Broker Notes: Why analysts name Coles, ARB and Whitehaven to buy now?
$Coles Group Ltd(COL.AU$: Barrenjoey has an overweight rating and A$22.00 target price on the stock.
Coles' cost blowout on its new automated distribution systems takes the gloss off the supermarket chain's FY 2022 performance, according to Barrenjoey analysts. They tell clients in a note that an early read of the Australian firm's result suggests that it is in line with market expectations, but they point out that total operating expenditure for new distribution centers and tech has increased from A$235 million to A$390 million and is now weighted toward FY 2023 and FY 2024.
$ARB Corp Ltd(ARB.AU$: Morgan Stanley keeps an overweight call on ARB and A$33.00/share target price.
Demand for auto parts supplier ARB's products is more resilient than bears appreciate, Morgan Stanley analyst Chenny Wang says in a note. ARB this week signaled that 2H headwinds will extend into the first half its new fiscal year before improving as new models and supply become available. That helped to put the brakes on ARB's stock-price rally, which had begun in mid-June. Wang also says bears appear to overlook that ARB and its competitors will benefit from elevated backlogs of orders over time.
$Whitehaven Coal Ltd(WHC.AU$: Citi has a buy rating and A$7.85 target on the Australian coal stock.
While Whitehaven's FY 2022 underlying profit was 10% above market consensus, its dividend was lower than expected and its production and cost guidance disappointing, according to Citi analyst Paul McTaggart.
Coles' cost blowout on its new automated distribution systems takes the gloss off the supermarket chain's FY 2022 performance, according to Barrenjoey analysts. They tell clients in a note that an early read of the Australian firm's result suggests that it is in line with market expectations, but they point out that total operating expenditure for new distribution centers and tech has increased from A$235 million to A$390 million and is now weighted toward FY 2023 and FY 2024.
$ARB Corp Ltd(ARB.AU$: Morgan Stanley keeps an overweight call on ARB and A$33.00/share target price.
Demand for auto parts supplier ARB's products is more resilient than bears appreciate, Morgan Stanley analyst Chenny Wang says in a note. ARB this week signaled that 2H headwinds will extend into the first half its new fiscal year before improving as new models and supply become available. That helped to put the brakes on ARB's stock-price rally, which had begun in mid-June. Wang also says bears appear to overlook that ARB and its competitors will benefit from elevated backlogs of orders over time.
$Whitehaven Coal Ltd(WHC.AU$: Citi has a buy rating and A$7.85 target on the Australian coal stock.
While Whitehaven's FY 2022 underlying profit was 10% above market consensus, its dividend was lower than expected and its production and cost guidance disappointing, according to Citi analyst Paul McTaggart.
Buy: Also known as strong buy and "on the recommended list." Needless to say, buy is a recommendation to purchase a specific security.
Sell: Also known as strong sell, it's a recommendation to sell a security or to liquidate an asset.
Hold (Neutral): In general terms, a company with a hold recommendation is expected to perform at the same pace as comparable companies or in line with the market.
Underperform: A recommendation that means a stock is expected to do slightly worse than the overall stock market return. Underperform can also be expressed as "moderate sell," "weak hold," and "underweight."
Outperform: Also known as "moderate buy," "accumulate," "add," and "overweight." Outperform is an analyst recommendation meaning a stock is expected to do slightly better than the market return.
Sell: Also known as strong sell, it's a recommendation to sell a security or to liquidate an asset.
Hold (Neutral): In general terms, a company with a hold recommendation is expected to perform at the same pace as comparable companies or in line with the market.
Underperform: A recommendation that means a stock is expected to do slightly worse than the overall stock market return. Underperform can also be expressed as "moderate sell," "weak hold," and "underweight."
Outperform: Also known as "moderate buy," "accumulate," "add," and "overweight." Outperform is an analyst recommendation meaning a stock is expected to do slightly better than the market return.
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