Australian Broker Call *Extra* Edition – Oct 21, 2020

Daily Market Reports | Oct 21 2020

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

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

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

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

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

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

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

COMPANIES DISCUSSED IN THIS ISSUE

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

A2M   ARB   BIN (2)   BTH   BXB   CCL   CQE (2)   CRN   GNG   GOZ   MTO   MYX   NWL (2)   OTW   PSQ   RMS   SRG   TCL   VHT   VVA   WHC  

A2M    THE A2 MILK COMPANY LIMITED

Dairy - Overnight Price: $14.70

Bell Potter rates ((A2M)) as Sell (5) -

The key question in a2 Milk's case is whether Bell Potter's FY21 downgrade to revenue expectations is a temporary daigou supply chain issue, or is it reflective of a wider demand issue?

Bell Potter notes it looks like demand expectations resulting from the pandemic have not eventuated and this has exposed a2 Milk to a destocking event over the first half of FY21. This is expected to continue until the true level of demand is discovered.

The broker does not agree with consensus baseline estimates and considers them too optimistic. Bell Potter retains its Sell rating with the target price falling to $12.70 from $13.75.

This report was published on October 9, 2020.

Target price is $12.70 Current Price is $14.70 Difference: minus $2 (current price is over target).
If A2M meets the Bell Potter target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $16.12, suggesting upside of 9.7%(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 47.88 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 50.2, 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 29.3.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of 54.77 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 60.5, implying annual growth of 20.5%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 24.3.

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

ARB    ARB CORPORATION LIMITED

Automobiles & Components - Overnight Price: $32.85

Wilsons rates ((ARB)) as Overweight (1) -

With sales up 18% with considerable margin expansion, Wilsons notes ARB Corp had a strong start to FY21. However, domestic sales are constrained by new vehicle supply and the Melbourne lockdown.

Stronger sales growth is expected in the second half provided constraints ease. ARB Corp expects export sales to remain strong in key markets like Europe, New Zealand and the US. Wilsons sees good prospects for sustained sales growth through a continued shift to SUVs and penetration of export markets.

Wilsons maintains its Overweight rating with a target price of $33.50.

This report was published on October 8, 2020.

Target price is $33.50 Current Price is $32.85 Difference: $0.65
If ARB meets the Wilsons target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $28.51, suggesting downside of -13.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 46.50 cents and EPS of 100.80 cents.
At the last closing share price the estimated dividend yield is 1.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 97.0, implying annual growth of 35.1%.
Current consensus DPS estimate is 50.4, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 33.9.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 52.50 cents and EPS of 95.60 cents.
At the last closing share price the estimated dividend yield is 1.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 34.36.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 92.9, implying annual growth of -4.2%.
Current consensus DPS estimate is 53.0, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 35.4.

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: $2.73

Goldman Sachs rates ((BIN)) as Neutral (3) -

Bingo Industries' first-quarter saw stronger than expected post-collections volumes offset by weaker collections volumes. Prices are below pre-covid levels and in-line with Goldman Sachs's estimate.

On account of the support from the budget, re-opening of NSW and Victoria progressing to a potential lifting of stage-4 lockdown, the broker believes the risks to Bingo's outlook are reducing in the near term.

Earnings estimates remain unchanged. Neutral rating is reaffirmed with the target price increased to $2.50 from $2.35.

This report was published on October 8, 2020.

Target price is $2.50 Current Price is $2.73 Difference: minus $0.23 (current price is over target).
If BIN meets the Goldman Sachs target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $2.61, suggesting downside of -4.5%(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 6.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 45.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.0, implying annual growth of -40.6%.
Current consensus DPS estimate is 2.6, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 45.5.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 4.00 cents and EPS of 9.00 cents.
At the last closing share price the estimated dividend yield is 1.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.8, implying annual growth of 63.3%.
Current consensus DPS estimate is 4.5, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 27.9.

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


Shaw and Partners rates ((BIN)) as Hold (3) -

Shaw and Partners notes the outlook for Bingo Industries post the pandemic remains positive although the growth trajectory has been pushed back to FY22 from FY21.

Several tailwinds exist in the form of massive infrastructure pipeline, a shift from landfill to recycling and the federal budget stimulus toward infrastructure and recycling segments.

However, the current uncertainty mars the positive outlook somewhat and Shaw and Partners maintains its Hold rating. The target price is increased to $2.65 from $2.50.

This report was published on October 9, 2020.

Target price is $2.65 Current Price is $2.73 Difference: minus $0.08 (current price is over target).
If BIN meets the Shaw and Partners target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $2.61, suggesting downside of -4.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 4.00 cents and EPS of 7.10 cents.
At the last closing share price the estimated dividend yield is 1.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 38.45.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.0, implying annual growth of -40.6%.
Current consensus DPS estimate is 2.6, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 45.5.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 6.00 cents and EPS of 12.00 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 22.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.8, implying annual growth of 63.3%.
Current consensus DPS estimate is 4.5, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 27.9.

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

BTH    BIGTINCAN HOLDINGS LIMITED

Cloud services - Overnight Price: $1.40

Canaccord Genuity rates ((BTH)) as Buy (1) -

Bigtincan Holdings started FY21 with the acquisition of Agnitio, a Danish-based company that is a pioneer in sales enablement for the Life Sciences sector.

In Canaccord Genuity's view, the acquisition is strategically sound as it brings a complementary technology extending the capability of Bigtincan's platform offering and is likely to be accretive from a revenue perspective.

The deal also increases the company's presence in Europe and improves geographic diversification. Target price is steady at $1.40. Buy rating retained.

This report was published on October 9, 2020.

Target price is $1.40 Current Price is $1.40 Difference: $0
If BTH meets the Canaccord Genuity target it will return approximately 0% (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 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 77.78.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 0.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 233.33.

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


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