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Australian Broker Call *Extra* Edition – Oct 14, 2019

Daily Market Reports | Oct 14 2019

This story features A2 MILK COMPANY LIMITED, and other companies. For more info SHARE ANALYSIS: A2M

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)

A2M   AMA   AQR   BTH   BVS   CCX (3)   EQT   JAN   KGN   NXS   RDY   SLK (2)   SOL   SSM   VVR  

A2M    THE A2 MILK COMPANY LIMITED

Dairy – Overnight Price: $12.45

Bell Potter rates ((A2M)) as Upgrade to Hold from Sell (3) –

Bell Potter has upgraded to Hold from Sell with a slightly higher share price target of $12.35 (up 10c) as the broker believes the share market has come to terms with the change in a2 Milk's investment profile, and this has now been well and truly priced into the share price.

The broker believes ongoing investment in branding and staff (particularly in China) will remain for the foreseeable future, but this is now better understood by investors. Equally noteworthy, Bell Potter is projecting the company will start paying dividends to shareholders from FY21 onwards.

This report was released on October 14, 2019.

Target price is $12.35 Current Price is $12.45 Difference: minus $0.1 (current price is over target).
If A2M meets the Bell Potter target it will return approximately minus 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $13.59, suggesting upside of 9.2%(ex-dividends)
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 40.13 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.03.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 43.4, 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 28.7.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 4.73 cents and EPS of 46.09 cents.
At the last closing share price the estimated dividend yield is 0.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.01.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 53.9, implying annual growth of 24.2%.
Current consensus DPS estimate is 4.7, implying a prospective dividend yield of 0.4%.
Current consensus EPS estimate suggests the PER is 23.1.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

AMA    AMA GROUP LIMITED

Automobiles & Components – Overnight Price: $1.28

Moelis rates ((AMA)) as Buy (1) –

AMA Group will buy 90% of smash repairer Capital SMART for $420m and 100% of automotive parts recycler, ACM Parts, for $20m.

The company plans a $216m equity raising at $1.15 a share, $199m in new debt and a $54m advance from working capital.

Moelis says the deal is highly synergistic and 2% earnings accretive in both FY20 and FY21. The broker expects ACM Parts to be in breakeven in FY20 and generating $2m in earnings before interest, tax, depreciation and amortisation in FY21.

While pricey, the broker believes the acquisition will strengthen the company's position as the dominant player in Australia and maintain cost competitiveness. The broker increases FY20 earnings estimates 22%. Buy rating retained. Revised target price is $1.61.

This report was published on October 2, 2019.

Target price is $1.61 Current Price is $1.28 Difference: $0.33
If AMA meets the Moelis target it will return approximately 26% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 2.80 cents and EPS of 5.00 cents.
At the last closing share price the estimated dividend yield is 2.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.60.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 3.50 cents and EPS of 7.40 cents.
At the last closing share price the estimated dividend yield is 2.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.30.

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

AQR    APN CONVENIENCE RETAIL REIT

REITs – Overnight Price: $3.43

Moelis rates ((AQR)) as Buy (1) –

Moelis examines the impact of impending service station sales by Caltex and 7-Eleven on APN Convenience Retail REIT.

Caltex is pitching 25 sites to developers across NSW, Victoria, WA and Queensland for high-value corner land-holdings in city locations (expected to fetch $120m in total). 7-Eleven is hoping to sell 15 service stations through a Burgess Rawson live-linked auction in Sydney and Melbourne this month for a total of $70m.

Strong pricing is expected for both portfolios, reflecting investor demand for secure rentals from blue-chip tenants.? Moelis notes APN Convenience Retail REIT is trading at a discount to peers and expects the disparity to narrow over time.

Hold rating retained. Target price is $3.44.

This report was published on October 9, 2019.

Target price is $3.44 Current Price is $3.43 Difference: $0.01
If AQR meets the Moelis target it will return approximately 0% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 21.80 cents and EPS of 22.40 cents.
At the last closing share price the estimated dividend yield is 6.36%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.31.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 22.50 cents and EPS of 23.10 cents.
At the last closing share price the estimated dividend yield is 6.56%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.85.

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

BTH    BIGTINCAN HOLDINGS LIMITED

Cloud services – Overnight Price: $0.55

Canaccord Genuity rates ((BTH)) as Buy (1) –

Bigtincan Holdings will buy leading US-based document automation company XINN for a maximum US$12m, comprising US$7.5m upfront and earn-out potential of US$4.5m. XINN's software is mainly used by global and financial services firms.

