Australian Broker Call *Extra* Edition – Jan 22, 2020

Daily Market Reports | Jan 22 2020

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)

APX   INA   LYL (2)   MND   MOZ   NST   SAR   SMR (2)   SSM   WHC  

APX    APPEN LIMITED

IT & Support - Overnight Price: $25.88

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

The company is currently Bell Potter's best pick in the tech sector. It is expected to report a very positive result for 2019, along with strong indications of continuing the same in 2020.

The company's growth, the broker explains, is driven by a strong core business along with expectations for improvement in the performance of Figure 8 in 2020. China is also expected to increase its contribution in terms of revenues in 2020 and after.

Bell Potter is bullish and expects operational profits to increase by 28% to $129.4m in 2020 and by 30% to $167.9m in 2021. Bell Potter rates this stock a Buy with a $28.75 target.

This report was released on January 17, 2020.

Target price is $28.75 Current Price is $25.88 Difference: $2.87
If APX meets the Bell Potter target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $29.66, suggesting upside of 14.6%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY19:

Bell Potter forecasts a full year FY19 dividend of 9.00 cents and EPS of 56.80 cents.
At the last closing share price the estimated dividend yield is 0.35%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 45.56.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 50.3, implying annual growth of 28.2%.
Current consensus DPS estimate is 8.8, implying a prospective dividend yield of 0.3%.
Current consensus EPS estimate suggests the PER is 51.5.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 11.00 cents and EPS of 74.20 cents.
At the last closing share price the estimated dividend yield is 0.43%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 34.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 65.1, implying annual growth of 29.4%.
Current consensus DPS estimate is 12.7, implying a prospective dividend yield of 0.5%.
Current consensus EPS estimate suggests the PER is 39.8.

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

INA    INGENIA COMMUNITIES GROUP

Aged Care & Seniors - Overnight Price: $4.65

Moelis rates ((INA)) as Hold (3) -

Moelis notes that the Ingenia group has been impacted by the bushfires and while none of the group's tourism parks have suffered any damage, the community owner lost two residents' homes at Lake Conjola.

Furthermore, notes Moelis, new home sales at Lake Conjola are expected to be adversely impacted during 2H20. The closure of three assets in NSW has led to a loss of close to -$2m in tourism revenue, although Moelis clarifies the group's insurance would cover the property loss as well as gross profits.

The broker recommends holding onto the shares for now. Moelis clarifies the bushfire impact is a one-off, without any impact on revenue. 

The broker also anticipates an improvement in residential market conditions. That, along with the real estate group's recent inclusion in the ASX200, are points in the company's favour. The broker retains its Hold rating with target price of $4.62.

This report was published on January 15, 2020.

Target price is $4.62 Current Price is $4.65 Difference: minus $0.03 (current price is over target).
If INA meets the Moelis target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 12.00 cents and EPS of 22.00 cents.
At the last closing share price the estimated dividend yield is 2.58%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.14.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 12.90 cents and EPS of 24.80 cents.
At the last closing share price the estimated dividend yield is 2.77%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.75.

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

LYL    LYCOPODIUM LIMITED

Mining Sector Contracting - Overnight Price: $6.30

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

The company's Mondium JV recently secured a circa $400m contract from Rio Tinto. This is the latest in a series of contracts and would enhance its market standing, suggests Bell Potter.

The broker also highlights an increase in the price of gold which has enhanced future prospects for the company. The analysts point out the company's minerals division operates at a higher margin, thereby increasing profitability prospects.

The broker has upgraded FY21 and FY22 revenue forecasts by 6.1% and 16.1% respectively. Bell Potter rates this stock a Buy with a $6.5 target.

This report was published on January 14, 2020.

Target price is $6.50 Current Price is $6.30 Difference: $0.2
If LYL meets the Bell Potter target it will return approximately 3% (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 32.00 cents and EPS of 43.70 cents.
At the last closing share price the estimated dividend yield is 5.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.42.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 36.00 cents and EPS of 52.20 cents.
At the last closing share price the estimated dividend yield is 5.71%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.07.

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


Hartleys rates ((LYL)) as Buy (2) -

Hartleys notes Lycopodium's Mondium JV has been awarded a contract worth close to $400m with Rio Tinto.

The broker terms this a significant achievement for Mondium and an acknowledgment of years of investment and work.

There have been project delays, observes Hartleys, but the impact is only short-term and the broker is confident about the firm’s prospects. The broker gives Lycopodium a Buy rating with target price $6.76

The report was first published on January 13, 2020.

Target price is $6.76 Current Price is $6.30 Difference: $0.46
If LYL meets the Hartleys target it will return approximately 7% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Hartleys forecasts a full year FY20 dividend of 30.00 cents and EPS of 41.60 cents.
At the last closing share price the estimated dividend yield is 4.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.14.

Forecast for FY21:

Hartleys forecasts a full year FY21 dividend of 36.70 cents and EPS of 56.40 cents.
At the last closing share price the estimated dividend yield is 5.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.17.

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


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