Australian Broker Call *Extra* Edition – Dec 07, 2018

Australia | Dec 07 2018

An additional news report on the recommendation, valuation, forecast and opinion changes for ASX-listed equities.

In addition to The Australian Broker Call Report, which is published and updated daily (Mon-Fri), FNArena has now added The Australian Broker Call *Extra* Edition, featuring additional sources of research and insights on ASX-listed stocks, also enlarging the number of stocks that make up the FNArena universe.

One key difference is the *Extra* Edition will not be updated daily, but merely "regularly" depending on availability of suitable quality content. As such, the *Extra* Edition tries to build a bridge between daily updates via the Australian Broker Call Report and ad hoc news stories, that are not always timely for investors hungry for the next information update.

Investors using the *Extra* Edition as a source of input for their own share market research should thus take into account that information after publication may not be up to date, or yet awaiting another update by FNArena's team of journalists.

Similar to The Australian Broker Call Report, this *Extra* Edition includes concise but limited reviews of research recently published by Stockbrokers and other experts, 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 of this Report.

The Australian Broker Call *Extra* Edition is a summary that has been prepared independently of the sources identified. Readers will check the full text of the recommendations and consult a Licenced Advisor before making any investment decision.

The copyright of this Report is owned by the publisher. Readers will not copy, forward or disseminate this Report to any other person. For more vital information about the sources included, see the bottom of this Report.


Last Updated: 03:23 PM on 6th December 2018.


COMPANIES DISCUSSED IN THIS ISSUE

The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)

ADX   AGI   AHG   AIS   APE   AQZ   BWP   CRN   EML   KMD   MNY (2)   MP1   NBL   NXT   RWC   SEN   TLX   VRL   Z1P  


ADX    ADX ENERGY LIMITED

Energy – Overnight Price: $0.01

Breakaway Research rates ADX as Buy (1) –

ADX Energy has three oil and gas assets in Italy, Romania and Tunisia, all of which appear technically and economically feasible and are third party verified. The company is facing financial constraints but has managed to secure funding in respect of Romania and Italy. If imminent farm-out in Tunisia is successful the company will have a three well drilling program in 2019, which should materially support its development plans and catalyse the share price, suggests Breakaway.

Drilling offshore at Dougga in Tunisia is the appraisal of a discovered resource and if successful could trigger a large gas project. Breakaway Research's current valuation of around 9c is based on Tunisian and Romanian activity, but there is substantial upside, to circa 32cps, if Italy is ratified.

The analysts believe the equity market is pricing ADX's resources too cheaply. Farm-out success should bring capital and industry endorsement and drilling activity should underpin value and provide market catalysts in 2019. Buy rating maintained.

This report was published on 29th November 2018.

Target price is $0.09 Current Price is $0.01 Difference: $0.08
If ADX meets the Breakaway Research target it will return approximately 800% (excluding dividends, fees and charges).

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


AGI    AINSWORTH GAME TECHNOLOGY LIMITED

Consumer Services – Overnight Price: $0.72

Canaccord Genuity rates AGI as Sell (5) –

Ainsworth Game Technology has recently downgraded guidance, citing a number of issues in the domestic market including competition, lower demand and approval delays. Guidance for the first half FY19 is down -29% to $8m. Full year guidance has been lowered to "at least $22m", a -44% drop on the previous corresponding period.

Canaccord Genuity has lowered its FY19 EPS forecast by -36% and FY20 by -27% and continues to see earnings risk to the downside.

Trading on a price earnings ratio of 18x and with downside earnings risk, the broker maintains a Sell rating and reduces the target price to $0.75 from $0.94.

This report was published on 25th November 2018.

Target price is $0.75 Current Price is $0.72 Difference: $0.03
If AGI meets the Canaccord Genuity target it will return approximately 4% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Canaccord Genuity forecasts a full year FY19 dividend of 0.00 cents and EPS of 5.00 cents.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 0.00 cents and EPS of 6.80 cents.
 


