Telstra Corporation. Spend, save, pivot, review grow? A$4.84 AUSTRALIA. Event. Impact. Earnings and target price revision.
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- Flora Lillian Sanders
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1 AUSTRALIA TLS AU Price (at 08:04, 17 Nov 2016 GMT) Neutral A$4.84 Valuation A$ DCF (WACC 6.4%, beta 0.8, ERP 5.0%, RFR 3.3%, TGR 1.0%) 12-month target A$ month TSR % Volatility Index Low GICS sector Telecommunication Services Market cap A$m 57, day avg turnover A$m Number shares on issue m 11,943 Investment fundamentals Year end 30 Jun 2016A 2017E 2018E 2019E Revenue m 25,911 26,516 27,769 28,314 EBIT m 5,807 5,761 5,752 5,190 Reported profit m 5,780 4,187 5,215 4,955 Adjusted profit m 3,411 3,633 3,604 3,188 Gross cashflow m 7,635 7,796 7,902 7,606 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 TLS AU vs ASX 100, & 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, November 2016 (all figures in AUD unless noted) 18 November 2016 Macquarie Securities (Australia) Limited Spend, save, pivot, review grow? Event Telstra has held its investor day in Sydney on Thursday. Impact Strategic pivot confirmed: Telstra did confirm a shift in strategy that will see it pursue growth initiatives in businesses close to the core. This involves a retraction from the Asian consumer growth strategy and is consistent with increased investment in its Domestic business for growth and improved efficiency. Against that, Telstra Health will remain a focus area as Telstra attempts to deliver services to that sector. Greater clarity in the investment program and productivity targets: Management did spend quite a bit of time discussing details of its $3bn capital program (expected returns >$500m EBITDA) and also how it will achieve an additional $1bn reduction in fixed costs by FY21. We had previously incorporated some upside to Telstra from its $3bn capex program via improved market share outcomes. We also have productivity savings implied across Telstra's key divisions, and hence do not see cause to change our estimates or target price on this update. We continue to see Telstra able to sustain its dividend, albeit with little margin for error given the challenges of the $2-3bn NBN gap (refer Telstra Corp - We need to talk about the dividend, 31 October 2016). Kicking off a capital allocation review: Telstra flagged a review of its capital allocation framework, to be completed over the next 6-12 months. This will be all-encompassing, however a key component could involve looking at options to realise value from the NBN payment stream, and in particular the $1bn in annual receipts (growing at CPI) contracted under the Infrastructure Services Agreement for 35 years. Few details were discussed, however possible solutions may include a sale of these revenues, securitisation, or an in-specie distribution. Difficult trading environment, but physicals holding up: Clearly competitive pressures have heightened over the past 18 months, however Telstra continues to add subscribers in key segments like post-paid mobile and NBN broadband. This is important to note given Telstra has been more vulnerable to competitors given recent network outages and the critical biannual iphone recontracting phase. These trends do give some comfort that its pricing premium remains manageable. Earnings and target price revision No change. Price catalyst 12-month price target: A$5.40 based on a DCF methodology. Catalyst: 1H17 result (Feb 2017) Action and recommendation Neutral. No change to our view following this update. The capital review may unlock some value for shareholders, but is unlikely to transform the underlying earnings challenge for Telstra that we have discussed previously. Please refer to page 10 for important disclosures and analyst certification, or on our website
