Australian Broker Call *Extra* Edition – Mar 12, 2020

This story features AUDINATE GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: AD8

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)

AD8   ADH (2)   ALU   AX1   BIN   BWX   CBR   CCX   FWD   GEM   HLA   HT1   HUO   IMD   IRI   MLD   MNY   MYS   PSI   PSQ   QIP   SHV   UWL (2)   VTG   VVR   XRF  

AD8    AUDINATE GROUP LIMITED

Hardware & Equipment – Overnight Price: $5.77

Canaccord Genuity rates ((AD8)) as Buy (1) –

Audinate Group reported first-half results with revenue of $16.1m and an operating profit of $2.5m. Broadly, the result was in-line with Canaccord Genuity’s forecasts.

Dante AV is expected to begin shipping by March 20, notes Canaccord. With growing acceptance in the market that Dante AV will challenge the incumbent HDBaseT, the broker estimates the market opportunity for Dante AV at $300m.

Canaccord Genuity points to a step-change in costs likely to exceed revenue in the short term due to Audinate doubling the size of the engineering/R&D team. This investment would generate positive operating leverage from FY22, predicts the broker.

Canaccord Genuity reduces revenue forecasts for FY20, FY21 and FY22 by -7%, -12% and -15% respectively, but is positive about the stock overall.

The broker retains the Buy recommendation with the target price at $7.20.

This report was published on February 24, 2020.

Target price is $7.20 Current Price is $5.77 Difference: $1.43
If AD8 meets the Canaccord Genuity target it will return approximately 25% (excluding dividends, fees and charges).
Current consensus price target is $8.20, suggesting upside of 42.1%(ex-dividends)
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 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 288.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -1.1, 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 N/A.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 0.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 2885.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 0.4, 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 1442.5.

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

ADH    ADAIRS LIMITED

Furniture & Renovation – Overnight Price: $1.60

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

Adairs posted a gross margin of 61.1% during the first half, its best since FY16, notes Canaccord Genuity. The broker is confident of the home furnishing player achieving the FY20 guidance for operating profit of $48m-$52m.

To cater to earnings volatility, the company has increased the fx forward cover up to 18 months, notes the broker, and has tied up with DHL as a 3PL or "third party logistics" partner to cater to warehousing and distribution needs.

Canaccord Genuity notes growth of 30% in the company’s online business along with acquisition of Mocka, an online nursery and children’s furniture retailer and a focus on forming 3PL relationships to increase market share.

Although the initiatives may take some time to pay off, the broker is positive and retains the Buy recommendation with the target price at $3.20.

The report was published on February 23, 2020.

Target price is $3.20 Current Price is $1.60 Difference: $1.6
If ADH meets the Canaccord Genuity target it will return approximately 100% (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 15.00 cents and EPS of 21.00 cents.
At the last closing share price the estimated dividend yield is 9.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.62.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 19.00 cents and EPS of 24.00 cents.
At the last closing share price the estimated dividend yield is 11.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.67.

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

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Wilsons rates ((ADH)) as Overweight (1) –

Specialty retailer of home furnishings with footprints in Australia and New Zealand, Adairs released the first-half results with revenue of $178.9m, up 8.8% while operating profits were at $23.2m, up 5.6%.

Wilsons notes the company has reiterated the FY20 guidance range for $48m-$52m (inclusive of Mocka). Also, states the broker, the company is cautious about covid-19 but does not expect it to hit until the fourth quarter.

Wilsons has made some minor changes to the operating profits forecast of 2.3% and -4.9% to $51.3m and $59.7m for FY20 and FY21. The broker is Overweight on the stock with the target price at $3.12.

The report was published on February 24, 2020.

Target price is $3.12 Current Price is $1.60 Difference: $1.52
If ADH meets the Wilsons target it will return approximately 95% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 15.50 cents and EPS of 20.80 cents.
At the last closing share price the estimated dividend yield is 9.69%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.69.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 17.50 cents and EPS of 25.20 cents.
At the last closing share price the estimated dividend yield is 10.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.35.

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

ALU    ALTIUM LIMITED

Hardware & Equipment – Overnight Price: $28.00

Bell Potter rates ((ALU)) as Upgrade to Buy from Hold (1) –

The first-half results were satisfactory, notes Bell Potter, with Altium's operating profits 6% above forecasts at US$36.8m and the interim dividend up 25% to $0.20.

The high tech software firm has reiterated the FY20 revenue guidance albeit on the lower side, due to factors like the coronavirus and a slow first half at Octopart, the firm's search engine for electronic and industrial parts.

The company is positive and remains committed to the target of reaching the 50,000 subscribers mark by FY20 end, observes the broker.