AHG    AUTOMOTIVE HOLDINGS GROUP LIMITED

Retailing – Overnight Price: $1.63

Moelis rates AHG as Hold (3) –

At its recent trading update Automotive Holdings downgraded FY19 underlying NPAT to be in the range of $56-59m, a -10% downgrade to consensus. The bulk of the downgrade comes from Automotive and is mainly due to deteriorating east coast trading conditions together with no signs of improvement in the WA market.

Moelis believes trading conditions could still get worse especially in NSW and Victoria as the property market slows. The broker has reduced its FY19 to FY21 earnings per share forecasts by -9-11%.

Target price drops to $1.82 to reflect the company's high levels of gearing and the downside risk. Hold rating maintained.

This report was published on 26th November 2018.

Target price is $1.82 Current Price is $1.63 Difference: $0.19
If AHG meets the Moelis target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $1.81, suggesting upside of 11.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY19:

Moelis forecasts a full year FY19 dividend of 12.10 cents and EPS of 16.80 cents.
At the last closing share price the estimated dividend yield is 7.42%.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.0, implying annual growth of -0.1%.

Current consensus DPS estimate is 11.8, implying a prospective dividend yield of 7.2%.
Current consensus EPS estimate suggests the PER is 9.6.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 13.70 cents and EPS of 19.00 cents.
At the last closing share price the estimated dividend yield is 8.40%.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.6, implying annual growth of 15.3%.

Current consensus DPS estimate is 13.7, implying a prospective dividend yield of 8.4%.
Current consensus EPS estimate suggests the PER is 8.3.

Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

AIS    AERIS RESOURCES LIMITED

Materials – Overnight Price: $0.19

Bell Potter rates AIS as Buy (1) –

Bell Potter initiates coverage with a Buy rating and $0.23 target price. Aeris Resources' primary asset is the 100% owned Tritton copper operation in NSW, consisting of two underground mines producing around 1.6mtpa of ore for around 25ktpa copper in concentrate.

Production guidance for FY19 is for 24,400 tonne copper in concentrate at a cash cost of $2.75-2.90/lb. This makes Aeris a relatively high cost producer and as such its financial performance is highly leveraged to the copper price, the broker notes.

Bell Potter believes Aeris is well placed to become the next mid-tier copper producer on the ASX through its Tritton operations and potential for exploration success at the Torrens JV.

This report was published on 30th November 2018.

Target price is $0.23 Current Price is $0.19 Difference: $0.04
If AIS meets the Bell Potter target it will return approximately 21% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Bell Potter forecasts a full year FY19 dividend of 0.00 cents and EPS of 4.30 cents.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 0.00 cents and EPS of 5.20 cents.


APE
    AP EAGERS LIMITED

Retailing – Overnight Price: $6.64

Moelis rates APE as Hold (3) –

At its recent trading update AP Eagers provided softer earnings guidance than Moelis had expected. This was mainly due to lower property sales and a lower dividend from Automotive Holdings ((AHG)), this despite APE increasing its stake in the period.

Management guided to reported pre-tax profit of $126-130m in 2018, lower than that reported in 2017. Management also noted that profit from its core car and truck retailing businesses will be slightly ahead of the previous corresponding period.

Moelis has downgraded its 2018-20 earnings per share forecasts by -3-9%. The broker prefers to sit on the fence at this time until the full impact of the flex commission ban across November and December is known.

Hold rating maintained and target price reduced to $7.75 from $8.20.

This report was published on 26th November 2018.

Target price is $7.75 Current Price is $6.64 Difference: $1.11
If APE meets the Moelis target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $7.65, suggesting upside of 15.2%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY18:

Moelis forecasts a full year FY18 dividend of 36.50 cents and EPS of 44.70 cents.
At the last closing share price the estimated dividend yield is 5.50%.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 48.7, implying annual growth of -3.2%.

Current consensus DPS estimate is 34.7, implying a prospective dividend yield of 5.2%.
Current consensus EPS estimate suggests the PER is 13.6.

Forecast for FY19:

Moelis forecasts a full year FY19 dividend of 36.50 cents and EPS of 42.60 cents.
At the last closing share price the estimated dividend yield is 5.50%.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 49.2, implying annual growth of 1.0%.

