Australian Broker Call *Extra* Edition – Sep 09, 2019

Daily Market Reports | Sep 09 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

Overnight prices mentioned are from September 6, 2019.

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)

APT (2)   ASL (2)   ATU   BGA   BTH   CUV   MSB   MTO   PAC   RDC   SNL   SRG   ST1  

APT    AFTERPAY TOUCH GROUP LIMITED

Business & Consumer Credit - Overnight Price: $33.28

Bell Potter rates ((APT)) as Buy (1) -

Afterpay Touch's FY19 result outpaced Bell Potter's estimates. 

While the broker notes short-term earnings are hard to predict, it remains confident in the company's trajectory, citing its dominance in high-value customer areas, rapid growth across key markets, and the surpassing of customer milestones in both the US and the UK.

Afterpay has announced a partnership with VISA in the United States, the pair committing to develop a range of product, experience and efficiency solutions. The broker upgrades earnings-per-share estimates 7.2%, 4.2% and 8.2% across FY20, FY21 and FY22. Target price rises to $38.41 from $31.76. Buy rating retained.

This report was published on August 28, 2019.

Target price is $38.41 Current Price is $33.28 Difference: $5.13
If APT meets the Bell Potter target it will return approximately 15% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 0.00 cents and EPS of 13.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 246.52.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of 29.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 114.76.

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


Wilsons rates ((APT)) as Hold (3) -

Afterpay Touch's FY19 results met Wilsons' estimates, thanks to powerful US growth, positive signs from Britain, and stellar growth in Australia and New Zealand in-store numbers, plus strong talent acquisition. The company also managed to control net transaction losses.

Afterpay has announced a collaboration with Visa but details are thin on the ground, the analysts complain. While Australia and New Zealand in-store numbers were strong, online growth slowed to 8% thanks to seasonal headwinds.

The broker says the company's trading momentum suggests investors should at least be market weight but notes the valuation is aggressive. Hold rating retained on valuation grounds. Target price rises to $27.47.

This report was published on August 29, 2019.

Target price is $27.47 Current Price is $33.28 Difference: minus $5.81 (current price is over target).
If APT meets the Wilsons target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 0.00 cents and EPS of 5.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 627.92.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of 21.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 154.79.

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

ASL    AUSDRILL LIMITED

Mining Sector Contracting - Overnight Price: $2.17

Moelis rates ((ASL)) as Upgrade to Buy (1) -

Ausdrill's FY19 result beat Moelis's estimates by 5% and guidance outpaced by 6%. Underground operations delivered a solid performance, posting a 2% uptick in second-half margins to 16%, from 14% in the first half. 

African operations proved challenging but the company forecasts an improvement in FY20.? Moelis expects -$295m in capital expenditure will continue to constrain free cash flow, despite improved cash conversion (89% from 66% in FY18).

The broker upgrades FY20 forecasts 9% to meet company guidance. Rating upgraded to Buy and target price rises to $2.33 from $1.82.

This report was published on August 30, 2019.

Target price is $2.33 Current Price is $2.17 Difference: $0.16
If ASL meets the Moelis target it will return approximately 7% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 8.00 cents and EPS of 20.40 cents.
At the last closing share price the estimated dividend yield is 3.69%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.64.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 9.20 cents and EPS of 23.00 cents.
At the last closing share price the estimated dividend yield is 4.24%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.43.

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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