Australian Broker Call *Extra* Edition – Aug 04, 2020

This story features APPEN LIMITED, and other companies. For more info SHARE ANALYSIS: APX

An additional news report on the recommendation, valuation, forecast and opinion changes for ASX-listed equities.

In addition to The Australian Broker Call Report, which is published and updated daily (Mon-Fri), FNArena has now added The Australian Broker Call *Extra* Edition, featuring additional sources of research and insights on ASX-listed stocks, also enlarging the number of stocks that make up the FNArena universe.

One key difference is the *Extra* Edition will not be updated daily, but merely "regularly" depending on availability of suitable quality content. As such, the *Extra* Edition tries to build a bridge between daily updates via the Australian Broker Call Report and ad hoc news stories, that are not always timely for investors hungry for the next information update.

Investors using the *Extra* Edition as a source of input for their own share market research should thus take into account that information after publication may not be up to date, or yet awaiting another update by FNArena's team of journalists.

Similar to The Australian Broker Call Report, this *Extra* Edition includes concise but limited reviews of research recently published by Stockbrokers and other experts, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end of this Report.

The Australian Broker Call *Extra* Edition is a summary that has been prepared independently of the sources identified. Readers will check the full text of the recommendations and consult a Licenced Advisor before making any investment decision.

The copyright of this Report is owned by the publisher. Readers will not copy, forward or disseminate this Report to any other person. For more vital information about the sources included, see the bottom of this Report.

COMPANIES DISCUSSED IN THIS ISSUE

Click on a symbol for fast access.
The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)

APX   BOQ (2)   BUB (2)   BWX (2)   CCX (2)   EHL (2)   GNX   HLS   INA   MIN   NXS   SOM   VCX   VVA  

APX    APPEN LIMITED

IT & Support – Overnight Price: $36.78

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

Wilsons initiates coverage of Appen with an Overweight rating and a target price of $42.56

Wilsons thinks the company is well-placed to capitalise on the opportunities in artificial intelligence and machine learning over the short and medium-term.

The broker likes Appen due to its performance record, high-quality customers and a dynamic growth strategy which involves supplementing organic growth with strategic acquisitions.

FY20 revenue is expected to be up 32% with operating income up 30%, largely in-line with consensus.

This report was published on July 27, 2020.

Target price is $42.56 Current Price is $36.78 Difference: $5.78
If APX meets the Wilsons target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $32.78, suggesting downside of -10.9%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 9.00 cents and EPS of 54.10 cents.
At the last closing share price the estimated dividend yield is 0.24%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 67.99.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 64.3, implying annual growth of 82.3%.
Current consensus DPS estimate is 10.9, implying a prospective dividend yield of 0.3%.
Current consensus EPS estimate suggests the PER is 57.2.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 11.00 cents and EPS of 77.40 cents.
At the last closing share price the estimated dividend yield is 0.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 47.52.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 84.8, implying annual growth of 31.9%.
Current consensus DPS estimate is 14.4, implying a prospective dividend yield of 0.4%.
Current consensus EPS estimate suggests the PER is 43.4.

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

BOQ    BANK OF QUEENSLAND LIMITED

Banks – Overnight Price: $5.77

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

Bank of Queensland’s third quarter Pillar 3 report disclosed a broadly stable CET1 ratio of 9.75% and growth of circa 1% in mortgage lending growth.

On the flip side, 90 days past due loans were $112m higher in the quarter. The bank has also increased its collective provisions by -$61m due to covid-19, bringing total collective provisions to -$71m. This stands at the top end of its -$49-71m expected range.

Bell Potter has reduced its FY20 net profit forecast by -14% after increasing the full year loan impairment expense (LIE) by -37%. The broker expects reduced distribution in October.

Bell Potter retains its Hold rating with a target price of $6.

This report was published on July 22, 2020.