Current consensus DPS estimate is 35.1, implying a prospective dividend yield of 5.3%.
Current consensus EPS estimate suggests the PER is 13.5.

Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


AQZ    ALLIANCE AVIATION SERVICES LIMITED

Transportation – Overnight Price: $2.41

Wilsons rates AQZ as Buy (1) –

Alliance Aviation's presentation at the Wilsons Rapid Insights conference in Sydney contained an encouraging trading update, in the broker's opinion. Management commentary was supportive of the broker's observation of reasonably buoyant trading conditions in recent months.

Contract is seeing volume growth and continued tight supply in the market, with three major contracts up for renewal in the remainder of FY19. Wet lease is also seeing volume growth, especially with operators other than Virgin Australia ((VAH)), and improved pricing on certain routes due to tight supply.

At its August result, management guided to an additional nine aircraft going into fleet and the broker understands three have entered fleet to date with a further two expected before the end of FY19.

EPS forecasts have been revised to between -1% to 5% in the short to medium term. Buy rating and $2.28 target retained.

This report was published on 23rd November 2018.

Target price is $2.48 Current Price is $2.41 Difference: $0.07
If AQZ meets the Wilsons target it will return approximately 3% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Wilsons forecasts a full year FY19 dividend of 14.90 cents and EPS of 17.60 cents.
At the last closing share price the estimated dividend yield is 6.18%.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 16.30 cents and EPS of 19.20 cents.
At the last closing share price the estimated dividend yield is 6.76%.


BWP    BWP TRUST

Real Estate – Overnight Price: $3.62

Shaw and Partners rates BWP as Downgrade to Sell from Hold (5) –

Stockbroker Shaw thinks of BWP in terms of "high quality", but it also believes the share price has run too far, hence the decision to downgrade to Sell from Hold.

The analysts acknowledge the balance sheet is "strong", providing management with reinvestment capacity, but they also suggest it will be a challenge to find any "cheap" acquisition opportunities left. Target $2.95 (unchanged).

This report was released on 28th November 2018.

Target price is $2.95 Current Price is $3.62 Difference: minus $0.67 (current price is over target).
If BWP meets the Shaw and Partners target it will return approximately minus 19% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY19:

Shaw and Partners forecasts a full year FY19 dividend of 18.10 cents and EPS of 17.50 cents.
At the last closing share price the estimated dividend yield is 5.00%.

Forecast for FY20:

Shaw and Partners forecasts a full year FY20 dividend of 18.40 cents and EPS of 18.20 cents.
At the last closing share price the estimated dividend yield is 5.08%.


CRN
    CORONADO GLOBAL RESOURCES

Materials – Overnight Price: $3.05

Bell Potter rates CRN as Initiation of coverage with Buy (1) –

Bell Potter initiates coverage with a Buy rating and $4.10 price target. The company is a pure-play metallurgical coal producer supplying customers in the Americas, Europe and Asia with sales of almost 22mt in 2018.

The broker believes the stock will have a high dividend yield, forecasting 16% in 2019. With mature assets and no major growth capex forecast, the broker expects high earnings to free cash flow realisation.

Continued strength in met coal markets is supported by constrained supply and persistent demand, and the broker believes the company's challenge will be to demonstrate to the market the significant increase in Curragh's value since its acquisition in 2017.

This report was published on 29th November 2018.

Target price is $4.10 Current Price is $3.05 Difference: $1.05
If CRN meets the Bell Potter target it will return approximately 34% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY18:

Bell Potter forecasts a full year FY18 dividend of 10.70 cents and EPS of 28.00 cents.
At the last closing share price the estimated dividend yield is 3.51%.

Forecast for FY19:

Bell Potter forecasts a full year FY19 dividend of 49.30 cents and EPS of 39.00 cents.
At the last closing share price the estimated dividend yield is 16.16%.

EML    EML PAYMENTS LIMITED

Software & Services – Overnight Price: $1.50

Bailieu Holst rates EML as Buy (1) –

The company's AGM confirmed the broker's forecasts for FY19, with first time revenue and EBITDA guidance of $82-88m and $26-28m respectively. EML operates a number of corporate gift card/loyalty reward programs for product manufacturers and service providers in Australia and overseas.

