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Australian Broker Call *Extra* Edition – Oct 30, 2020

Daily Market Reports | Oct 30 2020

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

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)

AMA   APE (3)   ARX   BGA   DTC   ELD   FDV   GUD   IEL   IGL   JLG (2)   LOV   NIC   OPT   PME   PSQ (2)   TRS   TYR  

AMA    AMA GROUP LIMITED

Automobiles & Components – Overnight Price: $0.73

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

Bell Potter runs the ruler over current forecasts for AMA Group and leaves them unchanged.

However, the broker has a slight upside bias and a positive catalyst for the share price may arise at the company’s upcoming AGM on November 19.

This is on the condition management is comfortable with the undertakings and the upcoming debt covenants test. Additionally, the analyst would like to see positive commentary around first quarter performance.

The Buy rating is unchanged and the target price is increased to $0.95 from $0.85.

This report was published on October 20, 2020.

Target price is $0.95 Current Price is $0.73 Difference: $0.22
If AMA meets the Bell Potter target it will return approximately 30% (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 minus 0.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 146.00.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of 3.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.81.

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

APE    EAGERS AUTOMOTIVE LIMITED

Automobiles & Components – Overnight Price: $11.56

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

For the nine months ended 30 September 2020, Eagers Automotive reported profit before tax growth of 45% to $96.6m. The underlying profit in the third quarter alone was 40% higher than in the first half.

Bell Potter assesses the key drivers of the performance to be less inventory due to strong demand and a constrained supply (due to factory closures in the second quarter). Cost reduction programs initiated by the company after the merger with Automotive Holdings Group also helped.

The broker expects supply restrictions to ease up, leading to higher sales and a potentially stronger December quarter. Profit before tax margins are expected to be around 3% or more for the next few months.

The rating is maintained at Hold and the target price is increased to $13.25 from $10.25.

This report was published on October 15, 2020.

Target price is $13.25 Current Price is $11.56 Difference: $1.69
If APE meets the Bell Potter target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $11.80, suggesting upside of 3.7%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 10.00 cents and EPS of 49.90 cents.
At the last closing share price the estimated dividend yield is 0.87%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.17.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 36.6, implying annual growth of N/A.
Current consensus DPS estimate is 10.0, implying a prospective dividend yield of 0.9%.
Current consensus EPS estimate suggests the PER is 31.1.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 20.00 cents and EPS of 58.20 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 19.86.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 53.3, implying annual growth of 45.6%.
Current consensus DPS estimate is 32.6, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 21.4.

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


Moelis rates ((APE)) as Buy (1) –

Moelis is impressed by Eagers Automotive's "very strong" third quarter, despite restrictions in Victoria. An underlying profit before tax of $96.6m for the 9 months till September and $40.3m profit reported in the first half implies the September quarter generated $56.3m in profit.

Demand shot up across Australia while  supply remained limited, the prime cause of stronger profit margins. Furthermore, significant cost reduction since the onset of covid-19 helped improve the bottom-line.

Earnings growth forecasts have been increased by circa 30% for FY20-22. Moelis maintains its Buy rating with the target price increased to $13.50 from $10.29.

This report was published on October 16, 2020.

Target price is $13.50 Current Price is $11.56 Difference: $1.94
If APE meets the Moelis target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $11.80, suggesting upside of 3.7%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 0.00 cents and EPS of 38.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 36.6, implying annual growth of N/A.
Current consensus DPS estimate is 10.0, implying a prospective dividend yield of 0.9%.
Current consensus EPS estimate suggests the PER is 31.1.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 44.40 cents and EPS of 59.80 cents.
At the last closing share price the estimated dividend yield is 3.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 53.3, implying annual growth of 45.6%.
Current consensus DPS estimate is 32.6, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 21.4.

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


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

Eagers Automotive's third-quarter update exceeded broker Wilsons' expectations with year to date profit before tax (till September 30) at $96.6m. The third quarter alone accounted for $56m, a material improvement over last year's $14m.

The September numbers were driven by a rebound in trading, contribution from the merged Automotive Holdings Group and stronger margins. Stronger margins, in turn, were on account of higher used car sales and less discounting on new car sales, points out Wilsons.

The company's sales trajectory is expected to remain above the industry level on account of lower expected deliveries caused by supply shortages. Thus, Wilsons expects margins to grow in the first half of 2021.

The Market Weight rating is unchanged and the target price is increased to $10.75 from $9.30.

This report was published on October 16, 2020.