2 Targeting $500m+ annualised benefit from $3bn capex program Telstra is looking to generate run rate EBITDA benefits in excess of $500m p.a. from its $3bn investment program, fully realised by FY21. The aggregate return target is to exceed the FY16 ROIC of ~14%. The benefits are expected to be split between revenue gains (two thirds) and cost out (one third). Short-term benefits will be impacted by an additional $100m p.a. in opex required to underpin the program. The $3bn strategic investment from FY17-19 is expected to be broken down into: Networks (more than $1.5bn): Constructing end to end user solutions and building the next generation network architecture. This involves constructing a network based fully on software defined network and network function virtualisation architecture by FY20; delivering 5x data growth with overall network costs flat by 2020; delivering peak mobile speeds of up to 1Gbps; doubling the speed of 4G to 98% of the population by FY19; and enhancing ADSL connectivity. Digitisation (~$1bn): The simplification and digitisation of user experiences and internal systems. This involves retiring or moving old applications to the cloud, straight through processing of nbn orders (i.e. without human intervention) and digital customer service transactions. Other customer service initiatives (up to $500m): The key metric is improved NPS, with Telstra targeting a 3-6 point annual increase from FY Fig 1 Capital intensity to jump to ~18% from FY17-19 due to $3bn capex program (Note: FY20-24 are Macquarie estimates) $bn 19.9% % 18.0% 17.9% 17.4% 15.6% 15.7% % 14.2% 14.6% 13.6% 13.9% 13.0% 13.0% 13.0% 13.0% 13.0% FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Capex ($bn) Capex/sales 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Note: Above data excludes spectrum Source: Company data, Macquarie Research, November 2016 $1bn in productivity savings Telstra is targeting a $1bn+ reduction in net underlying core fixed costs over the next five years. This is the equivalent of a 2%+ YoY reduction (ex NRIs) and over $2bn of gross productivity achievement (inflation adjusted). The cost out will be spread across the entire group, and is likely to be particularly important allowing Telstra to defend profitability in the low-margin fixed line nbn business. Telstra s costs can be broken into variable costs (DVCs), core fixed costs (non-dvcs) and growth costs: DVCs are expected to continue to rise given the mix shift in Telstra s business and the impact of NBN AVC and CVC charges. The key aim here is to ensure that DVC is efficient (i.e. supports revenue growth or can be directly linked to growth in the overall business). 18 November
3 Fixed costs (core non-dvcs) are the focus of Telstra s productivity program. Telstra is now targeting a $1bn annual reduction in underlying core fixed costs in absolute terms (i.e. inflation and wages growth must be offset by productivity gains). In FY16, underlying fixed costs fell 0.6%, implying productivity gains of several hundreds of millions of dollars (relative to the underlying inflationary pressures but not allowing for reinvestment costs). The fixed cost base is ~$8.4bn, which Telstra intends to reduce through simplifying and digitising systems and processes. Growth costs arise from new businesses and future M&A. As a result, these are difficult to forecast going forward, and it is also difficult for analysts to gain visibility as to the revenues being earned directly against these. Growth opex rose by 67% in the first half. Fig 2 Telstra cost breakdown $m FY15 FY16 $ ch vs. pcp % ch vs. pcp Core sales costs 6,782 7, % Core fixed costs (inc Corporate) 8,409 8, % (-0.6% underlying) New business costs % nbn Cost to Connect (C2C) % Ooyala Impairment nmf Reported Opex 15,598 16,600 1, % Source: Company data, Macquarie Research, November 2016 Strategic pivot away from new growth businesses Telstra modified its three strategic pillars, with the key change being a shift in focus from building new growth businesses to building growth in businesses close to