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Australian Broker Call *Extra* Edition – Mar 09, 2020

Daily Market Reports | Mar 09 2020

This story features AUSWIDE BANK LIMITED, and other companies. For more info SHARE ANALYSIS: ABA

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)

ABA   AVH (2)   CDA   CGL   EML   IFL   IMD   MCP (2)   NWH   OPT   OTW (2)   PPE   RDC   RHP   WTC  

ABA    AUSWIDE BANK LTD

Banks – Overnight Price: $5.59

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

Auswide Bank's FY20 first-half result fell just shy of Bell Potter's estimates, but the broker describes it as a good clean result that keeps the regional lender's three-year strategy on track.

Net interest margin and non-interest expenses grew, volume outpaced system growth, costs were controlled and credit quality was stable, analyse the analysts. CET1 capital was greater than both regulatory and internal targets. Management guides upwards for the second half.

The broker expects continued strength in net interest margins will yield a strong FY20 result, while a strong cost-to-income ratio and return on net trade assets bodes well for FY22. Target price rises to $6.90 from $6.70. Buy rating retained.

This report was published on February 19, 2020.

Target price is $6.90 Current Price is $5.59 Difference: $1.31
If ABA meets the Bell Potter target it will return approximately 23% (excluding dividends, fees and charges).

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 36.00 cents and EPS of 46.00 cents.
At the last closing share price the estimated dividend yield is 6.44%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.15.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 38.00 cents and EPS of 49.00 cents.
At the last closing share price the estimated dividend yield is 6.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.41.

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

AVH    AVITA MEDICAL LTD

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.56

Bell Potter rates ((AVH)) as Downgrade to Hold from Buy (3) –

Avita Medical's FY20 first-half earnings decline outpaced Bell Potter's forecast and Bell Potter expects continued growth in revenue and expenses should stabilise given the company has its full sales force in place.

The company is expected to accelerate its market entry, yielding greater research and development expenses, but the broker forecasts that this will be offset by higher revenue and sales.

Avita is pressing ahead with trauma wounds studies – a market twice the size of burns. The broker suggeste the company is cashed up and well positioned to take advantage of opportunities.

Target price is steady at 88c. The broker downgrades to Hold from Buy to account for a sharp rally in the share price.

This report was published on February 19, 2020.

Target price is $0.83 Current Price is $0.56 Difference: $0.27
If AVH meets the Bell Potter target it will return approximately 48% (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 1.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 46.67.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 0.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 93.33.

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


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

Wilsons found Avita Medical's FY20 first-half result was mixed, with volume growth being mitigated by price concessions.

Operating expenditure proved the big drag and sharply outpaced the broker. Wilsons believes the sales and marketing spend is necessary to support expansion and remains a believer, but seeks greater visibility and rationale around each program.

The broker notes the company's unique offering in Burns provides a chance for the company to substantially build market share at the expense of competitors. Meanwhile, Avita has announced that it is developing a next-generation device for outpatient burns and plans a launch in the second quarter of 2021. 

Overall, the broker expects continued increases in operating expenditure to fund a faster sales ramp-up and the necessary research and development to progress the pipeline.

Price target is 80c. Market weight rating retained.

This report was published on February 20, 2020.

Target price is $0.80 Current Price is $0.56 Difference: $0.24
If AVH meets the Wilsons target it will return approximately 43% (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 2.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 20.00.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 28.00.

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

CDA    CODAN LIMITED

Hardware & Equipment – Overnight Price: $6.77

Moelis rates ((CDA)) as Hold (3) –

Strong sales in Metal Detection and Radio Communications underpinned Codan's H1 result which came in slightly above management's guidance and triggered higher forecasts at Moelis.

The analysts explain a strong start to the new year from Metal Detection is feeding into higher expectations. H2 is expected to slightly outperform H1 with Metal Detection to benefit from seasonal and gold price tailwinds, in addition to incremental sales from the new Vanquish detector.

As far as FY21 is concerned, Moelis sees earnings growth driven by new detector releases, plus new ‘Cascade’ Radio sales, plus early commercialisation of Minetec. Moelis believes Codan shares deserve to trade on a higher multiple. Hold. Price target $8.53, up from $7.44.

