Australian Equity Strategy
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1 Australian Equity Strategy Macroeconomic and equities overview David Pobucky Macquarie Securities (Australia) Limited David.Pobucky@Macquarie.com 15 October 2018 In preparing this research, we did not take into account the investment objectives, financial situation and particular needs of the reader. Before making an investment decision on the basis of this research, the reader needs to consider, with or without the assistance of an adviser, whether the advice is appropriate in light of their particular investment needs, objectives and financial circumstances. Please see disclaimer.
2 Global growth remains above average The period of highly synchronised global growth seems to have passed. However, global growth remains above average, with GDP growing at an annualised pace of around 3¼%. So far, the tariffs implemented have been relatively minor. While an expected escalation would be more significant, the maximum global annual revenue would still be only half the US fiscal stimulus. We believe that recent momentum will continue for some time, despite risks around the escalation of global trade disputes. We expect the economic impact to be relatively small, as the scale of the tariffs under consideration remain significantly smaller than the US (and now Chinese) stimulus programs. Source: IMF, Macrobond, US Census Bureau, USTR, Macquarie Macro Strategy, October 2018 PAGE 2
3 Forecast Macquarie Research EQUITIES and is a tailwind for Australia s economy The Australian economy is on an improving path, supported by above-trend global growth, strong public demand and very low interest rates. GDP grew by a surprisingly strong 0.9% q/q in Q2 and 3.4% y/y. So growth is above potential and expected to remain so, on average, over the next few years. The rebound in commodity prices has helped support the terms of trade and growth in profits. Relatively favourable commodity prices have supported income growth in Australia over the past couple of years and this has also started to flow through to household income growth. Weak commodity prices would likely see this improvement go into reverse. Per cent 6 World & Australian GDP Growth Year-ended Per cent 6 Per cent 35 Growth in Profits & Terms of Trade Year-ended Per cent 30 5 Australia non-farm GDP growth Private non-financial corporate profits (LHS) Forecast Global GDP growth, advanced 2 qtrs GFC Terms of trade (RHS) Source: ABS, Macrobond, Macquarie Macro Strategy, October 2018 PAGE 3
4 Australia does not appear overly expensive relative to global markets Australia has passed the sweet spot it was in earlier in the year when it had similar characteristics to where the US market was two years ago. That is, before the Fed began to raise policy rates, before there was any hint around rising wage costs (profit share pressures) and when the full benefits of a weaker currency were flowing through to corporate earnings. Whilst we expect valuations to remain supported by historically low interest rates, and a weaker currency benefitting corporate earnings, cost pressures have increased. These include contractor and labour costs in WA for Resources companies (AWC), higher crude oil prices increasing the cost of production (QAN), and input cost pressures from higher freight costs (JHX, ORA) and raw materials (AMC, PGH). Although the Australian market is not overly expensive relative to global markets, EPS growth is uninspiring in comparison Relative PE Ratio - MSCI Australia vs MSCI World Australian valuations have risen, but the market is still not overly expensive vs global equities Relative PE Ratio - MSCI Australia vs MSCI EM Average /-1 std dev Average /-1 std dev Source: Factset, Macquarie Research, October 2018 PAGE 4
5 Double-digit returns are unlikely in the next 12 months Above-average valuations (15.6x 12m fwd earnings) will continue to be supported by low rates (RBA expected to be on hold until 2020), an improving economic environment and stronger earnings growth in FY19 for the market of 12%. The 12m rolling return has fallen to 5% after a steady climb since April. A contraction in the P/E multiple has removed -7% from the return, but earnings are still a positive tailwind, adding 9% despite the contribution having fallen since S&P/ASX Month Forward P/E Ratio 40% S&P/ASX 200 Rolling Total Returns Decomposed between PER chg & EPSg chg Cont to return from PER 16 30% Cont to return from EPS revisions 12m rolling return 14 20% 12 10% Long Term Average 0% 10 +/- 1 Std Dev -10% % Source: Factset, Macquarie Research, October 2018 PAGE 5
6 Conditions are challenging for Australian corporates FY18 earnings growth for Industrials (ex. Resources, LPTs, Banks) posted 1.3%, the second weakest year of growth since FY11. Australian corporate profits are expected to grow, but at a slower rate for FY19 than anticipated heading into the FY18 reporting season. We believe that there is still too much optimism built in given the structural and/or cyclical challenges that many sectors including the Banks, Retail, Insurance, Telco s and Real Estate are exposed to. FY19E were downgraded over reporting season Bank earnings have been rebased in FY18 Resources EPSg continues to support the market Industrials (Mkt ex Res, Banks & LPTs) EPSg (%) FY19E FY15 6 FY20E 4 2 FY13 FY14 FY17 0 FY12 FY18A -2-4 FY16 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Banks EPSg (%) FY14 5 FY13 FY19E 4 FY17 3 FY15 2 FY20E FY FY18A -5 FY16-6 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun Resources EPSg (%) FY FY14 FY19E FY18A FY13 FY20E -30 FY FY15 FY16-60 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Source: Company data, Macquarie Research, October 2018 PAGE 6
