Australian Broker Call
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September 15, 2023
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1).
Last Updated: 05:00 PM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
CAR CARSALES.COM LIMITED
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Overnight Price: $29.96
Macquarie rates CAR as Outperform (1) -
Macquarie assesses recent wins by Carsales in the US and Brazil should underpin upgrades to expectations. In the US, Premium Select, similar to the Australian Top Spot product, is estimated to potentially add 180 basis points per annum to yield growth over the next 2-3 years.
A new vertical in marine/boats has also been flagged as a $1bn opportunity. The company has signalled an increased pace in dealer additions in Brazil, a key source of potential upside. Macquarie retains an Outperform rating and raises the target to $31.50 from $29.00.
Target price is $31.50 Current Price is $29.96 Difference: $1.54
If CAR meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $28.14, suggesting downside of -5.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 71.70 cents and EPS of 90.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 82.8, implying annual growth of -54.3%. Current consensus DPS estimate is 66.2, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 36.0. |
Forecast for FY25:
Macquarie forecasts a full year FY25 dividend of 83.70 cents and EPS of 106.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 94.7, implying annual growth of 14.4%. Current consensus DPS estimate is 75.5, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 31.5. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
CU6 CLARITY PHARMACEUTICALS LIMITED
Medical Equipment & Devices
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Overnight Price: $1.23
Bell Potter rates CU6 as Speculative Buy (1) -
Clarity Pharmaceuticals is targeting the imaging and treatment of metastatic prostate cancer. The patient group is the subject of three ongoing clinical trials with preliminary results showing that 30% were positive in relation to the company's therapeutics.
While early days, Bell Potter notes the results appear highly encouraging. Speculative Buy retained. Target rises to $1.70 from $1.30.
Target price is $1.70 Current Price is $1.23 Difference: $0.47
If CU6 meets the Bell Potter target it will return approximately 38% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY24:
Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 12.80 cents. |
Forecast for FY25:
Bell Potter forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 8.90 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.64
Ord Minnett rates MYR as Hold (3) -
Following the release of FY23 financials, largely pre-released in early August, Ord Minnett has retained its 75c valuation and despite the shares are considered too cheaply priced, the rating remains on Hold.
FY24 will likely be challenging, suggests the broker, with sales forecast to shrink by -5%. Ord Minnett does note the first five weeks of FY24 have seen sales holding up "reasonably well".
Fashion retailing represents 60% of sales and Ord Minnett is anticipating this will prove one of the most vulnerable categories as the domestic economy slows down.
If current forecasts prove correct, Myer's net profit will fall by -32% to $48m in FY24. It appears only minimal changes have been made to estimates.
Target price is $0.75 Current Price is $0.64 Difference: $0.11
If MYR meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).
The company's fiscal year ends in July.
Forecast for FY24:
Ord Minnett forecasts a full year FY24 dividend of 3.00 cents and EPS of 5.70 cents. |
Forecast for FY25:
Ord Minnett forecasts a full year FY25 dividend of 4.00 cents and EPS of 6.00 cents. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $3.12
Ord Minnett rates SMR as Buy (1) -
Ord Minnett analysts have returned from visiting Stanmore Resources' Poitrel and South Walker Creek assets, concluding the company is operating more productively than the previous owners, being the JV between BHP Group and Mitsui.
On average quarterly production has increased by 6% since the purchase in 2022 and the broker thinks this trend is likely to continue.
Buy rating retained, with an 8% increase in valuation to $3.90. Stanmore Resources is Ord Minnett's favourite in the coal sector.
Target price is $3.90 Current Price is $3.12 Difference: $0.78
If SMR meets the Ord Minnett target it will return approximately 25% (excluding dividends, fees and charges).
The company's fiscal year ends in December.
Forecast for FY23:
Ord Minnett forecasts a full year FY23 dividend of 8.10 cents and EPS of 66.40 cents. |
Forecast for FY24:
Ord Minnett forecasts a full year FY24 dividend of 1.80 cents and EPS of 43.00 cents. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.13
Macquarie rates TBN as Outperform (1) -
Macquarie has toured the Tamboran Resources drilling operations at Shenandoah South, impressed with the new rig operations and strong support from the Northern Territory government.