Cannacord Genuity expects the deal will round out the company's sector representation, after a series of acquisitions, and notes the company's strong organic revenue growth guidance of between 30% to 40%. 

The company also announced a $20m institutional placement of at 54c a share to boost its balance sheet and fund further accretive acquisitions, and investment in sales and marketing and research and development.

The broker expects a Gartner report endorsing Bigtincan Holdings as the only sales enablement vendor to be endorsed across all key functionality metrics relative to its larger competitors should boost the company's tender chances.

 The broker upgrades EPS estimates 8%, 12% and 12% for FY20/FY21 and FY22. Target price is steady at 80c. Buy rating retained.

This report was published on October 9, 2019.

Target price is $0.80 Current Price is $0.55 Difference: $0.25
If BTH meets the Canaccord Genuity target it will return approximately 45% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 55.00.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 550.00.

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

BVS    BRAVURA SOLUTIONS LIMITED

Wealth Management & Investments – Overnight Price: $3.83

Wilsons rates ((BVS)) as Buy (1) –

Wilsons believes Bravura Solutions' market thrashing has been overplayed and believes the 12-month to 36-month outlook is positive.

The broker notes the FY21 earnings multiple doesn't reflect the company's deep functionality, recurring revenue and structural growth drivers.

Wilsons says the UK pipeline is solid and more deals are in the offing (Sonata deals are still to come), both in the UK and in the Australia super space. The broker is particularly fond of the company's strong margin improvement (to 19% in FY19 from 12.8% in FY16) and expects the company to breach 25% as maintenance contracts are added.

Operational leverage is strong so, while earnings are likely to be skewed to the second half of FY20, the present valuation appears undemanding relative to peers. The broker retains an Overweight rating. Target price falls to $5.34.

This report was published on October 10, 2019.

Target price is $5.34 Current Price is $3.83 Difference: $1.51
If BVS meets the Wilsons target it will return approximately 39% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 11.30 cents and EPS of 16.10 cents.
At the last closing share price the estimated dividend yield is 2.95%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.79.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 13.40 cents and EPS of 19.20 cents.
At the last closing share price the estimated dividend yield is 3.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.95.

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

CCX    CITY CHIC COLLECTIVE LTD

Apparel & Footwear – Overnight Price: $2.82

Bell Potter rates ((CCX)) as Buy (1) –

City Chic will buy the e-commerce assets of US-based women's plus-size retailer, Avenue Stores, for US416.5m.

Bell Potter estimates the deal will triple the company's US sales to $100m or 45% of group sales and expects the deal to be highly accretive.

The acquisition fits well with City Chic's strategy of expanding its segments (and US market share) and offers immediate leading exposure to the US value segment. 

E-commerce assets naturally yield access to Avenue's customer data base, opening the path to cross sales. Supply chain and purchasing synergies are also expected to feature.

The broker increases FY20-FY22 EPS 10%, 16% and 17% and the target price rises to $3.10 from $2.45. Buy rating retained.

This report was published on October 8, 2019.

Target price is $3.10 Current Price is $2.82 Difference: $0.28
If CCX meets the Bell Potter target it will return approximately 10% (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 7.70 cents and EPS of 10.30 cents.
At the last closing share price the estimated dividend yield is 2.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.38.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 9.70 cents and EPS of 12.90 cents.
At the last closing share price the estimated dividend yield is 3.44%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.86.

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


Canaccord Genuity rates ((CCX)) as Buy (1) –

Cannacord Genuity increases the target price for City Chic Collective after the company announced it would purchase the e-commerce assets of US-based Avenue Stores (the Avenue website was receiving monthly unique visitors of circa 1.6m).

The broker says the deal will be transformative for City Chic, boosting its US-presence, broadening its segment exposure to the women's plus-size market, and increasing the percentage of its online sales to 60% by FY21. 

Cannacord Genuity says the deal should offer several synergies, helping it create a more customer-centric operating model, deliver cross-sell opportunities, gain better buying discipline, and access a more efficient supply chain.

The deal is seriously accretive to boot and the broker upgrades EPS 8% for FY20 and 24% for FY21. Target price shoots to $3.50 a share from $2.25. Buy rating retained.

This report was published on October 8, 2019.

Target price is $3.50 Current Price is $2.82 Difference: $0.68
If CCX meets the Canaccord Genuity target it will return approximately 24% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 8.00 cents and EPS of 10.00 cents.
At the last closing share price the estimated dividend yield is 2.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.20.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 10.00 cents and EPS of 14.00 cents.
At the last closing share price the estimated dividend yield is 3.55%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.14.

