie Research, February 217 EBITDA margins at record levels We expect FMG to report record EBITDA margins for the 1HFY17 of just over 55%. The ability to report record margins at a time when iron-ore prices averaged A$86/t in 1HFY17 is impressive and reflects FMG s strong operating and cost reduction performance. We note that last time FMG reported EBITDA margins over 5% was the 1HFY14, when the iron-ore price averaged A$145/t. Fig 2 Record EBITDA margin forecast for 1HFY17 Fig 3 Gearing has fallen to ~3% Ebitda margin Iron-ore (A$/t) Net debt (US$b) Gearing (net debt/(nd + equity)) 6% % 5% 4% % 6.% 5.% 3% % 2% 1% % 2.% 1.% %..% Source: FMG, Macquarie Research, February 217 Source: FMG, Macquarie Research, February 217 Upgrading dividend forecast on lower gearing After paying solid dividends in FY13, FMG materially reduced its cash return to shareholders in the subsequent 18 months but begun to step up the dividend in 2HFY16. We believe FMG could surprise on the upside on its 1HFY17 dividend payment. We have lifted our payout ratio to ~5% for the full year, increasing the FY17 payout forecast to A$.44 implying 1HFY17 payout ratio of 45% and 2HFY17 payout of 6%. 2 February 217 2
3 Jan 11 May 11 Sep 11 Jan 12 May 12 Sep 12 Jan 13 May 13 Sep 13 Jan 14 May 14 Sep 14 Jan 15 May 15 Sep 15 Jan 16 May 16 Sep 16 Jan 17 Macquarie Wealth Management Fig 4 Dividend could surprise on the upside Y/E June 1H14a 2H14a 1H15a 2H15a 1H16a 2H16a 1H17e 2H17e DPS (A$) Payout ratio (%) 16% 28% 28% nm 2% 42% 45% 6% Franking (%) 1% 1% 1% 1% 1% 1% 1% 1% Source: FMG, Macquarie Research, February 217 Iron-ore trading well above our forecasts Spot iron-ore prices have continued to rally strongly, having traded above US$9/t for all of last week. The average price for 3QFY17 to date is now US$83/t, well above our 3QFY17 US$6/t forecast. In Australian dollars spot iron-ore prices have averaged A$11/t for 3QFY17 to date and are trading close to A$12/t. Shipping rates have also declined recently, and are now trading below US$5/wmt for capesize vessels from Western Australia to China. Fig 5 Spot prices over US$9/t (~A$12/t) Fig 6 Material upside to our forecasts Metal Bulletin Iron Ore (US$/t) - CFR Metal Bulletin Iron Ore (A$/t) - CFR 1. Macqaurie Forecast (US$/t) Spot Price (US$/t) Forward Curve (US$/t) Source: Bloomberg, Macquarie Research, February 217 Source: Bloomberg, Macquarie Research, February 217 FMG looks cheap at spot prices FMG looks attractive on FY17 earnings multiples based on Macquarie iron-ore forecasts, trading on a P/E and free cash flow yield 8.x and 18%, respectively. Unsurprisingly running spot prices delivers very attractive multiples beyond FY17, with P/E multiples below 4.x and free cash flow yields over 3% for FY18 and FY19. Fig 7 FMG looks cheap on FY17 multiples on both our forecasts and spot prices Y/E June FY17e FY18e FY19e Y/E June FY17e FY18e FY19e P/E 8.x 19.6x 27.8x P/E 4.7x 3.5x 3.4x EV/EBITDA 4.3x 7.1x 7.8x EV/EBITDA 2.7x 1.8x 1.4x Gearing 22% 23% 18% Gearing 9% (18%) (47%) Dividend yield 6.4% 3.2% 2.3% Dividend yield 11.8% 18.5% 19.3% FCF Yield 18% 3% 6% FCF Yield 28% 33% 33% Note: Multiples differ to our database, which converts US$ at spot while our forecasts are based on our A$ forecasts for the respective years. Source: FMG, Macquarie Research, February February 217 3
4 Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Mar 19 Jun 19 Sep 19 Dec 19 Mar 2 Jun 2 Sep 2 Dec 2 Mar 21 Jun 21 Sep 21 Dec 21 Mar 22 Jun 22 Sep 22 Dec 22 Sep 15 May 16 Jan 17 Sep 17 May 18 Jan 19 Sep 19 May 2 Jan 21 Sep 21 May 22 Jan 23 Sep 23 May 24 Jan 25 Sep 25 May 26 Jan 27 Sep 27 May 28 Jan 29 Sep 29 May 3 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY17e FY18e FY19e FY2e FY21e FY22e FY23e FY24e FY25e FY26e FY27e FY28e FY29e FY3e Macquarie Wealth Management Fig 8 FMG group production Fig 9 FMG quarterly cash costs Shipments (mt) (LHS) All in cash costs (US$/wmt) (RHS) C1 Cash costs (US$/wmt) All in cash costs (US$wmt) Source: FMG, Macquarie Research, February 217 Source: FMG, Macquarie Research, February 217 Fig 1 FMG reserves by project Fig 11 FMG resources by project Cloudbreak 9% Firetail 5% Kings and Queens 28% Christmas Creek 41% Cloudbreak 25% Eliwana and Flying Fish 6% Nyidinghu 21% Greater Solomon 23% Kings and Queens 16% Christmas Creek 18% Firetail 3% Source: FMG, Macquarie Research, February 217 Source: FMG, Macquarie Research, February 217 Greater Chichester 4% Fig 12 FMG debt repayment schedule Fig 13 FMG cumulative cash flow 2,5 Senior unsecured note (US$m) Senior secured credit facility/ secured notes (US$m) 25, Net cash (debt) (US$m) Market Cap (US$m) 2, 2, 15, 1,5 1, 1, 5, 5 (5,) (1,) Source: FMG, Macquarie Research, February 217 Source: FMG, Macquarie Research, February February 217 4
5 Macquarie Wealth Management Fig 14 FMG summary financials Fortescue Metals ASX: FMG Price: (A$ps) 6.88 Year end: Jun Rating: Outperform Up/dn TSR Mkt cap: (A$m) 21,423 Diluted shares (m) 3,114 Target: 7.6 1% 17% Mkt cap: (US$m) 16,425 ASSUMPTIONS FY14 FY15 FY16 FY17e FY18e FY19e FY2e ATTRIBUTABLE MINE OUTPUT FY14 FY15 FY16 FY17e FY18e FY19e FY2e Exchange Rate A$/US$ Iron-ore shipped (kt) Spot iron-ore (62% CIF) US$/t Cloudbreak (mt) mt Spot iron-ore (62% CIF) A$/t Christmas Creek (mt) mt RATIO ANALYSIS FY14 FY15 FY16 FY17e FY18e FY19e FY2e Firetail (mt) mt Diluted share capital m 3,119 3,12 3,117 3,132 3,132 3,132 3,132 Kings Valley (mt) mt EPS (diluted and pre sig. items) A FMG Shipped (mt) mt P/E x 7.2x 56.8x 15.9x 8.x 19.6x 27.8x 15.7x Nullagine JV (mt) - 1% mt CFPS A Iron Bridge (mt) mt P/CF x 3.7x 12.4x 6.5x 4.4x 13.5x 11.2x 6.8x Total shipments (1%) mt DPS A C1 Cash costs US$/wmt Dividend yield % 2.9%.7% 2.2% 6.4% 3.2% 2.3% 2.9% All in cash costs US$/wmt Franking Level % 1% 1% 1% 1% 1% 1% 1% CFR 62% Fe Equ costs US$/dmt Book value per share A$ps OPERATIONAL OUTLOOK P/Book value x 2.6x 2.4x 1.9x 1.7x 1.6x 1.5x 1.4x R.O.E. (pre sig items) % 36% 4% 9% 21% 8% 6% 9% Cloudbreak (mt) Christmas Creek (mt) Firetail (mt) R.O.A. (pre sig items) % 21% 5% 9% 16% 8% 6% 9% 18. Kings Valley (mt) Nullagine JV (mt) - 1% Iron Bridge (mt) Interest Cover x 6.5x 1.7x 2.8x 1.1x 5.3x 4.x 9.6x 16. EBITDA per share A$ps EV/EBITDA x 4.8x 1.2x 6.8x 4.3x 7.1x 7.8x 5.9x 14. FCF Yield % 24% 4% 13% 18% 3% 6% 9% EARNINGS FY14 FY15 FY16 FY17e FY18e FY19e FY2e Sales Revenue US$m 11,753 8,574 7,83 8,299 6,718 6,634 7, Other Revenue US$m Total Revenue US$m 11,879 8,651 7,9 8,299 6,718 6,634 7, Operating Costs US$m (6,131) (6,51) (3,841) (3,748) (3,943) (4,21) (4,468) 2. Operational EBITDA US$m 5,748 2,6 3,249 4,551 2,775 2,433 2,974 Exploration Expense/Write-offs US$m (16) (52) (136) (4) (41) (42) (43). FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY17eFY18eFY19eFY2eFY21eFY22eFY23eFY24eFY25e Corporate & Other Costs US$m (112) (94) (54) (72) (73) (75) (77) EBITDA US$m 5,62 2,454 3,59 4,439 2,661 2,316 2,854 RESERVES AND RESOURCES (ATTRIBUTABLE) D&A US$m (965) (1,45) (1,244) (1,225) (1,227) (1,227) (1,227) Iron-ore reserves EBIT US$m 4,655 1,49 1,815 3,214 1,434 1,89 1,627 Project Mt Fe CaFe SiO2 Al2O3 P LOI Net Interest US$m (72) (629) (653) (319) (271) (269) (169) Cloudbreak % 62.5% 5.5% 2.8%.6% 8.3% Profit Before Tax US$m 3, ,162 2,895 1, ,458 Christmas Creek % 61.8% 5.7% 2.9%.5% 7.4% Tax Expense US$m (1,173) (14) (369) (869) (349) (246) (437) Firetail % 63.1% 5.8% 2.5%.11% 6.4% Minorities US$m (1) (1) Kings and Queens % 62.2% 6.8% 2.7%.6% 9.1% Adjusted NPAT US$m 2, , ,21 Total Reserves 2, % 62.1% 6.