Target price is $10.75 Current Price is $11.56 Difference: minus $0.81 (current price is over target).
If APE 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 $11.80, suggesting upside of 3.7%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 23.90 cents and EPS of 41.90 cents.
At the last closing share price the estimated dividend yield is 2.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 36.6, implying annual growth of N/A.
Current consensus DPS estimate is 10.0, implying a prospective dividend yield of 0.9%.
Current consensus EPS estimate suggests the PER is 31.1.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 39.10 cents and EPS of 58.30 cents.
At the last closing share price the estimated dividend yield is 3.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.83.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 53.3, implying annual growth of 45.6%.
Current consensus DPS estimate is 32.6, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 21.4.

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

ARX    AROA BIOSURGERY LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $1.30

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

Bell Potter has updated following a market update (Q3) by Organogenesis, a US regenerative medicine company focusing on wound care and a close comparable to Aroa Biosurgery.

The broker reports the US-based company expects significant improvement for the rest of the financial year, sounding much more positive than the previous quarter.

Bell Potter infers the update by Organogenesis implies a positive outlook for Aroa and reaffirms its Buy rating with a target price of $2.10.

Aroa Biosurgery develops and commercialises Endoform, a proprietary soft tissue regeneration platform.

This report was published on October 16, 2020.

Target price is $2.10 Current Price is $1.30 Difference: $0.8
If ARX meets the Bell Potter target it will return approximately 62% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 2.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 46.43.

Forecast for FY22:

Bell Potter forecasts a full year FY22 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 100.00.

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

BGA    BEGA CHEESE LIMITED

Dairy – Overnight Price: $5.13

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

Bell Potter has updated forecasts to reflect recent movements in projected first half skim milk powder (SMP) returns over the past month, which have expanded by around two cents per litre.

Assuming no movement in the farmgate milk price (FMP), then at Koroit alone this would equate to around $6-8m in additional earnings (EBITDA) relative to the broker’s previous update.

Bell Potter upgrades profit (NPAT) forecasts by 12% in FY21, 5% in FY22, and 5% in FY23.

The Hold rating is unchanged and the target price is increased to $5.35 from $5.15.

This report was published on October 20, 2020.

Target price is $5.35 Current Price is $5.13 Difference: $0.22
If BGA meets the Bell Potter target it will return approximately 4% (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 13.00 cents and EPS of 20.00 cents.
At the last closing share price the estimated dividend yield is 2.53%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.65.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 17.00 cents and EPS of 26.80 cents.
At the last closing share price the estimated dividend yield is 3.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.14.

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

DTC    DAMSTRA HOLDINGS LIMITED

Software & Services – Overnight Price: $2.04

Wilsons rates ((DTC)) as Initiation of coverage with Overweight (1) –

Wilsons initiates coverage of Damstra Holdings with an Overweight rating and a $2.55 target price.

Damstra is an Australian-based, global provider of integrated workplace management solutions. Damstra develops, sells and implements integrated hardware and software-as-a-service (SaaS) solutions into an expanding number of industries where compliance and safety are paramount.

According to the report, Damstra has the ability to capitalise on the strong secular trends of increased compliance, greater regulation and ever-increasing duty-of-care expectations of corporations towards staff.

The broker recommends an Overweight rating based on several factors including a strong organic growth outlook driven by cross-sell opportunities and a high likelihood of accelerated earnings from margin expansion (around 68% of costs are fixed).

Additionally, there is considered to be a high degree of revenue visibility with Damstra and Vault recording FY20 recurring revenues of 91% and 92% respectively.

Wilsons also highlights robust FY21 guidance by the company of 30%-40% revenue growth excluding Vault. 

This report was published on October 20, 2020.

Target price is $2.55 Current Price is $2.04 Difference: $0.51
If DTC meets the Wilsons target it will return approximately 25% (excluding dividends, fees and charges).
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 minus 1.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 145.71.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of 0.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 408.00.

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

ELD    ELDERS LIMITED

Agriculture – Overnight Price: $11.41

Wilsons rates ((ELD)) as Underweight (5) –

Wilsons upgrades forecast earnings (EBITDA) for Elders by 4% in FY20 and 2% in the outer years. This reflects stronger earnings in the real estate and animal health segments, and higher agency services (livestock & wool) earnings in the second half.

The broker believes the company remains on track to post significant earnings growth in FY20, primarily driven by the acquisition of AIRR (a rural wholesale buying group) and crop input activity.

Wilsons reiterates its Underweight rating and increases the target price to $8.75 from $7.73.

This report was published on October 21, 2020.

Target price is $8.75 Current Price is $11.41 Difference: minus $2.66 (current price is over target).
If ELD meets the Wilsons target it will return approximately minus 23% (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 20.00 cents and EPS of 73.00 cents.
At the last closing share price the estimated dividend yield is 1.75%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.63.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 26.00 cents and EPS of 72.30 cents.
At the last closing share price the estimated dividend yield is 2.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.78.

