Rio Tinto. Mixed production, but iron-ore in line AUSTRALIA/UNITED KINGDOM A$48.99/ Event. Impact. Earnings and target price revision
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- Denis McLaughlin
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1 AUSTRALIA/UNITED KINGDOM RIO AU/RIO LN Price (at 6:1, 19 Jul 216 GMT) Outperform A$48.99/ Valuation A$ 52.22/ DCF (WACC 8.%, beta 1.2, ERP 5.%, RFR 3.3%) 12-month target A$ 54./ month TSR % Volatility Index Low/Medium GICS sector Materials 3-day avg turnover A$m 11.8 Combined market cap US$m 62,253 Number shares on issue m Investment fundamentals Year end 31 Dec 215A 216E 217E 218E Revenue m 36,785 33,676 33,165 32,198 EBIT m 5,378 5,252 3,988 3,584 Reported profit m ,19 2,274 2,31 Adjusted profit m 4,54 3,19 2,274 2,31 Gross cashflow m 8,333 7,922 7,483 6,621 CFPS CFPS growth % PGCFPS x PGCFPS rel x EPS adj EPS adj Aus Aó EPS adj growth % PER adj x PER rel x Total DPS Total DPS Aus Aó Total DPS Uk UKp Total div yield % Franking % ROA % ROE % EV/EBITDA x Net debt/equity % P/BV x RIO 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, July 216 (all figures in USD unless noted, TP in AUD) 2 July 216 Macquarie Securities (Australia) Limited Mixed production, but iron-ore in line Event RIO s 2Q CY16 production result was mixed. Global iron-ore shipments of 86.8mt were in line with our forecasts; however, stronger output of bauxite, aluminium, alumina and thermal coal was offset by weaker copper, diamonds and hard coking coal production. Guidance for global iron-ore shipments is unchanged at 35mt for CY16. Impact Mixed production result: RIO reported global iron-ore shipments of 86.8mt, in line with our forecasts; however stronger output of bauxite, alumina, aluminium and thermal coal was offset by weaker copper, hard coking coal and diamonds production. Output from the Pilbara operations and IOC were in line with our expectations. RIO reaffirmed that the delay in delivering the automated train systems has reduced CY17 guidance to 33 34mt. The approval of the Silvergrass development is still expected in 2H CY16. 35mt iron ore target retained, upgrade to thermal coal: Guidance for the majority of divisions was retained. RIO has separated its 35mt global shipment guidance for the first time to 33mt from the Pilbara and 2mt from IOC (Macq 334mt and 18mt, respectively). CY16 thermal coal guidance has been upgraded by 1mt from 16 17mt to 17 18mt, whilst diamonds guidance has been changed from 21mcts to 18 21mct, likely due to a larger-thanexpected impact from planned maintenance at Diavik. Spot upside risk to our base-case earnings and valuation: With spot iron ore prices trading above our forecasts at US$53.9/t, this is the primary driver behind the upside risk to our base-case earnings and valuation. At spot prices we value RIO at US$75bn versus our base case of US$71.3bn. Earnings and target price revision 2Q CY16 results see EPS fall by <1% for CY16E onward. Price catalyst 12-month price target: A$54. based on a 5/5 Blend 7xEV/Ebitda and NPV methodology. Catalyst: 1H CY16 earnings on 3 August 216. Action and recommendation Maintain Outperform: RIO s 2Q CY16 production result was mixed, with in line iron-ore volumes, stronger aluminium and weaker copper the key highlights. Production guidance for all key commodities has been left broadly unchanged, and there was no change to the development schedules for Nammuldi, Amrun or Oyu Tolgoi. Bouyant spot iron-ore prices continue to present upside risk to our base-case earnings forecasts for RIO in 216, and the stock's superior cash-flow generation at spot prices and stronger balance sheet are key drivers behind our preference for RIO over (BHP AU, A$19.83, Underperform, TP: A$17., Hayden Bairstow). Please refer to page 6 for important disclosures and analyst certification, or on our website
