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Australian Broker Call *Extra* Edition – Oct 14, 2020

Daily Market Reports | Oct 14 2020

This story features A2 MILK COMPANY LIMITED, and other companies. For more info SHARE ANALYSIS: A2M

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)

A2M   AHX   BRG   CTD   CXL   ELD   IRI   MFG   MSB   NST (2)   PGX   PMY   QAN   SAR   SHV   STO   SYD   TLX   TNE   TYR   WHC  

A2M    THE A2 MILK COMPANY LIMITED

Dairy – Overnight Price: $14.85

Wilsons rates ((A2M)) as Market Weight (3) –

a2 Milk's trading update pointed to a bigger than expected contraction in Daigou sales. While this was anticipated by Wilsons, and is consistent with the experience of a2 Milk's industry peers, the broker notes the quantum of the impact was magnified by the extent of inventory build-up in the channel, as well as the importance of this channel for the company.

In the longer-term, the broker remains confident in a2 Milk's ability to continue the transition towards a direct-to-China model. Shorter-term, the broker looks at the near-term uncertainty around channel dislocation and is cautious.

Market Weight rating retained with a target price of $15.50.

This report was published on September 30, 2020.

Target price is $15.50 Current Price is $14.85 Difference: $0.65
If A2M meets the Wilsons target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $16.12, suggesting upside of 8.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of 49.58 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 49.8, 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 29.8.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of 64.85 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.90.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 60.1, implying annual growth of 20.7%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 24.7.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

AHX    APIAM ANIMAL HEALTH LTD

Medical Equipment & Devices – Overnight Price: $0.65

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

La Nina conditions are expected for Australia and Shaw and Partners considers this is positive for agricultural conditions on the East Coast. Consequently, tailwinds for Apiam Animal Health are expected to strengthen.

The broker highlights the last few years had their fair share of drought conditions, negative agricultural volumes, high water prices, and reducing key animal herds. The expected La Nina event conditions will be highly favourable for agricultural volumes, believes the broker, noting a greater than 50% increase in wheat volumes is forecast with rising water security on the East Coast.

The company appears to be cheap versus its peers and a market leader in a consolidating sector, notes the broker.

Shaw and Partners reiterates its Buy recommendation and a target price of $0.79.

This report was published on October 5, 2020.

Target price is $0.79 Current Price is $0.65 Difference: $0.14
If AHX meets the Shaw and Partners target it will return approximately 22% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 1.50 cents and EPS of 5.90 cents.
At the last closing share price the estimated dividend yield is 2.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.02.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 2.00 cents and EPS of 7.50 cents.
At the last closing share price the estimated dividend yield is 3.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.67.

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

BRG    BREVILLE GROUP LIMITED

Household & Personal Products – Overnight Price: $27.57

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

Breville Group acquired Baratza, a company that designs and markets premium coffee grinders for North American and international markets for a consideration of circa US$60m.

Goldman Sachs sees this acquisition consistent with Breville Group's M&A strategy of bolt-on acquisitions.

The broker notes Baratza provides a product range complementary to Breville's existing products. There is also the prospect of revenue synergies to come from the distribution strength of Breville and Baratza which has its largest footprint in North America.

Goldman Sachs retains its Buy rating with the target price increased to $31 from $30.35.

The report was published on October 5, 2020.

Target price is $31.00 Current Price is $27.57 Difference: $3.43
If BRG meets the Goldman Sachs target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $26.86, suggesting downside of -2.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 47.00 cents and EPS of 68.00 cents.
At the last closing share price the estimated dividend yield is 1.70%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 40.54.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 63.6, implying annual growth of 25.9%.
Current consensus DPS estimate is 43.5, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 43.3.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 58.00 cents and EPS of 83.00 cents.
At the last closing share price the estimated dividend yield is 2.10%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 33.22.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 71.6, implying annual growth of 12.6%.
Current consensus DPS estimate is 49.1, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 38.5.

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

CTD    CORPORATE TRAVEL MANAGEMENT LIMITED

Travel, Leisure & Tourism – Overnight Price: $17.62

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

Corporate Travel Management announced the acquisition of Travel & Transport (T&T),  a US-based travel business specialising in professional services and healthcare verticals, for an enterprise value of $275m.