the core. Near-core businesses that were called out as a focus were e-health and intelligent video (despite management noting their disappointment at the Ooyala impairment). The remaining two strategic pillars are to deliver brilliant customer experiences (previously improving customer advocacy) and drive value and growth from the core (unchanged). Fig 3 Telstra s strategic shift towards core and near-core businesses New strategic pillars Old strategic pillars 1. Deliver brilliant customer experiences 1. Improve consumer advocacy 2. Drive value and growth from the core 2. Drive value and growth from the core 3. Build growth in businesses close to core 3. Build new growth businesses Source: Company data, Macquarie Research, November 2016 The strategic shift away from new growth businesses means that Telstra will not, for the meantime, be pursuing large-scale consumer play investments in Asia. Management noted that they had pushed the best opportunity in the region very hard (the Philippines), before concluding that Telstra does not have the capacity to consider other such opportunities given the $3bn domestic capex program. Telstra will, however, continue to pursue international expansion through its global enterprise services business and NAS, and will continue to expand its Asia- Pacific submarine cable network. Plugging the $2-3bn earnings gap from the NBN rollout Telstra highlighted key sources that could partly offset the $2-3bn recurring EBITDA gap caused by the NBN during the rollout period: A reduction in net underlying core fixed costs of over $800m over the next five years as part of Telstra s productivity program An annualised $500m+ EBITDA benefit generated by Telstra s $3bn strategic capex program Growth in four key product areas (mobiles, fixed, NAS/Data &IP and new business) 18 November
4 In our view, filling this gap requires good execution in a number of areas, including Mobiles; Productivity/cost out; NAS; Global GES; as well as turning around the negative contribution from New Business ventures. Stripping out PSAA and other one-off NBN payments, we see Telstra offsetting most of the NBN impact, but underlying earnings still falling by $379m (to $9.5bn) by FY22. On these estimates, total reported EBITDA (including PSAA payments) will fall by $753m from its $10.5bn starting point in FY16. Mobiles and Productivity benefits are likely to be the key swing factors in determining Telstra s longer term growth outlook. Productivity is not modelled explicitly as a segment, but is implied by our targets for longer-term segment margins; New Business investment has the potential to be a swing factor as well for Telstra. At the very least, we would expect them to nullify losses that increased to $236m in FY16 (from $146m in FY15), or consolidate profitable businesses into the core. Fig 4 Telstra underlying EBITDA waterfall: FY16a FY22e $m 10,000 9, ,000 8,500 8,000 9,907 (2,251 ) 571 (269) ,528 7,500 (482) 718 7,892 7,000 FY22e (ex PSAA and other NBN one-off) Impairment New Business Other core Global Connectivity NAS - Domestic Data & IP (ex ISDN) - Domestic Mobile - Domestic FY22e pre growth & initiatives NBN Recurring (ISA) ISDN PSTN, Broadband & Other Fixed FY16a (ex PSAA and other NBN one-off) Source: Macquarie Research, November 2016 Fig 5 Telstra reported EBITDA growth % ch vs. pcp 15% 10.9% 10% 6.1% 5% (0.6%) 1.5% 0% (1.8%) 2.6% -5% (1.0%) 0.5% (0.6%) (4.4%) (3.5%) (3.8%) -10% (11.9%) (10.2%) -15% FY16a FY17e FY18e FY19e FY20e FY21e FY22e Recurring EBITDA growth Reported EBITDA growth Reported EBITDA includes NBN one-off payments, new business losses and Ooyala impairment loss in FY16. Source: Macquarie Research, November November