Bell Potter has downgraded Altium’s FY20, FY21 and FY22 EPS (earnings per share) forecasts by -13%, -11% and -8% respectively. On a similar note, the broker has lowered the FY20 revenue and operating profits margin forecasts to US$ 207m and 40% respectively.

Overall, Bell Potter holds onto the Hold recommendation while reducing the target price to $40 from $42.5.

The report was published on February 17, 2020.

Special note: on March 10, Bell Potter decided to upgrade to Buy with a revised price target of $35. Earnings estimates below are from that report as forecasts were further reduced to the tune of -3%-4%. DPS forecasts didn't change.

Target price is $35.00 Current Price is $28.00 Difference: $7
If ALU 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 61.06 cents and EPS of 59.17 cents.
At the last closing share price the estimated dividend yield is 2.18%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 47.32.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 72.69 cents and EPS of 74.87 cents.
At the last closing share price the estimated dividend yield is 2.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 37.40.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

AX1    ACCENT GROUP LIMITED

Apparel & Footwear – Overnight Price: $1.23

Bell Potter rates ((AX1)) as Buy (1) –

Accent Group announced first-half results with total sales increasing by 13.6%. Operating profits were up 10.5% to $67.7m on a year-on-year basis and in-line with Bell Potter’s estimates. The gross margin saw a contraction of circa – 60bps on account of fx movements, but was offset by a better-than-expected cost of doing business/sales ratio.

The key points to note, states Bell Potter, are an expanding store network, improving vertical brand penetration and increasing productivity in terms of frontline performance and digital capabilities. The broker further observes growth initiatives being on track with the number of stores of various brands like TAF, Trybe, Pivot on the rise.

To check the impact of AASB16, the broker has lowered EPS estimates for FY20, FY21 and FY22 by -5.9%, -4.2% and -2.7% respectively.

The broker is positive about the stock and retains its Buy recommendation with the target price increasing to $2.40 from $1.95.

The report was published on February 20, 2020.

Target price is $2.40 Current Price is $1.23 Difference: $1.17
If AX1 meets the Bell Potter target it will return approximately 95% (excluding dividends, fees and charges).
Current consensus price target is $1.99, suggesting upside of 61.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 9.40 cents and EPS of 10.80 cents.
At the last closing share price the estimated dividend yield is 7.64%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 10.4, implying annual growth of 3.8%.
Current consensus DPS estimate is 9.1, implying a prospective dividend yield of 7.4%.
Current consensus EPS estimate suggests the PER is 11.8.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 9.90 cents and EPS of 12.30 cents.
At the last closing share price the estimated dividend yield is 8.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.0, implying annual growth of 5.8%.
Current consensus DPS estimate is 9.5, implying a prospective dividend yield of 7.7%.
Current consensus EPS estimate suggests the PER is 11.2.

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

BIN    BINGO INDUSTRIES LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $2.62

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

Bingo Limited provides end-to-end waste management solutions and operates the largest network of resource recovery and recycling facilities around NSW and Victoria.

The company handed in its report card for the first half. In terms of collections, sales were up 22% to $122m, operating profit up 28% to $25m while margins improved to 20.3%. Post-collections saw the sales up by 56% to $163m, operating profit saw an increase of a whopping 120% to $56m with the margins up 34.2%. The results were well above the broker’s forecasts.

Shaw and Partners is of the view the waste management company would enter Queensland by FY21. The broker also feels that if Bingo Industries can work on its past net investment in network and strategic acquisitions, the company would have a great FY21 result.

Shaw and Partners considers the company too conservative with respect to affirming FY20 operating profits forecast; $159m to $164m versus the broker’s $163m.

Overall, the broker is positive due to the massive infrastructure pipeline, a shift from landfill to recycling, and falling resi sensitivity, among other factors. The broker believes FY21 could be a massive year for the company.

Shaw and Partners retains its Buy rating with the target price at $3.40.

The report was published on February 21, 2020.

Target price is $3.40 Current Price is $2.62 Difference: $0.78
If BIN meets the Shaw and Partners target it will return approximately 30% (excluding dividends, fees and charges).
Current consensus price target is $3.16, suggesting upside of 20.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Shaw and Partners forecasts a full year FY20 dividend of 3.20 cents and EPS of 8.30 cents.
At the last closing share price the estimated dividend yield is 1.22%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.6, implying annual growth of 146.2%.
Current consensus DPS estimate is 4.7, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 27.3.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 5.00 cents and EPS of 11.10 cents.
At the last closing share price the estimated dividend yield is 1.91%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.60.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.2, implying annual growth of 27.1%.
Current consensus DPS estimate is 5.1, implying a prospective dividend yield of 1.9%.
Current consensus EPS estimate suggests the PER is 21.5.

Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

BWX    BWX LTD

Household & Personal Products – Overnight Price: $3.27

Canaccord Genuity rates ((BWX)) as Hold (3) –

BWX Ltd is a consumer goods manufacturer and wholesaler of natural skincare products with brands like Sukin, Uspa, Edwar Beale and Renew Skincare under its belt.

The beauty products manufacturer reported a first-half operating profit of $11.6m (post-AASB 16) which was lower than expected. Canaccord Genuity notes the miss was partly due to cost reclassification and higher marketing costs. The brand Sukin was the key highlight with reported revenue 2% more than expected.

The company reaffirmed its guidance for revenue growth of 20-25% and operating profits growth at 25-35% (pre-AASB 16 basis). Also, notes the broker, the company is not impacted materially by the coronavirus as China forms less than 5% of group revenue.

Canaccord Genuity is cautious and has reduced operating profits by -2% for FY20 while keeping the same flat for FY21. The broker retains the Hold recommendation with the target price increasing to $4.01 to $2.79.

The report was published on February 23, 2020.

Target price is $4.01 Current Price is $3.27 Difference: $0.74
If BWX meets the Canaccord Genuity target it will return approximately 23% (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 4.00 cents and EPS of 11.00 cents.
At the last closing share price the estimated dividend yield is 1.22%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.73.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 6.00 cents and EPS of 14.00 cents.
At the last closing share price the estimated dividend yield is 1.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.36.

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

CBR    CARBON REVOLUTION LIMITED

Automobiles & Components – Overnight Price: $3.09

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

Carbon Revolution had a great first-half with sales up 177% year-on-year to 6,761 wheels and revenues up 243% year-on-year to $20.1m. The cost of goods sold fell by -19.1% year on year to $3,560 per wheel, with more reductions expected on account of economies of scale during the second half.

Revenue from engineering services was up 251% year-on-year to $1.1m, indicating a huge increase in new Original Equipment Manufacturer (OEM) vehicle programs. Bell Potter reckons this refers to programs for CY21 and beyond and not the current year.

The manufacturing company has reiterated the FY20 wheel sales forecast of circa 23,000 which the broker considers to be significant. The company expects to become operating-profits positive by the fourth quarter of FY20. Bell Potter points towards a number of catalysts like an increase in wheel sales volume, reduction in the average cost of goods sold during the second half and a possible announcement of three vehicle programs.

The broker is cautious given the uncertainty over the cost of goods sold, but increases the FY20 EPS estimates by 10.5% while reducing the same for FY21 and FY22 by -1.3% and -2.4% respectively.  Bell Potter reiterates the Buy recommendation with the target price unchanged at $5.80.

The report was published on February 20, 2020.

Target price is $5.80 Current Price is $3.09 Difference: $2.71
If CBR meets the Bell Potter target it will return approximately 88% (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 17.30 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 minus 0.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 386.25.

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: $2.41

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

The multi-channel retailer saw operating profits shoot up 20.8% during the first half on a year-on-year basis to $19.1m, while corresponding revenue increased by 39% to $104.8m during the period.

Bell Potter notes the role played by USA in particular and the Northern Hemisphere in general, where sales tripled and formed 29% of the total group sales during the first half. This was due to both strong organic growth along with the inclusion of Hips & Curves and Avenue.

Post-acquisition of Avenue saw the retailer implementing its customer-centric operating model and rebuilding the stock position, observes the broker, with the focus during the second half on the integration of supply chain, better customer engagement and promoting the online channel.

Bell Potter does not expect the coronavirus to disrupt sales/inventory and reckons the company is on track to deliver good results for FY20. The broker is positive about the retailer’s prospects and has increased the net profit after tax estimates for FY20, FY21 and FY22 by 4%, 4.5% and 8.7% respectively.

Bell Potter holds onto the Buy rating for now, with the target price increased to $3.90 from $3.15.

The report was published on February 20, 2020.

Target price is $3.90 Current Price is $2.41 Difference: $1.49
If CCX meets the Bell Potter target it will return approximately 62% (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 3.10 cents and EPS of 10.20 cents.
At the last closing share price the estimated dividend yield is 1.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.63.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 9.90 cents and EPS of 13.20 cents.
At the last closing share price the estimated dividend yield is 4.11%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.26.

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

FWD    FLEETWOOD CORPORATION LIMITED

Infra & Property Developers – Overnight Price: $1.43

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

Broker Canaccord notes positioning Fleetwood as a vertically integrated builder with nationwide reach has not been easy especially since the concept is niche.

The broker acknowledges the presence of a demand pipeline but this is yet to convert to contracts. Moreover, the existing contracts have been vulnerable to swings in demand and mix, observes Canaccord Genuity. The company expects more revenue in the second half.