Bell Potter views the acquisition as compelling due to increased scale with a combined total transaction value of $10.8bn in 2019 and expansion into a truly global hotel program through T&T’s Radius hotel program. The broker notes the acquisition will be earnings per share accretive on a 2019 basis.

Overall, despite the uncertainty facing the resumption of corporate travel especially international, the broker believes this is an opportunistic acquisition and backs management to execute over time.

Bell Potter maintains its Buy rating with the target price increasing to $18.50 from $16. 

The report was published on October 1, 2020.

Target price is $18.50 Current Price is $17.62 Difference: $0.88
If CTD meets the Bell Potter target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $16.63, suggesting downside of -5.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of 8.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 197.98.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.6, implying annual growth of N/A.
Current consensus DPS estimate is 2.0, implying a prospective dividend yield of 0.1%.
Current consensus EPS estimate suggests the PER is 267.0.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 15.00 cents and EPS of 52.80 cents.
At the last closing share price the estimated dividend yield is 0.85%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 33.37.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 54.4, implying annual growth of 724.2%.
Current consensus DPS estimate is 13.4, implying a prospective dividend yield of 0.8%.
Current consensus EPS estimate suggests the PER is 32.4.

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

CXL    CALIX LIMITED

Overnight Price: $0.84

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

Shaw and Partners notes Calix's direct separation technology has advanced over the last five years to the point where a major European cement company has stated its intentions to develop it into commercial use.

This is a significant step forward, comments the broker, and will reduce the risk for which investors will eventually reward Calix.

More catalysts are expected over the next 12 months and the broker feels this will support Calix trade up to higher levels. The company will undertake four site upgrades and add two new manufacturing sites in the US, steps the broker thinks will de-risk its earning profile.

Buy rating reaffirmed with the target price increasing to $1.20. 

This report was published on October 1, 2020.

Target price is $1.20 Current Price is $0.84 Difference: $0.36
If CXL meets the Shaw and Partners target it will return approximately 43% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 0.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 120.00.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of 0.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 280.00.

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

ELD    ELDERS LIMITED

Agriculture – Overnight Price: $11.88

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

Bell Potter has updated its forecasts on Elders to reflect recent trading updates and to incorporate the data trends in livestock and wool markets. The broker notes crop input suppliers showed strong demand through the second half.

Looking at weekly livestock statistics to September, the broker suggests the value of cattle turnoff year to date is up 29% on a yearly basis. Lamb markets were weaker, but this was anticipated and was not as bad as had been envisaged.

For wool markets, volumes in the second half were down -15% year on year, but Bell Potter had allowed for even more and was pleased with the outcome.

Bell Potter maintains its Buy rating with the target price increasing to $12.25 from $11.85.

The report was published on October 1, 2020.

Target price is $12.25 Current Price is $11.88 Difference: $0.37
If ELD meets the Bell Potter target it will return approximately 3% (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 20.00 cents and EPS of 66.60 cents.
At the last closing share price the estimated dividend yield is 1.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.84.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 25.00 cents and EPS of 77.90 cents.
At the last closing share price the estimated dividend yield is 2.10%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.25.

Market Sentiment: 0.5
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: $3.78

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

Bell Potter makes no changes to its forecasts for Integrated Research, updated at the company's FY20 result release in mid-August.

Earnings growth in FY21-23 will be driven mostly by high single-digit to low double-digit revenue growth and some improvement in margins, anticipates the broker.

Growth forecast for FY21 is on the lower end due to the release of new SaaS and hybrid products which are expected to start contributing in the second half of FY21.

The rating is upgraded to Buy from Hold with the target price unchanged at $4.25.

This report was published on October 2, 2020.

Target price is $4.25 Current Price is $3.78 Difference: $0.47
If IRI 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 FY21:

Bell Potter forecasts a full year FY21 dividend of 8.00 cents and EPS of 15.30 cents.
At the last closing share price the estimated dividend yield is 2.12%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.71.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 9.00 cents and EPS of 16.90 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 22.37.

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

MFG    MAGELLAN FINANCIAL GROUP LIMITED

Wealth Management & Investments – Overnight Price: $64.20

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

During the September quarter, Magellan Financial Group's funds under management (FUM) grew by 5.0% led by organic growth and investment returns.

The broker highlights over the quarter, except for the High Conviction fund and Airlie, most key products either mildly underperformed or posted very mild outperformance resulting in a less impressive start to the year for the group.