5 Capital management review Telstra announced a review of its capital allocation strategy over the next 6-12 months, which will also cover how to best drive value from NBN payment streams long-term capex post NBN and investment decisions such as M&A criteria. The NBN payment streams comprise: One off payments of ~$5bn (net of NBN cost to connect and post-tax) will be received over the next 4-5 years Longer term recurring infrastructure payments will increase over the next four years to $1bn p.a. (pre-tax) and will grow with inflation once the rollout is complete The objectives of the capital management framework are unchanged (maximise shareholder returns, maintain financial strength and retain financial flexibility). Market remains competitive In the trading update, Telstra noted solid performance since the FY16 result with continued momentum in mobile and fixed SIOs. Broadly, Telstra noted: Continuation of competitive intensity, particularly in mobiles and Data & IP Competition will increase in fixed also, with new entrants expected in the nbn market in FY17. Telstra s differentiation strategy will continue to focus on content and bundling Stable APRU on sequential basis Customers migrating to higher value plans Specifically in mobiles, Telstra appears to be delivering stable outcomes in a competitive market: After 18 months of competition driving higher inclusions, overall service revenue is beginning to stabilise, and the negative impacts from reduced out of plan charges are expected to moderate in FY17 Handset costs are increasing, although subsidies have remained constant and Telstra has launched a new leasing product Competition in the BYO market remains intense, though Telstra noted its focus on handsetplan customers Specifically in fixed: Telstra flagged an increase in competition for broadband plans of $80 and above Belong, Telstra s attacker brand, has reached over 100k subscribers Telstra continues to see high uptake of subscriptions to Telstra Air and Telstra TV FY17 guidance maintained Telstra reaffirmed FY17 guidance which includes total income growth of mid-to-high single digits (Macq +6.6%) and EBITDA growth of low-to-mid single digits (+4.0%). Fig 6 Telstra FY17 guidance FY16 actual FY17 guidance Macquarie estimate Total income $27.1bn Mid-to-high single digit growth +6.6% EBITDA $10.7bn Low-to mid single digit growth +4.0% Capex/sales ratio 15.2% ~18% 18% Free cashflow $4.8bn $ billion $3.8 billion *Guidance assumes wholesale price stability, no impairments to investments, and that the NBN is rolled out in line with the nbn Corporate plan Guidance excludes proceeds from M&A, the sale of businesses and spectrum payments, as well as a $246m Ooyala impairment in FY16 and FY17 restructuring costs of $ m. Refer fig 2 for more detail. Source: Company data, Macquarie Research, November November
6 Macro remains supportive The current macro environment remains supportive for Telstra despite the recent uptick in bond yields. Telstra s yield spread above cash rates of 524bps sits above the three-year average of 352bps. Similarly, Telstra s spread above long-term bonds is currently 410bps, well above the three year average of 271bps. In addition, Telstra s yield spread over both the average yield of the ASX 200 and the average bank yield has risen. Fig 7 Yield comparison: Telstra, Cash and 10yr Fig 8 Telstra yield spread over Cash and 10yr 8% 6% 6% 5% 4% 4% 3% 2% 2% 1% 0% Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 AU Cash AU 10yr FY1 Div yield (TLS) 0% Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 TLS / AU cash TLS / AU 10yr Source: Bloomberg, Macquarie Research, November 2016 Source: Bloomberg, Macquarie Research, November 2016 Fig 9 Telstra yield spread vs. Banks Fig 10 Telstra yield spread vs. ASX % 1.5% 1.0% 0.5% 2.5% 2.0% 1.5% 0.0% -0.5% -1.0% -1.5% -2.0% Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 TLS / Banks 1.0% 0.5% 0.0% Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 TLS / ASX 200 Source: Bloomberg, Macquarie Research, November 2016 Source: Bloomberg, Macquarie Research, November 2016 PE Rel analysis On A PE Rel basis, Telstra is currently tracking at a discount to its 36-month rolling average PE Rel against the ASX 200 Industrials. 18 November