2 Analysis RIO s 2Q CY16 production results for their core earnings contributor, iron ore, were in line with our estimates. However, the group that will generate the most growth for RIO, copper, had a disappointing result that was offset by strength of bauxite and thermal coal. RIO have however, reaffirmed their guidance for all commodities. The only two exceptions were thermal coal lifting by 1Mt to 17 18mt and diamonds having a range now of 18 21mct from 21mcts, which we believe may be due to a larger-than-expected disruption from the planned maintenance at Diavik. Fig 1 RIO s iron-ore shipments were in line with our forecasts; however, production of other key commodities was mixed Quarterly Production result 2Q CY16e 2Q CY16a Var (%) Global iron-ore Global iron-ore shipments (mt) - 1% basis (%) Global iron-ore production (mt) - 1% basis (1%) Pilbara Iron-ore Pilbara iron-ore shipments (mt)- 1% basis (1%) Pilbara iron-ore production (mt)- 1% basis (1%) Other Bauxite (kt) 11,256 12,73 7% Aluminium (kt) % Mined copper (kt) (%) Hard coking coal (kt) 1,973 1,798 (9%) Semi-soft and thermal coal (kt) 5,1 5,216 4% Titanium dioxide slag (kt) (1%) Source: Company data, Macquarie Research, July 216 We also saw some of the smaller aspects of RIO s portfolio having lower volumes than expected. This was seen across the board from borates to uranium to salt. This is also the first reporting period under RIO s new structure for which many of these smaller business units have been reorganised under Alan Davies. Fig 2 Hard coking coal production was impacted by a planned longwall move at Kestrel, whilst lower grades and interrupted mining operations resulted in lower-than-expected production of refined copper and diamonds Detailed breakdown (RIO share) 2Q CY16e 2Q CY16a Var (%) Alumina (kt) 1,944 2,46 5% Aluminium (kt) % Bauxite (kt) 11,256 12,73 7% Borates (kt) (2%) Hard Coking Coal (kt) 1,973 1,798 (9%) Semi-soft coking coal (kt) (1%) Thermal coal (kt) 4,1 4,323 5% Copper - mined (kt) (%) Copper - refined (kt) (18%) Copper - total (kt) (6%) Diamonds (kcts) 5,37 4,436 (12%) Iron-ore (kt) 69,391 68,886 (1%) Titanium dioxide slag (kt) (1%) Uranium (klbs) 1,865 1,439 (23%) Gold - mined (koz) (17%) Gold - refined (koz) % Gold - total (koz) (13%) Molybdenum (kt).3 (3%) Silver - mined (koz) 721 1,22 42% Silver - refined (koz) % Silver - total (koz) 1,117 1,69 44% Salt (kt) 1,368 1,117 (18%) Source: Company data, Macquarie Research, July July 216 2
3 Fig 3 RIO net debt and gearing outlook Fig 4 RIO dividend coverage Net Debt/ (Cash) (US$m) Net Gearing (%) Free Cash Flow (US$m) Dividend (US$m) 16, 14, 12, 1, 8, 6, 4, 2, 3% 25% 2% 15% 1% 5% 8, 7, 6, 5, 4, 3, 2, 1, Dividend Cover (x) %. Source: Company data, Macquarie Research, July 216 Source: Company data, Macquarie Research, July 216 Fig 5 RIO capex forecasts Fig 6 RIO Ebitda margin by division 6, Sustaining capex incl. exporation (US$m) Growth capex (US$m) 6.% Ebitda margin (next 1 years) 5, 5.% 4, 4.% 3, 3.% 2, 2.% 1, 1.% Source: Company data, Macquarie Research, July 216 Source: Company data, Macquarie Research, July 216.% Iron Ore Aluminium Copper & Coal Diamonds and Minerals Fig 7 RIO Pilbara iron-ore production and shipments Fig 8 RIO NPV by division Production (mt)- 1% Shipments (mt)- 1% Diamonds & Minerals 3% Aluminium 6% Copper & Coal 21% 1 5 Iron Ore 7% CY13a CY14a CY15a CY16e CY17e CY18e CY19e CY2e Source: Company data, Macquarie Research, July 216 Source: Company data, Macquarie Research, July July 216 3