Collective performance fees from individual funds are forecast to be broadly flat, with the current first half performance fees forecast at $33m.

Neutral rating is retained with a target price of $54.86.

This report was published on October 7, 2020.

Target price is $54.86 Current Price is $64.20 Difference: minus $9.34 (current price is over target).
If MFG meets the Goldman Sachs target it will return approximately minus 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $59.66, suggesting downside of -7.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 232.00 cents and EPS of 253.00 cents.
At the last closing share price the estimated dividend yield is 3.61%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.38.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 242.4, implying annual growth of 11.0%.
Current consensus DPS estimate is 221.4, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 26.5.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 254.00 cents and EPS of 281.00 cents.
At the last closing share price the estimated dividend yield is 3.96%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 273.6, implying annual growth of 12.9%.
Current consensus DPS estimate is 245.3, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 23.5.

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

MSB    MESOBLAST LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $3.27

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

The US Food and Drug Authority (FDA) issued a complete response letter in regard to Ryoncil’s Biologics License Application (BLA) filing for paediatric SR-aGvHD. FDA recommended Mesoblast to provide more evidence of efficacy by running at least one randomised controlled trial in GvHD (adults and/or children).

Bell Potter was surprised as this was totally unprecedented and believes the FDA’s action has more to do with the fact that Ryoncil is the first allogeneic stem cell therapy to go in front of them for approval. It looks like the FDA wants to see the first such therapy being approved on the basis of a randomised controlled trial.

While disappointed, Mesoblast is moving forward on the path to get approval for Ryoncil for both covid-19 ARDS and SR-aGvHD. The broker believes the company may get GvHD approval in children as early as 2021, or approval for both children and high-risk adults in 2023.

FY21-22 net profit forecast has been materially reduced driven by the delayed launch of Ryoncil for paediatric SR-aGvHD to FY24.

The Buy rating is maintained. The target price is reduced to $7 from $7.30.

This report was published on October 5, 2020.

Target price is $7.00 Current Price is $3.27 Difference: $3.73
If MSB meets the Bell Potter target it will return approximately 114% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of 4.26 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 76.72.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of 1.03 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 317.78.

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

NST    NORTHERN STAR RESOURCES LTD

Gold & Silver – Overnight Price: $16.00

Canaccord Genuity rates ((NST)) as Upgrade to Buy from Hold (1) –

Canaccord Genuity sees minimal interloper risk to the proposed merger-of-equals between Norther Star Resources and Saracen Mineral Holdings ((SAR)).

The broker notes Saracen shareholders will receive 0.3763 Northern Star Resources' shares for each Saracen share held. The deal is supported by both companies and values the enlarged entity at $17bn. This, notes the broker, would position the company as the second-largest ASX-listed gold producer.

Three key supporting aspects for the merger are the cost and operational synergies as well as growth prospects.

Rating upgraded to Buy from Hold with the target price rising to $17.20 from $14.30.

This report was published on October 7, 2020.

Target price is $17.20 Current Price is $16.00 Difference: $1.2
If NST meets the Canaccord Genuity target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $14.39, suggesting downside of -10.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 0.16 cents and EPS of 0.90 cents.
At the last closing share price the estimated dividend yield is 0.01%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 1777.78.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 84.6, implying annual growth of 126.8%.
Current consensus DPS estimate is 24.0, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 18.9.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.23 cents and EPS of 1.07 cents.
At the last closing share price the estimated dividend yield is 0.01%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 1495.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 105.7, implying annual growth of 24.9%.
Current consensus DPS estimate is 24.3, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 15.1.

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


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

Northern Star Resources and Saracen Mineral Holdings ((SAR)) will be undergoing a merger-of-equals via a scheme of arrangement under which Northern Star will acquire 100% of Saracen's shares.

Saracen shareholders will receive 0.3763 of Northern Star shares for each Saracen share held at the scheme record date which is expected to be in February 2021.

Saracen Mineral will also pay a special, fully franked dividend of 3.8c/sh that is conditional on the scheme becoming effective and banking consents.

Goldman Sachs thinks the proposed merger is consistent with the strategy for both companies and will benefit from a complementary asset base and management style. In the broker's view, the merger would combine the two best organic growth profiles in the Australian gold sector, with production forecast at circa 2.1moz per annum by FY25. This is 50% more than the production in FY20.