7 Fig 11 PE Absolute Telstra & ASX 200 Industrials Fig 12 PE Rel Telstra vs. ASX 200 Industrials PER 20x 18x 16x 14x 12x 10x 8x 6x 4x 2x 0x PE Rel vs ASX 200 Industrials 1.4x 1.2x 1.0x 0.8x 0.6x 0.4x 0.2x 0.0x TLS-AU ASX 200 Industrials TLS-AU Rolling 36M Mean Source: Bloomberg, Macquarie Research, November 2016 Source: Bloomberg, Macquarie Research, November November
8 (TLS) $4.84 Interim 1H16 2H16 1H17e 2H17e Full year FY16 FY17e FY18e FY19e Sales revenue $m 13, , , ,083.8 Sales revenue $m 25, , , ,313.5 Other revenue $m Other revenue $m Revenue (ex PSAA payments) $m 13, , , ,467.0 Revenue (ex PSAA payments) $m 26, , , ,994.4 Opex $m 8, , , ,578.8 Opex $m 16, , , ,420.8 EBITDA $m 5, , , ,888.2 EBITDA $m 9, , , ,573.5 D&A $m 2, , , ,101.8 D&A $m 4, , , ,418.0 EBIT $m 3, , , ,786.4 EBIT $m 5, , , ,155.5 Associates $m Associates $m EBIT incl. assoc $m 3, , , ,806.4 EBIT incl. assoc $m 5, , , ,189.5 Net Interest Expense $m Net Interest Expense $m Pre-Tax Profit $m 2, , , ,473.5 Pre-Tax Profit $m 5, , , ,476.6 Tax Expense $m Tax Expense $m 1, , , ,288.4 Net Profit $m 1, , , ,775.2 Net Profit $m 3, , , ,188.2 Minority Interests $m Minority Interests $m Adjusted Earnings $m 1, , , ,775.2 Adjusted Earnings $m 3, , , ,188.2 NRIs (net of tax) $m , NRIs (net of tax) $m 2, , ,767.2 Reported Earnings $m 2, , , ,937.1 Reported Earnings $m 5, , , ,955.4 EPS (Adj/dil) cps EPS (Adj/dil) cps EPS Grow th % (8.9%) (23.6%) 5.7% 14.6% EPS Grow th % (16.4%) 9.9% 0.2% (9.2%) Ordinary DPS cps Ordinary DPS cps Special DPS cps Special DPS cps Total DPS cps Total DPS cps Dividend yield % 3.2% 3.2% 3.2% 3.2% Dividend yield % 6.4% 6.4% 6.4% 6.4% Payout ratio (adj) % 104.2% 119.0% 98.6% 103.8% Payout ratio (adj) % 111.1% 101.1% 101.0% 111.2% FCF/sh cps FCF/sh cps FCFE yield (annualised) % 4.0% 7.1% 4.9% 5.6% FCFE yield (annualised) % 5.6% 5.2% 7.6% 8.0% EBITDA margin % 37.2% 37.8% 36.3% 36.3% EBITDA margin % 37.5% 36.3% 34.9% 33.0% EBIT margin % 22.2% 21.4% 21.4% 20.7% EBIT margin % 21.8% 21.0% 19.9% 17.8% EBITDA grow th % (3.9%) (7.7%) (0.6%) (0.3%) EBITDA grow th % (5.8%) (0.4%) 1.2% (4.5%) EBIT Grow th % (7.6%) (16.3%) (2.0%) 0.3% EBIT Grow th % (12.0%) (0.9%) (0.3%) (9.9%) Profit and Loss Ratios FY16 FY17e FY18e FY19e Cashflow Analysis FY16 FY17e FY18e FY19e Income grow th (ex PSAA payments) % 0.4% 2.8% 5.2% 1.0% EBITDA $m 9, , , ,573.5 % of EBITDA in 1H % 50.7% 50.6% 50.8% 50.9% Ch in Working Capital $m (179.0) (461.9) (29.3) 61.4 Effective tax rate % 30.0% 29.0% 29.0% 29.0% Net Interest Paid $m (729.0) (652.4) (687.6) (712.9) PER (adj) x Tax Paid $m (1,860.0) (1,837.3) (1,835.2) (2,068.1) EV/EBIT x Other $m , , ,488.9 EV/EBITDA x Operating Cashflow $m 7, , , ,342.9 EV/Sales x Acquisitions $m (197.0) Capex $m (4,194.0) (4,950.2) (5,336.3) (4,909.1) Balance Sheet Ratios FY16 FY17e FY18e FY19e Asset Sales $m Other $m 1, ROE % 38.5% 27.4% 35.8% 34.3% Investing Cashflow $m (2,420.0) (4,700.2) (5,336.3) (4,909.1) ROFE % 19.5% 18.9% 18.4% 16.3% Dividends Paid $m (3,787.0) (3,737.3) (3,661.4) (3,568.4) ROA % 14.3% 13.8% 13.5% 12.2% Equity movements $m (68.0) (1,500.0) (1,500.0) (1,500.0) Net Debt (pro-forma) $m 12,459 14,439 15,306 15,940 Debt movements $m Net Debt/Equity x Other $m Net Debt/EBITDA x Financing Cashflow $m (2,917.0) (4,257.4) (4,294.6) (4,433.8) Interest Cover (EBIT) x EFPOWA m 12,226 11,848 11,736 11,436 Net Cashflow $m 2,149.0 (1,000.0) - - Divisional revenue estimates FY16 FY17e FY18e FY19e Balance Sheet FY16 FY17e FY18e FY19e Fixed $m 7,029 6,634 6,142 5,368 Cash $m 3, , , ,550.0 Mobiles $m 10,441 10,345 10,623 10,909 Receivables $m 6, , , ,738.6 Data & IP $m 3,789 3,756 3,689 3,607 Inventories $m NAS $m 2,763 3,592 4,669 5,370 Investments $m Media $m 974 1,057 1,141 1,236 PP&E $m 20, , , ,897.8 International $m Intangibles $m 9, , , ,229.0 Other sales revenue $m 838 1,051 1,389 1,708 Other Assets $m 2, , , ,939.7 Other revenue (inc Foxtel) $m Total Assets $m 43, , , ,169.9 Total revenue $m 25,911 26,516 27,769 28,314 Payables $m 4, , , ,406.7 Short Term Debt $m 2, , , ,655.0 Long Term Debt $m 14, , , ,128.3 Snapshot Current Provisions $m 1, , , ,701.0 Current price $ $4.84 Other Liabilities $m 4, , , ,942.0 EFPOWA # 12,226 Total Liabilities $m 27, , , ,833.0 Market cap $m 59,172 Shareholders Funds $m 15, , , ,300.9 Net debt $m 12,459 Minority Interests $m EV $m 71,631 Shaereholder Equity $m 15, , , ,336.9 Source: Company data, Macquarie Research, November November
