article 3 months old

Australian Broker Call *Extra* Edition – Oct 21, 2019

Daily Market Reports | Oct 21 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)

360 (2)   BLG   FPH   GSS   HLO   LVT   NCK   NSR   PPS (3)  

360    LIFE360 INC

Software & Services – Overnight Price: $3.56

Bell Potter rates ((360)) as Buy (1) –

Life360 has reached some key milestones, Bell Potter notes, hitting 25m monthly active users, number one social networking app in the US (Apple Store), and number eight spot for all free apps available on Apple in the US.

The rapid user growth rate underpins the broker's positive view on the stock, with Life360 adding around 600,000 – 700,000 users a month.

The broker has increased its target price to $6.60 from $6.40 and retains Buy, suggesting valuation is compelling.

(Report 15/10/19)

Target price is $6.60 Current Price is $3.56 Difference: $3.04
If 360 meets the Bell Potter target it will return approximately 85% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY19:

Bell Potter forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 27.07 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 13.15.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 20.23 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 17.60.

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


Moelis rates ((360)) as Buy (1) –

Life360 revealed the September quarter was its largest quarter of growth in the US, albeit slightly below Moelis's expectation. The company continues to deliver strong user growth and is on track to beat the prospectus monthly active user forecast for December 2019 of 26m.

The broker assumes 26.7m at year end with December generally a seasonally strong quarter.

Moelis believes Life360 represents excellent value with the company continuing to demonstrate strong momentum across the business as the leading family location sharing and security app globally. Target falls to $6.44 from $6.50, Buy retained.

(Report 15/10/19)

Target price is $6.44 Current Price is $3.56 Difference: $2.88
If 360 meets the Moelis target it will return approximately 81% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY19:

Moelis forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 24.93 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 14.28.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 17.95 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 19.83.

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

BLG    BLUGLASS LIMITED

Hardware & Equipment – Overnight Price: $0.14

Wilsons rates ((BLG)) as Market Weight (3) –

BluGlass continues to move forward in the process of commercialising its proprietary LED technology, but the road has been a bumpy one to date, Wilsons notes.

The loss of a potential deal with Lumileds last year sapped investor confidence, but a recent agreement with Bridgelux provides hope commercialisation can occur, and there are discussions with other players being held.

The broker has adjusted forecasts on the assumption of a more protracted rollout, and retains Market Weight on a balance of rollout risk and a sizeable addressable market. Target 14c.

(Report 17/10/19)

Target price is $0.14 Current Price is $0.14 Difference: $0
If BLG meets the Wilsons target it will return approximately 0% (excluding dividends, fees and charges).
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 minus 0.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 15.56.

Forecast for FY21:

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

FPH    FISHER & PAYKEL HEALTHCARE CORPORATION LIMITED

Medical Equipment & Devices – Overnight Price: $17.55

Wilsons rates ((FPH)) as Market Weight (3) –

Fisher & Paykal Healthcare's FY20 outlook has improved since the FY19 result, Wilsons notes, from a growth profile that was driven by FX and R&D grants to one that now incorporates sales momentum across the business, including in the previously dragging OSA segment.

While the stock appears expensive compared to  international medical device peers, the valuation gap is narrowing, and Wilsons assess this premium can be maintained in the near term.

Market Weight retained, target rises to $16.

Target price is $16.00 Current Price is $17.55 Difference: minus $1.55 (current price is over target).
If FPH meets the Wilsons target it will return approximately minus 9% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is N/A
The company's fiscal year ends in March.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 21.77 cents and EPS of 42.03 cents.
At the last closing share price the estimated dividend yield is 1.24%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 41.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 41.5, implying annual growth of N/A.
Current consensus DPS estimate is 26.7, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 42.3.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 21.77 cents and EPS of 45.91 cents.
At the last closing share price the estimated dividend yield is 1.24%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 38.23.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 46.4, implying annual growth of 11.8%.
Current consensus DPS estimate is 31.4, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 37.8.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: -0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

GSS    GENETIC SIGNATURES LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $1.12

Bell Potter rates ((GSS)) as Initiation of Coverage: Buy (Speculative) (1) –

Genetic Signatures is a specialist molecular diagnostics company which is focused on developing multiplexed molecular diagnostic tests for infectious diseases using its proprietary platform technology.