EML recently announced a partnership with Apple Pay, with plans to launch the new product in Australia in FY19, Europe in FY20 and the US thereafter. Baillieu Holst expects EML's contract with salary packager McMillan Shakespeare ((MMS)) to be its largest reloadable program in Australia. The company has also signed an agreement with PointsBet to enter the newly legislated sports wagering market in the USA in FY19.

The broker maintains a Buy rating and $2.40 price target.

This report was published on 27th November 2018.

Target price is $2.40 Current Price is $1.50 Difference: $0.9
If EML meets the Bailieu Holst target it will return approximately 60% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Bailieu Holst forecasts a full year FY19 dividend of 0.00 cents and EPS of 4.60 cents.

Forecast for FY20:

Bailieu Holst forecasts a full year FY20 dividend of 0.00 cents and EPS of 8.40 cents.

KMD    KATHMANDU HOLDINGS LIMITED

Retailing – Overnight Price: $2.52

Canaccord Genuity rates KMD as Upgrade to Buy from Hold (1) –

The broker notes Kathmandu has started the year well from a sale perspective, suggesting last year's trend of lower sales growth and better margins due to reduced clearance stock have now normalised.

Management expects first half FY19 NPAT to be up strongly on the previous corresponding period. Canaccord Genuity was forecasting first half NPAT of NZ$15.6m but minor modelling tweaks brings this to NZ$16.1m.

The broker expects the Oboz acquisition to contribute around half of its forecast NZ$10m EBITDA uplift for the year. Retail assumptions are for like-for-like sales growth of 3.8% and a -110bps fall in gross margins.

Rating is upgraded to Buy from Hold and the price target increased to $3.05 from $2.93.

This report was published on 25 November 2018.

Target price is $3.05 Current Price is $2.52 Difference: $0.53
If KMD meets the Canaccord Genuity target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $3.07, suggesting upside of 21.6%(ex-dividends)
The company's fiscal year ends in July.

Forecast for FY19:

Canaccord Genuity forecasts a full year FY19 dividend of 16.62 cents and EPS of 24.01 cents.
At the last closing share price the estimated dividend yield is 6.59%.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.0, implying annual growth of N/A.

Current consensus DPS estimate is 15.1, implying a prospective dividend yield of 6.0%.
Current consensus EPS estimate suggests the PER is 10.5.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 16.62 cents and EPS of 24.93 cents.
At the last closing share price the estimated dividend yield is 6.59%.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.2, implying annual growth of 5.0%.

Current consensus DPS estimate is 16.3, implying a prospective dividend yield of 6.5%.
Current consensus EPS estimate suggests the PER is 10.0.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


MNY    MONEY3 CORPORATION LIMITED

Diversified Financials – Overnight Price: $1.62

Canaccord Genuity rates MNY as Buy (1) –

Money3's AGM confirmed a continuation of growth in auto lending volumes, as the company deploys capital from the $50m funding tranche accessed in May.

First quarter net profit is up 6% on the previous corresponding period and suggests a run rate at the top end of guidance for FY19 profit of $35-36m. The broker has raised its FY19 EPS forecast by 2% and FY20 forecast by 7%.

Canaccord believes the stock was unfairly sold off following the Senate review into consumer lending and notes the company has already outlined plans to exit SACC lending, therefore there should be no additional impact on earnings.

The broker retains a Buy rating and raises the target price to $2.49 from $2.45.

This report was issued on 27th November 2018.

Target price is $2.49 Current Price is $1.62 Difference: $0.87
If MNY meets the Canaccord Genuity target it will return approximately 54% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Canaccord Genuity forecasts a full year FY19 dividend of 10.25 cents and EPS of 19.90 cents.
At the last closing share price the estimated dividend yield is 6.33%.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 12.00 cents and EPS of 21.20 cents.
At the last closing share price the estimated dividend yield is 7.41%.

Shaw and Partners rates MNY as Hold (3) –

Stockbroker Shaw witnessed the company issuing "strong" guidance for the year at the AGM, alongside a positive trading update. None of it was unexpected.