On a positive note, the company has a strong capital structure to capitalise on when needed and is working on broadening the client base to reduce volatility. The broker also notes the absence of debt and a great balance sheet in general.

The Searipple Accommodation Solution saw higher utilisation due to more shutdown activity. Canaccord Genuity reckons accommodation demand would rise due to major gas-related projects and believes this division would be the biggest contributor to the operating profits for the first time.

Canaccord has revised down its EPS estimates for FY20 and FY21 by -6% and -3% respectively. Overall, the broker considers the stock to be valued cheaply and retains the Buy rating with the target price at $2.49.

The report was published on February 24, 2020.

Target price is $2.49 Current Price is $1.43 Difference: $1.06
If FWD meets the Canaccord Genuity target it will return approximately 74% (excluding dividends, fees and charges).

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 4.00 cents and EPS of 15.50 cents.
At the last closing share price the estimated dividend yield is 2.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.23.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 4.75 cents and EPS of 18.40 cents.
At the last closing share price the estimated dividend yield is 3.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.77.

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

GEM    G8 EDUCATION LIMITED

Childcare – Overnight Price: $1.22

Canaccord Genuity rates ((GEM)) as Hold (3) –

G8 Education 's first half was as expected, with the operational performance good but the support office costs a drag. Canaccord foresees the high costs situation continuing during the current year with things improving in the next year.

The greenfield portfolio is beginning to grow and expected to contribute about $35-40m in operating profits from the next year. However, notes the broker, management at the company needs to put in -$10m during the year for it to be able to accelerate the performance of these centres.

Canaccord notes the bushfires and covid-19 have impacted the business by creating instability and reducing occupancy. 

Overall, the broker expects investors to take a wait and watch approach, despite the stock being valued attractively. Canaccord Genuity retains the Hold rating with the target price at $2.22.

The report was published on February 24, 2020.

Target price is $2.22 Current Price is $1.22 Difference: $1
If GEM meets the Canaccord Genuity target it will return approximately 82% (excluding dividends, fees and charges).
Current consensus price target is $1.87, suggesting upside of 53.4%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 11.00 cents and EPS of 17.00 cents.
At the last closing share price the estimated dividend yield is 9.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.18.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.8, implying annual growth of 15.7%.
Current consensus DPS estimate is 10.5, implying a prospective dividend yield of 8.6%.
Current consensus EPS estimate suggests the PER is 7.7.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 12.00 cents and EPS of 20.00 cents.
At the last closing share price the estimated dividend yield is 9.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.10.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.4, implying annual growth of 16.5%.
Current consensus DPS estimate is 12.4, implying a prospective dividend yield of 10.2%.
Current consensus EPS estimate suggests the PER is 6.6.

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

HLA    HEALTHIA LIMITED

Healthcare services – Overnight Price: $1.03

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

Healthia reported first-half results with revenues of $44m and operating profits at $5.8m. The company has increased its portfolio to about 140 in December 2019 from 105 in 2018. Canaccord Genuity believes the acquired physiotherapy business would support future organic growth.

The company announced in January it is expanding its iOrthotics manufacturing business into the US by forming an LLC in which Healthia would own 58%. Another project in the making is the opening of two new green-field multidisciplinary health clinics in Bundaberg and Pimpama.

Canaccord has reduced the operating profits forecasts for FY20 and FY21 by -2% and -1% to $14.3m and $18.1m respectively. The broker holds onto the Buy recommendation with the target price at $1.45.

The report was published on February 24, 2020.

Target price is $1.45 Current Price is $1.03 Difference: $0.42
If HLA meets the Canaccord Genuity target it will return approximately 41% (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 4.00 cents and EPS of 13.00 cents.
At the last closing share price the estimated dividend yield is 3.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.92.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 5.00 cents and EPS of 15.00 cents.
At the last closing share price the estimated dividend yield is 4.85%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.87.

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

HT1    HT&E LIMITED

Out of Home Advertising – Overnight Price: $1.43

Canaccord Genuity rates ((HT1)) as Hold (3) –

The company has been taking over the metro radio market from its peers and has made important gains in the breakfast slots in Sydney and Melbourne, notes Canaccord Genuity.

Further, the Hong Kong business has become a material contributor to the group operating profits. However, Hong Kong has suffered due to anti-government protests and the coronavirus scare. The coronavirus continues to loom as a threat for the next quarter as well, highlights the broker.

Canaccord states that despite paying dividends worth $11m and buying back shares worth $6m, the company’s net cash increased by $3m for the period and points to the low capital needs of the business. However, further the broker also notes the dividend policy of 60-80% payout may become a pressure point in the face of an earnings decline.

The broker has lowered estimates for the FY20 and FY21 operating profit by -3% and -2% respectively, net profit after taxes by -5% and EPS by -4% and -3% respectively.