The near focus for investors will be on flow tests and type curves while gas commercialisation is the key to the medium term.
The broker suggests market concerns around funding and flow rates can be overcome in the next 12 months and retains an Outperform rating. Target is raised to $0.35 from $0.30.
Target price is $0.35 Current Price is $0.13 Difference: $0.225
If TBN meets the Macquarie target it will return approximately 180% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 2.30 cents. |
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 1.90 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $21.62
Macquarie rates WBC as Neutral (3) -
Macquarie assesses the Westpac institutional business has performed relatively well recently and rebounded from the disappointing performance that followed the issues unveiled by AUSTRAC.
With more investment expenditure directed to growth rather than compliance, the broker envisages further upside, particularly if the bank is successful in gaining FX wallet share in middle markets.
While the bank could potentially move ahead of competitors, the broker acknowledges the risk around implementation and budget slippages remains high. Neutral retained. Target is $21.
Target price is $21.00 Current Price is $21.62 Difference: minus $0.62 (current price is over target).
If WBC meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $22.78, suggesting upside of 4.6% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 142.00 cents and EPS of 205.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 204.9, implying annual growth of 28.1%. Current consensus DPS estimate is 140.0, implying a prospective dividend yield of 6.4%. Current consensus EPS estimate suggests the PER is 10.6. |
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 144.00 cents and EPS of 174.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 185.3, implying annual growth of -9.6%. Current consensus DPS estimate is 141.0, implying a prospective dividend yield of 6.5%. Current consensus EPS estimate suggests the PER is 11.7. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates WBC as Add (1) -
Westpac's institutional bank accounted for around 14% of earnings in the first half and a strategy has been outlined to grow in this area by doing more "and better" business with existing clients.
The bank asserts returns on the lending book are attractive on a stand-alone basis, with foundations in transaction banking and liquidity management, but it also wants more financial markets and lending business.
Morgans assesses, if Westpac can materially improve its business performance, then investment in the stock could deliver attractive returns as share prices rise and cash returns to investors lift.
Add rating maintained. Target is reduced to $22.58 from $23.02 as a result of adjustments to long-term franking assumptions.
Target price is $22.58 Current Price is $21.62 Difference: $0.96
If WBC meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $22.78, suggesting upside of 4.6% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY23:
Morgans forecasts a full year FY23 dividend of 146.00 cents and EPS of 223.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 204.9, implying annual growth of 28.1%. Current consensus DPS estimate is 140.0, implying a prospective dividend yield of 6.4%. Current consensus EPS estimate suggests the PER is 10.6. |
Forecast for FY24:
Morgans forecasts a full year FY24 dividend of 147.00 cents and EPS of 206.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 185.3, implying annual growth of -9.6%. Current consensus DPS estimate is 141.0, implying a prospective dividend yield of 6.5%. Current consensus EPS estimate suggests the PER is 11.7. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Today's Price Target Changes
| Company | Last Price | Broker | New Target | Prev Target | Change | |
| CAR | Carsales | $29.80 | Macquarie | 31.50 | 29.00 | 8.62% |
| CU6 | Clarity Pharmaceuticals | $1.24 | Bell Potter | 1.70 | 1.30 | 30.77% |
| SMR | Stanmore Resources | $3.27 | Ord Minnett | 3.90 | 3.70 | 5.41% |
| TBN | Tamboran Resources | $0.14 | Macquarie | 0.35 | 0.30 | 16.67% |
| WBC | Westpac | $21.77 | Morgans | 22.58 | 23.02 | -1.91% |
Summaries
| CAR | Carsales | Outperform - Macquarie | Overnight Price $29.96 |
| CU6 | Clarity Pharmaceuticals | Speculative Buy - Bell Potter | Overnight Price $1.23 |
| MYR | Myer | Hold - Ord Minnett | Overnight Price $0.64 |
| SMR | Stanmore Resources | Buy - Ord Minnett | Overnight Price $3.12 |
| TBN | Tamboran Resources | Outperform - Macquarie | Overnight Price $0.13 |
| WBC | Westpac | Neutral - Macquarie | Overnight Price $21.62 |
| Add - Morgans | Overnight Price $21.62 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 5 |
| 3. Hold | 2 |
Friday 15 September 2023
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