Target price is $6.00 Current Price is $5.77 Difference: $0.23
If BOQ meets the Bell Potter target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $5.86, suggesting upside of 1.5%(ex-dividends)
The company's fiscal year ends in August.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 10.00 cents and EPS of 53.00 cents.
At the last closing share price the estimated dividend yield is 1.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.89.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 53.5, implying annual growth of -32.8%.
Current consensus DPS estimate is 12.1, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 10.8.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 30.00 cents and EPS of 44.00 cents.
At the last closing share price the estimated dividend yield is 5.20%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 46.7, implying annual growth of -12.7%.
Current consensus DPS estimate is 31.9, implying a prospective dividend yield of 5.5%.
Current consensus EPS estimate suggests the PER is 12.4.

Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

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Goldman Sachs rates ((BOQ)) as No Rating (-1) –

Bank of Queensland's Pillar 3 disclosure shows the bank took a further collective provision of -$61m during the third quarter. This brings its total pandemic related collective provision to -$71m.

This is at the top-end of the range provided by management but remains below the increase expected by the broker. Write-offs during the half were also materially below the broker's estimates.

The broker is pleased by the update, noting the better than expected capital position and bad & doubtful debts.

Even so, uncertainty remains with respect to the loan book performance once the loan deferral period comes to an end later this year. The broker thus leaves its forecasts unchanged for now.

Goldman Sachs retains its Buy rating with a target price of $7.17. 

This report was published on July 24, 2020.

Target price is $7.17 Current Price is $5.77 Difference: $1.4
If BOQ meets the Goldman Sachs target it will return approximately 24% (excluding dividends, fees and charges).
Current consensus price target is $5.86, suggesting upside of 1.5%(ex-dividends)
The company's fiscal year ends in August.

Forecast for FY20:

Goldman Sachs forecasts a full year FY20 EPS of 51.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.31.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 53.5, implying annual growth of -32.8%.
Current consensus DPS estimate is 12.1, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 10.8.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 EPS of 46.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.54.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 46.7, implying annual growth of -12.7%.
Current consensus DPS estimate is 31.9, implying a prospective dividend yield of 5.5%.
Current consensus EPS estimate suggests the PER is 12.4.

Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

BUB    BUBS AUSTRALIA LIMITED

Dairy – Overnight Price: $0.87

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

Bubs Australia’s Q4 gross revenue was down -5% year on year and below Bell Potter’s forecast. This was due to a bigger than expected revenue pull-forward in revenues to the third quarter from covid-19.

Infant milk formula revenues were up 20% year on year despite softer Diagou numbers. The company reported negative June quarter operating cashflows.

Earnings forecasts have been reduced for FY20-22. The broker notes the company is still in the early stage of its product life cycle where revenue is mostly driven by expansion in distribution, product uptake and category expansion.

The revenue and earnings ceiling for the company appears to be high, comments the broker and notes signs of positive momentum in the infant formula business.

Since the stock is trading within Bell Potter’s target range, it downgrades its rating to Hold from Buy. The valuation is decreased to $1 from $1.15.

This report was published on July 28, 2020.

Target price is $1.00 Current Price is $0.87 Difference: $0.13
If BUB meets the Bell Potter target it will return approximately 15% (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 1.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 48.33.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 0.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 217.50.

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

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

Bubs Australia’s June quarter was mixed with the top-line hit by channel inventory re-adjustment. This was due to pull-forward sales in the third quarter along with destocking across the Diagou channel.

The second half proved to be resilient despite covid-19 and posted double-digit sales growth for its core infant formula segment. Travel restrictions in the near term render the outlook volatile. In the long run, the broker sees good growth prospects except for higher costs.

Wilsons retains its Market Weight rating with a target price of $0.93.

This report was published on July 28, 2020.

Target price is $0.93 Current Price is $0.87 Difference: $0.06
If BUB meets the Wilsons target it will return approximately 7% (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 1.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 54.38.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 0.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 217.50.

Market Sentiment: 0.0
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: $3.92

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

BWX recently raised $40m, to be deployed for the development of a new factory. This will triple the company’s manufacturing capacity by FY23, expects Bell Potter.