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

FDV    FRONTIER DIGITAL VENTURES LIMITED

Online media & mobile platforms – Overnight Price: $1.26

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

Frontier Digital Ventures has completed an accelerated entitlement offer and $63.4m equity placement to institutional investors, raising a total of $92.6m at an issue price of $1.25 per share.

Via the yet-to-be-completed retail tranche of the company’s entitlement offer, the company hopes to raise a further $7.4m.

Proceeds from this raising have been earmarked for three classifieds businesses, Fincaraiz (Colombia), Avito (Morocco) & Tayara (Tunisia) for an all-in consideration of around $56.0m.

Residual funds will be used to shore up the company’s already robust net cash positions, explains Bell Potter. Its also considered the funds will provide additional headroom for further working capital, portfolio optimisation and growth opportunities.

Bell Potter retains its Hold (Speculative) rating and increases the price target to $1.40 from $1.18.

Target price is $1.40 Current Price is $1.26 Difference: $0.14
If FDV meets the Bell Potter target it will return approximately 11% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 3.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 39.38.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 2.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 45.00.

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

GUD    G.U.D. HOLDINGS LIMITED

Automobiles & Components – Overnight Price: $12.81

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

GUD Holdings confirmed a strong start to the year with sales up 14% in the September quarter.

Wilsons highlights the result was driven by the core automotive segment which saw a longer than expected period of replenishment orders. Also, some resellers preferred to carry higher stock to mitigate potential covid-related supply chain issues.

This leads the broker to suspect some of the current sales growth may be temporary. However, industry feedback confirms higher automotive aftermarket demand due to strong domestic travel activity.

While continuing to view the share price as broadly reflecting fair value, Wilsons maintains its Market Weight rating with a target price of $12.60.

This report was published on October 16, 2020.

Target price is $12.60 Current Price is $12.81 Difference: minus $0.21 (current price is over target).
If GUD meets the Wilsons target it will return approximately minus 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $12.68, suggesting upside of 0.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 56.00 cents and EPS of 69.90 cents.
At the last closing share price the estimated dividend yield is 4.37%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 65.6, implying annual growth of 30.2%.
Current consensus DPS estimate is 43.8, implying a prospective dividend yield of 3.5%.
Current consensus EPS estimate suggests the PER is 19.3.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 57.00 cents and EPS of 70.00 cents.
At the last closing share price the estimated dividend yield is 4.45%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 68.5, implying annual growth of 4.4%.
Current consensus DPS estimate is 53.1, implying a prospective dividend yield of 4.2%.
Current consensus EPS estimate suggests the PER is 18.5.

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

IEL    IDP EDUCATION LIMITED

Education & Tuition – Overnight Price: $20.77

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

After a trading update, Goldman Sachs calculates approximately 70% of the company’s IELTs network capacity has been reinstated. This is an increase from around 55% on 18 Aug 2020.

At the time of the Goldman Sachs report, all of the company’s student placement offices had re-opened, with the exception of Melbourne. This is up from 109 out of 127 offices being open as at 18 Aug 2020. In addition, explains the analyst, the company has reopened its English language teaching schools in Vietnam and Cambodia.

Applied student placement volumes in the first quarter were down -22% on the previous corresponding period. However, Goldman Sachs highlights the company commented that students are largely holding on to their study goals.

The broker maintains its Buy rating and target price of $22.50.

This report was published on October 20, 2020.

Target price is $22.50 Current Price is $20.77 Difference: $1.73
If IEL meets the Goldman Sachs target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $21.53, suggesting upside of 6.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 13.00 cents and EPS of 18.00 cents.
At the last closing share price the estimated dividend yield is 0.63%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 115.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.9, implying annual growth of -35.3%.
Current consensus DPS estimate is 8.4, implying a prospective dividend yield of 0.4%.
Current consensus EPS estimate suggests the PER is 120.2.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 29.00 cents and EPS of 41.00 cents.
At the last closing share price the estimated dividend yield is 1.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 50.66.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 43.0, implying annual growth of 154.4%.
Current consensus DPS estimate is 30.4, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 47.2.

Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

IGL    IVE GROUP LIMITED

Media – Overnight Price: $0.79

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

IVE Group has announced the signing of a binding agreement to divest its IVE Telefundraising business, Pareto Phone, for $16.5m. The proceeds will be used to further strengthen the company’s balance sheet, notes Bell Potter.

The broker expects an update on current trading conditions and existing FY21 guidance at the upcoming AGM, which is due to be held on November 24, 2020.

The analyst estimates the sale will reduce net debt by a further circa -$16.5m to $104.8m (as at 30 June 2020).

The Buy rating and $1.05 target price are unchanged.

This report was published on October 20, 2020.