This report was published on February 21, 2020.

Target price is $8.53 Current Price is $6.77 Difference: $1.76
If CDA 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 17.70 cents and EPS of 34.80 cents.
At the last closing share price the estimated dividend yield is 2.61%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.45.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 19.50 cents and EPS of 37.90 cents.
At the last closing share price the estimated dividend yield is 2.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.86.

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

CGL    THE CITADEL GROUP LIMITED

IT & Support – Overnight Price: $3.70

Bell Potter rates ((CGL)) as Downgrade to Hold from Buy (3) –

Citadel Group's FY20 first-half result broadly met the broker, although net profit after tax fell -18% short, thanks to higher depreciation and amortisation charges. On the upside, operating cash flow rose 41% and the conversion rate was strong at greater than 100%, plus management reiterated guidance.

Citadel also announced the purchase of UK healthcare software company Wellbeing Software Group for $198m.

Broker downgrades FY20, FY21 and FY20 EPS forecasts -9%, -15% and -16%, reflecting lower earnings and higher depreciation and amortisation in the existing business. Price target falls -8% to $5.50 from $6. Rating falls to Hold from Buy.

This report was published on February 18, 2020.

Target price is $5.50 Current Price is $3.70 Difference: $1.8
If CGL meets the Bell Potter target it will return approximately 49% (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 10.80 cents and EPS of 21.50 cents.
At the last closing share price the estimated dividend yield is 2.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.21.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 12.80 cents and EPS of 28.90 cents.
At the last closing share price the estimated dividend yield is 3.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.80.

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

EML    EML PAYMENTS LIMITED

Business & Consumer Credit – Overnight Price: $3.12

Wilsons rates ((EML)) as Buy (1) –

EML Payment's FY20 first-half result outpaced Wilsons estimates, which sat at the top end of guidance, and management raised guidance for the second half.

Volumes rose strongly across all divisions, with virtual card payments outperforming. The broker believes the increase in guidance is conservative, based on the company's track record. Also on the upside, Breakage rates are declining.

Wilsons believes recent share price weakness provides a strong opportunity to enter the stock given the company is trading at a price-earnings multiple of 19x FY21 earnings, yet boasts a 51% compound average growth rate for earnings.

Target price set at $5.89. Overweight rating retained.

This report was published on February 20, 2020.

Target price is $4.80 Current Price is $3.12 Difference: $1.68
If EML meets the Wilsons target it will return approximately 54% (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 10.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.89.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of 17.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.73.

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

IFL    IOOF HOLDINGS LIMITED

Wealth Management & Investments – Overnight Price: $5.35

Bell Potter rates ((IFL)) as Sell (5) –

IOOF Holdings' FY20 first-half result was in line with recently released guidance, but failed to impress the broker who remains underwhelmed since the "misleading" first-quarter update.

Bell Potter perceives ANZ Wealth guidance to be unrealistic, notes ANZ synergies continue to deplete, and spies margin pressure on IOOF's platform and advisory businesses. The broker believes there are still many one-off compliance and other costs that need to be factored into the underlying result and expects they will drift higher.

Bell Potter downgrades EPS estimates -1.4%, -1.7% and -2.4% for FY20, FY21 and FY22, to reflect lower margin forecasts. Sell rating and $4.10 target price retained.

The report was published on February 18, 2020.

Target price is $4.10 Current Price is $5.35 Difference: minus $1.25 (current price is over target).
If IFL meets the Bell Potter target it will return approximately minus 23% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $7.23, suggesting upside of 35.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 33.50 cents and EPS of 40.20 cents.
At the last closing share price the estimated dividend yield is 6.26%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.31.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 43.0, implying annual growth of 430.9%.
Current consensus DPS estimate is 35.7, implying a prospective dividend yield of 6.7%.
Current consensus EPS estimate suggests the PER is 12.4.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 35.00 cents and EPS of 47.20 cents.
At the last closing share price the estimated dividend yield is 6.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 58.0, implying annual growth of 34.9%.
Current consensus DPS estimate is 44.4, implying a prospective dividend yield of 8.3%.
Current consensus EPS estimate suggests the PER is 9.2.

Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

IMD    IMDEX LIMITED

Mining Sector Contracting – Overnight Price: $1.42

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

Imdex's FY20 first-half result pleased Bell Potter, metrics falling just shy despite the company absorbing extra research and development expenses.

Revenue rose 2.2% to a record high, thanks to continued conversion of customers and technologies to its IMDEXHUB and a cracker performance in the Asia Pacific – partly offset by weakness in the the Americas. 

The broker notes revenue has kicked off strongly in the second half and management guides to a strong six months. Emerging technologies were on track.

Bell Potter expects the company's earnings will continue to outpace global exploration spend given its comparative advantages. Price target rises to $1.72 from $1.62. Buy rating retained.

This report was published on February 18, 2020.

Target price is $1.72 Current Price is $1.42 Difference: $0.3
If IMD meets the Bell Potter target it will return approximately 21% (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 4.60 cents and EPS of 8.10 cents.
At the last closing share price the estimated dividend yield is 3.24%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.53.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 3.30 cents and EPS of 9.50 cents.
At the last closing share price the estimated dividend yield is 2.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.95.

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

MCP    MCPHERSON'S LIMITED

Health & Nutrition – Overnight Price: $1.89

Moelis rates ((MCP)) as Buy (1) –

McPherson's FY20 first-half result missed Moelis's estimates at the headline level but sharply outpaced in composition.

Higher-than-expected investments in the JV brands and weakness in Singapore and New Zealand drove headline weakness, but core brands performed strongly with Dr LeWinn continuing to outperform the category, while margins rose.

The broker notes that operating cash flow was weak, but the company managed to stock up prior to the Chinese New Year shutdown. This triggered a rise in net debt, but the company remains under-geared, say the analysts.

Management maintained guidance, despite the strong brand performance, as a nod to the coronavirus. Skincare is expected to continue to underpin the long-term forecast for the company, which continues to grow market share across several key categories; and mergers and acquisitions are on the agenda.

The broker too remains cautious for the second half and FY20 EPS is unchanged. EPS for FY21 and FY22 rise 6% and 7% respectively. Buy rating retained. Target price is $2.91.

This report was published on February 19, 2020.

Target price is $2.91 Current Price is $1.89 Difference: $1.02
If MCP meets the Moelis target it will return approximately 54% (excluding dividends, fees and charges).

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 10.00 cents and EPS of 13.90 cents.
At the last closing share price the estimated dividend yield is 5.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.60.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 10.70 cents and EPS of 17.00 cents.
At the last closing share price the estimated dividend yield is 5.66%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.12.

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


Shaw and Partners rates ((MCP)) as Downgrade to Hold from Buy (3) –

McPherson's FY20 first-half result broadly met Shaw & Partners forecasts and management reiterated guidance.

Headline revenue was flat with the Skin, Hair and Body segment (core owned brands), particularly Dr LeWinn, outpacing. The broker believes the company has taken a conservative stance with the result, excluding a number of one-offs which would have provided an 8% beat to the broker.

Shaw & Partners spies an acquisition in the wings, and believes it would diversify and crystallise own brand earnings away from Multix, resulting in material cross-sell and synergies on the pharmacy and export front, and allow the company to clock 40% plus EPS growth. Gearing is low, leaving room to maneuvre. 

The broker applies a Reduce rating given the 22x price-earnings ratio, risks relating to China and a potential earnings reversal for Multix as foreign exchange, commodity and manufacturing headwinds conspire against it. Price target rises to $2.85.

This report was published on February 20, 2020.

Target price is $1.51 Current Price is $1.89 Difference: minus $0.38 (current price is over target).
If MCP meets the Shaw and Partners target it will return approximately minus 20% (excluding dividends, fees and charges – negative figures indicate an expected loss).

Forecast for FY20:

Shaw and Partners forecasts a full year FY20 dividend of 8.50 cents and EPS of 13.20 cents.
At the last closing share price the estimated dividend yield is 4.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.32.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 12.10 cents and EPS of 18.40 cents.
At the last closing share price the estimated dividend yield is 6.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.27.