% 2.8%.6% 8.% Significant Items (post tax) US$m (22) 192 Iron-ore resources Reported NPAT US$m 2, , ,21 Project Mt Fe CaFe SiO2 Al2O3 P LOI Cloudbreak 1,9 56.5% 61.6% 6.1% 3.4%.6% 8.3% Christmas Creek 2, % 6.9% 6.7% 3.5%.5% 7.9% CASHFLOW FY14 FY15 FY16 FY17e FY18e FY19e FY2e Firetail % 62.3% 6.4% 3.%.11% 6.7% Net Profit US$m 2, , ,21 Kings and Queens 1, % 6.9% 7.8% 3.3%.7% 8.8% Interest/Tax/D&A US$m 1,876 1,19 1,727 1, ,124 1,418 Fortescue Mines 5, % 61.1% 6.9% 3.4%.6% 8.2% Working Capital/other US$m (298) (39) (337) (28) (13) Greater Chichester % 61.3% 6.6% 3.5%.6% 6.8% Net Operating Cashflow US$m 5,395 1,447 2,413 3,712 1,184 1,418 2,336 Greater Solomon 2, % 61.3% 6.9% 3.7%.8% 7.3% Capex US$m (1,995) (849) (358) (758) (72) (423) (847) Eliwana and Flying Fish % 63.2% 5.2% 2.9%.9% 6.5% Investments US$m Nyidinghu 2, % 62.9% 4.9% 3.3%.15% 8.7% Sale of PPE and Other US$m Total Resources 11, % 61.7% 6.4% 3.4%.9% 8.% Free cash flow US$m 4,3 76 2,55 2, ,489 Magnetite Reserves Mt Mass Recovery (Fe) (SiO2) (Al2O3) Dividends Paid US$m (581) (343) (114) (599) (597) (258) (327) North Star % 67.2% 5.5%.3% Debt US$m (3,174) (257) (2,695) (1,581) (2) (1,996) (2) Magnetite Resources Equity Issuance US$m (17) (3) (21) Project Mt Mass Recovery Fe SiO2 Al2O3 Other US$m North Star and Eastern Limb 3, % 3.7% 41.% 2.5% Net Financing Cashflow US$m (3,772) (63) (2,83) (2,18) (617) (2,254) (347) Glacier Valley 2, % 32.5% 39.1% 1.7% Net change in cash US$m (775) 774 (135) (1,26) 1,142 West Star % 29.% 42.9% 3.2% Total 6, % 31.4% 4.3% 2.2% VALUATION Spot Prices Macquarie Forecasts BALANCE SHEET FY14 FY15 FY16 FY17e FY18e FY19e FY2e Projects A$m A$ps A$m A$ps Cash US$m 2,398 2,381 1,583 2,357 2, ,14 Fortescue Operations 55, , PP&E & Mine Development US$m 18,68 17,729 16,867 16,4 15,875 15,71 14,692 Undeveloped Resources 2, , Exploration US$m Other resources Total Assets US$m 22,694 21,36 19,337 19,67 18,852 16,831 17,731 Unpaid capital.. Debt US$m 9,557 9,569 6,771 5,19 5,17 3,174 3,154 Prepayments (887) (.28) (917) (.29) Total Liabilities US$m 15,111 13,823 1,931 9,837 8,81 6,464 6,672 Corporate (638) (.2) (655) (.21) Total Net Assets / Equity US$m 7,583 7,537 8,46 9,834 1,5 1,366 11,6 Cash 5, , Net Debt / (Cash) US$m 7,159 7,188 5,188 2,833 2,948 2,212 1,5 Debt (6,769) (2.17) (6,92) (2.22) Gearing (net debt/(nd + equity)) % 49% 49% 38% 22% 23% 18% 9% Net Equity Value (@ 8.5% WACC) 55, , Gearing (net debt/equity) % 94% 95% 62% 29% 29% 21% 9% Price Target (5/5 NPV and 6.x EV/Ebitda) 7.6 Source: FMG, Macquarie Research, February February 217 5
6 Macquarie Wealth Management Macquarie Quant View The quant model currently holds a strong positive view on Fortescue Metals Group. The strongest style exposure is Growth, indicating this stock has good historic and/or forecast growth. Growth metrics focus on both top and bottom line items. The weakest style exposure is Quality, indicating this stock is likely to have a weaker and less stable underlying earnings stream. 6/1547 Global rank in Materials % of BUY recommendations 2% (4/2) Number of Price Target downgrades Number of Price Target upgrades 23 Fundamentals Attractive Quant Local market rank Global sector rank Displays where the company s ranked based on the fundamental consensus Price Target and Macquarie s Quantitative Alpha model. Two rankings: Local market (Australia & NZ) and Global sector (Materials) Macquarie Alpha Model ranking A list of comparable companies and their Macquarie Alpha model score (higher is better). Factors driving the Alpha Model For the comparable firms this chart shows the key underlying styles and their contribution to the current overall Alpha score. 2.9 Rio Tinto 2.3 Rio Tinto BHP Billiton 1.6 BHP Billiton Kumba Iron Ore Mount Gibson Iron 1..9 Kumba Iron Ore Mount Gibson Iron % -8% -6% -4% -2% % 2% 4% 6% 8% 1% Valuations Growth Profitability Earnings Momentum Price Momentum Quality Macquarie Earnings Sentiment Indicator The Macquarie Sentiment Indicator is an enhanced earnings revisions signal that favours analysts who have more timely and higher conviction revisions. Current score shown below. Drivers of Stock Return Breakdown of 1 year total return (local currency) into returns from dividends, changes in forward earnings estimates and the resulting change in earnings multiple. Rio Tinto BHP Billiton Kumba Iron Ore Mount Gibson Iron Rio Tinto BHP Billiton Kumba Iron Ore Mount Gibson Iron % -5% % 5% 1% Dividend Return Multiple Return Earnings Outlook 1Yr Total Return What drove this Company in the last 5 years Which factor score has had the greatest correlation with the company s returns over the last 5 years. Volatility 25 Day 25d Volatility PEG Ratio Inverted Relative Turnover Interest Cover Merton Score Turnover (USD) 25 Day EPS Growth 5yr Historic -34% -35% -36% Negatives Positives -27% 25% 25% 39% 39% -4% -2% % 2% 4% How it looks on the Alpha model A more granular view of the underlying style scores that drive the alpha (higher is better) and the percentile rank relative to the sector and market. Alpha Model Score Valuation Growth Profitability Earnings Momentum Price Momentum Quality Capital & Funding Liquidity Risk Technicals & Trading Normalized Score Percentile relative to sector(/1547) Percentile relative to market(/422) Source (all charts): FactSet, Thomson Reuters, and Macquarie Research. For more details on the Macquarie Alpha model or for more customised analysis and screens, please contact the Macquarie Global Quantitative/Custom Products Group (cpg@macquarie.com) 2 February 217 6
7 Macquarie Wealth Management Important disclosures: Recommendation definitions Macquarie - Australia/New Zealand Outperform return >3% in excess of benchmark return Neutral return within 3% of benchmark return Underperform return >3% below benchmark return Benchmark return is determined by long term nominal GDP growth plus 12 month forward market dividend yield Macquarie Asia/Europe Outperform expected return >+1% Neutral expected return from -1% to +1% Underperform expected return <-1% Macquarie South Africa Outperform expected return >+1% Neutral expected return from -1% to +1% Underperform expected return <-1% Macquarie - Canada Outperform return >5% in excess of benchmark return Neutral return within 5% of benchmark return Underperform return >5% below benchmark return Macquarie - USA Outperform (Buy) return >5% in excess of Russell 3 index return Neutral (Hold) return within 5% of Russell 3 index return Underperform (Sell) return >5% below Russell 3 index return Volatility index definition* This is calculated from the volatility of historical price movements. Very high highest risk Stock should be expected to move up or down 6 1% in a year investors should be aware this stock is highly speculative. High stock should be expected to move up or down at least 4 6% in a year investors should be aware this stock could be speculative. Medium stock should be expected to move up or down at least 3 4% in a year. Low medium stock should be expected to move up or down at least 25 3% in a year. Low stock should be expected to move up or down at least 15 25% in a year. * Applicable to Asia/Australian/NZ/Canada stocks only Recommendations 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations Financial definitions All "Adjusted" data items have had the following adjustments made: Added back: goodwill amortisation, provision for catastrophe