The broker retains the Hold recommendation for now with the target price at $1.70.

The report was published on February 24, 2020.

Target price is $1.70 Current Price is $1.43 Difference: $0.27
If HT1 meets the Canaccord Genuity target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $1.51, suggesting upside of 5.8%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 9.00 cents and EPS of 11.00 cents.
At the last closing share price the estimated dividend yield is 6.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.7, implying annual growth of N/A.
Current consensus DPS estimate is 8.2, implying a prospective dividend yield of 5.7%.
Current consensus EPS estimate suggests the PER is 12.2.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 10.00 cents and EPS of 13.00 cents.
At the last closing share price the estimated dividend yield is 6.99%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.6, implying annual growth of 7.7%.
Current consensus DPS estimate is 8.8, implying a prospective dividend yield of 6.2%.
Current consensus EPS estimate suggests the PER is 11.3.

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

HUO    HUON AQUACULTURE GROUP LIMITED

Aquaculture – Overnight Price: $3.96

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

Huon Aquaculture is a salmon producer in Tasmania with operations spanning the entire supply chain across hatcheries, marine farms and harvesting & processing.

Huon Aquaculture released first-half results with revenues up 31% at $178.1m year-on-year. Operating profits were down -6% at $20.4m while net profit after taxes was down -51% at $4.3m for the same (both pre-AASB 16).

Biomass development was up 21% year-on-year, notes Bell Potter, but the cost of the same (on a per kg basis) was down -2.2% year-on-year. Also, the broker states the average price at $13.37/kg was below its expectations by -8%.

Bell Potter notes that while the company aims to harvest volumes of at least 25,000t, it is unlikely to reach previous guidance pricing of $14.50/kg.

The broker foresees softer profitability per kg along with the impact of AASB 16 and has downgraded the operating net profit after taxes for FY20, FY21 and FY22 by -87%, -33% and -21% respectively.

Bell Potter retains the Hold rating with the target price at $4.45.

The report was published on February 21, 2020.

Target price is $4.45 Current Price is $3.96 Difference: $0.49
If HUO meets the Bell Potter target it will return approximately 12% (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 3.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 132.00.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 5.00 cents and EPS of 24.30 cents.
At the last closing share price the estimated dividend yield is 1.26%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.30.

Market Sentiment: 0.0
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: $1.26

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

Imdex reported a solid first-half result, the numbers largely in-line with expectations. With a shift towards generating revenues from the rental fleet, there is an ongoing transition towards better quality earnings, notes Canaccord Genuity, with revenue growth expected to continue during the second half.

Revenues in the first half amounted to $127.9m with operating profits at $28.1m. The broker expects revenue growth of 16% during the third quarter. Broker Canaccord notes an improvement in key ratios with the gross margin at 67.6% and the operating profit margin at 22%.

Even though Imdex did not provide any guidance, Canaccord Genuity observes an increase in the number of tools on rent at January end with the company achieving the highest ever January revenue. Overall, the broker is positive and has increased the operating profit estimates for FY20 and FY21 by 1.2% and 1.7% respectively.

Canaccord Genuity holds on to its Buy rating with the target price at $1.61.

The report was published on February 17, 2020.

Target price is $1.61 Current Price is $1.26 Difference: $0.35
If IMD meets the Canaccord Genuity target it will return approximately 28% (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 5.00 cents and EPS of 9.00 cents.
At the last closing share price the estimated dividend yield is 3.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.00.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 3.00 cents and EPS of 10.00 cents.
At the last closing share price the estimated dividend yield is 2.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.60.

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

IRI    INTEGRATED RESEARCH LIMITED

IT & Support – Overnight Price: $2.81

Bell Potter rates ((IRI)) as Upgrade to Buy from Hold (1) –

The software firm’s net profit after tax grew 1% to $11.8m, 3% above Bell Potter’s estimates and at the top end of the firm’s guidance. Other parameters like revenue and operating profits were in-line with the broker’s figures except for the interim dividend; flat at $0.035 versus Bell Potter's $0.04.

Integrated Resources has a number of renewals scheduled in the second half and this growth would form the main chunk of growth for the entire FY20, notes the broker. Bell Potter remains cautious due to a slight reduction in the revenue forecasts and has downgraded FY20, FY21 and FY22 EPS forecasts by -1%, -2% and -2% respectively.

Overall, the broker views the stock as being reasonably valued and upgrades to Buy from Hold with a target price of $3.50.

The report was published on February 20, 2020.

Target price is $3.50 Current Price is $2.81 Difference: $0.69
If IRI 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 7.50 cents and EPS of 13.90 cents.
At the last closing share price the estimated dividend yield is 2.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.22.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 8.50 cents and EPS of 15.60 cents.
At the last closing share price the estimated dividend yield is 3.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.01.