9 Fundamentals Macquarie Wealth Management Macquarie Quant View The quant model currently holds a marginally positive view on Telstra Corporation. The strongest style exposure is Profitability, indicating this stock is efficiently converting investments to earnings; proxied by ratios like ROE or ROA. The weakest style exposure is Price Momentum, indicating this stock has had weak medium to long term returns which often persist into the future. 61/180 Global rank in Telecommunication Services % of BUY recommendations 12% (2/16) Number of Price Target downgrades 4 Number of Price Target upgrades 0 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 (Telecommunication Services) 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. Spark New Zealand 0.7 Spark New Zealand 0.3 TPG Telecom -0.8 TPG Telecom % -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% 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. Spark New Zealand 0.4 Spark New Zealand -0.6 TPG Telecom -0.9 TPG Telecom % -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 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. EV/EBITDA FY0 Dividend Yield NTM Price to Cash FY0 EV/EBITDA LTM Dividend Cover Net Income Margin FY0 Return on Assets FY0 Interest Cover -30% -30% -30% -31% Negatives Positives -40% -20% 0% 20% 40% 37% 37% 37% 36% 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(/180) Percentile relative to market(/423) 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) 18 November
10 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 >+10% Neutral expected return from -10% to +10% Underperform expected return <-10% Macquarie South Africa Outperform expected return >+10% Neutral expected return from -10% to +10% Underperform expected return <-10% 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 3000 index return Neutral (Hold) return within 5% of Russell 3000 index return Underperform (Sell) return >5% below Russell 3000 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 % in a year investors should be aware this stock is highly speculative. High stock should be expected to move up or down at least 40 60% in a year investors should be aware this stock could be speculative. Medium stock should be expected to move up or down at least 30 40% in a year. Low medium stock should be expected to move up or down at least 25 30% 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 30 September 2016 AU/NZ Asia RSA USA CA EUR Outperform 47.26% 55.50% 38.46% 45.47% 59.09% 48.21% (for US coverage by MCUSA, 8.20% of stocks followed are investment banking clients) Neutral 38.01% 29.31% 42.86% 48.77% 37.88% 36.79% (for US coverage by MCUSA, 8.25% of stocks followed are investment banking clients) Underperform 14.73% 15.19% 18.68% 5.76% 3.03% 15.00% (for US coverage by MCUSA, 8.00% of stocks followed are investment banking clients) TLS AU vs ASX 100, & 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, November month target price methodology TLS AU: A$5.40 based on a DCF methodology Company-specific disclosures: TLS AU: Macquarie and its affiliates collectively and beneficially own or control 1% or more of any class of Limited's equity securities. MACQUARIE CAPITAL (AUSTRALIA) LIMITED or one of its affiliates has provided Ltd with investment advisory services in the past 24 months, for which it received compensation. Important disclosure information regarding the subject companies covered in this report is available at Date Stock Code (BBG code) Recommendation Target Price 29-Oct-2016 TLS AU Neutral A$ Aug-2016 TLS AU Neutral A$ May-2016 TLS AU Neutral A$ Feb-2016 TLS AU Neutral A$ Nov-2015 TLS AU Neutral A$ Aug-2015 TLS AU Underperform A$ Feb-2015 TLS AU Neutral A$ Feb-2015 TLS AU Neutral A$ Dec-2014 TLS AU Neutral A$ Aug-2014 TLS AU Neutral A$ Feb-2014 TLS AU Neutral A$4.80 Target price risk disclosures: TLS 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: 18 November