reserves, IFRS derivatives & hedging, IFRS impairments & IFRS interest expense Excluded: non recurring items, asset revals, property revals, appraisal value uplift, preference dividends & minority interests EPS = adjusted net profit / efpowa* ROA = adjusted ebit / average total assets ROA Banks/Insurance = adjusted net profit /average total assets ROE = adjusted net profit / average shareholders funds Gross cashflow = adjusted net profit + depreciation *equivalent fully paid ordinary weighted average number of shares All Reported numbers for Australian/NZ listed stocks are modelled under IFRS (International Financial Reporting Standards). Recommendation proportions For quarter ending 31 December 216 AU/NZ Asia RSA USA CA EUR Outperform 57.53% 5.72% 45.57% 42.28% 6.58% 52.79% (for global coverage by Macquarie, 8.71% of stocks followed are investment banking clients) Neutral 33.9% 33.97% 43.4% 5.11% 37.23% 35.62% (for global coverage by Macquarie, 8.5% of stocks followed are investment banking clients) Underperform 8.56% 15.3% 11.39% 7.61% 2.19% 11.59% (for global coverage by Macquarie, 4.63% of stocks followed are investment banking clients) FMG AU vs ASX 1, & rec history (all figures in AUD currency unless noted) Note: Recommendation timeline if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period. Source: FactSet, Macquarie Research, February month target price methodology FMG AU: A$7.6 based on a 5/5 NPV and 6.x EV/Ebitda methodology Company-specific disclosures: FMG AU: Mark Barnaba, Chairman of Macquarie Group, WA is a non executive director of Ltd. MACQUARIE SECURITIES (AUSTRALIA) LIMITED or one of its affiliates managed or co-managed a public offering of securities of Ltd in the past 12 months, for which it received compensation. Macquarie Securities Australia Limited acted as Broker for a Dividend Neutralisation for Fortescue Metals Group Limited. MACQUARIE CAPITAL (AUSTRALIA) LIMITED or one of its affiliates has provided Ltd with investment advisory services in the past 12 months, for which it received compensation. Important disclosure information regarding the subject companies covered in this report is available at Date Stock Code (BBG code) Recommendation Target Price 31-Jan-217 FMG AU Outperform A$7.6 2-Dec-216 FMG AU Outperform A$ Nov-216 FMG AU Outperform A$6.3 2-Sep-216 FMG AU Outperform A$ Aug-216 FMG AU Outperform A$ Jul-216 FMG AU Outperform A$5. 19-Jul-216 FMG AU Outperform A$4.7 6-Jul-216 FMG AU Outperform A$ Jun-216 FMG AU Outperform A$ May-216 FMG AU Outperform A$ May-216 FMG AU Outperform A$ Apr-216 FMG AU Outperform A$3.4 4-Apr-216 FMG AU Outperform A$3.3 8-Mar-216 FMG AU Outperform A$ Feb-216 FMG AU Outperform A$ Jan-216 FMG AU Outperform A$ Dec-215 FMG AU Outperform A$ Dec-215 FMG AU Outperform A$2.9 2 February 217 7
8 This publication was disseminated on 2 February 217 at 3:45 UTC. Macquarie Wealth Management 26-Nov-215 FMG AU Outperform A$3. 3-Oct-215 FMG AU Outperform A$ Oct-215 FMG AU Outperform A$ Sep-215 FMG AU Outperform A$ Aug-215 FMG AU Outperform A$ May-215 FMG AU Neutral A$ Apr-215 FMG AU Neutral A$ Mar-215 FMG AU Neutral A$ Feb-215 FMG AU Neutral A$ Jan-215 FMG AU Neutral A$ Sep-214 FMG AU Neutral A$4.4 2-Aug-214 FMG AU Neutral A$5. 17-Jul-214 FMG AU Neutral A$ Jun-214 FMG AU Outperform A$ May-214 FMG AU Outperform A$5.5 2-Feb-214 FMG AU Outperform A$6.3 Target price risk disclosures: FMG AU: Any inability to compete successfully in their markets may harm the business. This could be a result of many factors which may include geographic mix and introduction of improved products or service offerings by competitors. The results of operations may be materially affected by global economic conditions generally, including conditions in financial markets. The company is exposed to market risks, such as changes in interest rates, foreign exchange rates and input prices. From time to time, the company will enter into transactions, including transactions in derivative instruments, to manage certain of these exposures. A$ strength vs the US$ is a key risk as costs and capital expenditure are denominated in A$, while product prices are denominated in US$. The company has senior unsecured debt of US$7bn; this potentially leaves interest service risk should markets turn down unexpectedly or operations be hampered unexpectedly. Analyst certification: We hereby certify that all of the views expressed in this report accurately reflect our personal views about the subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. The Analysts responsible for preparing this report receive compensation from Macquarie that is based upon various factors including Macquarie Group Limited (MGL) total revenues, a portion of which are generated by Macquarie Group s Investment Banking activities. General disclosure: This research has been issued by Macquarie Securities (Australia) Limited ABN , AFSL , a Participant of the ASX and Chi-X Australia Pty Limited. This research is distributed in Australia by Macquarie Wealth Management, a division of Macquarie Equities Limited ABN AFSL ("MEL"), a Participant of the ASX, and in New Zealand by Macquarie Equities New Zealand Limited ( MENZ ) an NZX Firm. Macquarie Private Wealth s services in New Zealand are provided by MENZ. Macquarie Bank Limited (ABN , AFSL No ) ( MBL ) is a company incorporated in Australia and authorised under the Banking Act 1959 (Australia) to conduct banking business in Australia. None of MBL, MGL or MENZ is registered as a bank in New Zealand by the Reserve Bank of New Zealand under the Reserve Bank of New Zealand Act Apart from Macquarie Bank Limited ABN (MBL), any MGL subsidiary noted in this research,, is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Australia) and that subsidiary s obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of that subsidiary, unless noted otherwise. This research contains general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice, you should consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. 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Fortescue Metals Group
AUSTRALIA FMG AU Price (at 4:13, 31 Jan 217 GMT) Outperform A$6.6 Valuation A$ - DCF (WACC 8.5%, beta 1.3, ERP 5.%, RFR 3.3%) 4.91 12-month target A$ 7.6 12-month TSR % +19.1 Volatility Index High GICS
More informationFortescue Metals Group
AUSTRALIA FMG AU Price (at 3:1, 22 Feb 217 GMT) Outperform A$6.99 Valuation A$ - DCF (WACC 8.5%, beta 1.3, ERP 5.%, RFR 3.3%) 4.79 12-month target A$ 7.6 12-month TSR % +13.2 Volatility Index High GICS
More informationPlatinum Asset Management
AUSTRALIA PTM AU Price (at 06:10, 11 Jul 2016 GMT) Neutral A$5.52 Valuation A$ - DCF (WACC 9.3%, beta 1.2, ERP 5.0%, RFR 3.3%) 5.19 12-month target A$ 5.36 12-month TSR % +2.6 Volatility Index Low/Medium
More informationFortescue Metals Group
AUSTRALIA FMG AU Price (at 08:49, 24 Jun 20 GMT) Outperform A$3.27 Valuation A$ - DCF (WACC 9.6%, beta 1.4, ERP 5.0%, RFR 3.3%) 3.57 12-month target A$ 3.60 12-month TSR % +.9 Volatility Index Very High
More informationSG Fleet Group. Another UK acquisition. Earnings and target price revision
AUSTRALIA SGF AU Price (at 08:26, 30 Nov 2016 GMT) Outperform A$3.23 Valuation - PER A$ 3.96-4.22 12-month target A$ 4.37 12-month TSR % +41.0 Volatility Index High GICS sector Commercial & Professional
More informationIOOF. Positive flows in 1Q17. FUM and Net Flows for September Qtr Source: Company data, Macquarie Research, Oct 2016.
