The team at Morgans has been looking at a number of updates this week.
Let's see if the broker has responded positively or negatively to them. Here's what you need to know:
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Flight Centre Travel Group Ltd (ASX: FLT)
Morgans was surprised to see this travel agent giant reaffirm its earnings guidance given the disruption caused by the Middle East conflict.
However, with the leisure business struggling, the broker has concerns that its FY 2027 performance could be impacted.
Nevertheless, it has retained its buy rating on Flight Centre shares with a reduced price target of $14.55. It said:
Surprisingly, FLT has maintained its FY26 earnings guidance. It noted that the conflict is creating near-term uncertainty and temporarily disrupting international travel patterns. It is having a more significant impact on Leisure (April profit was down ~A$10m on the pcp). While the reiteration of guidance was better than feared, our concern is that following its key trading period (May-June), FLT will likely need to revise guidance as we expect leisure demand will remain weak. If it wasn't for this conflict, FLT would have had a great year given its results for the first nine months were strong.
We have made material revisions to our forecasts and now sit well below guidance. We assume that the conflict and a subdued consumer environment continue to impact the 1H27. We are buyers of FLT post the earnings downgrade given the company is worth materially more than the current share price. We know from past economic and geopolitical events, that after a downturn, travel demand rebounds.
Sigma Healthcare Ltd (ASX: SIG)
Morgans was pleased with a trading update from Chemist Warehouse owner Sigma Healthcare this month.
However, due to recent share price strength, the broker has downgraded Sigma shares to an accumulate rating with a trimmed price target of $3.30. It commented:
SIG has provided a solid trading update to 30 April (domestic) and to 31 March (international), noting continuing GLP-1s tailwinds. SIG continues its international expansion with entry into the UK market and expanding distribution capacity in New Zealand. We have made minor upgrades to forecasts however a higher risk-free rate sees our valuation reduce modestly to A$3.30 (was $3.36). Recent share price strength sees us move to an ACCUMULATE (from BUY) recommendation.
Westpac Banking Corp (ASX: WBC)
Finally, in response to this banking giant's results, Morgans has reduced its earnings and dividend estimates.
However, it has lifted its recommendation from sell to trim with a price target of $33.07. It said:
Strong volume momentum but earnings leverage dissipated with margin compression and credit risk pressures. FY27-28F EPS/DPS downgraded 4-5% on 2% lower revenue and 1% higher cost base. FY28F EPS/DPS unchanged. Target price down c.3% to $33.07. We moderate from SELL to TRIM, given potential TSR of c.-8% at current prices.