The analysts remain of the view the shares look "cheap". The Hold rating remains in place because there is a Senate enquiry, with the analysts suggesting it's probably best to await outcomes and potential negative market sentiment.

For investors who dare to look through these issues, Shaw seems convinced here lays an opportunity to make a "significant return", once clean air announces itself. Target $2.31.

This report was released on 28th November 2018.

Target price is $2.31 Current Price is $1.62 Difference: $0.69
If MNY meets the Shaw and Partners target it will return approximately 43% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Shaw and Partners forecasts a full year FY19 dividend of 9.00 cents and EPS of 20.20 cents.
At the last closing share price the estimated dividend yield is 5.56%.

Forecast for FY20:

Shaw and Partners forecasts a full year FY20 dividend of 10.80 cents and EPS of 24.20 cents.
At the last closing share price the estimated dividend yield is 6.67%.


MP1
    MEGAPORT LIMITED

Software & Services – Overnight Price: $3.65

Goldman Sachs rates MP1 as Initiation of coverage with Neutral (3) –

Goldman Sachs initiates coverage with a Neutral rating and $4.10 price target. Megaport uses software defined networking to facilitate connectivity for its customers to its Megaport Fabric across 234 data centres globally.

Cisco's Global Cloud index forecasts global data centre traffic to grow 3x by 2021. This strong demand outlook and Megaport's first mover advantage underpins the broker's 3-year 50% revenue CAGR forecast.

Although the broker holds a positive view on the stock the price target offers 6% potential upside, below the median expected for the broker's emerging Australian companies, hence the Neutral rating.

This report was published on 27 November 2018.

Target price is $4.10 Current Price is $3.65 Difference: $0.45
If MP1 meets the Goldman Sachs target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $4.75, suggesting upside of 30.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY19:

Goldman Sachs forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 28.00 cents.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -27.3, implying annual growth of N/A.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY20:

Goldman Sachs forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 22.00 cents.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -24.1, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is N/A.

Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


NBL    NONI B LIMITED

Retailing – Overnight Price: $2.82

Wilsons rates NBL as Buy (1) –

Noni B's trading update on November 22nd revealed that year to date like-for-like sales were down -5% year-on-year, but its $30m cost efficiency program is tracking well ahead of schedule. An additional $20m of cost efficiencies have been identified and will be 50% realised in the second half of FY19.

As a result, the five speciality fashion brands acquired in July 2018 are expected to be EBITDA positive in FY19. Wilsons has raised EBITDA forecasts for FY19 and FY20 by 5.3% and 7.1% respectively.

Difficult trading conditions have continued into the first half of FY19 but the broker believes most of the decline is the result of management trying to reset its brand quickly. This should ultimately result in more favourable trading performances in FY20 and beyond.

The broker retains a Buy rating and $4.66 target price.

This report was published on November 23rd 2018.

Target price is $4.66 Current Price is $2.82 Difference: $1.84
If NBL meets the Wilsons target it will return approximately 65% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Wilsons forecasts a full year FY19 dividend of 12.10 cents and EPS of 15.20 cents.
At the last closing share price the estimated dividend yield is 4.29%.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 24.50 cents and EPS of 41.20 cents.
At the last closing share price the estimated dividend yield is 8.69%.

NXT    NEXTDC LIMITED

Software & Services – Overnight Price: $6.45

Goldman Sachs rates NXT as Initiation of coverage with Buy (1) –

Goldman Sachs initiates coverage with a Buy rating and $8.00 price target. The broker notes the company has invested significant capital in recent years expanding its facilitie to take advantage of the growing cloud migration of big data.

This results in the broker's forecast 3yr EBITDA CAGR of 43%, the highest in its coverage. The broker's FY19 sales/EBITDA forecasts are 4%/8% above the midpoint of management's guidance, which has been historically conservative.

Goldman Sachs' target price implies a 34% upside potential on the current share price.

This report was published on 27th November 2018.