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


E.L. & C Baillieu rates ((CCX)) as Downgrade to Hold from Buy (3) –

EL&C Baillieu downgrades City Chic Collective given the recent share-price run.

Meanwhile, the retailer has confirmed it has bought the e-commerce assets of US specialty retailer, Avenue, for US$16.5m.

The broker says, assuming the company can retain 50% of Avenue's sales, the acquisition could boost FY21 earnings per share by 16%, and raises the target price to $2.66 from $2.20.

Originally a women's plus-size retailer, Avenue entered Chapter 11 bankruptcy in August, and City Chic acquired the e-commerce assets for a combination of cash and debt.

The broker says the move is consistent with the company's strategy of growing its US footprint through customer acquisition and expansion into new segments. The plus-size market is estimated at US$25bn.

This report was published on October 9, 2019.

Target price is $2.66 Current Price is $2.82 Difference: minus $0.16 (current price is over target).
If CCX meets the E.L. & C Baillieu target it will return approximately minus 6% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY20:

E.L. & C Baillieu forecasts a full year FY20 dividend of 8.50 cents and EPS of 10.50 cents.
At the last closing share price the estimated dividend yield is 3.01%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.86.

Forecast for FY21:

E.L. & C Baillieu forecasts a full year FY21 dividend of 10.00 cents and EPS of 12.40 cents.
At the last closing share price the estimated dividend yield is 3.55%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.74.

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

EQT    EQUITY TRUSTEES LIMITED

Diversified Financials – Overnight Price: $31.83

Wilsons rates ((EQT)) as Buy (1) –

Deals are starting to flow through the EQT Holdings pipeline, the company announcing it will assume Responsible Entity and Registrable Superannuation Entity functions for $15bn of Colonial Mutal Life Assuance Society's assets, taking EQT's funds under managemet to more than $100bn.

The big bonus is that the transaction allows EQT Holdings to build a scaleable low-cost Superannuation Trustee Office, yielding strong margin growth on new business.

Earnings from the deal will be skewed to the second half. Wilsons increases the target price to $34.61, expecting a total shareholder return of 18%. Buy rating retained, the company remaining one of Wilson's Conviction stocks. 

This report was published on October 3, 2019.

Target price is $34.61 Current Price is $31.83 Difference: $2.78
If EQT meets the Wilsons target it will return approximately 9% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Wilsons forecasts a full year FY19 dividend of 90.00 cents and EPS of 107.90 cents.
At the last closing share price the estimated dividend yield is 2.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.50.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 99.00 cents and EPS of 118.50 cents.
At the last closing share price the estimated dividend yield is 3.11%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.86.

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

JAN    JANISON EDUCATION GROUP LIMITED

Education & Tuition – Overnight Price: $0.31

Bell Potter rates ((JAN)) as Buy (1) –

The company has now signed a contract to deliver the PISA-based test for schools to the USA, with Brazil and Russia having signed up earlier already. Bell Potter highlights the enormous revenue opportunity that is opening up.

The broker's forecasts assume some level of organic growth, but remain conservative in light of the potential that appears to be opening up. The analysts are awaiting signs that management is able to leverage scale and intellectual property into higher margins, which would trigger a re-rating in the share market, says Bell Potter.

For now, Buy rating retained alongside a price target of 40c.

This report was released on 14 October 2019.

Target price is $0.40 Current Price is $0.31 Difference: $0.09
If JAN meets the Bell Potter target it will return approximately 29% (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 0.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 51.67.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of 0.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 34.44.

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

KGN    KOGAN.COM LTD

Retailing – Overnight Price: $6.02

E.L. & C Baillieu rates ((KGN)) as Initiation of coverage with Buy (1) –

Baillieu has initiated coverage of Kogan with a maiden price target of $7.18 alongside a Buy rating. The broker sees the company as well-positioned to leverage its private-label offer on top of remaining opportunities to expand the product range.

The price position and depth of Kogan's private-label range will continue to support strong revenue growth, surmises the broker, noting FY20 should see a number of vertical businesses launching.

Baillieu's positive view is underpinned by growth forecasts that sit above market consensus. The broker sees further upside potential.

This report was released on October 11, 2019.

Target price is $7.18 Current Price is $6.02 Difference: $1.16
If KGN meets the E.L. & C Baillieu target it will return approximately 19% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

E.L. & C Baillieu forecasts a full year FY20 dividend of 18.60 cents and EPS of 24.80 cents.
At the last closing share price the estimated dividend yield is 3.09%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.27.

Forecast for FY21:

E.L. & C Baillieu forecasts a full year FY21 dividend of 21.80 cents and EPS of 29.10 cents.
At the last closing share price the estimated dividend yield is 3.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.69.

Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

NXS    NEXT SCIENCE LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $2.61

Wilsons rates ((NXS)) as Initiation of coverage with Buy (1) –

Wilsons initiates coverage of Next Science, which sells wound care, orthopaedic and surgical wash products, with an Overweight rating.

Next Science owns a scaleable proprietary anti biofilm platform – chemical compositions that disrupt and remove biofilms known to have a negative impact on clinical outcomes.

The technology is targeted at high unmet-need therapeutic areas and Next Science has signed distribution agreements with recognised partners, including 3M, Zimmer, Biomet and Grace Medical. 

From here, the broker says the company's success will hinge on the commercial execution capabilities of its partners, and expects rapid growth in product and partnerships. Target price kicks of at $3.46.

This report was published on October 1, 2019.

Target price is $3.46 Current Price is $2.61 Difference: $0.85
If NXS meets the Wilsons target it will return approximately 33% (excluding dividends, fees and charges).

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 4.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 60.70.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 2.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 100.38.

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

RDY    READYTECH HOLDINGS LTD

Software & Services – Overnight Price: $1.93

Wilsons rates ((RDY)) as Buy (1) –

ReadyTech remains firmly on Wilsons' Conviction Insights list with an Overweight rating and a $2.50 price target (up from $2.38 in September). The analysts note the share price is gradually re-rating.

The company was able to announce two M&A deals, labeled "sound", which further strengthens its employment software offering, in the analysts' view.

Wilsons observes the company continues trading in line with prospectus forecasts, as also witnessed through the release of the Q1 update. Earnings estimates have risen.

This report was released on October 11, 2019.

Target price is $2.50 Current Price is $1.93 Difference: $0.57
If RDY meets the Wilsons target it will return approximately 30% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 3.10 cents and EPS of 10.40 cents.
At the last closing share price the estimated dividend yield is 1.61%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.56.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 6.10 cents and EPS of 12.70 cents.
At the last closing share price the estimated dividend yield is 3.16%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.20.

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

SLK    SEALINK TRAVEL GROUP LIMITED

Travel, Leisure & Tourism – Overnight Price: $5.01

E.L. & C Baillieu rates ((SLK)) as Upgrade to Buy (1) –

EL&C Baillieu has upgraded SeaLink Travel Group to a Buy from Hold after the company announced it would buy Australia's largest private metropolitan bus operator Transit Systems Group (TSG) for $635m at an acquisition multiple of 8.2x enterprise value pre-synergies. TSG also has operations in London and Singapore.

The deal entails an $269m upfront in SeaLink Travel scrip at $3.69 a share, which will take TSG's stake in SeaLink to 33%, with a two-year escrow; $118m in cash and $221m in debt.

The company will fund the transaction through a $65m institutional placement and an $89m entitlement offer, and the company will refinance with a new debt facility. The dividend payout ratio of 50%-70% will be maintained.

The broker notes all TSG's contracts are long-term with staggered maturities and have no fare-box risk, increasing SeaLink's more stable contract revenues to 83% from 34%, while the less predictable tourism revenue falls 67% to only 15% of revenue.

The broker upgrades FY21 EPS forecasts 15%. Target price rises to $5.20 from $3.75.

This report was published on October 9, 2019.

Target price is $5.20 Current Price is $5.01 Difference: $0.19
If SLK meets the E.L. & C Baillieu target it will return approximately 4% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

E.L. & C Baillieu forecasts a full year FY20 dividend of 15.00 cents and EPS of 14.70 cents.
At the last closing share price the estimated dividend yield is 2.99%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 34.08.

Forecast for FY21:

E.L. & C Baillieu forecasts a full year FY21 dividend of 20.50 cents and EPS of 33.50 cents.
At the last closing share price the estimated dividend yield is 4.09%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.96.

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


Taylor Collison rates ((SLK)) as Outperform (2) –

Taylor Collison upgrades SeaLink Travel Group to Outperform after the company announced it would purchase Australia's largest privately owned metropolitan bus operator Transit Systems Group (TSG) for $635m plus earn-out of up to $63m.

SeaLink will pay $598m upfront through its scrip, with escrow, $329m in cash, and assumed debt. The deal implies an 8.2x earning acquisition multiple (pre-synergies). The broker says the acquisition is roughly 30% accretive, and gearing will approach 2.5x after settlement – the high end of the comfort zone.

TSG's chief executive will take the helm of SeaLink, replacing Jeff Ellison, and has taken a 100% scrip consideration. The broker expects SeaLink to trade at 9.5x FY21 earnings, thanks to geographically diverse earnings and strong margins. Target price rises to $4.50 a share.