The rationale for the merger is a suggested synergy value of $1.5-2bn over the next ten years expected to be achieved via geographic, operational and strategic synergies across the combined asset base.

Goldman Sachs retains its Neutral rating with a target price of $14.4.

This report was published on October 6, 2020.

Target price is $14.40 Current Price is $16.00 Difference: minus $1.6 (current price is over target).
If NST meets the Goldman Sachs target it will return approximately minus 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $14.39, suggesting downside of -10.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 24.00 cents and EPS of 106.30 cents.
At the last closing share price the estimated dividend yield is 1.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.05.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 84.6, implying annual growth of 126.8%.
Current consensus DPS estimate is 24.0, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 18.9.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 27.00 cents and EPS of 139.40 cents.
At the last closing share price the estimated dividend yield is 1.69%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.48.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 105.7, implying annual growth of 24.9%.
Current consensus DPS estimate is 24.3, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 15.1.

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

PGX    PRIMERO GROUP LIMITED

Mining Sector Contracting – Overnight Price: $0.36

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

Primero Group has increased its FY21 contracted order book by 24%. Looking at recent developments, Canaccord Genuity suggests the company looks well-placed to have three large projects commence over the next two years with a combined value of more than $400m.

The broker sees material upside potential to the company pending final investment decision announcements from the three major projects Primero is already working on.

Canaccord Genuity maintains its Buy rating with the target price rising to $0.57 from $0.54.

This report was published on October 5, 2020.

Target price is $0.57 Current Price is $0.36 Difference: $0.21
If PGX meets the Canaccord Genuity target it will return approximately 58% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 2.00 cents and EPS of 6.10 cents.
At the last closing share price the estimated dividend yield is 5.56%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.90.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 3.00 cents and EPS of 7.20 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 5.00.

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

PMY    PACIFICO MINERALS LTD

Overnight Price: $0.02

Shaw and Partners rates ((PMY)) as Initiation of coverage with Buy (1) –

Shaw and Partners initiates coverage on Pacifico Minerals with a Buy recommendation and a target price of $0.037.

Pacifico Minerals is developing the Sorby Hills Lead-Silver Project in the Kimberley Region of Western Australia. The company holds a 75% interest in the Sorby Hills JV with China’s largest lead smelting and silver producer Henan Yuguang holding the rest.

In August, Pacifico Minerals released the results of a pre-feasibility study that outlined a -$183m project mining producing 1.5mtpa of ore and 78ktpa of a lead/silver concentrate over a 10-year mine life. 

The company is progressing to a definitive feasibility study (DFS) and conducting additional exploration and resource definition drilling for a final investment decision in late 2021. The broker expects the first production in mid-2023.

Shaw and Partners is attracted to the stock and notes there are limited opportunities to gain exposure to silver on the ASX.

This report was published on October 2, 2020.

Target price is $0.04 Current Price is $0.02 Difference: $0.017
If PMY meets the Shaw and Partners target it will return approximately 85% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 20.00.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 20.00.

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

QAN    QANTAS AIRWAYS LIMITED

Transportation & Logistics – Overnight Price: $4.30

Goldman Sachs rates ((QAN)) as Upgrade to Buy from Neutral (1) –

Goldman Sachs has become confident the Australian domestic aviation markets will re-open pre-Christmas given the rates of community transmission across the Australia states, recent moves to relax border restrictions and the introduction of tourism stimulus, all ahead of the critical summer holiday period.

The broker expects a staggered approach to the re-opening of the states starting with NSW, and also the formation of a limited trans-Tasman bubble from December.

Goldman Sachs prefers exposure to Australian stocks as the broker notes the Australian domestic recovery is in its infancy with the stocks leveraged to profit from a domestic market recovery.

Qantas is upgraded to Buy from Neutral with the target price rising to $5.28 from $3.55.

This report was published on October 4, 2020.

Target price is $5.28 Current Price is $4.30 Difference: $0.98
If QAN meets the Goldman Sachs target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $4.21, suggesting downside of -2.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 27.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 15.93.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -38.9, 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 FY22:

Goldman Sachs forecasts a full year FY22 dividend of 0.00 cents and EPS of 47.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.8, implying annual growth of N/A.
Current consensus DPS estimate is 1.8, implying a prospective dividend yield of 0.4%.
Current consensus EPS estimate suggests the PER is 14.4.