Target price is $8.00 Current Price is $6.45 Difference: $1.55
If NXT meets the Goldman Sachs target it will return approximately 24% (excluding dividends, fees and charges).
Current consensus price target is $7.77, suggesting upside of 20.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY19:

Goldman Sachs forecasts a full year FY19 dividend of 0.00 cents and EPS of 0.00 cents.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -1.3, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY20:

Goldman Sachs forecasts a full year FY20 dividend of 0.00 cents and EPS of 0.05 cents.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 0.6, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 1075.0.

Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


RWC    RELIANCE WORLDWIDE CORPORATION LIMITED

Capital Goods – Overnight Price: $4.46

Goldman Sachs rates RWC as Initiation of coverage with Buy (1) –

Goldman Sachs initiates coverage with a Buy rating and $5.40 price target. The company is the world's largest manufacturer of push-to-connect plumbing fittings and currently has an 11% share of the US market.

Since its peak in August 2018, the company's share price is down -27% versus a -9% decline for the ASX200. The broker attributes this to slowing housing activity in the company's three key geographies.

However, the broker believes the current share price weakness offers investors positively skewed risk-reward given the products have limited exposure to new housing, particularly in the US where demand is driven by repair and maintenance, and accelerated expansion in Europe through the acquisition of John Guest.

This report was published on November 29th 2018.

Target price is $5.40 Current Price is $4.46 Difference: $0.94
If RWC meets the Goldman Sachs target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $5.85, suggesting upside of 31.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY19:

Goldman Sachs forecasts a full year FY19 dividend of 9.00 cents and EPS of 22.00 cents.
At the last closing share price the estimated dividend yield is 2.02%.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 22.2, implying annual growth of 80.5%.
Current consensus DPS estimate is 10.7, implying a prospective dividend yield of 2.4%.
Current consensus EPS estimate suggests the PER is 20.1.

Forecast for FY20:

Goldman Sachs forecasts a full year FY20 dividend of 10.00 cents and EPS of 25.00 cents.
At the last closing share price the estimated dividend yield is 2.24%.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.8, implying annual growth of 16.2%.
Current consensus DPS estimate is 12.3, implying a prospective dividend yield of 2.8%.
Current consensus EPS estimate suggests the PER is 17.3.

Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


SEN    SENETAS CORPORATION LIMITED

Technology Hardware & Equipment – Overnight Price: $0.09

Bell Potter rates SEN as Downgrade to Hold from Buy (3) –

Senetas Corp's trading update was mixed, in the broker's view, with the key positive being demand for the company's flagship product, a 100Ggps encryptor, is ahead of expectations. The key negative was first half FY19 earnings are expected to be below the previous corresponding period.

Management also noted a large customer is no longer purchasing Senetas encryptors. No formal FY19 guidance was forthcoming but a further update would follow the December sales results.

Bell Potter has reduced FY19, FY20 and FY21 EPS forecasts by -43%, -22% and -13% respectively.

Rating is downgraded to Hold from Buy and the target price reduced to $0.10 from $0.13.

This report was published on 29th November 2018.

Target price is $0.10 Current Price is $0.09 Difference: $0.01
If SEN meets the Bell Potter target it will return approximately 11% (excluding dividends, fees and charges).

Forecast for FY19:

Bell Potter forecasts a full year FY19 dividend of 1.00 cents and EPS of 3.00 cents.
At the last closing share price the estimated dividend yield is 11.11%.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 1.00 cents and EPS of 5.00 cents.
At the last closing share price the estimated dividend yield is 11.11%.


TLX
    TELIX PHARMACEUTICALS LIMITED

Pharmaceuticals, Biotechnology & Life Sciences – Overnight Price: $0.64

Wilsons rates TLX as Buy (1) –

The company has acquired its Belgian partner, ANMI, giving it complete control of prostate cancer imaging product illumet. Commercial plans in the US are well advanced, where good initial sales are anticipated, and Telix has flagged further corporate activity for this asset in Europe and Rest-of-World.

Wilsons believes investors have a medium-term earnings story and the prospect of a transformative US FDA approval next year with illumet, together with Telix's activities across renal cancer, glioblastoma and the 'flagship' product TLX591 for prostate cancer.

Further commercial partnerships and other corporate activity is likely in 2019. Buy rating and $1.89 target price retained.

This report was published on 27th November 2018.