AUSTRALIA IFL AU Price (at 06:35, 26 Oct 2016 GMT) Outperform A$8.34 Valuation A$ - DCF (WACC 8.8%, beta 1.1, ERP 5.0%, RFR 3.3%) 8.74 12-month target A$ 9.00 12-month TSR % +14.3 Volatility Index Low/Medium
More informationQBE Insurance. QBE ANZ performance: LMI vs. Excl. LMI (A$m) Source: Company data, Macquarie Research, April 16. Earnings and target price revision
AUSTRALIA QBE AU Price (at 10:44, 27 Apr 2016 GMT) Neutral A$11.19 Valuation A$ - DCF (WACC 9.3%, beta 1.1, ERP 5.0%, RFR 3.8%) 11.34 12-month target A$ 12.00 12-month TSR % +12.7 Volatility Index Low/Medium
More informationSG Fleet Group % growth in FY17. Earnings and target price revision. Price catalyst. Catalyst: Results and contract wins.
AUSTRALIA SGF AU Price (at 07:57, 27 Oct 2016 GMT) Outperform A$3.85 Valuation - PER A$ 3.92-4.18 12-month target A$ 4.37 12-month TSR % +18.1 Volatility Index Medium GICS sector Commercial & Professional
More informationKingsgate Consolidated
AUSTRALIA KCN AU Price (at 6:11, 31 Jul 215 GMT) Underperform A$.67 Valuation A$ - DCF (WACC 12.%, beta 1.6, ERP 5.%, RFR 3.8%).3 12-month target A$.3 12-month TSR % -54.9 Volatility Index Very High GICS
More informationOil Search. Proving up PNG A$7.11 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA OSH AU Price (at 05:10, 16 Feb 2017 GMT) Outperform A$7.11 Valuation A$ - DCF (WACC 8.5%, beta 1.4, ERP 5.0%, RFR 3.3%) 6.70 12-month target A$ 7.60 12-month TSR % +8.2 Volatility Index Medium
More informationOz Minerals. Solid start to the year A$5.62 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA OZL AU Price (at 6:24, 21 Apr 216 GMT) Underperform A$5.62 Valuation A$ - DCF (WACC 1%, beta 1.4, ERP 5.%, RFR 3.8%) 4.61 12-month target A$ 4.6 12-month TSR % -15.5 Volatility Index High GICS
More informationOz Minerals. On track to meet guidance A$6.51 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA OZL AU Price (at 08:20, 22 Jul 2016 GMT) Underperform A$6.51 Valuation A$ - DCF (WACC 9.0%, beta 1.4, ERP 5.0%, RFR 3.3%) 4.31 12-month target A$ 5.00 12-month TSR % -21.4 Volatility Index High
More informationSandfire Resources. Swings to net cash A$5.34 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA SFR AU Price (at 6:11, 7 Jul 216 GMT) Outperform A$5.34 Valuation A$ - DCF (WACC 9.%, beta 1.4, ERP 5.%, RFR 3.3%) 5.82 12-month target A$ 6.1 12-month TSR % +18.3 Volatility Index Medium GICS
More informationSilver Chef. Capital raising A$7.71 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA SIV AU Price (at 08:50, 21 Mar 2017 GMT) Neutral A$7.71 Valuation - PER A$ 6.68 12-month target A$ 6.68 12-month TSR % -7.4 Volatility Index Medium GICS sector Capital Goods Market cap A$m 278
More informationNIB Holdings. Lowest in 4 years still enough A$3.72 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst
AUSTRALIA NHF AU Price (at 09:52, 02 Mar 2016 GMT) Outperform A$3.72 Valuation A$ 3.85 - DCF (WACC 8.5%, beta 1.0, ERP 5.0%, RFR 3.8%, TGR 2.5%) 12-month target A$ 4.00 12-month TSR % +11.7 Volatility
More informationEclipx Group. Highlights its funding flexibility A$3.77 AUSTRALIA. Event. Impact. Earnings and target price revision.
AUSTRALIA ECX AU Price (at 02:49, 15 Dec 2016 GMT) Outperform A$3.77 Valuation - PER A$ 3.53-3.78 12-month target A$ 4.22 12-month TSR % +16.3 Volatility Index Low/Medium GICS sector Diversified Financials
More informationOrocobre. Upside exposure fading. Earnings and target price revision. Price catalyst. Catalyst: Update on projects or Q1 report
AUSTRALIA ORE AU Price (at 5:11, 28 Feb 217 GMT) Neutral A$3.8 Valuation - DCF (WACC 1.%) A$ 1.34 12-month target A$ 3.17 12-month TSR % +2.9 Volatility Index High GICS sector Materials Market cap A$m
More informationPilbara Minerals (PLS AU) Ramp-up gaining traction
17 January 219 Australia EQUITIES PLS AU Price (at 5:1, 16 Jan 219 GMT) Outperform A$.7 Valuation A$ 1.11 - DCF (WACC 1.%, beta 1.6, ERP 5.%, RFR 3.8%) 12-month target A$ 1.2 12-month TSR % +72.7 Volatility
More informationAutomotive Holdings Group
AUSTRALIA AHG AU Price (at 06:14, 11 Aug 2016 GMT) Outperform A$4.61 Valuation - EV/EBITA A$ 4.09-4.63 12-month target A$ 4.36 12-month TSR % -0.2 Volatility Index Low GICS sector Retailing Market cap
More informationFortescue Metals Group
AUSTRALIA FMG AU Price (at 5:1, 5 Mar 215 GMT) Neutral A$2.29 Valuation A$ 2.6 - DCF (WACC 1.%, beta 1.4, ERP 5.%, RFR 3.8%, TGR 2.6%) 12-month target A$ 2.6 12-month TSR % +16. Volatility Index High GICS
More informationSims Metal Management
AUSTRALIA SGM AU Price (at 5:11, 17 Nov 215 GMT) Outperform A$7.19 Valuation - EV/EBIT A$ 8.49-9.6 12-month target A$ 8.9 12-month TSR % +26.6 Volatility Index Medium GICS sector Materials Market cap A$m
More informationPerseus Mining. Revised Sissingué plan A$0.31 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA PRU AU Price (at 5:1, 31 Mar 217 GMT) Neutral A$.31 Valuation A$ - DCF (WACC 1.%, beta.4, ERP 5.%, RFR 3.3%).35 12-month target A$.32 12-month TSR % +3.2 Volatility Index Very High GICS sector
More informationSeek. Progresses Zhaopin privatisation A$16.33 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA SEK AU Price (at 06:33, 07 Apr 2017 GMT) Outperform A$16.33 Valuation - Sum of Parts A$ 16.77 12-month target A$ 16.50 12-month TSR % +3.9 Volatility Index Low/Medium GICS sector Commercial &
More informationTox Free Solutions. Winning work again A$2.34 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA TOX AU Price (at 05:10, 30 Nov 2016 GMT) Outperform A$2.34 Valuation - EV/EBITDA A$ 2.52-3.07 12-month target A$ 2.79 12-month TSR % +23.1 Volatility Index Medium GICS sector Commercial & Professional
More informationWhitehaven Coal. China outlook drives impairments A$1.04 AUSTRALIA. Event. Impact. Earnings and target price revision.