11 This publication was disseminated on 17 November 2016 at 13:53 UTC. Macquarie Wealth Management 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 18 November
Platinum 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 informationA$4.85 AUSTRALIA. TLS AU vs ASX 100, & rec history
AUSTRALIA TLS AU Price (at 05:10, 16 Feb 2017 GMT) Neutral A$4.85 Valuation A$ 5.18 - DCF (WACC 6.4%, beta 0.8, ERP 5.0%, RFR 3.3%, TGR 1.0%) 12-month target A$ 5.00 12-month TSR % +9.5 Volatility Index
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 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 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 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 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 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 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 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 informationAUSTRALIA Price Event Valuation A$ month target A$ 5.20
AUSTRALIA VOC AU Price (at 05:10, 22 Feb 2017 GMT) Outperform A$4.81 Valuation A$ 5.02 - DCF (WACC 7.7%, beta 1.2, ERP 5.0%, RFR 3.3%, TGR 1.0%) 12-month target A$ 5.20 12-month TSR % +12.2 Volatility
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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 informationFairfax / REA Group. No housing boom here. A$0.81 Valuation A$ Sum of Parts 12-month target A$ month TSR % +16.0
AUSTRALIA FXJ AU Price (at 05:11, 03 Nov 2016 GMT) Outperform A$0.81 Valuation A$ 0.88 - Sum of Parts 12-month target A$ 0.90 12-month TSR % +16.0 Volatility Index Low/Medium Market cap A$m 1,863 30-day
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 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 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 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 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 informationEarnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA TLS AU Price (at 13:07, 19 Apr 2012 GMT) Outperform A$3.39 Volatility index Low 12-month target A$ 3.55 12-month TSR % +13.0 Valuation A$ - DCF (WACC 9.6%, beta 0.9, ERP 6.0%, TGR 1.0%) 3.55
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 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 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 informationAged Care. Propco sale & lease back A$2.71 A$5.75 A$6.15 AUSTRALIA. Event. Impact. Outlook
AUSTRALIA JHC AU Price (at 06:10, 27 Apr 2015 GMT) Outperform A$2.71 Valuation A$ 2.97 - DCF (WACC 9.1%, beta 1.1, ERP 5.0%, RFR 4.5%, TGR 2.3%) 12-month target A$ 3.00 12-month TSR % +14.7 Volatility
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 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 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 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 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 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 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 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 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 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 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 informationSeek. SEEKing to evolve A$17.10 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA SEK AU Price (at 12:41, 17 Feb 2015 GMT) Outperform A$17.10 Valuation - Sum of Parts A$ 18.03 12-month target A$ 18.10 12-month TSR % +8.5 Volatility Index Medium GICS sector Commercial & Professional