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

MLD    MACA LIMITED

Mining Sector Contracting – Overnight Price: $0.80

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

Maca reported operating profits of $54.4m, 10% above Canaccord Genuity’s forecast (post-AASB 16). The operating profits margin for the mining division improved with the figure at 17.7%. The operating profit margin for the group was about 150bps higher than expected.

Maca has reiterated revenue guidance of $770m with operating profits in the range of $104 -110m.? Canaccord Genuity has increased estimated FY20 revenue by 1%, operating profits by 3% and EPS by 10%.

The broker is positive about the company due to factors including improved quality of earnings, strength in gold markets, longer dates order book, and an attractive valuation.

The broker retains the Buy recommendation with the target price at $1.33.

The report was published on February 24, 2020.

Target price is $1.33 Current Price is $0.80 Difference: $0.53
If MLD meets the Canaccord Genuity target it will return approximately 66% (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 5.00 cents and EPS of 13.00 cents.
At the last closing share price the estimated dividend yield is 6.25%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.15.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 5.00 cents and EPS of 13.40 cents.
At the last closing share price the estimated dividend yield is 6.25%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.97.

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

MNY    MONEY3 CORPORATION LIMITED

Business & Consumer Credit – Overnight Price: $2.01

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

Money3 reported a strong first-half, prompting Canaccord Genuity to upgrade numbers with the expectation that the full-year results will beat guidance. The broker also notes growth in the loan book along with a more efficient capital structure. If this growth rate continues, the net profit after taxes could well cross $40m, reckons the broker.

Money3’s net profit after taxes stand at $30m, notes Canaccord Genuity,  with earnings tilting towards the second half of the year. New loans are up 25% due to reduced Big Four bank lending. The cherry on the cake is the satisfactory performance of Go Car – Money3's recent acquisition – grown by 50% since acquisition.

The broker has upgraded FY20 EPS forecast by 7%, retaining the Buy recommendation with the target price set at $3.20.

The report was published on February 17, 2020.

Target price is $3.20 Current Price is $2.01 Difference: $1.19
If MNY meets the Canaccord Genuity target it will return approximately 59% (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 10.00 cents and EPS of 18.00 cents.
At the last closing share price the estimated dividend yield is 4.98%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.17.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 13.00 cents and EPS of 23.00 cents.
At the last closing share price the estimated dividend yield is 6.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.74.

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

MYS    MYSTATE LIMITED

Banks – Overnight Price: $4.88

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

Bell Potter states MyState produced another clean and quality result for the first-half with the net profit after taxes 5% higher at $15.1m. Other important figures include a fully franked interim dividend of $0.1425, net interest margins of 1.82% and CET1 ratio of 11.4%.

The result was driven by higher operating income and lower wholesale funding costs, states the broker, describing the credit quality as sound with the financial services firm retaining enough capital to fund long term growth.

Bell Potter expects the NIM (net interest margin) to be slightly higher in the second half along with a 7-8% increase in net profit after taxes. The broker reiterates the Buy rating with the target price increased to $6.10 from $5.60.

The report was published on February 21, 2020.

Target price is $6.10 Current Price is $4.88 Difference: $1.22
If MYS meets the Bell Potter target it will return approximately 25% (excluding dividends, fees and charges).

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 29.30 cents and EPS of 40.00 cents.
At the last closing share price the estimated dividend yield is 6.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.20.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 30.30 cents and EPS of 43.00 cents.
At the last closing share price the estimated dividend yield is 6.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.35.

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

PSI    PSC INSURANCE GROUP LIMITED

Insurance – Overnight Price: $2.84

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

PSC Insurance reported an operating profit of $18.9m, up 24% while revenue grew by 37% to $74.8m during the first half. Bell Potter believes the result is driven by the insurer’s recent acquisitions. The broker expects a strong full-year result with growth skewed to the second half.

PSC Insurance remains keen on further acquisition opportunities along with starting new ventures across Australia, UK and even in Hong Kong, notes Bell Potter. 

The broker has downgraded the EPS estimates by -2.5%, -2.6% and -3.1% for FY20, FY21 and FY22 respectively but retains the Hold rating with the target price unchanged at $3.00.

The report was published on February 20, 2020.

Target price is $3.00 Current Price is $2.84 Difference: $0.16
If PSI meets the Bell Potter target it will return approximately 6% (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 8.70 cents and EPS of 13.10 cents.
At the last closing share price the estimated dividend yield is 3.06%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.68.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 9.40 cents and EPS of 13.70 cents.
At the last closing share price the estimated dividend yield is 3.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.73.