After a strong FY20, BWX’s investment in a manufacturing facility is seen as an important step in future-proofing its manufacturing capabilities. 

BWX's operating income grew 29.3% year on year in FY20. This is in-line with Bell Potter's estimates. The company is guiding to FY21 revenue & operating income growth of at least 10%. This looks conservative, comments the broker.

Earnings forecasts downgraded for FY20-22 driven by dilution from the capital raising, the FY20 result and FY21 guidance. The broker expects the majority gains from BWX’s new investment will be realised from FY23 onwards.

Bell Potter retains its Hold rating with the target price increasing to $4.35 from $4.15.

This report was published on July 28, 2020.

Target price is $4.35 Current Price is $3.92 Difference: $0.43
If BWX meets the Bell Potter target it will return approximately 11% (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 4.50 cents and EPS of 11.60 cents.
At the last closing share price the estimated dividend yield is 1.15%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 33.79.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 5.20 cents and EPS of 12.90 cents.
At the last closing share price the estimated dividend yield is 1.33%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.39.

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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Shaw and Partners rates ((BWX)) as Hold (3) –

BWX’s FY20 result was strong in a very uncertain environment, observes Shaw and Partners. Net sales were up 25% year on year and operating cash flows also continued to improve.

FY21 guidance expects revenue and operating income growth of at least 10%, which Shaw and Partners considers to be conservative.

The company raised $40m as new capital to invest in the manufacturing of a new facility.

Against an uncertain environment, Shaw and Partners reiterates its Hold recommendation with a target price of $3.93.

This report was published on July 28, 2020.

Target price is $3.93 Current Price is $3.92 Difference: $0.01
If BWX meets the Shaw and Partners target it will return approximately 0% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Shaw and Partners forecasts a full year FY20 dividend of 4.30 cents and EPS of 11.20 cents.
At the last closing share price the estimated dividend yield is 1.10%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 35.00.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 5.00 cents and EPS of 16.70 cents.
At the last closing share price the estimated dividend yield is 1.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.47.

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

CCX    CITY CHIC COLLECTIVE LTD

Apparel & Footwear – Overnight Price: $3.40

Goldman Sachs rates ((CCX)) as Buy (1) –

City Chic Collective will be raising $80m in equity and has been selected as "the stalking horse bidder" for US-based Catherines. If successful, about 80% of revenues will come from the online channel in FY22 versus 65% in 2020, estimates Goldman Sachs.

Goldman Sachs is optimistic about the outlook due to expansion of the retailer’s online presence, improving scale in the US and a strong balance sheet. Earnings forecasts have been upgraded for FY20-22.

Goldman Sachs retains its Buy rating with the target price increasing to $4.15 from $3.20.

This report was published on July 27, 2020.

Target price is $4.15 Current Price is $3.40 Difference: $0.75
If CCX meets the Goldman Sachs target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $3.62, suggesting upside of 6.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Goldman Sachs forecasts a full year FY20 dividend of 0.00 cents and EPS of 9.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 37.78.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.9, implying annual growth of -4.8%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 43.0.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 0.00 cents and EPS of 10.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 34.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 10.7, implying annual growth of 35.4%.
Current consensus DPS estimate is 1.7, implying a prospective dividend yield of 0.5%.
Current consensus EPS estimate suggests the PER is 31.8.

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

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

City Chic Collective continues to expand in North America and has announced a potential acquisition of plus-sized retailer Catherines’ for US$16.0m.

While the retailer finished FY20 with net cash of $3.9m, it will be raising capital of $90m to help with its growth strategies, reports Wilsons.

The company released a trading update for FY20 and expects operating income for the year to be 4.6% above consensus forecasts. The broker considers the outcome positive in a difficult trading environment.

Wilsons maintains its Overweight rating with the target price unchanged at $3.17.

This report was published on July 24, 2020.