This report was published on October 9, 2019.

Target price is $4.50 Current Price is $5.01 Difference: minus $0.51 (current price is over target).
If SLK meets the Taylor Collison target it will return approximately minus 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY20:

Taylor Collison forecasts a full year FY20 dividend of 17.00 cents and EPS of 27.90 cents.
At the last closing share price the estimated dividend yield is 3.39%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.96.

Forecast for FY21:

Taylor Collison forecasts a full year FY21 dividend of 21.00 cents and EPS of 32.30 cents.
At the last closing share price the estimated dividend yield is 4.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.51.

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

SOL    WASHINGTON H SOUL PATTINSON & COMPANY LIMITED

Diversified Financials – Overnight Price: $22.03

Shaw and Partners rates ((SOL)) as Initiation of coverage with Buy (1) –

Shaw and Partners initiates coverage on Washington H Soul Pattinson & Company with a Buy recommendation and Medium risk rating. The broker regales investors with the company's superlative track record and strong portfolio, which includes Brickworks ((BKW)) and New Hope ((NHC)).

The stock is seen offering a total shareholder return of 31%, is comfortably geared and has a superb track record of paying increased dividends. Meanwhile, Shaw and Partners spies a catalyst in the start-up Round Oak Minerals business, which is on track to turn a profit after two years of losses. 

The broker also expects the Federal Court will approve the TPG Telecom ((TPM)) and Vodafone merger prior to Christmas. The target price kicks of at $26.00 a share.

This report was published on October 4, 2010.

Target price is $26.00 Current Price is $22.03 Difference: $3.97
If SOL meets the Shaw and Partners target it will return approximately 18% (excluding dividends, fees and charges).

Forecast for FY20:

Shaw and Partners forecasts a full year FY20 dividend of 60.00 cents and EPS of 129.50 cents.
At the last closing share price the estimated dividend yield is 2.72%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.01.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 62.00 cents and EPS of 134.60 cents.
At the last closing share price the estimated dividend yield is 2.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.37.

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

SSM    SERVICE STREAM LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $2.60

E.L. & C Baillieu rates ((SSM)) as Upgrade to Buy from Hold (1) –

Stockbroker Baillieu has upgraded to Buy from Hold following the company securing multi-year Wireless Design and Construct (D&C) contracts with all three wireless carrier network operators in Australia. The move was equally triggered by a weakening share price.

Utilities (interesting because of aging infrastructure) represent some 45% of group revenues these days, the stockbroker commenting this is further evidence of a diversified services provider. The present valuation discount of -24% compares with -19% historically, on average. Target lifts to $3.

This report was released on October 14, 2019.

Target price is $3.00 Current Price is $2.60 Difference: $0.4
If SSM meets the E.L. & C Baillieu target it will return approximately 15% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

E.L. & C Baillieu forecasts a full year FY20 dividend of 10.00 cents and EPS of 16.00 cents.
At the last closing share price the estimated dividend yield is 3.85%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.25.

Forecast for FY21:

E.L. & C Baillieu forecasts a full year FY21 dividend of 10.50 cents and EPS of 16.70 cents.
At the last closing share price the estimated dividend yield is 4.04%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.57.

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

VVR    VIVA ENERGY REIT

REITs – Overnight Price: $2.97

Moelis rates ((VVR)) as Hold (3) –

Moelis examines the impact of impending service station sales by Caltex and 7-Eleven on Viva Energy REIT.

Caltex is pitching 25 sites to developers across NSW, Victoria, WA and Queensland for high-value corner land-holdings in city locations (expected to fetch $120m in total). 7-Eleven is hoping to sell 15 service stations through a Burgess Rawson live-linked auctionin Sydney and Melbourne this month for a total of $70m.

Strong pricing is expected for both portfolios, reflecting investor demand for secure rentals from blue-chip tenants.

Moelis notes Viva Energy REIT is trading at 37.6% premium to net-tangible assets ($2.18). Hold rating retained and target price rises to $2.64.

This report was published on October 9, 2019.

Target price is $2.64 Current Price is $2.97 Difference: minus $0.33 (current price is over target).
If VVR meets the Moelis target it will return approximately minus 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in December.

Forecast for FY19:

Moelis forecasts a full year FY19 dividend of 14.50 cents and EPS of 14.50 cents.
At the last closing share price the estimated dividend yield is 4.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.48.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 15.00 cents and EPS of 15.00 cents.
At the last closing share price the estimated dividend yield is 5.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.80.

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


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, Independent 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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CHARTS

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