7 Rebased to 100 Macquarie Research EQUITIES Offshore earners continue to deliver Despite some softening over the course of the year, global GDP growth remains above average. This is supporting the strong performance of the offshore earners this year, in particular WOR, RMD, COH, CPU, LLC, TWE and BXB. Offshore earners have outperformed the market significantly since global growth started rising in Q We expect this to continue, given their exposure to faster growing markets, and above average global growth supported by ongoing US stimulus and recent Chinese policy easing. 190 Capital Performance of the Offshore Earners vs the Market Offshore earners basket: AAD, AMC, ANN, BLD, BXB, COH, CPU, CSL, IPL, JHX, LLC, NWS, ORA, QBE, RMD, SHL, TWE, WOR Oct 2013 Oct 2014 Oct 2015 Oct 2016 Oct 2017 Oct 2018 S&P/ASX 200 Index Offshore Earners Capital performance of the offshore earners vs the market assumes an equal weighted basket of stocks for the offshore earners index. Source: Factset, Macquarie Research, October 2018 PAGE 7
8 Capital management continues There were a number of capital management surprises during reporting season, with new buybacks or extensions being announced. A number of companies also announced special dividends and capital returns (IAG 19.5cps subject to approval at AGM and ING 33cps). Code Company Buyback Note Amount Code Company Special Dividend Note Amount Catalysts for capital management initiatives include: strong balance sheets which allow for this optionality strong metrics with low leverage and high interest cover strong cash flow BSL BlueScope Steel On-market $250m ABC Adelaide Brighton Fully franked 4cps CWN Crown Resorts On-market $400m GMA Genworth Mortgage Fully franked 4cps ING Inghams Group On-market 5% IAG Insurance Australia Group Subject to approval at the AGM 5.5cps improved operational certainty limited alternative use for capital and relatively attractive equity valuations (REITs some share prices trading at discounts to our analysts NAV on the stocks) JHG Janus Henderson On-market US$100m QUB Qube Holdings Fully franked 2cps PPC Peet On-market 5% SUN Suncorp Group Fully franked 8cps QAN Qantas Airways On-market $332m WHC Whitehaven Coal Fully franked 13cps RIO Rio Tinto On-market US$1bn WOW Woolworths Fully franked 10cps Source: Company announcements, Macquarie Research, October 2018 PAGE 8
9 Consumer Operating leverage continues to slow The trend of disappointing operating leverage outcomes continued from the February reporting season. Companies including JBH and HVN enjoyed positive sales growth, yet by and large, had poor margin outcomes relative to history. Competitive pressures remain strong and weaker operating leverage relative to history reflects continued investment in price, service, range or omni channel capability to maintain existing performance metrics. JBH Australia Modest operating leverage HVN Australia normally highly levered but not in FY18 Operating leverage calculated using sales growth and EBIT growth Source: Company reports, Macquarie Research, October 2018 PAGE 9
10 Resources Cost pressures increasing Expected margins for FY19 fell over reporting season due to increasing cost pressures despite forecasts for revenue growth increasing. Most cost pressures are still in the non-controllable basket (oil prices, raw materials), and labour is getting tighter. Trade fundamentals for base metals in particular are reporting robust trade/market signals, and global industrial production growth is around the long run-average. But a bearish market response is a risk given increasing global trade tensions. % Resources - Revenue Growth Pre-reporting Post-reporting % Resources - EBITDA Margin 38 Pre-reporting Post-reporting Jun 15A Jun 16A Jun 17A Jun 18A Jun 19E 22 Jun 15A Jun 16A Jun 17A Jun 18A Jun 19E Above charts calculated using aggregate data for resource companies including AJM, AQG, ARI, AWC, AWE, BHP, BPT, BSL, CTX, DCN, DLS, EVN, FMG, GOR, GXY, IGO, ILU, KAR, MGX, MIN, MLX, MMG, NCM, NHC, NST, OGC, ORE, ORG, OSH, OZL, PLS, PNL, PRU, RIO, RRL, RSG, S32, SAR, SBM, SEH, SFR, SGM, STO, SXY, SYR, WAF, WHC, WOR, WPL and WSA. Source: Macquarie Research, October 2018 PAGE 10
11 URW LEP NSR CLW SCG AVN SCP CMW IDR CQR GOZ GPT GTY VCX ARF DXS MGR SGP PPC LLC GMG CHC Macquarie Research EQUITIES Cost of debt is becoming a key issue for the REITs REITs have been a beneficiary of falling bond yields and a decline in the cost of debt since the GFC. We expect this to reverse as firmer global economic growth pushes bond yields higher. At the shorter end of the curve, the Australian 90-day BBSW has increased from 1.80% to 2.10% in the six months to June Our property analysts estimate that a 25bp increase in the cost of debt will create an earnings headwind for individual REITs of up to 5% before taking hedging into account. The largest impact will be on REITs with the highest gearing and lowest cost of debt such as URW, LEP, NSR and CLW. (%) Earnings Impact from a 25bp Increase in the Cost of Debt (0.4) (0.2) 0.2 (1.0) (2.0) (3.0) (4.0) (5.0) (6.0) (5.4) (1.1) (0.8) (1.6) (1.6) (1.5) (1.5) (1.3) (1.3) (2.0) (2.0) (1.8) (1.8) (1.8) (2.5) (2.4) (3.1) (3.1) (4.1) Earnings impact All data is pro-rated for the 12 months to June We note this ignores the impact of hedging (typically 60-80%) which will limit the earnings impact Source: Macquarie Research, October 2018 PAGE 11
12 Banks Majors continue to shed market share Retail banking conditions continued to deteriorate in 2H18 due to increased competition, higher funding costs, and slowing credit growth. Housing credit growth has moderated further (~4.6%). This marks the lowest rate of growth since 2013, but the rate of decline slowed in July. The majors continue to shed market share and grew at ~0.75x system. The challenging operating environment for the bank sector has in our view been captured in the current discounted valuation relative to the broader market (the sector is trading at a ~34% discount to All Industrials). 84% Housing Loans Outstanding - Major Banks Relative to APRA and RBA System x 1.1 Major Banks PER relative to All Industrials (ex banks) 83% APRA system RBA system % % % % % % 76% Nov-13 Jul-14 Mar-15 Nov-15 Jul-16 Mar-17 Nov-17 Jul Majors PE Rel LT average 5yr average Source: Factset, RBA, APRA, Macquarie Research, October 2018 PAGE 12
