Major Banks Set To Report Earnings

Posted on | by Todd | Leave a Comment on Major Banks Set To Report Earnings

The ANZ will announce its annual results on Thursday as the first of the major banks to report over the next three weeks. NAB will report next Thursday and WBC will report the following Thursday.

ANZ is expected to announce a full year cash profit of $6.89 billion and a DPS of 83 cents on revenue of $20.7 billion. Much of this gain is based on stronger owner-occupied home lending.

Analysts are expecting ANZ to be the first of the major banks to return capital to shareholders given its pro-forma position outlined by APRA last month.

At this point, the NAB’s profit forecast is expected to be $6.6 billion with a DPS of 99 cents.

MQG will report their half-yearly results this Friday. The numbers on the street are reflecting a profit of $1.1 billion with a DPS of $2.10 per share.

ANZ

NAB

 

Westpac

MQG

XJO – Rallies from 5630 Support Level

Posted on | by Leon Hinde | Leave a Comment on XJO – Rallies from 5630 Support Level

The S&P/ASX 200 Index finished the week to Friday up 1.6%, the best performing sector was the Utilities sector, up 3.9%. AGL Energy Ltd led the performance rising by 5.0% and the worst performing sector was the Telecoms sector, up only 0.7%. 

The XJO index found support at 5640 early this month and has since rallied to the top end of the trading range, making a high in Friday’s session of 5925.

Chart – XJO

 

BHP Weaker On Production Miss

Posted on | by Todd | Leave a Comment on BHP Weaker On Production Miss

The Q1  production numbers for BHP were on the soft side with weaker production and shipments of Iron ore  and coal offsetting slightly better output in Copper and Crude Oil.

The company has left its full year guidance unchanged for FY18, despite recent reports that they could miss those production levels by up to 10%.

We expect the recent price volatility in Iron Ore and Coal to impact shares price trajectory well into FY18.

The newly appointed Chairman, Ken MacKenzie, addressed shareholders for the first time yesterday as the share price was pressured back below $26.50.

On balance, we believe that Iron Ore prices are at the upper end of the price range and a pullback into the $25.00 range is a reasonable buy level for BHP. 

BHP

 

QBE Is Approaching Technical Resistance

Posted on | by Todd | Leave a Comment on QBE Is Approaching Technical Resistance

With 30% of QBE’s insurance business in North America, the 20% drop in the share price after Hurricanes Harvey and Irma now looks excessive.

It’s estimated that the net impact of these events for QBE was $600 million, comfortably short of the $1.1 billion gross costs implied as the storms made landfall.

However, based on after-tax earnings of the Australia and New Zealand operations only, we estimate that QBE’s 2H17 dividend will fall from 33 cents per share down to 10 cents.

After posting an intra-day low of $9.65 on October 3rd, the share price has recovered back over $10.80 in early trade.

In our view this bounce back is approaching technical resistance and internal momentum indicators are suggesting a move lower in the near-term.

Investors should exit long QBE positions and look to reenter in the lower $10.00 handle.

QBE

 

 

 

Brambles – Finding Valuation Support

Posted on | by Leon Hinde | Leave a Comment on Brambles – Finding Valuation Support

BXB’s 1Q18 sales trading update was slightly better than market expectations with robust 6% constant currency revenue growth for the first quarter.

Underlying FY18 earnings will likely grow at 5 – 6% and increase to $1bn.

On the back of increase to earnings, our target price range for BXB is $9.25 support and $10.00 resistance. BXB is a strong business with dominant global market positions, we’re comfortable running a buy write strategy on BXB.

FY18 forecast dividend yield is 4%, we allow for moderate capital growth and cap the gains with a  covered call option to boost the annual cash flow to 10%+.

Brambles