Christmas has come early for the bank’s shareholders with the decision to slightly increase the 2024 dividend – despite a single-digit decline in the net profit and cash earnings.
Beating the market benchmark is never easy, with 72 per cent of Australian actively managed global equity general funds trailing the S&P World Index in the six months to June 30, 2024. Domestic equity funds performed slightly better, albeit against a significantly lower bar set by the S&P/ASX 200 Index.
Three broker buys this week
With yesterday’s 50bps rate hike, confidence has slipped, and every sector is weaker. A somewhat unexpected increase in the cash rate to 0.85 per cent saw the S&P/ASX200 slump by 1.5 per cent. The large move was predicted by only a few experts with the RBA highlighted the fact that inflation had increased significantly around the country, due to energy and materials prices, and therefore action needed to be taken. This remains a challenging proposition for the RBA, seeking to normalise policy at a time when surging consumer prices on daily goods are already hitting demand and sentiment. They clearly risk sending the economy into a recession in 2023 and beyond.
Fund managers were among the top performers of the day, with Magellan (ASX:MFG) gaining 2.1 percent. Here are three Buys that the brokers are confident will outperform.
Cleanaway Waste Management Ltd (ASX:CWY- Is Australia’s largest, publicly listed waste management company. With over 6,000 employees in more than 250 locations across Australia, the company caters to a diverse range of customers from small businesses through to government agencies and large multi-national clients. The firm believes all waste is a resource and aims to incorporate recovery, recycling and reuse throughout our operations.
- Macquarie has an Outperform recommendation with a target price of $3.65 (current price $2.91). The broker says the stock has been resilient in a volatile market and this should continue. “CWY has flagged incremental annual overhead costs of -$15m and envisages a pay-off in efficiency and system improvements over time,” says the broker. Macquarie forecasts a full year FY22 dividend of 4.60 cents and EPS of 8.30 cents.
- Morgan Stanley has an Overweight recommendation with a target price of $3.30. The broker has become even more confident in the company’s outlook following the June 7 investor presentation where management highlighted environmental initiatives and came away feeling the company’s environmental goals and customer value proposition are in alignment.
Vicinity Centres (ASX:VCX) – Is one of Australia’s leading retail property groups, reimagining the way Australians live, work and play. Previously known as Federation Centres, and Centro Properties the company specialises in the ownership and management of Australian shopping centres with a focus on Chadstone shopping centre.
- Macquarie has upgraded to Outperform from Neutral recommendation with a target price of $2.01 (current price $1.87). The broker is attracted to the defensive cash flows of Vicinity Centres and says “retail shopping centres perform well on a relative basis during a cyclical downturn. The balance sheet and hedging profile screen positively against peers, with Macquarie noting gearing is a conservative 26% and hedging 82%, and thus the group is relatively protected from higher rates.”
CSL Limited (ASX:CSL) – Is an Australian multinational specialty biotechnology company that researches, develops, manufactures, and markets products to treat and prevent serious human medical conditions.
- Morgan Stanley has an Overweight recommendation with a target price of $310.00 (current price $267.68). The broker says the results from CSL’s overseas peers indicate signs of increasing plasma collections and revenue growth. “Data also show CSL’s collections centre rollouts remain strong,” says Morgan Stanley. Overweight rating retained.