More informationAMP. Earnings and target price revision. No change. Price catalyst. Action and recommendation
AUSTRALIA AU Price (at CLOSE#, 19 Mar 213) Underperform A$5.7 Volatility index Low 12-month target A$ 4.99 12-month TSR % +3.6 Valuation - Sum of Parts A$ 4.68 GICS sector Insurance Market cap A$m 14,855
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 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 informationFisher & Paykel Healthcare
NEW ZEALAND FPH NZ Price (at 05:00, 28 May 2015 GMT) Outperform NZ$6.30 Valuation NZ$ 7.29 - 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 % +17.6 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 informationFilling in the gaps. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA PGH AU Price (at 06:11, 16 Jun 2015 GMT) Neutral A$4.45 Valuation - Peers' Multiples A$ 4.70 12-month target A$ 4.70 12-month TSR % +10.3 Volatility Index Low GICS sector Materials Market cap
More informationCSL. New competitor on the block A$89.68 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA AU Price (at 10:28, 20 May 2015 GMT) Outperform A$89.68 Valuation A$ 95.47 - DCF (WACC 8.1%, beta 1.0, ERP 5.0%, RFR 3.8%, TGR 2.5%) 12-month target A$ 102.00 12-month TSR % +15.7 Volatility
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 informationGreencross. Check up. We review the outlook for GXL. Earnings and target price revision. Price catalyst. Catalyst: FY15/6 results
AUSTRALIA GXL AU Price (at 09:46, 13 Jul 2015 GMT) Outperform A$5.00 Valuation - EV/EBITA A$ 7.15-8.05 12-month target A$ 7.50 12-month TSR % +53.9 Volatility Index Medium GICS sector Health Care Equipment
More informationMonash IVF Group. Share losses compound pain A$1.40 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst
AUSTRALIA MVF AU Price (at 05:10, 25 Feb 2015 GMT) Outperform A$1.40 Valuation A$ 1.80 - DCF (WACC 1.8%, beta 1.1, ERP, RFR 4.5%, TGR 2.0%) 12-month target A$ 1.80 12-month TSR % +33.8 Volatility Index
More informationAustal. Retail take up 62% Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA ASB AU Price (at 01:41, 02 Jan 2013 GMT) A$0.58 Volatility index Medium GICS sector Capital Goods Market cap A$m 201 30-day avg turnover A$m 0.3 Number shares on issue m 346.0 Investment fundamentals
More informationCrown Resorts. A favourable risk/reward setting A$12.94 AUSTRALIA. Event. Impact. Earnings and target price revision.
AUSTRALIA CWN AU Price (at 06:10, 06 Jul 2015 GMT) Outperform A$12.94 Valuation A$ 18.52 - DCF (WACC 8.6%, beta 1.2, ERP 5., RFR 3.8%, TGR 2.) 12-month target A$ 16.20 12-month TSR % +28.1 Volatility Index
More informationA$6.69 AUSTRALIA. TPM AU vs ASX 100, & rec history
AUSTRALIA TPM AU Price (at 06:16, 17 Mar 2017 GMT) Neutral A$6.69 Valuation A$ 8.38 - DCF (WACC 7.6%, beta 1.2, ERP 5.0%, RFR 3.3%, TGR 1.0%) 12-month target A$ 7.60 12-month TSR % +15.9 Volatility Index
More informationGeneration Healthcare REIT All about spread Event
AUSTRALIA GHC AU Price (at 04:51, 14 Feb 2015 GMT) Neutral A$1.60 Valuation - Sum of Parts A$ 1.18-1.26 12-month target A$ 1.59 12-month TSR % +5.1 Volatility Index Low GICS sector Real Estate Market cap
More informationPremier Investments. Smiggle proving a four leaf clover A$13.79 AUSTRALIA. Event. Impact. Earnings and target price revision.
AUSTRALIA PMV AU Price (at 05:28, 21 Mar 2017 GMT) Outperform A$13.79 Valuation - Sum of Parts A$ 16.46 12-month target A$ 17.19 12-month TSR % +28.7 Volatility Index Low/Medium GICS sector Retailing Market
More informationAustralian Banks. If it s too good to be true AUSTRALIA. Event. Impact. Outlook. Impact of repricing and capital from additional 10% investor RWA
CBA CBA CBA CBA AUSTRALIA Changes to lending rates (bps) bps Owner Occupier Investor P&I IO P&I IO 0 20 25 36 CBA 3 25 24 26 7 7 25 25 3 8 23 28 BEN 0 0 25 25 Source: Company data, Macquarie research,
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