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

SAR    SARACEN MINERAL HOLDINGS LIMITED

Gold & Silver – Overnight Price: $6.04

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

Northern Star Resources ((NST)) and Saracen Mineral Holdings will be undergoing a merger-of-equals via a scheme of arrangement under which Northern Star will acquire 100% of Saracen's shares.

Saracen shareholders will receive 0.3763 of Northern Star shares for each Saracen share held at the scheme record date which is expected to be in February 2021.

Saracen Mineral will also pay a special, fully franked dividend of 3.8c/sh that is conditional on the scheme becoming effective and banking consents.

Goldman Sachs thinks the proposed merger is consistent with the strategy for both companies and will benefit from a complementary asset base and management style. In the broker's view, the merger would combine the two best organic growth profiles in the Australian gold sector, with production forecast at circa 2.1moz per annum by FY25. This is 50% more than the production in FY20.

The rationale for the merger is a suggested synergy value of $1.5-2bn over the next ten years expected to be achieved via geographic, operational and strategic synergies across the combined asset base.

Goldman Sachs retains its Buy rating with a target price of $6.2.

This report was published on October 6, 2020.

Target price is $6.20 Current Price is $6.04 Difference: $0.16
If SAR meets the Goldman Sachs target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $5.83, suggesting downside of -3.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 7.00 cents and EPS of 37.30 cents.
At the last closing share price the estimated dividend yield is 1.16%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.19.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.2, implying annual growth of 42.4%.
Current consensus DPS estimate is 5.3, implying a prospective dividend yield of 0.9%.
Current consensus EPS estimate suggests the PER is 22.2.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 13.00 cents and EPS of 43.90 cents.
At the last closing share price the estimated dividend yield is 2.15%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 35.4, implying annual growth of 30.1%.
Current consensus DPS estimate is 10.7, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 17.1.

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

SHV    SELECT HARVESTS LIMITED

Agriculture – Overnight Price: $6.45

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

Select Harvests acquired the Piangil almond orchard for -$129m. The acquisition is assessed by Wilsons to be modestly earnings per share accretive with benefits from scale and synergy offset by the capital burden of buying the asset at a full price.

Earnings forecasts have been downgraded for FY21-22 led by anticipation of higher AUD/USD rates.

The recent recovery in exports of Californian almond shipments and forward commitment supports the broker's assumption of a stronger (USD) almond price in FY21.

Wilsons retains its Market Weight rating with a target price at $5.76.

This report was published on October 6, 2020.

Target price is $5.76 Current Price is $6.45 Difference: minus $0.69 (current price is over target).
If SHV meets the Wilsons target it will return approximately minus 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in September.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 12.50 cents and EPS of 23.40 cents.
At the last closing share price the estimated dividend yield is 1.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.56.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 13.30 cents and EPS of 24.20 cents.
At the last closing share price the estimated dividend yield is 2.06%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.65.

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

STO    SANTOS LIMITED

NatGas – Overnight Price: $5.08

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

Santos reported the Narrabri coal seam gas project has received environmental approval from the state to go ahead. The approval is conditional upon mitigation of any adverse impacts.

In Shaw in Partners' view, the announcement is incrementally positive for the company although expected. Thus, there is no change to earnings forecast.

The broker continues to like Santos for its operational and financial leverage to an oil price recovery.

Buy rating reaffirmed with a target price of $6.

This report was published on October 1, 2020.

Target price is $6.00 Current Price is $5.08 Difference: $0.92
If STO meets the Shaw and Partners target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $6.52, suggesting upside of 28.3%(ex-dividends)

Forecast for FY20:

Current consensus EPS estimate is 21.8, implying annual growth of N/A.
Current consensus DPS estimate is 7.2, implying a prospective dividend yield of 1.4%.
Current consensus EPS estimate suggests the PER is 23.3.

Forecast for FY21:

Current consensus EPS estimate is 34.7, implying annual growth of 59.2%.
Current consensus DPS estimate is 9.3, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 14.6.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SYD    SYDNEY AIRPORT HOLDINGS LIMITED

Infrastructure & Utilities – Overnight Price: $6.15

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

Goldman Sachs has become confident the Australian domestic aviation markets will re-open pre-Christmas given the rates of community transmission across the Australia states, recent moves to relax border restrictions and the introduction of tourism stimulus, all ahead of the critical summer holiday period.