4 Fig 9 RIO summary financials ASX: RIO Price: (A$ps) 5.64 Year end: Dec Rating: Outperform Up/dn TSR LSE: RIO Price: ( ps) Diluted shares (m) 1,822 ASX Target: 54. 7% 1% Mkt cap: (US$m) 62,253 LSE Target: 27. 8% 11% ASSUMPTIONS CY13 CY14 CY15 CY16e CY17e CY18e CY19e ASSUMPTIONS CY13 CY14 CY15 CY16e CY17e CY18e CY19e Exchange Rate A$/US$ Commodity prices Exchange Rate C$/US$ Iron-ore (US$/t) Exchange Rate USDZAR Hard coking coal (US$/t) RATIO ANALYSIS CY13 CY14 CY15 CY16e CY17e CY18e CY19e Thermal coal (US$/t) Diluted share capital m 1,858 1,859 1,825 1,822 1,822 1,822 1,822 Copper (US$/lb) EPS (underlying, undiluted) US Alumina (US$/t) P/E x 6.9x 7.6x 15.3x 22.3x 3.5x 34.1x 32.3x Aluminium (US$/lb) CFPS US P/CF x 4.7x 4.9x 7.4x 8.7x 9.1x 1.2x 9.7x Production by commodity DPS US Iron-ore (1% Basis) Dividend yield % 5.1% 5.7% 5.7% 2.9% 1.6% 1.5% 1.6% Pilbara (mt) Franking Level % 1% 1% 1% 1% 1% 1% 1% Iron Ore Company of Canada (mt) Book value per share US$ps Iron-ore (1%) P/Book value x 1.3x 1.3x 1.6x 1.6x 1.5x 1.5x 1.5x Iron-ore (RIO Reported Share) R.O.E. (pre sig items) % 2% 12% -4% 7% 5% 4% 4% Pilbara (mt) R.O.A. (pre sig items) % 15% 14% 9% 7% 6% 6% 6% Iron Ore Company of Canada (mt) Interest Cover x 39.3x 25.3x 11.4x 8.6x 6.9x 6.5x 7.x Iron-ore (RIO Reported Share) EBITDA per share US$ps Aluminium (RIO Share) EV/EBITDA x 3.7x 3.8x 6.1x 6.5x 6.8x 7.4x 6.9x Bauxite (mt) FCF Yield % 7% 13% 8% 8% 5% 2% 3% Alumina (mt) EARNINGS CY13 CY14 CY15 CY16e CY17e CY18e CY19e Aluminium (mt) Revenue US$m 51,171 47,664 34,829 31,175 3,77 29,745 31,417 Copper (RIO Share) Operating Costs US$m (33,9) (3,376) (24,164) (22,212) (22,426) (22,347) (23,475) Mined Copper (kt) Operational EBITDA US$m 18,81 17,288 1,665 8,963 8,281 7,398 7,942 Refined Copper (kt) Corporate Costs & EAU Adjustments US$m 3,428 2,377 1,956 2,5 2,457 2,454 2,48 Total Copper (mt) Underlying Ebitda US$m 21,59 19,665 12,621 11,464 1,738 9,851 1,35 Coal (RIO Reported Share) Depreciation & Amortisation US$m (4,791) (4,86) (4,646) (4,788) (5,245) (4,671) (4,928) Thermal coal (mt) Operational Ebit US$m 16,718 14,85 7,975 6,676 5,493 5,18 5,422 Semi-soft Coking Coal (mt) Impairments US$m (7,531) (473) (2,791) Hard Coking Coal (mt) Share of EAU Profit/(Loss) US$m Total Coal (mt) Adjustments US$m (1,973) (2,397) (1,569) (1,4) (1,42) (1,457) (1,49) Other (RIO Share) Profit from Operations US$m 7,912 12,56 3,976 5,652 4,388 3,984 4,15 Diamonds (kcts) 16,26 13,872 17,394 2,852 28,545 28,137 27,729 Net Interest US$m (425) (585) (698) (774) (791) (798) (775) Uranium (mlbs) Other Finance Costs US$m (3,982) (2,423) (4,4) (4) (4) (4) (4) TiO2 Feedstock (kt) 1,622 1,442 1,89 1,4 1,192 1,192 1,192 Profit Before Tax US$m 3,55 9,552 (726) 4,478 3,197 2,786 2,975 Borates (kt) Tax Expense US$m (2,426) (3,53) (993) (1,343) (959) (836) (893) Net Earnings US$m 1,79 6,499 (1,719) 3,134 2,238 1,95 2,83 Post-tax exceptionals US$m EBITDA BY COMMODITY Minority Interests US$m 2, (25) Iron Ore (US$bn) Aluminium (US$bn) 25. Attributable Profit US$m 3,665 6,527 (866) 3,19 2,274 2,31 2,147 Copper & Coal (US$bn) Diamonds and Minerals (US$bn) Post-tax adjustments to underlying US$m 6,552 2,778 5,46 Other (US$bn) Underlying Profit US$m 1,217 9,35 4,54 3,19 2,274 2,31 2,147 CASHFLOW CY13 CY14 CY15 CY16e CY17e CY18e CY19e Net Earnings US$m 1,79 6,499 (1,719) 3,134 2,238 1,95 2,83 Interest/Tax/D&A US$m 6,762 6,322 7,722 5,188 5,645 5,71 5,328 Working Capital/other US$m 7,237 1,465 3,38 (332) (296) (244) (259) Net Operating Cashflow US$m 15,78 14,286 9,383 7,99 7,587 6,777 7,152 Capital Expenditure US$m (12,944) (7,418) (4,55) (4,4) (4,226) (5,311) (5,145) Disposals/(Acquisitions) US$m (57) (744) (135) Other US$m 2,55 1, Free cash flow US$m 4,132 7,783 4,783 4,697 3,42 1,466 2,7 Dividends US$m (3,322) (3,71) (4,76) (2,752) (1,876) (1,75) (984) New Equity US$m 159 1,291 (1,925) Debt Drawdown/(Repayment) US$m 2,122 (3,34) (1,681) Other US$m Net Financing Cashflow US$m (934) (5,436) (7,67) (2,752) (1,876) (1,75) (984) FX Adjustment US$m (117) (14) (17) Net change in cash US$m 3,81 2,27 (3,57) 1,944 1, , CY13 CY14 CY15a CY16e CY17e CY18e CY19e CY2e CY21e CY22e CY23e CY24e CY25e BALANCE SHEET CY13 CY14 CY15 CY16e CY17e CY18e CY19e VALUATION Cash US$m 1,216 12,423 9,366 11,31 12,854 13,245 14,268 Projects US$m US$/sh A$m A$/sh