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

PSQ    PACIFIC SMILES GROUP LIMITED

Healthcare services – Overnight Price: $1.68

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

The Pacific Smiles Group is one of the largest branded dental groups in Australia, operating full-service dental centres at 93 sites, located mostly in NSW, Victoria and Queensland.

The dental group had a positive and mostly in-line first half with revenue of $68.3m and patient fees of $105.4m. The underlying operating profit and net profit after taxes were up 15% and 11.2% respectively at $12.9m and $5m.

Bell Potter notes the company has upgraded FY20 guidance for growth at 11-15% while targets like the opening of new centres and same centre patient fee growth remain unchanged.

The broker has increased EPS forecasts in FY20 and FY22 by about 3% while reducing the FY21 figure by -2%. FY20 operating profit growth is gauged to be 13.9% for FY20, while gross patient fee growth would be about 14.5%.

The broker retains the Hold recommendation with the target price increased to $2.11 from $1.95.

The report was published on February 21, 2020.

Target price is $2.11 Current Price is $1.68 Difference: $0.43
If PSQ meets the Bell Potter target it will return approximately 26% (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 6.10 cents and EPS of 6.50 cents.
At the last closing share price the estimated dividend yield is 3.63%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.85.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 6.30 cents and EPS of 7.20 cents.
At the last closing share price the estimated dividend yield is 3.75%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.33.

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

QIP    QANTM INTELLECTUAL PROPERTY LIMITED

Legal – Overnight Price: $1.23

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

QANTM Intellectual Property owns Davies Collison Cave (DCC) and FPA, two professional Intellectual Property (IP) services firms that have significant market share positions in Australia.

The company released first-half results with revenue of $58.9m and operating profits of $11.5m, both slightly above Bell Potter’s forecast. The operating profit margin saw a decline of -1.9% due to a rise in investment in the business. Bell Potter notes a 9.2% increase in revenue from the patents business along with an increase in the Asia momentum.

Bell Potter is positive about the company due to factors like increased investment in FY20, the pipeline of patent work, momentum in Asia and the valuation of the stock.

The broker has not made any changes to EPS forecasts and retains the Buy rating with the target price unchanged at $1.80.

The report was published on February 21, 2020.

Target price is $1.80 Current Price is $1.23 Difference: $0.57
If QIP meets the Bell Potter target it will return approximately 46% (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 8.10 cents and EPS of 11.70 cents.
At the last closing share price the estimated dividend yield is 6.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.51.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 8.40 cents and EPS of 12.20 cents.
At the last closing share price the estimated dividend yield is 6.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.08.

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

SHV    SELECT HARVESTS LIMITED

Agriculture – Overnight Price: $5.82

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

Select Harvests is a vertically integrated grower, processor and marketer of almonds, with farming and processing assets in Australia. The company operates a diversified portfolio of almond orchards as well as a processing facility.

Select Harvests has been affected due to covid-19 demand disruption and an increase in US supply, although Bell Potter believes the issues are not structural and the situation will improve. While the broker assumed crop yield would be below expectations for FY20, the company has stated there was no concern about achieving the volume yields.

Bell Potter is of the opinion that operating profits are likely to be around $60-72m, below the current consensus forecast of about $82m.

The broker has reduced net profit after tax forecasts by -25%, -12% and -9% respectively for FY20, FY21 and FY22. This outlook is driven by an increase in water costs plus lower pricing. 

The broker downgrades to Hold from Buy with the target price at $8.75.

The report was published on February 21, 2020.

Target price is $8.75 Current Price is $5.82 Difference: $2.93
If SHV meets the Bell Potter target it will return approximately 50% (excluding dividends, fees and charges).
The company's fiscal year ends in September.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 19.00 cents and EPS of 33.50 cents.
At the last closing share price the estimated dividend yield is 3.26%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.37.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 28.00 cents and EPS of 53.60 cents.
At the last closing share price the estimated dividend yield is 4.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.86.

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

UWL    UNITI WIRELESS LIMITED

Telecommunication – Overnight Price: $1.12

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

Driven by better than expected organic growth in the wholesale and infrastructure segments as well as achieving cost efficiencies from integrating 1300 Australia into the specialty services business, Uniti Group has upgraded its operating profits guidance for FY20 from $32m to between $35-37m, notes Bell Potter.

Consequently, Bell Potter has upgraded its FY20, FY21 and FY22 EPS estimates by 21%, 12% and 10% respectively. The broker has also upgraded forecasts for operating profits for FY20 to $35.9m with a continuous increase in FY21 and FY22 respectively.

Bell Potter maintains the Buy recommendation with the target price increased to $2.30 from 2.10.

The report was published on February 17, 2020.

Target price is $2.30 Current Price is $1.12 Difference: $1.18
If UWL meets the Bell Potter target it will return approximately 105% (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 5.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.13.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of 6.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.78.