The broker expects a staggered approach to the re-opening of the states starting with NSW, and also the formation of a limited trans-Tasman bubble from December.

Exposure to Australian stocks is preferred with the Australian domestic recovery in its infancy and the broker likes stocks leveraged to profit from a domestic market recovery.

Sydney Airport Holdings' rating is retained at Buy from Neutral with the target price rising to $7.02 from $6.16.

This report was published on October 4, 2020.

Target price is $7.02 Current Price is $6.15 Difference: $0.87
If SYD meets the Goldman Sachs target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $5.87, suggesting downside of -4.5%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY20:

Goldman Sachs forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 11.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 55.91.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -8.8, 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:

Goldman Sachs forecasts a full year FY21 dividend of 13.60 cents and EPS of 0.00 cents.
At the last closing share price the estimated dividend yield is 2.21%.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 0.3, implying annual growth of N/A.
Current consensus DPS estimate is 13.0, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 2050.0.

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

TLX    TELIX PHARMACEUTICALS LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $1.80

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

Wilsons maintains its Overweight rating and a price target of $2.73.

Telix Pharmaceuticals’ prostate cancer agent (TLX591-CDx) was filed for both US and European approvals and is expected to be approved by the second quarter of 2021.

The broker highlights Telix is the first to seek approval for a PSMA directed PET/CT imaging agent in both major markets and expects the product to generate more than $100m annualised sales within three years of launch.

The report was published on October 2, 2020.

Target price is $2.73 Current Price is $1.80 Difference: $0.93
If TLX meets the Wilsons target it will return approximately 52% (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 12.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 13.95.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 0.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 257.14.

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

TNE    TECHNOLOGYONE LIMITED

IT & Support – Overnight Price: $8.38

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

TechnologyOne received an adverse ruling in a court case (brought about by an ex-employee) that requires TechnologyOne to pay the ex-employee -$5.2m. Bell Potter notes this is well above the -$1.6m hit the company had already taken in relation to the case.

While the company will be appealing the verdict, it will have to take an additional provision of about -$3.6m in its FY20 result. As a result, the company now expects to be at the lower end of guidance (which is for profit before tax between $82.5-85.6m) 

FY20 earnings per share forecast has been reduced by -2% due to the expected additional provision, but there is negligible change to the broker's FY21-22 forecasts.

Bell Potter maintains its Buy rating with a target price of $9.50.

This report was published on October 6, 2020.

Target price is $9.50 Current Price is $8.38 Difference: $1.12
If TNE meets the Bell Potter target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $8.12, suggesting downside of -3.2%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 13.10 cents and EPS of 19.70 cents.
At the last closing share price the estimated dividend yield is 1.56%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 42.54.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.3, implying annual growth of 4.7%.
Current consensus DPS estimate is 12.6, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 43.4.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 15.10 cents and EPS of 23.00 cents.
At the last closing share price the estimated dividend yield is 1.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 36.43.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.3, implying annual growth of 10.4%.
Current consensus DPS estimate is 14.5, implying a prospective dividend yield of 1.7%.
Current consensus EPS estimate suggests the PER is 39.3.

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

TYR    TYRO PAYMENTS LIMITED

Business & Consumer Credit – Overnight Price: $3.91

Goldman Sachs rates ((TYR)) as Initiation of coverage with Neutral (3) –

Goldman Sachs initiates coverage on Tyro Payments with a Neutral rating and a target price of $3.20.

Tyro Payments provides in-store payment services as a merchant acquirer along with a number of business banking products to more than 32k merchants in the Australian market.

In Goldman Sachs's view, Tyro Payments has several drivers of growth like the rising usage of card payment relative to cash, value-add services that can only be provided by Tyro since it is the only specialist payment provider with a banking license and its e-commerce solution for online payment acceptance.

These tailwinds are expected to drive revenue growth over FY20-FY23 at a compounded annual growth rate (CAGR) of 20%.

Target price is $3.20 Current Price is $3.91 Difference: minus $0.71 (current price is over target).
If TYR meets the Goldman Sachs target it will return approximately minus 18% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $3.48, suggesting downside of -10.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 3.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 130.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -3.1, 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 FY22:

Goldman Sachs forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 391.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -1.0, 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.