AUSTRALIA WHC AU Price (at 06:10, 13 Aug 2015 GMT) Neutral A$1.04 Valuation A$ - DCF (WACC 8.0%, beta 1.6, ERP 5.0%, RFR 3.8%) 1.18 12-month target A$ 1.15 12-month TSR % +10.6 Volatility Index High GICS
More informationRamsay Health Care. France begins to bite A$66.37 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst
AUSTRALIA RHC AU Price (at 06:11, 06 Aug 2015 GMT) Neutral A$66.37 Valuation A$ 64.54 - DCF (WACC 8.1%, beta 1.1, ERP 5.0%, RFR 3.8%, TGR 3.0%) 12-month target A$ 70.00 12-month TSR % +7.3 Volatility Index
More informationFisher & Paykel Healthcare
NEW ZEALAND FPH NZ Price (at 05:00, 10 Jul 2015 GMT) Outperform NZ$7.03 Valuation NZ$ 7.39 - DCF (WACC 8.8%, beta 0.9, ERP 7.0%, RFR 4.5%, TGR 2.0%) 12-month target NZ$ 7.80 12-month TSR % +13.1 Volatility
More informationIndependence Group NL
AUSTRALIA IGO AU Price (at 12:29, 26 Oct 216 GMT) Outperform A$4.25 Valuation A$ - DCF (WACC 8.4%, beta 1.2, ERP 5.%, RFR 3.3%) 3.98 12-month target A$ 5. 12-month TSR % +2.2 Volatility Index High GICS
More informationPanAust. Larger impairment and dividend cut A$1.35 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst
AUSTRALIA PNA AU Price (at 7:6, 19 Feb 215 GMT) Outperform A$1.35 Valuation A$ - DCF (WACC 11.%, beta 1.7, ERP 5.%, RFR 3.8%) 1.73 12-month target A$ 1.7 12-month TSR % +25.9 Volatility Index High GICS
More informationOz Minerals. Raises copper production outlook A$9.08 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst
AUSTRALIA OZL AU Price (at 7:28, 3 Jan 27 GMT) Neutral A$9.8 Valuation A$ - DCF (WACC 9.%, beta.4, ERP 5.%, RFR 3.3%) 8.48 2-month target A$ 9.3 2-month TSR % +4.6 Volatility Index High GICS sector Materials
More informationRegis Resources. Strong 1H15 result A$1.29 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA RRL AU Price (at 7:29, 13 2 GMT) Outperform A$1.29 Valuation A$ - DCF (WACC 9.%, beta 1.5, ERP 5.%, RFR 3.8%) 1.68 12-month target A$ 1.7 12-month TSR % +37.2 Volatility Index High GICS sector
More informationCardno. Tough half over A$2.88 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA CDD AU Price (at 04:53, 17 Feb 2015 GMT) Neutral A$2.88 Valuation - Sum of Parts A$ 2.80-3.43 12-month target A$ 3.12 12-month TSR % +18.4 Volatility Index Medium GICS sector Capital Goods Market
More informationSirtex Medical. Healthy dose sales. Earnings and target price revision. Price catalyst. Catalyst: FY16 result on the 24th of August
AUSTRALIA SRX AU Price (at CLOSE#, 11 Jul 2016) Outperform A$27.88 Valuation A$ 37.93 - DCF (WACC 9.0%, beta 1.2, ERP 5.0%, RFR 3.3%, TGR 1.5%) 12-month target A$ 38.00 12-month TSR % +37.4 Volatility
More informationNational Australia Bank
AUSTRALIA NAB AU Price (at 06:10, 27 Jul 2015 GMT) Outperform A$33.91 Valuation A$ - DCF (WACC 9.6%, beta 1.0, ERP 5.0%, RFR 5.8%) 37.74 12-month target A$ 39.39 12-month TSR % +22.1 Volatility Index Low
More informationBendigo and Adelaide Bank
AUSTRALIA AU Price (at 06:17, 30 Mar 2017 GMT) Underperform A$12.03 Valuation A$ 11.48- - Sum of Parts/GG 11.71 12-month target A$ 11.50 12-month TSR % +1.2 Volatility Index Low/Medium GICS sector Banks
More informationNewcrest Mining. Strong production result A$21.37 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst
AUSTRALIA NCM AU Price (at 5:37, 27 Oct 216 GMT) Neutral A$21.37 Valuation A$ - DCF (WACC 5.%, beta.8, ERP 5.%, RFR 3.3%) 15.8 12-month target A$ 24. 12-month TSR % +13.9 Volatility Index Medium GICS sector
More informationCochlear. Roberts replaced A$88.66 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA COH AU Price (at 06:47, 26 May 2015 GMT) Outperform A$88.66 Valuation A$ 81.19 - DCF (WACC 8.0%, beta 1.0, ERP 5.0%, RFR 3.8%, TGR 3.0%) 12-month target A$ 95.00 12-month TSR % +9.8 Volatility
More informationSouthern Cross Media. Streamlining ahead of reform? A$1.37 AUSTRALIA
AUSTRALIA SXL AU Price (at 05:10, 27 Mar 2017 GMT) Neutral A$1.37 Valuation A$ - DCF (WACC 8.0%, beta 1.2, ERP 5.0%, RFR 3.3%) 1.39 12-month target A$ 1.30 12-month TSR % +0.8 Volatility Index Medium GICS
More informationCoca-Cola Amatil. Not as fizzy as it looks A$8.78 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst
AUSTRALIA CCL AU Price (at CLOSE#, 21 Aug 2015) Underperform A$8.78 Valuation A$ 8.47 - DCF (WACC 8.7%, beta 1.0, ERP 5.0%, RFR 3.8%, TGR 1.9%) 12-month target A$ 8.99 12-month TSR % +7.3 Volatility Index
More informationBoart Longyear. Earnings and target price revision. No change. Price catalyst. Action and recommendation
AUSTRALIA BLY AU Price (at 08:01, 12 Sep 2013 GMT) Neutral A$0.50 Valuation A$ 0.71 - DCF (WACC 10.1%, beta 1.5, ERP 0.1%, RFR 0.1%, TGR 0.0%) 12-month target A$ 0.56 12-month TSR % +12.0 Volatility Index
More informationNuplex Industries. Should benefit from a weak Kiwi NZ$4.55 NEW ZEALAND. Event. Impact. Earnings and target price revision.
