Broker watch: Airlines not travel, QBE leveraged to rates, ANZ beats expectations

Market Index takes a look at any noteworthy broker updates for ASX 200 companies from this week.

Bullish on airlines but not travel

Brokers are divided on the positive updates from Flight Centre (ASX: FLT) and Qantas (ASX: QAN) this week.

Qantas rallied 2.8% ($5.76) on Monday after saying it expects to return to profitability in FY23 as travel rebounds ahead of expectations.

Whereas Flight Centre said March total transaction volumes was almost triple the prior period, sitting around 59% of pre-covid levels. The business managed to operate on a cashflow positive basis in March.

Interestingly, most brokers hopped on board Qantas, with consensus rating the stock as a Buy with a $6.2 target price. More broadly speaking, brokers were impressed with the faster-than-expected capacity rebound and upgraded their earnings forecasts.

Qantas 12-month price chart

Flight Centre on the other hand received a number of hold and sell ratings after revenue margins and earnings were slightly below expectations. Consensus rates the stock as a Sell with a $17.62 target price.

Flight Centre 12-month price chart

Caution for Woolworths

Woolworths (ASX: WOW) delivered a fairly upbeat March quarter earnings update as inflation and higher in-home consumption helped prop sales up by 9.7% to $15.1bn.

In response to the earnings update, Woolies received 2 sells, 2 hold and 1 buy update. Consensus has a $38.12 target price. The sell ratings were more cautious as opposed to bearish.

UBS described the results as a mixed bag and sales missed its analysts' forecasts. While Credit Suisse expects softer-than-anticipated inflation and higher costs to weigh on future earnings.

Woolworths 12-month price chart

ANZ beats expectations 

ANZ (ASX: ANZ) said that all-important net interest margins continued to decline in the first-half of FY22, down to 1.58% compared to 1.63% a year ago. Though, its outlook was rather encouraging, citing its expectations of "2H22 margins as being slightly positive."

Brokers were quick to hop on board the positive outlook, with mostly buy ratings. Consensus has a $29.56 price target.

The general view was that first-half earnings were passable, but appear to mark a trough for the company. A near-term rebound is expected as banks begin to see margin tailwinds from higher interest rates.

ANZ 12-month price chart

Packaging gains 

An earnings upgrade from Brambles (ASX: BXB) has bolstered packing peers like Amcor (ASX: AMC).

Brambles bumped up its FY22 revenue and profit expectations by 1-3% after passing on higher prices to customers, which more than offset "extraordinary" timber and cost inflation. Brokers were mostly Buy rated on the stock, with a consensus price target of $11.78.

Brambles 12-month price chart

QBE leveraged to rates

QBE Insurance (ASX: QBE) rallied 5.5% on Thursday after recording 19% growth in first quarter gross written premiums.

Brokers view the stock as a Strong Buy with a $15.47 target price after yesterday's upbeat result.

The US$75m hit from Ukraine wasn't viewed as a major issue and macro, industry and company-specific factors were all in-favour of the company's positive trajectory.

QBE 12-month price chart