13 Difference in P/E relative to median Macquarie Research EQUITIES Value stocks at distressed levels 8 A combination of earnings and interest rate risk has driven valuation dispersion to distressed levels. The cheap end of the equity market is under pressure from cyclical and structural growth risks in sectors including media, retail, telecommunications and insurance. This is classic value trap territory without a sustainable growth rebound. From a strategy perspective, we believe investors should stick to growth and quality. Valuation spreads continue to widen 12 Month Fwd PEs for Industrials (25th percentile & 75th percentile vs median) 12 PE Spread (75th less 25th Percentile) th percentile th percentile The chart on the left reflects the spread between the 75th percentile P/E (above the x axis) relative to the median (50th percentile), and the spread between the 25th percentile P/E (below the x axis) relative to the median (50th percentile). The chart on the right reflects the spread between the 75th and 25th percentiles relative to the median (50th percentile). Source: Thomson Reuters, Macquarie Research, October 2018 PAGE 13
14 Growth to continue to outperform We don t think that the current environment will drive a sustainable turnaround in value (deep cyclicals). There is potential for a degree of relative performance from parts of the market that have been heavily discounted (eg. Banks), but some valuation convergence does not equate to a reversion to mean levels. The cheaper end of the market remains low earnings growth and we therefore continue to remain positive on growth and quality. Australia - Value vs Growth 40% 30% 20% Value Outperforming 10% 0% -10% Growth Outperforming -20% -30% -40% Chart based on the 12-month rolling returns of the MSCI Australia Value Index and the MSCI Australia Growth Index Source: Factset, Macquarie Research, October 2018 PAGE 14
15 Small-caps disappoint, but opportunities present Ex-100 stocks made up an equal proportion of the largest beats to Macquarie s earnings expectations over reporting season. However, they made up the vast majority of earnings misses, and consequently, small caps underperformed large caps over reporting season. Ex-100 stocks are expected to generate 18% EPS growth in FY19, in comparison to the broader market at 12%. Whilst we believe that there is too much optimism built in to both, there are select opportunities outside the large caps. Large caps have clawed back the weakness in their 12-month rolling returns, but cyclical and structural pressures remain present in the largecap space (Retail, REITs, Telco s, Banks). 80% Australia - Small vs Large 60% 40% 20% Small Outperforming 0% -20% -40% Large Outperforming -60% Chart based on the 12-month rolling returns of the MSCI Australia Small Cap Index and the MSCI Australia Large Cap Index Source: Factset, Macquarie Research, October 2018 PAGE 15
16 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, which is currently around 9%. Macquarie Asia/Europe Outperform expected return >+10% Neutral expected return from -10% to +10% Underperform expected <-10% Mazi Macquarie - South Africa Outperform return > 10% in excess of benchmark return Neutral return within 10% of benchmark return Underperform return > 10% below benchmark return 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 return > 5% in excess of benchmark return Neutral return within 5% of benchmark return Underperform return > 5% below benchmark return Volatility index definition* This is calculated from the volatility of historic 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 Australian/NZ stocks only Recommendation 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 2018 AU/NZ Asia RSA USA CA EUR Outperform 51.56% 59.51% 45.05% 46.88% 67.86% 46.70% (for global coverage by Macquarie, 3.70% of stocks followed are investment banking clients) Neutral 33.20% 28.92% 37.36% 47.70% 25.00% 42.73% (for global coverage by Macquarie, 2.04% of stocks followed are investment banking clients) Underperform 15.23% 11.57% 17.58% 5.42% 7.14% 10.57% (for global coverage by Macquarie, 0.47% of stocks followed are investment banking clients) PAGE 16
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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 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
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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 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
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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 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 informationBuilders Barometer. Rising damp AUSTRALIA. Event. Impact. Outlook
Jan 00 Mar 01 May 02 Jul 03 Sep 04 Nov 05 Jan 07 Mar 08 May 09 Jul 10 Sep 11 Nov 12 Jan 14 Mar 15 May 16 AUSTRALIA Rising damp Event The ABS released February 2017 building approvals data. Seasonallyadjusted,
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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
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AUSTRALIA Insolvencies Stubborn # of Insolvencies 17, 16, 15, 14, 13, 12, 11, 1, Source: ASIC, Macquarie Research, Dec 212 WA/VIC insolvencies deterioration 2.4 2.2 Jan- 2 1.8 1.6 1.4 1.2 1 Source: ASIC,
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
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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
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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 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 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
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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
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AUSTRALIA SUL AU Price (at 07:08, 22 Aug 2012 GMT) Outperform A$8.00 Volatility index Low/Medium 12-month target A$ 8.50 12-month TSR % +10.7 Valuation - EV/EBITA A$ 7.10-7.75 GICS sector Retailing Market