The end market for the company's products is one of the fastest growing segments within the global infectious disease IVD market, Bell Potter notes, and there is still headroom for growth.

The broker expects compound annual revenue growth of 42.6% and values the stock at $1.60, initiating coverage with a Buy (Speculative) rating.

(Report 16/10/19)

Target price is $1.60 Current Price is $1.12 Difference: $0.48
If GSS meets the Bell Potter target it will return approximately 43% (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 minus 3.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 32.94.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 2.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 46.67.

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

HLO    HELLOWORLD LIMITED

Travel, Leisure & Tourism – Overnight Price: $4.48

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

Helloworld has acquired the TravelEdge Group for an approximate 6x FY19 PE multiple. Bell Potter suggests the business will complement Helloworld’s existing corporate operations in A&NZ, provide additional knowledge and capability, build out the company’s portfolio of blue chip corporate accounts and be earnings accretive in FY20.

The stock represents a compelling buying opportunity, the broker suggests, with limited downside risk. Buy rating retained, target rises to $5.85 from $5.50.

(Report 16/10/19)

Target price is $5.85 Current Price is $4.48 Difference: $1.37
If HLO meets the Bell Potter target it will return approximately 31% (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 23.00 cents and EPS of 37.80 cents.
At the last closing share price the estimated dividend yield is 5.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.85.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 25.50 cents and EPS of 43.00 cents.
At the last closing share price the estimated dividend yield is 5.69%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.42.

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

LVT    LIVETILES LIMITED

Cloud services – Overnight Price: $0.30

Wilsons rates ((LVT)) as Sell (5) –

LiveTile’s Sep Q provided a disappointing start to FY20. Incremental annual recurring revenue came in at its lowest level in six quarters, Wilsons notes, and costs were higher than guided.

On the back of this slower quarter, the broker estimates the company will have to significantly step up incremental annual recurring revenues (ARR) to meet its FY21 target.

Wilsons also fears the recent raising will not be enough to cover cash burn and the company may have to return to the market. Underweight retained. A roll forward of valuation bring a target increase to 26c from 24c.

(Report 15/10/19)

Target price is $0.24 Current Price is $0.30 Difference: minus $0.06 (current price is over target).
If LVT meets the Wilsons target it will return approximately minus 20% (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 minus 3.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 9.38.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 2.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 12.50.

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

NCK    NICK SCALI LIMITED

Furniture & Renovation – Overnight Price: $6.53

Wilsons rates ((NCK)) as Market Weight (3) –

Recent indicators meant Nick Scali's announced decline in sales growth came as no surprise to Wilsons, but a forecast -30.4% year on year drop in first half profit was more than the broker feared. Difficult conditions have continued into the second half.

Lower interest rates and an upturn in housing has the company hopeful of second half improvement, but the broker is remaining conservative. Market Weight retained, target falls -9.8% to $5.92.

(Report 17/10/19)

Target price is $5.92 Current Price is $6.53 Difference: minus $0.61 (current price is over target).
If NCK meets the Wilsons target it will return approximately minus 9% (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 38.50 cents and EPS of 45.30 cents.
At the last closing share price the estimated dividend yield is 5.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.42.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 42.00 cents and EPS of 48.90 cents.
At the last closing share price the estimated dividend yield is 6.43%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.35.

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

NSR    NATIONAL STORAGE REIT

REITs – Overnight Price: $1.83

Goldman Sachs rates ((NSR)) as Initiation of coverage with Sell (5) –

National Storage REIT is Australia’s only listed pure-play self-storage REIT, notes Goldman Sachs. It is highly levered to residential consumers who lease storage units on a short-term basis and account for 70% of its rental revenues.