GBPm GBP/sh Other current assets US$m 12,66 8,72 6,188 5,795 5,625 5,479 5,85 Iron Ore 59, , , Property, Plant & Equipments US$m 7,827 68,693 61,57 59,563 58,485 59,125 59,342 Copper & Coal 19, , , Other Non-current assets US$m 17,916 18,9 14,953 15,171 15,418 15,62 15,986 Diamonds & Minerals 2, , , Total Assets US$m 111,25 17,827 91,564 91,839 92,382 93,469 95,446 Aluminium 5, , , Debt US$m 28,551 25,219 23,624 23,624 23,624 23,624 23,624 Cash 1, , , Payables US$m 8,976 8,38 6,919 6,479 6,29 6,126 6,541 Debt (23,624) (12.95) (31,499) (17.29) (16,874) (9.25) Other liabilities US$m 19,996 19,76 16,893 17,226 17,596 17,971 18,435 Group & Unallocated (2,137) (1.17) (2,849) (1.56) (1,526) (.84) Total Net Assets / Equity US$m 53,52 54,594 44,128 44,51 44,872 45,747 46,846 Net Equity Value (WACC 11% Nom) 71, , , Net Debt / (Cash) US$m 18,335 12,796 14,258 12,314 1,77 1,379 9,356 Price Target AUD 54. GBP 27. Gearing (net debt/(nd + equity)) % 26% 19% 24% 22% 19% 18% 17% Gearing (net debt/equity) % 34% 23% 32% 28% 24% 23% 2% Source: Company data, Macquarie Research, July July 216 4
5 Macquarie Quant View The quant model currently holds a reasonably positive view on. 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 Profitability, indicating this stock is not efficiently converting investments to earnings; proxied by ratios like ROE or ROA. 289/158 Global rank in Materials % of BUY recommendations 43% (6/14) Number of Price Target downgrades Number of Price Target upgrades 2 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 % -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 % -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. Price to Book NTM Price to Sales NTM Price to Sales FY1 Price to Book FY1 EBITDA Revisions 3 Month Profit Margin FY1 3m Earnings Revisions Relative Turnover -32% -24% -24% -25% Negatives Positives 3% 28% 38% 36% -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(/158) Percentile relative to market(/398) 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 July 216 5
6 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 3 June 216 AU/NZ Asia RSA USA CA EUR Outperform 45.17% 56.% 36.36% 43.16% 63.39% 45.91% (for global coverage by Macquarie, 6.27% of stocks followed are investment banking clients) Neutral 36.21% 28.59% 4.26% 5.38% 29.46% 36.96% (for global coverage by Macquarie, 6.33% of stocks followed are investment banking clients) Underperform 18.62% 15.41% 23.38% 6.46% 7.14% 17.12% (for global coverage by Macquarie, 5.38% of stocks followed are investment banking clients) RIO AU vs ASX 1, & rec history RIO LN vs FTSE 1, & rec history BHP AU vs ASX 1, & rec history (all figures in AUD currency unless noted) (all figures in GBP currency unless noted) (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, July month target price methodology RIO AU: A$54. based on a 5/5 Blend 7xEV/Ebitda and NPV methodology RIO LN: 27. based on a NPV/7x EV/Ebitda blend methodology BHP AU: A$17. based on a NPV/ - 7x EV/Ebitda blend methodology Company-specific disclosures: RIO AU: Macquarie Capital (USA) Inc. or one of its affiliates, expects to receive or intends to seek compensation for investment banking services from Ltd in the next three months. RIO LN: Macquarie Bank Limited makes a market in the securities in respect of Limited. Macquarie Capital (USA) Inc. or one of its affiliates, expects to receive or intends to seek compensation for investment banking services from Ltd in the next three months. BHP AU: Macquarie and its affiliates collectively and beneficially own or control 1% or more of any class of Limited's equity securities. Important disclosure information regarding the subject companies covered in this report is available at Date Stock Code (BBG code) Recommendation Target Price 19-Jul-216 RIO AU Outperform A$54. 6-Jul-216 RIO AU Outperform A$ Jun-216 RIO AU Outperform A$5. 19-May-216 RIO AU Outperform A$ May-216 RIO AU Outperform A$ Apr-216 RIO AU Outperform A$5. 14-Dec-215 RIO AU Outperform A$ Sep-215 RIO AU Outperform A$57. 7-Aug-215 RIO AU Outperform A$64. 1-Jul-215 RIO AU Neutral A$ May-215 RIO AU Neutral A$ Mar-215 RIO AU Neutral A$ Feb-215 RIO AU Neutral A$ Jan-215 RIO AU Outperform A$6. 9-Sep-214 RIO AU Outperform A$72. 2 July 216 6