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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 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
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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
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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 informationBreville Group. Keurig no small drip. Earnings and target price revision. Price catalyst. Catalyst: 1H13 results. Action and recommendation
AUSTRALIA BRG AU Price (at 06:10, 23 Aug 2012 GMT) Outperform A$5.25 Volatility index Medium 12-month target A$ 5.85 12-month TSR % +16.5 Valuation - EV/EBIT A$ 5.40-5.85 GICS sector Retailing Market cap
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
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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
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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
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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
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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
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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
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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
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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
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AUSTRALIA CBA AU Price (at 06:27, 09 Aug 2012 GMT) Underperform A$57.03 Volatility index Low 12-month target A$ 48.03 12-month TSR % -9.9 Valuation A$ - DCF (WACC 10.3%, beta 1.0, ERP 5.0%, RFR 5.5%) 50.40
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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
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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
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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
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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
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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
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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
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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
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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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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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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
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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
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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
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AUSTRALIA AAX AU Price (at 09:24, 23 Aug 2012 GMT) Outperform A$3.30 Volatility index High 12-month target A$ 3.70 12-month TSR % +18.0 Valuation - EV/EBITA A$ 3.43-3.90 GICS sector Capital Goods Market
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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
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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
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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
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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
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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
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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
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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
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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
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NEW ZEALAND CEN NZ Price (at 06:38, 14 Aug 2012 GMT) Outperform NZ$4.88 Volatility index Low 12-month target NZ$ 5.70 12-month TSR % +21.8 Valuation NZ$ - DCF (WACC 8.1%, beta 0.6, ERP 7.0%, RFR 4.0%)
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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
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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
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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
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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
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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
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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
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AUSTRALIA BBG AU Price (at 06:10, 27 Aug 2012 GMT) A$1.35 Volatility index Very High GICS sector Consumer Durables & Apparel Market cap A$m 644 30-day avg turnover A$m 4.4 Number shares on issue m 478.9
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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
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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
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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
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Average Monthly Long/Short Return Jul-96 Feb-97 Sep-97 Apr-98 Nov-98 Jun-99 Jan-00 Aug-00 Mar-01 Oct-01 May-02 Dec-02 Jul-03 Feb-04 Sep-04 Apr-05 Nov-05 Jun-06 Jan-07 Aug-07 Mar-08 Oct-08 May-09 Dec-09
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