Target price is $3.17 Current Price is $3.40 Difference: minus $0.23 (current price is over target).
If CCX meets the Wilsons target it will return approximately minus 7% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $3.62, suggesting upside of 6.6%(ex-dividends)
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 7.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 45.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.9, implying annual growth of -4.8%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 43.0.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of 14.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.29.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 10.7, implying annual growth of 35.4%.
Current consensus DPS estimate is 1.7, implying a prospective dividend yield of 0.5%.
Current consensus EPS estimate suggests the PER is 31.8.

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

EHL    EMECO HOLDINGS LTD

Mining Sector Contracting – Overnight Price: $0.96

Goldman Sachs rates ((EHL)) as Buy (1) –

Emeco Holdings did not provide any formal guidance for FY21, its segment-wise outlook commentary points to a flat FY21 operating income (year on year).

Goldman Sachs highlights coal to be the primary swing factor here. Management expects a -10-20% decline in Eastern rental operating income, offset by growth in Western rental of 15%, Pit N Portal and Force.

Coal headwinds are expected to persist in FY21-22. The broker anticipates coal to be the primary driver of stock performance near term. The stock will likely rate higher if prices move in-line with the broker’s forecasts.

Goldman Sachs retains its Buy rating with the target price decreasing to $1.30 from $1.40.

This report was published on July 27, 2020.

Target price is $1.30 Current Price is $0.96 Difference: $0.34
If EHL meets the Goldman Sachs target it will return approximately 35% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 10.00 cents and EPS of 22.00 cents.
At the last closing share price the estimated dividend yield is 10.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.36.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 27.00 cents and EPS of 34.00 cents.
At the last closing share price the estimated dividend yield is 28.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 2.82.

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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Moelis rates ((EHL)) as Hold (3) –

Emeco Holdings’ FY20 results were on expected lines. For FY21, Eastern rental earnings are expected to be down -10-20%, states Moelis. This is mostly due to covid-19-led lower coal prices.

The good news is FY21 Western rental is expected to grow 15% due to the strong demand for gold and iron ore. Overall, the FY21 operating income is estimated to be in-line with consensus.

If subdued conditions in coal markets persist, the company’s operating leverage could put pressure on its earnings, believes the broker. Despite diversification efforts, the company retains significant exposure to coal.

Moelis retains its Hold rating with a target price of $1.09.

This report was published on July 28, 2020.

Target price is $1.09 Current Price is $0.96 Difference: $0.13
If EHL meets the Moelis target it will return approximately 14% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 0.00 cents and EPS of 15.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.32.

Forecast for FY22:

Moelis forecasts a full year FY22 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 5.45.

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

GNX    GENEX POWER LIMITED

EV, Solar & Batteries – Overnight Price: $0.28

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

Canaccord Genuity thinks the focus should be on progress with Genex Power’s flagship Kidston pumped hydro development (K2H) project which is on the cusp of a final investment decision and partial sell down.

Construction activities continue at Jemalong and remain unaffected by covid-19. The broker expects the company will contract up to 50% of expected generation before the first offtake commences in the December quarter.

Canaccord Genuity maintains its Speculative Buy rating with a target price of $0.34.

This report was published on July 28, 2020.

Target price is $0.34 Current Price is $0.28 Difference: $0.06
If GNX meets the Canaccord Genuity target it will return approximately 21% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 1.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 21.54.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 0.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 93.33.

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

HLS    HEALIUS LIMITED

Healthcare services – Overnight Price: $3.18

Goldman Sachs rates ((HLS)) as Neutral (3) –

Healius pre-announced headline FY20 results with operating income -38% year on year and net profit lower by -41% year on year.

What Goldman Sachs finds interesting is that the recovery seen in pathology and imaging in the mid-June update has continued through to end-July.

With the sale of its Medical Centres division to BGH Capital, the investor focus has shifted towards the company’s ability to narrow the gap in profitability in its remaining core divisions, suggests the broker.