7 This publication was disseminated on 19 July 216 at 15:55 UTC. Macquarie Wealth Management 8-Aug-214 RIO AU Outperform A$ May-214 RIO AU Outperform A$ Sep-213 RIO AU Outperform A$81. 6-Sep-213 RIO AU Outperform A$77. Target price risk disclosures: RIO 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. RIO LN: 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. BHP 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. 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. This research has been prepared for the use of the clients of the Macquarie Group and must not be copied, either in whole or in part, or distributed to any other person. If you are not the intended recipient, you must not use or disclose this research in any way. If you received it in error, please tell us immediately by return and delete the document. We do not guarantee the integrity of any s or attached files and are not responsible for any changes made to them by any other person. Nothing in this research shall be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction. This research is based on information obtained from sources believed to be reliable, but the Macquarie Group does not make any representation or warranty that it is accurate, complete or up to date. We accept no obligation to correct or update the information or opinions in it. Opinions expressed are subject to change without notice. The Macquarie Group accepts no liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this research and/or further communication in relation to this research. The Macquarie Group produces a variety of research products, recommendations contained in one type of research product may differ from recommendations contained in other types of research. The Macquarie Group has established and implemented a conflicts policy at group level, which may be revised and updated from time to time, pursuant to regulatory requirements; which sets out how we must seek to identify and manage all material conflicts of interest. The Macquarie Group, its officers and employees may have conflicting roles in the financial products referred to in this research and, as such, may effect transactions which are not consistent with the recommendations (if any) in this research. The Macquarie Group may receive fees, brokerage or commissions for acting in those capacities and the reader should assume that this is the case. The Macquarie Group s employees or officers may provide oral or written opinions to its clients which are contrary to the opinions expressed in this research. Important disclosure information regarding the subject companies covered in this report is available at Macquarie Group 2 July 216 7
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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 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 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. 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 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 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 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 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 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 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 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 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 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$m 278
More informationKingsgate Consolidated