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

WHC    WHITEHAVEN COAL LIMITED

Coal – Overnight Price: $0.99

Shaw and Partners rates ((WHC)) as Upgrade to Buy (1) –

Shaw and Partners expects coal to be in the top three performing commodities in September looking at the 20-25% rise in prices during the month.

The inflection point across thermal & metallurgical coal occurred during the 1st week of the month and reflects the resumption of buying by India post covid-19 and the monsoon season lull as well as supply side financials stretched with more than 50% of global producers operating at a cash loss position.

The broker expects Whitehaven Coal will continue to progress and close the gap with Fortescue Metals Group while tracking the cyclical trajectory of the coal price.

Rating has been upgraded to Buy with the target price rising to $2 from $1.80.

This report was published on October 1, 2020.

Target price is $2.00 Current Price is $0.99 Difference: $1.01
If WHC meets the Shaw and Partners target it will return approximately 102% (excluding dividends, fees and charges).
Current consensus price target is $1.52, suggesting upside of 53.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 13.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 7.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -5.8, implying annual growth of N/A.
Current consensus DPS estimate is 0.4, implying a prospective dividend yield of 0.4%.
Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 3.00 cents and EPS of 8.40 cents.
At the last closing share price the estimated dividend yield is 3.03%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 4.2, implying annual growth of N/A.
Current consensus DPS estimate is 2.5, implying a prospective dividend yield of 2.5%.
Current consensus EPS estimate suggests the PER is 23.6.

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


Disclaimer:
The content of this information does in no way reflect the opinions of FNArena, or of its journalists. In fact we don't have any opinion about the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface. This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FNArena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.

As part of emerging new trends overseas, The Australian Broker Call *Extra* Edition also includes providers of sponsored research. Readers should bear in mind, sponsored research, while not necessarily of lower quality, has the embedded complication that the company that is the subject of the research has paid for this research. Providers of sponsored research that can potentially be included in this Report are Breakaway Research, Edison Investment Research, Independent Investment Research, NDF Research, Pitt Street Research, and TMT Analytics.

Decisions about inclusions in this Report are made independently of the providers of stock market research and at full discretion of the team of journalists responsible for content at FNArena. Inclusion does not equal endorsement, in any way, shape or form. This Report is provided for informational purposes only.

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CHARTS

A2M AHX BRG CTD CXL ELD IRI MFG MSB NST PGX PMY QAN SHV STO SYD TLX TNE TYR WHC

For more info SHARE ANALYSIS: A2M - A2 MILK COMPANY LIMITED

For more info SHARE ANALYSIS: AHX - APIAM ANIMAL HEALTH LIMITED

For more info SHARE ANALYSIS: BRG - BREVILLE GROUP LIMITED

For more info SHARE ANALYSIS: CTD - CORPORATE TRAVEL MANAGEMENT LIMITED

For more info SHARE ANALYSIS: CXL - CALIX LIMITED

For more info SHARE ANALYSIS: ELD - ELDERS LIMITED

For more info SHARE ANALYSIS: IRI - INTEGRATED RESEARCH LIMITED

For more info SHARE ANALYSIS: MFG - MAGELLAN FINANCIAL GROUP LIMITED

For more info SHARE ANALYSIS: MSB - MESOBLAST LIMITED

For more info SHARE ANALYSIS: NST - NORTHERN STAR RESOURCES LIMITED

For more info SHARE ANALYSIS: PGX - PRIMERO GROUP LIMITED

For more info SHARE ANALYSIS: PMY - PACIFICO MINERALS LTD

For more info SHARE ANALYSIS: QAN - QANTAS AIRWAYS LIMITED

For more info SHARE ANALYSIS: SHV - SELECT HARVESTS LIMITED

For more info SHARE ANALYSIS: STO - SANTOS LIMITED

For more info SHARE ANALYSIS: SYD - SYDNEY AIRPORT

For more info SHARE ANALYSIS: TLX - TELIX PHARMACEUTICALS LIMITED

For more info SHARE ANALYSIS: TNE - TECHNOLOGY ONE LIMITED

For more info SHARE ANALYSIS: TYR - TYRO PAYMENTS LIMITED

For more info SHARE ANALYSIS: WHC - WHITEHAVEN COAL LIMITED