Healius is currently performing up to 16k covid-19 tests per day, up from 2-3k per day at end-March. The broker thinks Healius' volumes are likely to grow at strong levels in the near-term.

Goldman Sachs maintains its Neutral rating with a target price of $3.16.

This report was published on July 27, 2020.

Target price is $3.16 Current Price is $3.18 Difference: minus $0.02 (current price is over target).
If HLS meets the Goldman Sachs target it will return approximately minus 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $3.30, suggesting upside of 3.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Goldman Sachs forecasts a full year FY20 dividend of 7.00 cents and EPS of 9.00 cents.
At the last closing share price the estimated dividend yield is 2.20%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 35.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.2, implying annual growth of 21.7%.
Current consensus DPS estimate is 3.1, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 28.4.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 8.00 cents and EPS of 15.00 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 21.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.6, implying annual growth of 39.3%.
Current consensus DPS estimate is 4.5, implying a prospective dividend yield of 1.4%.
Current consensus EPS estimate suggests the PER is 20.4.

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

INA    INGENIA COMMUNITIES GROUP

Aged Care & Seniors – Overnight Price: $4.59

Goldman Sachs rates ((INA)) as Buy (1) –

Ingenia Communities Group finished FY20 with 325 new home settlements, ahead of Goldman Sachs’ expected 305.

Funds raised in April will be used for acquiring the existing Land Lease lifestyle community of Sunnylake Shores (central coast of NSW) for -$16m. This will add 38 development sites along with additional vacant land to add to the group’s pipeline.

The broker expects more acquisitions by December 31 and into 2021 which will add to the existing portfolio and development pipeline. The group will release its FY20 results on August 18^th and the broker is optimistic.

Goldman Sachs reaffirms its Buy rating with a target price of $5.25.

This report was published on July 27, 2020.

Target price is $5.25 Current Price is $4.59 Difference: $0.66
If INA meets the Goldman Sachs target it will return approximately 14% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Goldman Sachs forecasts a full year FY20 dividend of 10.00 cents and EPS of 20.00 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 22.95.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 10.00 cents and EPS of 19.00 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 24.16.

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

MIN    MINERAL RESOURCES LIMITED

Iron Ore – Overnight Price: $26.41

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

Mineral Resources’ June quarter was minimally impacted from covid-19, observes Bell Potter. Iron ore shipments increased by 53% quarter on quarter and shows the company is capitalising on the strong iron ore pricing environment.

The broker sees the potential for more headwinds with Vale striving to increase its exports. Earnings forecasts are revised upwards for FY20-22 due to an upgrade in iron ore pricing assumptions and more production at Koolyanobbing.

Keeping in mind the recent share price outperformance and uncertainty over the sustainability of iron ore pricing, Bell Potter downgrades its rating to Hold from Buy. The target price is increased to $23.55 from $20.40.

Target price is $23.55 Current Price is $26.41 Difference: minus $2.86 (current price is over target).
If MIN meets the Bell Potter target it will return approximately minus 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $21.80, suggesting downside of -17.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 88.00 cents and EPS of 176.00 cents.
At the last closing share price the estimated dividend yield is 3.33%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.01.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 190.1, implying annual growth of 118.5%.
Current consensus DPS estimate is 57.0, implying a prospective dividend yield of 2.2%.
Current consensus EPS estimate suggests the PER is 13.9.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 103.00 cents and EPS of 206.40 cents.
At the last closing share price the estimated dividend yield is 3.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 218.8, implying annual growth of 15.1%.
Current consensus DPS estimate is 97.0, implying a prospective dividend yield of 3.7%.
Current consensus EPS estimate suggests the PER is 12.1.

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

NXS    NEXT SCIENCE LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $1.29

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

Next Science’s receipts in the first half match broadly with Wilsons’ revenue forecast. This was despite a steep covid-19 led reduction in the company's surgical and wound care categories.