Target price is $1.89 Current Price is $0.64 Difference: $1.25
If TLX meets the Wilsons target it will return approximately 195% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY18:

Wilsons forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 6.20 cents.

Forecast for FY19:

Wilsons forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 9.80 cents.

VRL    VILLAGE ROADSHOW LIMITED

Media – Overnight Price: $2.42

Bailieu Holst rates VRL as Buy (1) –

The broker found the recent trading update at the company's AGM the "most encouraging across the board update for many periods", despite lacking firm numbers. Gold Coast theme parks were cited as returning to a positive trajectory in FY19, Cinema Exhibition has started FY19 well as has Film Distribution.

Baillieu Holst has upgraded FY19 and FY20 EBITDA forecasts by 4% and 3% respectively, mainly driven by Theme Parks. The share price has enjoyed a strong rally from the deeply discounted capital raising in July 2018, The broker continues to balance the period of sustained under-performance against the current improvement in trading commentary. The broker also notes investors will be seeking clarity on the resumption of dividends.

The broker retains a Buy rating and $3.00 target price.

This report was published on 26th November 2018.

Target price is $3.00 Current Price is $2.42 Difference: $0.58
If VRL meets the Bailieu Holst target it will return approximately 24% (excluding dividends, fees and charges).
Current consensus price target is $2.30, suggesting downside of -4.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY19:

Bailieu Holst forecasts a full year FY19 dividend of 4.00 cents and EPS of 12.80 cents.
At the last closing share price the estimated dividend yield is 1.65%.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.5, implying annual growth of -86.3%.
Current consensus DPS estimate is 4.8, implying a prospective dividend yield of 2.0%.
Current consensus EPS estimate suggests the PER is 25.5.

Forecast for FY20:

Bailieu Holst forecasts a full year FY20 dividend of 11.00 cents and EPS of 18.00 cents.
At the last closing share price the estimated dividend yield is 4.55%.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 13.3, implying annual growth of 40.0%.
Current consensus DPS estimate is 8.5, implying a prospective dividend yield of 3.5%.
Current consensus EPS estimate suggests the PER is 18.2.

Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


Z1P    ZIP CO LIMITED

Diversified Financials – Overnight Price: $1.04

Shaw and Partners rates Z1P as Buy (1) –

Shaw and Partners notes management has announced Zip Co has hit a milestone of $100m in monthly transaction volumes in November, while also signing up Bunnings ((WES)) as a customer, to go live in December.

FY19 is shaping up to become "considerably" stronger than FY18, observe the analysts. On the back of securing Tiger, Super Retail Group ((SUL)), Kogan ((KGN)) and Officeworks, among others, the analysts see a rosy future ahead, declaring this company "best of breed" in its sector.

It is the broker's view the competition largely consists of lower quality peers including Openpay, PartPay, FuturePay, Ourpay, Oxipay, BrightePay, all offering a homogenous platform with little distinction, whereas Zip Co is seen developing "a long term disruption strategy".

Buy rating retained. Target $1.60. This report was released on 3rd December 2018.

Target price is $1.60 Current Price is $1.04 Difference: $0.56
If Z1P meets the Shaw and Partners target it will return approximately 54% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Shaw and Partners forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 0.70 cents.

Forecast for FY20:

Shaw and Partners forecasts a full year FY20 dividend of 0.00 cents and EPS of 1.10 cents.

Disclaimer:
The content of this information does in no way reflect the opinions of FNArena, or of its journalists. In fact we don't have any opinion about the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface. This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FNArena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.

As part of emerging new trends overseas, The Australian Broker Call *Extra* Edition also includes providers of sponsored research. Readers should bear in mind, sponsored research, while not necessarily of lower quality, has the embedded complication that the company that is the subject of the research has paid for this research. Providers of sponsored research that can potentially be included in this Report are Breakaway Research, Edison Investment Research, NDF Research, Pitt Street Research, and TMT Analytics.

Decisions about inclusions in this Report are made independently of the providers of stock market research and at full discretion of the team of journalists responsible for content at FNArena. Inclusion does not equal endorsement, in any way, shape or form. This Report is provided for informational purposes only.

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