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

NWH    NRW HOLDINGS LIMITED

Mining Sector Contracting – Overnight Price: $2.18

Moelis rates ((NWH)) as Buy (1) –

NRW Holdings' FY20 first-half result beat Moelis on most metrics.

Civil disappointed but this was more than offset by higher margin divisions and the broker expects a recovery in the second half. Margin estimates for Mining, Drill and Blast, and Mining Technologies, were revised to the upper end of guidance.

Meanwhile, the company paid -$40m less for the BGCC acquisition than announced, thanks largely to BGCC's $29m cash balance, securing more than 50% of synergies. The integration is proceeding well.

The company's FY20 revenue guidance is "mostly secured" and early signs suggest FY20 may prove another beat on the broker and consensus. Moelis believes the company's $3.8bn order book and strong balance sheets position it well to capitalise on its $10bn pipeline. 

Target price rises to $3.47 from $3.40. Buy rating retained.

This report was published on February 21, 2020.

Target price is $3.47 Current Price is $2.18 Difference: $1.29
If NWH meets the Moelis target it will return approximately 59% (excluding dividends, fees and charges).

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 5.50 cents and EPS of 22.20 cents.
At the last closing share price the estimated dividend yield is 2.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.82.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 7.70 cents and EPS of 27.80 cents.
At the last closing share price the estimated dividend yield is 3.53%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.84.

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

OPT    OPTHEA LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $3.00

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

Opthea has placed $50m in shares, at $2.65 each. Bell Potter says the raising will provide a cash runway for the 2020 first-half and believes the raising was timely given it strengthens the company's negotiating position and allows it to proceed apace with manufacturing of clinical drugs prior to starting its Phase-3 programs and trials for OPT-302 wet AMD.

The broker estimates the program will cost -US$200m, requiring more funds, and expects the company will bring on a strategic partner for FY21.

Bell Potter notes higher research and development costs have hurt earnings but remains a believer. Speculative Buy rating retained and target price rises to $5.05 from $4.80.

This report was published on February 18, 2020.

Target price is $5.05 Current Price is $3.00 Difference: $2.05
If OPT meets the Bell Potter target it will return approximately 68% (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 16.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 17.86.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of 37.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.02.

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

OTW    OVER THE WIRE HOLDINGS LIMITED

Cloud services – Overnight Price: $3.21

Bell Potter rates ((OTW)) as Hold (3) –

Over the Wire's FY20 first-half result fell -40% short of Bell Potter's forecast as revenue and margins slumped and amortisation rose. Operating cash flow fell -21% but conversion remained strong at more than 100%.

The dividend rose 20%, in line with forecasts and no specific guidance was offered, although management was optimistic that its undefined second-half revenue target was achievable. Commentary suggested acquisitions were in the wings, report the analysts.

The broker downgrades EPS -29%, -24% and -19% across FY20, FY21 and FY22 (excluding acquisitions).

Target price falls -20% to $4 from $5. Hold rating retained.

This report was published on February 19, 2020.

Target price is $4.00 Current Price is $3.21 Difference: $0.79
If OTW meets the Bell Potter target it will return approximately 25% (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 3.80 cents and EPS of 11.90 cents.
At the last closing share price the estimated dividend yield is 1.18%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.97.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 4.80 cents and EPS of 16.40 cents.
At the last closing share price the estimated dividend yield is 1.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.57.

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 ((OTW)) as Buy (1) –

Over the Wire's FY20 first-half result fell way short of Baillieu's estimates, due to falls in non-recurring revenue and higher than expected investment in expansion as the company doubled its number of business development managers, added software development resources and trialled offshoring of some back-office tasks, all of which were expected to increase sales and cut costs going forward.

The balance sheet remained solid with zero net debt and $7.4m in cash, providing room for accretive acquisitions. Management was upbeat on the second half, believing it would meet its organic growth target. The company is aiming for 25% growth in recurring revenue over 18 months.