AUSTRALIA KCN AU Price (at 6:11, 31 Jul 215 GMT) Underperform A$.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 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 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 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 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 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$m
More informationPilbara Minerals (PLS AU) Ramp-up gaining traction
17 January 219 Australia EQUITIES PLS AU Price (at 5:1, 16 Jan 219 GMT) Outperform A$.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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 informationFortescue 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 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 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 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 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 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 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 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 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 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 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 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 informationSouth32. Wind in the sails. S32 AU/S32 LN/S32 SJ Outperform Price (at 13:20, 03 Mar 2017 GMT) A$2.70/ 1.66/R26.70
AUSTRALIA/UNITED KINGDOM/SOUTH AFRICA S32 AU/S32 LN/S32 SJ Outperform Price (at 13:2, 3 Mar 217 GMT) A$2.7/ 1.66/R26.7 Valuation A$ 2.78/ 1.67/R27.9 - DCF (WACC 1.%, beta 1.1, ERP 5.%, RFR 3.3%) 12-month
More informationFortescue Metals Group
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%) 4.96 12-month target A$ 7.6 12-month TSR % +14.9 Volatility Index High GICS
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 informationSouth32. Richards Bay and Hillside site tours. S32 AU/S32 LN/S32 SJ Outperform Price (at 02:33, 30 Nov 2016 GMT) A$2.72/ 1.66/R28.
AUSTRALIA/UNITED KINGDOM/SOUTH AFRICA S32 AU/S32 LN/S32 SJ Outperform Price (at 2:33, 3 Nov 216 GMT) A$2.72/ 1.66/R28.84 Valuation A$2.55/ 1.59/R27.75 - DCF (WACC 1.%, beta 1.1, ERP 5.%, RFR 3.3%) 12-month
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 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 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 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 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 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 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 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 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 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 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 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 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 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.
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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 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 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 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 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 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 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 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 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 informationNine Entertainment Co.
AUSTRALIA NEC AU Price (at 06:47, 26 Feb 2015 GMT) Outperform A$2.03 Valuation A$ - DCF (WACC 8.2%, beta 1.2, ERP 5.0%, RFR 3.8%) 2.41 12-month target A$ 2.25 12-month TSR % +15.3 Volatility Index Low/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 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
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