Although dwelling prices have started to rebound in Sydney and Melbourne, which can lead to increased housing turnover, markets outside of New South Wales and Victoria remain weak and transaction volumes subdued, the broker notes.

Compared to global self storage peers, National Storage is trading at one of the lowest earnings multiples, which the broker believes is merited given its lower growth rate versus peers. Coverage initiated with a Sell rating and $1.51 target.

(Report 14/10/19)

Target price is $1.51 Current Price is $1.83 Difference: minus $0.32 (current price is over target).
If NSR meets the Goldman Sachs target it will return approximately minus 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $1.66, suggesting downside of -9.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Goldman Sachs forecasts a full year FY20 dividend of 10.00 cents and EPS of 10.00 cents.
At the last closing share price the estimated dividend yield is 5.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.9, implying annual growth of -55.3%.
Current consensus DPS estimate is 9.8, implying a prospective dividend yield of 5.4%.
Current consensus EPS estimate suggests the PER is 18.5.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 10.00 cents and EPS of 10.00 cents.
At the last closing share price the estimated dividend yield is 5.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 10.3, implying annual growth of 4.0%.
Current consensus DPS estimate is 10.4, implying a prospective dividend yield of 5.7%.
Current consensus EPS estimate suggests the PER is 17.8.

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

PPS    PRAEMIUM LIMITED

Wealth Management & Investments – Overnight Price: $0.56

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

Praemium hit the $500m inflows mark for the first time in the Sep Q. The UK-based business had its second best quarter despite the quieter northern holiday period, and took out the Schroeders UL Platform Award for Discretionary Managers, which Bell Potter suggests is indicative of the traction the firm is gaining.

The broker upgrades earnings forecasts in line with growing funds inflows and lifts its target to 73c from 70c. Buy retained.

(Report 14/10/19)

Target price is $0.73 Current Price is $0.56 Difference: $0.17
If PPS meets the Bell Potter target it will return approximately 30% (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 2.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.67.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 1.20 cents and EPS of 2.30 cents.
At the last closing share price the estimated dividend yield is 2.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.35.

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


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

Praemium posted a positive Sep Q in which funds under management increased by 8% to $10.3bn, Canaccord Genuity notes. The strong result makes the broker's expectation that A&NZ-related outflows would result in FY20 funds under management being flat at $9.8bn look conservative.

Canaccord is nevertheless mindful that we are still at a relatively early stage in the current period and see the Dec Q as key in determining if current forecasts will need amending. Buy and 75c target retained.

(Report 14/10/19)

Target price is $0.75 Current Price is $0.56 Difference: $0.19
If PPS meets the Canaccord Genuity target it will return approximately 34% (excluding dividends, fees and charges).

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


Shaw and Partners rates ((PPS)) as Buy (1) –

Pramium announced an all-round solid set of platform numbers for the September quarter that was ahead of Shaw’s expectations. Most importantly, funds under management of $10.3bn was 4% above the broker's forecast and 29% up on the prior year.

It is salient to note, suggests Shaw, that Praemium is growing its percentage of new wins and renewals and has a new "category killer" product in the form of the Unified Managed Account which will allow the company to compete far more favourably against its peers.

Fundamentally the company is an attractive investment prospect as it continues to disrupt financial services in the wealth management sector, in the broker's opinion. Buy (High Risk) with an 80c target.

(Report 15/10/19)

Target price is $0.80 Current Price is $0.56 Difference: $0.24
If PPS 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 FY20:

Shaw and Partners forecasts a full year FY20 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 62.22.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 0.00 cents and EPS of 1.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 43.08.

Market Sentiment: 1.0
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.

Share on FacebookTweet about this on TwitterShare on LinkedIn

Click to view our Glossary of Financial Terms

CHARTS

360 BLG FPH GSS HLO LVT NCK NSR PPS