NEW ZEALAND NPX NZ Price (at 05:00, 31 Jul 2015 GMT) Outperform NZ$4.55 Valuation NZ$ 4.40 - DCF (WACC 12.5%, beta 1.4, ERP 7.0%, RFR 4.5%, TGR 2.0%) 12-month target NZ$ 4.75 12-month TSR % +10.6 Volatility
More informationSenex Energy Production and revenue unsurprised, cash builds on lower capex
26 April 2018 Australia EQUITIES SXY AU Price (at 06:10, 26 Apr 2018 GMT) Outperform A$0.42 Valuation A$ 0.49 - DCF (WACC 9.1%, beta 1.5, ERP 4.0%, RFR 4.3%) 12-month target A$ 0.50 12-month TSR % +19.0
More informationMeridian Energy. On tax depreciation NZ$2.08 NEW ZEALAND. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
NEW ZEALAND MEL NZ Price (at 05:00, 13 Jul 2015 GMT) Outperform NZ$2.08 Valuation NZ$ 2.50 - DCF (WACC 7.8%, beta 0.6, ERP 7.0%, RFR 3.6%, TGR 2.0%) 12-month target NZ$ 2.60 12-month TSR % +31.7 Volatility
More informationOrigin Energy. 4Q Production. ORG reported its 4 th quarter production report, following on ConocoPhilips quarterly result.
AUSTRALIA ORG AU Price (at 06:11, 30 Jul 2015 GMT) Neutral A$11.35 Valuation A$ 12.79 - DCF (WACC 10.3%, beta 1.3, ERP 5.0%, RFR 3.8%, TGR 2.0%) 12-month target A$ 12.89 12-month TSR % +18.1 Volatility
More informationKaroon Gas. What a difference a day makes A$1.63 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst
AUSTRALIA KAR AU Price (at 05:10, 16 Mar 2017 GMT) Outperform A$1.63 Valuation A$ - DCF (WACC 11.1%, beta 1.7, ERP 5.0%, RFR 3.3%) 2.79 12-month target A$ 2.40 12-month TSR % +47.7 Volatility Index High
More informationEvolution Mining. Cowal pushes EVN beyond 800kozpa A$1.10 AUSTRALIA. Event. Impact. Earnings and target price revision.
AUSTRALIA EVN AU Price (at 3:18, 26 May 215 GMT) Neutral A$1.1 Valuation A$ - DCF (WACC 9.%, beta 1.7, ERP 5.%, RFR 3.8%) 1.11 12-month target A$ 1.1 12-month TSR % +1.8 Volatility Index High GICS sector
More informationSilver Lake Resources
AUSTRALIA SLR AU Price (at 12:42, 27 Jan 215 GMT) Neutral A$.25 Valuation - DCF (WACC 1.%) A$.23 12-month target A$.23 12-month TSR % -8. Volatility Index Very High GICS sector Materials Market cap A$m
More informationSaracen Mineral Holdings
AUSTRALIA SAR AU Price (at 5:, Jan 17 GMT) Neutral A$1.11 Valuation A$ - DCF (WACC 5.%, beta.4, ERP 5.%, RFR 3.3%) 1.19 12-month target A$ 1. 12-month TSR % +.5 Volatility Index High GICS sector Materials
More informationSpotless Group Holdings
AUSTRALIA SPO AU Price (at 05:45, 31 Jan 2017 GMT) Neutral A$0.94 Valuation - Peer multiples A$ 1.02 12-month target A$ 1.02 12-month TSR % +18.3 Volatility Index High GICS sector Commercial & Professional
More informationTelstra Corporation. Vodafone better, but far from good A$6.43 AUSTRALIA. Event. Impact. Earnings and target price revision.
AUSTRALIA TLS AU Price (at 11:23, 21 Jul 2015 GMT) Neutral A$6.43 Valuation A$ 6.37 - DCF (WACC 6.8%, beta 0.8, ERP 5.0%, RFR 3.8%, TGR 1.2%) 12-month target A$ 6.30 12-month TSR % +3.3 Volatility Index
More informationBHP Billiton. Mad Dog 2 gets FID AUSTRALIA/ UNITED KINGDOM/ SOUTH AFRICA. Event. Impact. Earnings and target price revision.
AUSTRALIA/ UNITED KINGDOM/ SOUTH AFRICA BHP AU/BLT LN/BIL SJ Outperform Price (at 12:49, 02 Dec 2016 GMT) A$25.02/ 13.39/R234.60 Valuation A$ 20.74/ 12.25/R217.81 - DCF (WACC 7.4%, beta 1.2, ERP 5.0%,
More informationSuper Retail Group (SUL AU) Are we there yet?
25 October 2018 Australia EQUITIES SUL AU Price (at 09:01, 24 Oct 2018 GMT) Neutral A$8.33 Valuation A$ 8.30-9.50 - EV/EBITA 12-month target A$ 8.70 12-month TSR % +10.9 Volatility Index GICS sector Low/Medium
More informationANZ Bank. The Dis-Associates. Earnings and target price revision. No change. Price catalyst. Catalyst: 3Q15 Trading Update. Action and recommendation
AUSTRALIA ANZ AU Price (at 07:51, 03 Jul 2015 GMT) Underperform A$32.46 Valuation - DDM/PE A$ 32.52 12-month target A$ 33.91 12-month TSR % +10.0 Volatility Index Low GICS sector Banks Market cap A$m 89,752
More informationCIMIC Group. Earnings and target price revision. No change. Price catalyst. Catalyst: Q1 earnings 13 April. Action and recommendation
AUSTRALIA CIM AU Price (at 05:10, 31 Mar 2017 GMT) Outperform A$35.93 Valuation A$ 42.69 - DCF (WACC 8.5%, beta 1.4, ERP 5.0%, RFR 3.3%, TGR 2.0%) 12-month target A$ 42.50 12-month TSR % +22.0 Volatility
More informationChallenger. Normalised margin trends expected to decline. Earnings and target price revision. Price catalyst. Action and recommendation
1H13E 2H13E 1H14E 2H14E 1H15E 2H15E AUSTRALIA CGF AU Price (at CLOSE#, 20 Aug 2012) Outperform A$3.76 Volatility index Low 12-month target A$ 4.57 12-month TSR % +26.4 Valuation - Sum of Parts A$ 4.57
More informationNEW ZEALAND Price Valuation NZ$ 1.74 Event 12-month target NZ$ month TSR % -10.1
NEW ZEALAND GNE NZ Price (at 05:06, 24 Feb 2015 GMT) Underperform NZ$2.20 Valuation NZ$ 1.74 - DCF (WACC 8.1%, beta 0.6, ERP 7.0%, RFR 3.6%, TGR 2.1%) 12-month target NZ$ 1.82 12-month TSR % -10.1 Volatility
More informationDoray Minerals. Mine life upside at Andy Well A$0.44 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst
AUSTRALIA DRM AU Price (at 5:28, 22 Jun 215 GMT) Outperform A$.44 Valuation A$ - DCF (WACC 1.%, beta 1.9, ERP 5.%, RFR 3.8%).8 12-month target A$.8 12-month TSR % +81.8 Volatility Index High GICS sector
More informationFisher & Paykel Healthcare
NEW ZEALAND FPH NZ Price (at 03:59, 16 Mar 2015 GMT) Outperform NZ$6.63 Valuation NZ$ 6.86 - DCF (WACC 8.8%, beta 0.9, ERP 7.0%, RFR 4.5%, TGR 2.0%) 12-month target NZ$ 7.25 12-month TSR % +11.6 Volatility
More informationGenworth Mortgage Insurance Australia
AUSTRALIA GMA AU Price (at 07:29, 05 Aug 2015 GMT) Outperform A$3.50 Valuation A$ - DCF (WACC 12.0%, beta 1.6, ERP 5.0%, RFR 4.5%) 3.52 12-month target A$ 3.47 12-month TSR % +9.2 Volatility Index Medium
More informationAustralian Iron Ore Miners
AUSTRALIA BHP Billiton Neutral Market Cap US$69,410m Price A$18.55/ 8.48/ZAR182.75 Price Target A$15.50/ 7.20/ZAR163 TSR (15%)/(13%)/(9%) Rio Tinto Outperform Market Cap US$56,484m Price A$46.47/ 21.05
More informationSandfire Resources. Strong result but guidance light A$6.10 AUSTRALIA. Event. Impact. Earnings and target price revision.
