Australian Broker Call *Extra* Edition – Jul 08, 2019

Daily Market Reports | Jul 08 2019

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.

?COMPANIES DISCUSSED IN THIS ISSUE

Click on a symbol for fast access.
The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)

AHQ   ALU   CAJ   EPD   EXP   HUB   MCR   NEC   NUF   NWL (2)   PBH   REH   RHP   SHV   SSM   SWM  

AHQ    ALLEGIANCE COAL LTD

Coal - Overnight Price: $0.07

Bell Potter rates ((AHQ)) as Initiation of coverage with Buy (1) -

Bell Potter initiates coverage of Allegiance Coal with a Buy, high risk, rating.

The broker says the company is undervalued  and expects this discount to unwind as the company completes permitting and brings the Tenas semi-soft coking coal project in British Columbia into production. 

The mine has a 22-year life and Japan's giant coal company Itochu is about to increase its stake from 10% to 20% through an investment agreement. The broker says there is potential to leverage the start-up into a larger project.

The Buy recommendation is supported by the broker's positive view on metallurgical coal prices, but its full reliance on the speculative project accounts for the high-risk rating.

This report was published on June 27, 2019.

Target price is $0.15 Current Price is $0.07 Difference: $0.08
If AHQ meets the Bell Potter target it will return approximately 114% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

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

ALU    ALTIUM LIMITED

Hardware & Equipment - Overnight Price: $35.47

Bell Potter rates ((ALU)) as Hold (3) -

Bell Potter believes Altium is on track to achieve and possible exceed its ambitious $200m revenue target for FY20. 

It also expects the company's margins will be well ahead of target.

The broker makes no changes to forecasts, but the target price rises 7% to $40, a 14% premium to the share price.

Buy rating retained.

This report was published on July 4, 2019.

Target price is $40.00 Current Price is $35.47 Difference: $4.53
If ALU meets the Bell Potter target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $29.50, suggesting downside of -16.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY19:

Bell Potter forecasts a full year FY19 dividend of 33.00 cents and EPS of 41.20 cents.
At the last closing share price the estimated dividend yield is 0.93%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 86.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 41.7, implying annual growth of 44.5%.
Current consensus DPS estimate is 35.5, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 85.1.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 39.00 cents and EPS of 51.70 cents.
At the last closing share price the estimated dividend yield is 1.10%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 68.61.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 50.3, implying annual growth of 20.6%.
Current consensus DPS estimate is 40.5, implying a prospective dividend yield of 1.1%.
Current consensus EPS estimate suggests the PER is 70.5.

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

CAJ    CAPITOL HEALTH LIMITED

Healthcare services - Overnight Price: $0.25

Shaw and Partners rates ((CAJ)) as Buy (1) -

Capitol Health has confirmed it will report in line with consensus and announced that the managing director Andrew Harrison will take a non-executive director position in the company and hand over the reins to chief operating officer Justin Walter.

The broker believes that following Harrison's transformation, Walter will be able to focus on building organic growth.

In terms of reporting, Shaw calculates that Capitol has delivered a 7% improvement in the run rate from the first half to the second half of 2019, and will report slightly subdued margins in the second-half of 17.4%.

The company reports improved trading conditions in the second half, which Shaw expects will drive an improved result in FY20. Shaw notes the company trades -30% below peers and expects a rerating. Buy reiterated. Target price steady at 27c.

This report was published on July 2, 2019. 

Target price is $0.27 Current Price is $0.25 Difference: $0.02
If CAJ meets the Shaw and Partners target it will return approximately 8% (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 1.10 cents and EPS of 1.50 cents.
At the last closing share price the estimated dividend yield is 4.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.67.

Forecast for FY20:

Shaw and Partners forecasts a full year FY20 dividend of 1.10 cents and EPS of 1.70 cents.
At the last closing share price the estimated dividend yield is 4.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.71.

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


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