Despite a disappointing result and a second miss in the last half, the broker remains optimistic, citing a low price-earnings ratio, favourable sector fundamentals, strong recurring revenue, potential for acquisitions, and potential earnings upside assuming the company hits its growth target.

Target price falls to $4.14 from $4.89. Buy rating retained, the broker believing upside risk outweighs downside risk.

This report was published on February 21, 2020.

Target price is $4.14 Current Price is $3.21 Difference: $0.93
If OTW meets the E.L. & C Baillieu target it will return approximately 29% (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 3.80 cents and EPS of 9.80 cents.
At the last closing share price the estimated dividend yield is 1.18%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.76.

Forecast for FY21:

E.L. & C Baillieu forecasts a full year FY21 dividend of 4.30 cents and EPS of 15.10 cents.
At the last closing share price the estimated dividend yield is 1.34%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.26.

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

PPE    PEOPLE INFRASTRUCTURE LTD

Jobs & Skilled Labour Services – Overnight Price: $3.26

PhillipCapital rates ((PPE)) as Buy (1) –

People Infrastructure's FY20 first-half result missed Phillip Capital's estimates by -6%, despite posting strong growth across most metrics.

The company posted strong organic and inorganic revenue growth, with Facilities Management a star performer and margins beating the broker. Six acquisitions have been completed since November 17 and all exceeded expectations.

The broker notes the company continues to benefit from the long-term structural shift by employers towards part-time and casual workers, and temporary workers given it is the largest provider of contract staff to the Community Services sector, which is posting exceptional growth due to the roll-out of the National Disability Insurance Scheme, and the ageing population. 

EPS forecasts fall -4% for FY20 and -1% for FY21. The broker anticipates two more accretive acquisitions within 18 months.

The broker favours the company, given its growing strength in Healthcare and Disability (51% of profit), and the long-term opportunities offered by the NDIS.

Buy retained. Target price rises to $4.05 from $3.79.

This report was published on February 19, 2020.

Target price is $4.05 Current Price is $3.26 Difference: $0.79
If PPE meets the PhillipCapital target it will return approximately 24% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY20:

PhillipCapital forecasts a full year FY20 dividend of 11.00 cents and EPS of 23.00 cents.
At the last closing share price the estimated dividend yield is 3.37%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.17.

Forecast for FY21:

PhillipCapital forecasts a full year FY21 dividend of 13.50 cents and EPS of 27.00 cents.
At the last closing share price the estimated dividend yield is 4.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.07.

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

RDC    REDCAPE HOTEL GROUP

Travel, Leisure & Tourism – Overnight Price: $1.07

Moelis rates ((RDC)) as Buy (1) –

Redcape Hotel Group's FY20 first-half result beat Moelis's estimates as strength in gaming margins and growth in Food and Beverage flowed through to revenue.

Gearing fell at the lower end of guidance, and the company refinanced at a lower rate, resulting in a -110 basis point reduction to its weighted average cost of debt. The dividend is paid from free cash flow, point out the analysts.

Management upgraded EPS and dividend guidance and the broker upgrades FY20 EPS forecasts roughly 5% accordingly. The company remains the broker's pick among real-estate options and believes guidance is achievable. Potential accretive acquisitions are also an option.

Buy rating and $1.26 target price retained.

This report was published on February 20, 2020.

Target price is $1.26 Current Price is $1.07 Difference: $0.19
If RDC meets the Moelis target it will return approximately 18% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 8.80 cents and EPS of 9.20 cents.
At the last closing share price the estimated dividend yield is 8.22%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.63.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 8.90 cents and EPS of 9.50 cents.
At the last closing share price the estimated dividend yield is 8.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.26.

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

RHP    RHIPE LIMITED

Cloud services – Overnight Price: $1.62

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

Rhipe's FY20 first-half result romped in 12% ahead of Bell Potter's estimates, thanks mainly to slower than forecast investment in Japan. But group sales jumped 33%, thanks to demand for public cloud software and infrastructure. 