AUSTRALIA SFR AU Price (at 06:37, 29 Jul 20 GMT) Outperform A$6.10 Valuation A$ - DCF (WACC 10.0%, beta 1.7, ERP 5.0%, RFR 3.8%) 8.02 12-month target A$ 8.00 12-month TSR % +35.8 Volatility Index Medium
More informationIluka Resources. A soft start to FY15 A$7.73 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA ILU AU Price (at 06:10, 15 Apr 2015 GMT) Underperform A$7.73 Valuation A$ - DCF (WACC 9.0%, beta 1.5, ERP 5.0%, RFR 3.8%) 6.35 12-month target A$ 6.50 12-month TSR % -12.6 Volatility Index Medium
More informationAustralian Mid-cap Iron-Ore
AUSTRALIA Recommendation changes None BC Iron Outperform Price $0.23 Market Cap A$45m Target Price $0.35 TSR 52% Mt Gibson Iron Neutral Price $0.18 Market Cap A$196m Target Price $0.25 TSR 39% Grange Resources
More informationGeneration Healthcare REIT
AUSTRALIA GHC AU Price (at 06:13, 24 Aug 2015 GMT) Neutral A$1.65 Valuation - Sum of Parts A$ 1.51-1.59 12-month target A$ 1.59 12-month TSR % +1.8 Volatility Index Low GICS sector Real Estate Market cap
More informationVista Group International
NEW ZEALAND VGL NZ Price (at 03:15, 26 Feb 2015 GMT) Outperform NZ$4.35 Valuation NZ$ 4.31 - DCF (WACC 9.9%, beta 1.0, ERP 7.0%, RFR 4.0%, TGR 2.0%) 12-month target NZ$ 4.75 12-month TSR % +9.5 Volatility
More informationKiwi Property Group. Land banking for the future NZ$1.43 NEW ZEALAND. Event. Impact. Earnings and target price revision.
NEW ZEALAND KPG NZ Price (at 08:19, 07 Apr 2017 GMT) Outperform NZ$1.43 Valuation NZ$ 1.53 - DCF (WACC 6.9%, beta 0.6, ERP 7.0%, RFR 3.5%, TGR 2.0%) 12-month target NZ$ 1.53 12-month TSR % +11.8 Volatility
More informationAuckland International Airport
NEW ZEALAND AIA NZ Price (at 04:00, 27 Nov 2013 GMT) Neutral NZ$3.42 Valuation NZ$ 3.37 - DCF (WACC 8.0%, beta 0.9, ERP 7.0%, RFR 4.3%, TGR 3.0%) 12-month target NZ$ 3.37 12-month TSR % +2.6 Volatility
More informationIron Mountain. US$10 worth Recalling at investor day US$31.83 UNITED STATES. Event. Impact. Earnings and target price revision.
UNITED STATES IRM US Price (at 20:03, 07 Oct 2015 GMT) Outperform US$31.83 Valuation - DCF (WACC 6.1%) US$ 40.00 12-month target US$ 40.00 12-month TSR % +31.6 GICS sector Real Estate Market cap US$m 6,711
More informationHealthcare. Currency adjustments AUSTRALIA. Event. Impact. Outlook COH 8.0% RMD 6.9% CSL 6.0% ANN 5.0% SHL 2.6%
AUSTRALIA Recommendations: CSL Outperform P/T: $110.00 RMD Underperform P/T: $7.50 COH Outperform P/T: $100.00 SHL Outperform P/T: $24.00 ANN Outperform P/T: $26.00 RHC Outperform P/T: $75.00 A$ earnings
More informationDowner EDI Two out of three ain t bad Event
AUSTRALIA DOW AU Price (at 06:26, 01 Dec 2016 GMT) Outperform A$6.08 Valuation - Sum of Parts A$ 5.69-6.38 12-month target A$ 6.40 12-month TSR % +9.6 Volatility Index Medium GICS sector Commercial & Professional
More informationSingTel. Optus rises A$3.98 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA SGT AU Price (at 05:10, 12 Feb 2015 GMT) Outperform A$3.98 Valuation - Sum of Parts A$ 4.64-4.73 12-month target A$ 4.69 12-month TSR % +22.4 Volatility Index Low GICS sector Telecommunication
More informationRamsay Health Care (RHC AU) RHC UK on the mend?
17 October 2018 Australia EQUITIES RHC AU Price (at 05:48, 17 Oct 2018 GMT) Outperform A$54.18 Valuation A$ 68.50 - DCF (WACC 7.4%, beta 0.9, ERP 5.0%, RFR 3.7%, TGR 3.7%) 12-month target A$ 68.50 12-month
More informationCarsales.com. Motoring along nicely A$10.23 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA CRZ AU Price (at 9:48, 18 Feb 15 GMT) Outperform A$1.23 Valuation A$ 12.59 - DCF (WACC 8.1%, beta 1.2, ERP 5., RFR 3.8%, TGR 3.) 12-month target A$ 12.3 12-month TSR % +24.1 Volatility Index
More informationEarnings and target price revision. Price catalyst. Catalyst: 1H14 result in February Action and recommendation
AUSTRALIA CBA AU Price (at 06:10, 10 Sep 2013 GMT) Neutral A$73.63 Valuation A$ - DCF (WACC 10.3%, beta 1.0, ERP 5.0%, RFR 5.5%) 50.40 12-month target A$ 66.15 12-month TSR % -5.0 Volatility Index Low
More informationAUSTRALIA Price Valuation A$ 7.52 Event 12-month target A$ month TSR % +3.4
AUSTRALIA ILU AU Price (at 05:10, 19 Feb 2015 GMT) Neutral A$7.59 Valuation A$ 7.52 - DCF (WACC 9.0%, beta 1.5, ERP 5.0%, RFR 4.5%, TGR 3.9%) 12-month target A$ 7.50 12-month TSR % +3.4 Volatility Index
More informationSingTel. Earnings and target price revision. Price catalyst. Action and recommendation. Maintain Outperform.
AUSTRALIA SGT AU Price (at 05:10, 06 Dec 2012 GMT) Outperform A$2.59 Volatility index Low 12-month target A$ 2.81 12-month TSR % +14.6 Valuation - Sum of Parts A$ 2.81 GICS sector Telecommunication Services
More informationPremier Investments. Making a move? A$14.18 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA PMV AU Price (at 09:06, 29 Mar 2017 GMT) Outperform A$14.18 Valuation - Sum of Parts A$ 17.19 12-month target A$ 17.92 12-month TSR % +30.4 Volatility Index Low/Medium GICS sector Retailing Market
More informationDexus Property Group. Infra driving industrial demand A$9.94 AUSTRALIA. Event. Impact. Earnings and target price revision.
AUSTRALIA DXS AU Price (at 06:10, 06 Apr 2017 GMT) Neutral A$9.94 Valuation - NAV A$ 9.20-9.57 12-month target A$ 9.57 12-month TSR % +1.0 Volatility Index Low GICS sector Real Estate Market cap A$m 9,621
More informationAdelaide Brighton. Overcoming headwinds A$5.45 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA ABC AU Price (at 09:22, 23 Feb 2017 GMT) Outperform A$5.45 Valuation A$ 6.40 - DCF (WACC 7.8%, beta 1.2, ERP 5.0%, RFR 3.3%, TGR 2.0%) 12-month target A$ 6.30 12-month TSR % +2 Volatility Index
More informationRio Tinto. Expect more cash back in RIO AU/RIO LN Outperform AUSTRALIA/UNITED KINGDOM. Event. Impact. Earnings and target price revision
AUSTRALIA/UNITED KINGDOM RIO AU/RIO LN Outperform Price (at 8:37, 13 Feb 217 GMT) A$68.32/ 34.45 Valuation - DCF (WACC 7.4%, beta 1.2, ERP 5.%, RFR 3.3%) A$72.24/ 43.35 12-month target A$79./ 43.35 12-month
More informationAust. General Insurance
AUSTRALIA June 2016 3 mth rolling market results Personal Commercial Market Average Rate Growth -3. -3.6% -3.3% GWP Growth 1.8% -0.8% 0.9% Volume Growth 2.8% 0.8% 2.1% Est. Exposure Value Growth 2. 2.