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

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

Uniti Group announced an improvement in performance with second half-forecasts well above Canaccord Genuity's expectations.

The company guided towards operating profits in the range of $17.5-18.5m for the second half, ahead of $16.8m expected by Canaccord Genuity. The performance is attributed to better-than-expected organic growth in the wholesale and infrastructure businesses as well as higher synergies due to the integration of 1300 Australia into the specialty services segment.

Canaccord Genuity is positive about Uniti’s prospects due to the recurring nature of the group’s revenues and maintains the Buy recommendation with the target price increased to $2.20 from $1.90.

The report was published on February 17, 2020.

Target price is $2.20 Current Price is $1.12 Difference: $1.08
If UWL meets the Canaccord Genuity target it will return approximately 96% (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 6.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.67.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 0.00 cents and EPS of 7.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.00.

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

VTG    VITA GROUP LIMITED

Telecommunication – Overnight Price: $1.20

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

Vita Group provides telecommunications, computers and related products and services via retail and business channels.

The first-half results were solid with revenues and operating profits at $432m and $26.4m respectively (pre-AASB 16) despite reduction in remunerations in the ICT retail channel, comments Canaccord Genuity.

The ICT (information and communication technology) divisional revenues and operating profit increased to $420m and $43.7m respectively, although with a decrease in margins to 10.4% from 10.8%. The SHAW (skin-health and wellness) divisional revenues were $11m with operating losses of -$0.8m.

The broker has upgraded its FY20 and FY21 operating profits forecasts (pre-AASB 16) to $47.2m and $55.8m respectively, retaining the Buy rating. The target price is increased to $1.95 from $1.75.

The report was published on February 23, 2020.

Target price is $1.95 Current Price is $1.20 Difference: $0.75
If VTG meets the Canaccord Genuity target it will return approximately 63% (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 10.00 cents and EPS of 16.10 cents.
At the last closing share price the estimated dividend yield is 8.33%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.45.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 11.00 cents and EPS of 19.20 cents.
At the last closing share price the estimated dividend yield is 9.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.25.

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

VVR    VIVA ENERGY REIT

REITs – Overnight Price: $2.64

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

Viva Energy REIT operates 425 service stations located through Australia. After announcing a broadly as expected FY19 result, Shaw and Partners is of the view the REIT’s FY20 guidance with distributable earning per share growth of between 3% to 3.75% is conservative and expects the company to outperform its guidance.

The company continues to be on an acquisition spree with $100m kept for FY20, notes Shaw and Partners.

Shaw and Partners considers the REIT stock cheap with respect to peers, and with Net Tangible Assets (NTA) upside for the company, the stock is seen as an attractive investment. The broker retains the Buy rating with the target price at $3.04.

The report was published on February 21, 2020.

Target price is $3.04 Current Price is $2.64 Difference: $0.4
If VVR meets the Shaw and Partners target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $2.72, suggesting upside of 3.2%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY20:

Shaw and Partners forecasts a full year FY20 dividend of 15.20 cents and EPS of 15.20 cents.
At the last closing share price the estimated dividend yield is 5.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.37.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.1, implying annual growth of -35.0%.
Current consensus DPS estimate is 15.1, implying a prospective dividend yield of 5.7%.
Current consensus EPS estimate suggests the PER is 17.5.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 15.90 cents and EPS of 15.90 cents.
At the last closing share price the estimated dividend yield is 6.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.60.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.9, implying annual growth of 5.3%.
Current consensus DPS estimate is 15.9, implying a prospective dividend yield of 6.0%.
Current consensus EPS estimate suggests the PER is 16.6.

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

XRF    XRF SCIENTIFIC LIMITED

Mining Sector Contracting – Overnight Price: $0.20

Canaccord Genuity rates ((XRF)) as Speculative Buy (1) –

XRF Scientific manufactures equipment and chemicals, distributed to production mines, construction material companies and commercial analytical laboratories, in Australia and overseas, and used in the preparation of samples for analysis.

The analysts find the company released a solid first half with $15.7m in revenue with the consumables division exceeding estimates by 22%.

The broker notes the focus areas for FY20 including precious metals, geographic expansion, increase in market share and launching new capital equipment products.

Canaccord Genuity has increased its FY20 and FY21 estimates while maintaining the Buy rating. The target price is increased to $0.33 from $0.27.

The report was published on February 23, 2020.

Target price is $0.33 Current Price is $0.20 Difference: $0.13
If XRF meets the Canaccord Genuity target it will return approximately 65% (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 1.20 cents and EPS of 2.40 cents.
At the last closing share price the estimated dividend yield is 6.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.33.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 1.40 cents and EPS of 2.60 cents.
At the last closing share price the estimated dividend yield is 7.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.69.

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

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