Earnings before interest, tax, depreciation and amortisation, nearly lapped the broker, reflecting the AASB16 and a $1.7m write-back on the DBITS acquisition. Balance sheet remains strong with operating cash flow improving 50% on the previous corresponding period, and net cash was sitting at $24m, point out the analysts.

Management reiterated guidance (ex Japan) but upgraded Japan guidance given delays. The broker suggests margin pressure is now priced into consensus. EPS forecasts fall -3.4%, -14.1% and -10.7% across FY20, FY21 and FY22.

Buy recommendation retained. Target price is steady at $2.60.

This report was published on February 18, 2020.

Target price is $2.19 Current Price is $1.62 Difference: $0.57
If RHP meets the Bell Potter target it will return approximately 35% (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 3.50 cents and EPS of 4.30 cents.
At the last closing share price the estimated dividend yield is 2.16%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 37.67.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 4.00 cents and EPS of 5.50 cents.
At the last closing share price the estimated dividend yield is 2.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.45.

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

WTC    WISETECH GLOBAL LIMITED

Cloud services – Overnight Price: $15.03

Bell Potter rates ((WTC)) as Downgrade to Sell from Hold (5) –

WiseTech Global's FY20 first-half result missed the broker by roughly -14% as revenues and margins dived. Management has downgraded FY20 guidance to reflect the impact of the coronavirus on manufacturing and exports.

Bell Potter downgraded EPS forecasts -26%, -27% and -28% across FY20, FY21 and FY22, noting its revenue estimates are at the upper end of revised guidance. The broker awaits a recovery in trade volumes and downgraded to Sell from Hold. Target price falls to $20 from $25.

Investors should note that, since the release of this report on February 19, 2020, Bell Potter has followed up on March 5 with a further reduction in forecasts to the tune of -5%, but also with an upgrade to Hold from Buy given the sharp fall in the share price since. The new price target is $16, down from $20.

Target price is $20.00 Current Price is $15.03 Difference: $4.97
If WTC meets the Bell Potter target it will return approximately 33% (excluding dividends, fees and charges).
Current consensus price target is $26.83, suggesting upside of 78.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 3.70 cents and EPS of 16.80 cents.
At the last closing share price the estimated dividend yield is 0.25%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 89.46.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.4, implying annual growth of 43.5%.
Current consensus DPS estimate is 3.7, implying a prospective dividend yield of 0.2%.
Current consensus EPS estimate suggests the PER is 59.2.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 4.70 cents and EPS of 24.10 cents.
At the last closing share price the estimated dividend yield is 0.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 62.37.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 31.7, implying annual growth of 24.8%.
Current consensus DPS estimate is 5.2, implying a prospective dividend yield of 0.3%.
Current consensus EPS estimate suggests the PER is 47.4.

Market Sentiment: 0.8
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

ABA AVH CDA CGL EML IFL IMD MCP NWH OPT OTW PPE RDC RHP WTC

For more info SHARE ANALYSIS: ABA - AUSWIDE BANK LIMITED

For more info SHARE ANALYSIS: AVH - AVITA MEDICAL INC

For more info SHARE ANALYSIS: CDA - CODAN LIMITED

For more info SHARE ANALYSIS: CGL - THE CITADEL GROUP LIMITED

For more info SHARE ANALYSIS: EML - EML PAYMENTS LIMITED

For more info SHARE ANALYSIS: IFL - IOOF HOLDINGS LIMITED

For more info SHARE ANALYSIS: IMD - IMDEX LIMITED

For more info SHARE ANALYSIS: MCP - MCPHERSON'S LIMITED

For more info SHARE ANALYSIS: NWH - NRW HOLDINGS LIMITED

For more info SHARE ANALYSIS: OPT - OPTHEA LIMITED

For more info SHARE ANALYSIS: OTW - OVER THE WIRE HOLDINGS LIMITED

For more info SHARE ANALYSIS: PPE - PEOPLE INFRASTRUCTURE LIMITED

For more info SHARE ANALYSIS: RDC - REDCAPE HOTEL GROUP

For more info SHARE ANALYSIS: RHP - RHIPE LIMITED

For more info SHARE ANALYSIS: WTC - WISETECH GLOBAL LIMITED