More informationAustralian Banks. Funding markets open for now
AUSTRALIA Weekly performance 4% 2% % -2% -4% -6% -8% -1% Source: IRESS, August 212 Rolling monthly performance 8% 6% 4% 2% % -2% -4% -6% Source: IRESS, August 212 Rolling yearly performance % 15% 5% -5%
More informationANZ Bank. What execution risk? Earnings and target price revision. Price catalyst. Catalyst: 1Q17 Trading update, February 2017.
AUSTRALIA ANZ AU Price (at 09:15, 18 Jan 2017 GMT) Neutral A$30.11 Valuation A$ 30.69- - Sum of Parts/GG 31.47 12-month target A$ 31.00 12-month TSR % +8.4 Volatility Index Low/Medium GICS sector Banks
More informationMMG. A year of consolidation in 2017 AUSTRALIA/HONG KONG. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA/HONG KONG AU / 128 HK Outperform Price (at 4:, 13 Mar 217 GMT) A$4.9/HK$2.85 Valuation - DCF (WACC 7.%, ERP 5.%, RFR 3.3%) A$4.86/HK$2.85 12-month target A$5.5/HK$3.2 12-month TSR % +12.2 Volatility
More informationKaroon Gas. Losing the deal A$1.83 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA KAR AU Price (at 05:10, 29 Mar 2017 GMT) Outperform A$1.83 Valuation A$ - DCF (WACC 11.1%, beta 1.7, ERP 5.0%, RFR 3.3%) 2.79 12-month target A$ 2.40 12-month TSR % +31.5 Volatility Index High
More informationNational Australia Bank
AUSTRALIA NAB AU Price (at 08:23, 03 Jul 2012 GMT) Outperform A$23.68 Volatility index Low 12-month target A$ 27.66 12-month TSR % +24.9 Valuation A$ - DCF (WACC 12.6%, beta 1.0, ERP 5.0%, RFR 5.8%) 25.14
More informationAustralian Banks. Money Talks vertically challenged AUSTRALIA. Inside. Majors average short positions and banks index
Jun- Dec- Jun- Dec- Jun- Dec- Jun-1 Dec-1 Jun-11 Dec-11 Jun-1 Dec-1 Jun-1 Dec-1 Jun-1 Dec-1 Jun- Dec- AUSTRALIA Repricing generally follows an election s Nov Aug 1 Sep 1 1-1 Source: RBA, Macquarie Research,
More informationGenesis Energy. A 9% FCF yield and you call underperform? NZ$1.71 NEW ZEALAND. Event. Impact. Earnings and target price revision.
NEW ZEALAND GNE NZ Price (at 06:49, 29 Jul 2015 GMT) Underperform NZ$1.71 Valuation NZ$ 1.60 - DCF (WACC 8.0%, beta 0.6, ERP 7.0%, RFR 3.5%, TGR 2.1%) 12-month target NZ$ 1.65 12-month TSR % +6.1 Volatility
More informationRio Tinto. Mixed production, but iron-ore in line AUSTRALIA/UNITED KINGDOM A$48.99/ Event. Impact. Earnings and target price revision
AUSTRALIA/UNITED KINGDOM RIO AU/RIO LN Price (at 6:1, 19 Jul 216 GMT) Outperform A$48.99/ 24.63 Valuation A$ 52.22/ 27.97 - DCF (WACC 8.%, beta 1.2, ERP 5.%, RFR 3.3%) 12-month target A$ 54./ 27. 12-month
More informationAustralian Banks. Pre-Reporting Form Guide AUSTRALIA. Event. Impact. Outlook
AUSTRALIA MRE vs Consensus MQG FY15 Consensus FY15 Date Profit EPS DPS Profit EPS DPS BEN 10-Aug 439 92 67 434 92 67 CBA 12-Aug 9,289 557 420 9,116 554 419 Source: Factset, Macquarie Research, August 2015
More informationAustralian Mobile Market
AUSTRALIA Telstra data inclusions on key post-paid plans $130 $130 $95 $70 $55 Optus data inclusions on key post-paid plans "Everyday Connect" "Mobile Accelerate" $50 $40 Vodafone data inclusions on key
More informationAussie Macro Moment. Budget 16/17 careful consolidation AUSTRALIA. Event. Impact. Outlook
AUSTRALIA Lower deficits still in train, arriving late - - - /5 /7-5 -5 Jun-9 Jun- Jun Jun-8 Jun Jun Jun- Revenue recovery remains sluggish 7 5 Australian Federal : Underlying Balance ( of GDP) 5/ Spending
More informationUGL. Driving growth in DTZ. Earnings and target price revision. No change. Price catalyst. Action and recommendation
AUSTRALIA AU Price (at 08:17, 03 Sep 2012 GMT) Underperform A$10.52 Volatility index Low 12-month target A$ 11.08 12-month TSR % +12.0 Valuation A$ - DCF (beta 1.1, ERP 5.0%, RFR 6.0%, TGR 2.5%) 15.09
More information3P Learning. Coming to America... A$2.55 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA 3PL AU Price (at 09:19, 02 Mar 2015 GMT) Outperform A$2.55 Valuation - DCF A$ 2.65-3.35 12-month target A$ 3.00 12-month TSR % +18.9 Volatility Index Low/Medium GICS sector Consumer Services
More informationBHP Billiton. 2 C could make all the difference. BHP AU/BLT LN/BIL SJ Underperform Price (at 06:10, 06 Apr 2016 GMT)
AUSTRALIA/UNITED KINGDOM/SOUTH AFRICA BHP AU/BLT LN/BIL SJ Underperform Price (at 06:10, 06 Apr 2016 GMT) A$16.14/ 7.35/R155.35 Valuation A$14.93/ 7.00/R156.74 - DCF (WACC 7.4%, beta 1.1, ERP 5.0%, RFR
More informationBlueScope Steel. Execution, execution, execution A$12.33 AUSTRALIA. Event. Impact. Earnings and target price revision.
AUSTRALIA BSL AU Price (at 05:10, 20 Feb 2017 GMT) Outperform A$12.33 Valuation A$ 13.09 - DCF (WACC 9.0%, beta 1.2, ERP 5.0%, RFR 3.8%, TGR 2.0%) 12-month target A$ 14.30 12-month TSR % +17.0 Volatility
More informationAsaleo Care. NZ$ pulped. We review the outlook for Asaleo. Earnings and target price revision. Price catalyst. Catalyst: CY15 results.
AUSTRALIA AHY AU Price (at 06:10, 16 Jul 2015 GMT) Outperform A$1.80 Valuation - EV/EBITA A$ 1.90-2.00 12-month target A$ 2.00 12-month TSR % +16.8 Volatility Index Low GICS sector Household & Personal
More informationSims Metal Management
AUSTRALIA SGM AU Price (at 10:44, 15 Feb 2017 GMT) Outperform A$12.14 Valuation A$ - DCF (WACC 8.3%, beta 1.4, ERP 5.0%, RFR 3.3%) 13.79 12-month target A$ 13.60 12-month TSR % +15.0 Volatility Index High
More informationSouth32. Klipspruit coal mine tour AUSTRALIA/ UNITED KINGDOM/ SOUTH AFRICA. Event. Impact. Earnings and target price revision.
AUSTRALIA/ UNITED KINGDOM/ SOUTH AFRICA S32 AU/S32 LN/S32 SJ Outperform Price (at 12:26, 2 Dec 216 GMT) A$2.83/ 1.67/R29.31 Valuation - DCF (WACC 1.%, beta 1.1, ERP 5.%, RFR 3.3%) A$ 2.55/ 1.59/R27.75
More informationRyman Healthcare. Arrested development NZ$9.60 NEW ZEALAND. Event. Impact. Earnings and target price revision. Price catalyst
NEW ZEALAND RYM NZ Price (at 6:, 19 May 216 GMT) Outperform NZ$9.6 Valuation NZ$ 1.5 - DCF (WACC 9.%, beta.8, ERP 7.%, RFR 4.5%, TGR 2.%) 12-month target NZ$ 11. 12-month TSR % +16.5 Volatility Index Low
More information