The third quarter will continue to see a subdued wound care segment with wound clinics reopening slowly. Surgical sales are expected to be about 75% of the second half revenue due to Zimmer’s purchasing cycle and recent approvals in Europe and Australia.

Wilsons also expects FDA approval for XPerience. If approved, this will add circa US$5m to FY21 and US$10m to FY22 estimates, calculates the broker. First-half results are to be declared on August 26^th.

Wilsons maintains its Overweight rating with a target price of $2.87.

This report was published on July 28, 2020.

Target price is $2.87 Current Price is $1.29 Difference: $1.58
If NXS meets the Wilsons target it will return approximately 122% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 6.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 19.25.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 5.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 24.34.

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

SOM    SOMNOMED LIMITED

Medical Equipment & Devices – Overnight Price: $1.30

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

SomnoMed’s June quarter update noted second-half sales to be double Goldman Sachs's forecast. Diagnosis volumes are about 85% back to normal and improving. 

The broker's FY21 revenue forecast is now 80% of pre-covid-19 levels. The pandemic has cost the company a year of growth, comments the broker, but has also left the business in the best financial position ever seen.

Cash on hand is $30m and will help growth, margin expansion and the evolution of connected care strategies.

Wilsons maintains its Overweight rating with a target price of $1.65.

This report was published on July 24, 2020.

Target price is $1.65 Current Price is $1.30 Difference: $0.35
If SOM meets the Wilsons target it will return approximately 27% (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 0.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 162.50.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of 1.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 118.18.

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

VCX    VICINITY CENTRES

REITs – Overnight Price: $1.27

Goldman Sachs rates ((VCX)) as Buy (1) –

Vicinity Centres' portfolio net valuations decreased by -11.3% in June, which is at the bottom of company management's expected range of -11%-13%.

Goldman Sachs thinks the market will consider the valuation announcement as positive for the REIT. The bulk of the decline was around the regional, sub-regional, and neighbourhood assets, notes the broker.

The broker suggests investors are likely to focus on near term valuations due to the uncertain and challenging environment. This is especially true for Melbourne, where the REIT derives circa 47% of its rental income (on the broker's estimate).

Goldman Sachs retains its Buy rating with a target price of $1.74.

This report was published on July 24, 2020.

Target price is $1.74 Current Price is $1.27 Difference: $0.47
If VCX meets the Goldman Sachs target it will return approximately 37% (excluding dividends, fees and charges).
Current consensus price target is $1.56, suggesting upside of 23.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Goldman Sachs forecasts a full year FY20 EPS of 16.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.94.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.3, implying annual growth of 69.2%.
Current consensus DPS estimate is 7.8, implying a prospective dividend yield of 6.1%.
Current consensus EPS estimate suggests the PER is 8.3.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 EPS of 12.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.58.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.0, implying annual growth of -21.6%.
Current consensus DPS estimate is 9.0, implying a prospective dividend yield of 7.1%.
Current consensus EPS estimate suggests the PER is 10.6.

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

VVA    VIVA LEISURE LIMITED

Travel, Leisure & Tourism – Overnight Price: $2.16

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

Viva Leisure will acquire Australian Fitness Management (AFM), the master franchisor of the Plus Fitness franchise. Shaw and Partners expects the acquisition to be earnings accretive immediately.

The company seems to be experiencing a recovery, unlike other discretionary leisure exposures like travel stocks. Most of Viva Leisure’s facilities are operating and membership has recovered to 98% of pre-covid levels.

The positives from the AFM acquisition are more than offset by the impact of covid-19 and leads the broker to reduce estimated earnings for FY20-21.

Shaw and Partners reiterates its Buy rating with a target price of $2.60.

This report was published on July 27, 2020.

Target price is $2.60 Current Price is $2.16 Difference: $0.44
If VVA meets the Shaw and Partners target it will return approximately 20% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Shaw and Partners forecasts a full year FY20 dividend of 0.00 cents and EPS of 0.00 cents.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 0.00 cents and EPS of 10.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.18.

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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