Target price is $1.05 Current Price is $0.79 Difference: $0.26
If IGL meets the Bell Potter target it will return approximately 33% (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 7.90 cents and EPS of 20.80 cents.
At the last closing share price the estimated dividend yield is 10.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.80.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 11.60 cents and EPS of 19.80 cents.
At the last closing share price the estimated dividend yield is 14.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.99.

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

JLG    JOHNS LYNG GROUP LIMITED

Building Products & Services – Overnight Price: $3.05

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

Johns Lyng Group has entered into a services agreement with Westpac General Insurance Limited (WGIL) for the provision of the group's building and restoration services across WGIL's national client base, with the agreement effective immediately.

The new arrangement provides the company with exposure to a long sought-after insurance client, explains the broker.

This follows on from the recent announcement of a new agreement with Chubb Insurance, which was effective from 1 October 2020. Both agreements with WGIL and Chubb are for initial periods of three years. WGIL and Chubb Insurance hold a 6% and 1% share, respectively, of the domestic home and motor insurance market.

The WGIL agreement has the potential, in the view of Canaccord Genuity, to be material to the Insurance Building & Restoration Services (IB&RS) division, which already has an established arrangement in place with CommInsure. That arrangement represents around 7% of the domestic home and motor insurance market and an estimated 7.5% of IB&RS' revenues in FY20.

The Buy rating is unchanged and the target price is increased to $3.20 from $2.80

This report was published on October 20, 2020.

Target price is $3.20 Current Price is $3.05 Difference: $0.15
If JLG meets the Canaccord Genuity target it will return approximately 5% (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 5.00 cents and EPS of 9.00 cents.
At the last closing share price the estimated dividend yield is 1.64%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 33.89.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 5.00 cents and EPS of 10.00 cents.
At the last closing share price the estimated dividend yield is 1.64%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.50.

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


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

Johns Lyng Group has announced it has entered into a nationwide Services Agreement with Westpac General Insurance Limited (WGIL) for an initial period of three years, effective 19 Oct 2020.

The Agreement is for the provision of building and restoration services for insurance claims. This incorporates the full range of the company’s insurance building services which includes assessment, restoration and repairs and makesafe. These services will be deployed across WGIL’s national client base.

Goldman Sachs sees new contract wins as one of the key drivers for the company over the short to medium term. The others are considered an increasing volume of work from existing contracts and panels and geographic expansion.

Acquisitions can further add to growth, which is a stated strategy of management. The Buy rating and target price of $3.35 are unchanged.

This report was published on October 19, 2020.

Target price is $3.35 Current Price is $3.05 Difference: $0.3
If JLG meets the Goldman Sachs target it will return approximately 10% (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 4.00 cents and EPS of 8.00 cents.
At the last closing share price the estimated dividend yield is 1.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 38.13.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 5.00 cents and EPS of 9.00 cents.
At the last closing share price the estimated dividend yield is 1.64%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 33.89.

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

LOV    LOVISA HOLDINGS LIMITED

Luxury – Overnight Price: $8.02

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

Lovisa Holdings provided an update on trading and operations, which sees Bell Potter strengthening sales forecasts, given the positive momentum (especially Australia and New Zealand).

The broker believes an encouraging trend is developing with global same store sales (SSS) growth for the 16 weeks year-to-date of -10.2% versus the first eight weeks of -19.0%. This implies to the analyst the most recent eight weeks were only slightly negative.

Additionally, store roll outs continue, albeit slowly, comments the broker. It's considered the roll out pace will ramp-up entering FY22.

For FY21, FY22 and FY23, the broker increases EPS forecasts by 41%, 0% and 5%, respectively.

The Buy rating is unchanged and the target price is increased to $10 from $8.35.

This report was published on October 21, 2020.

Target price is $10.00 Current Price is $8.02 Difference: $1.98
If LOV meets the Bell Potter target it will return approximately 25% (excluding dividends, fees and charges).
Current consensus price target is $7.90, suggesting upside of 0.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 7.90 cents and EPS of 21.70 cents.
At the last closing share price the estimated dividend yield is 0.99%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 36.96.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.0, implying annual growth of 98.1%.
Current consensus DPS estimate is 12.8, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 37.3.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 23.50 cents and EPS of 36.10 cents.
At the last closing share price the estimated dividend yield is 2.93%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.22.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 31.2, implying annual growth of 48.6%.
Current consensus DPS estimate is 20.7, implying a prospective dividend yield of 2.6%.
Current consensus EPS estimate suggests the PER is 25.1.

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

NIC    NICKEL MINES LIMITED

Nickel – Overnight Price: $0.97

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

Nickel Mines has signed a Memorandum of Understanding (MoU) with Shanghai Decent Investment (SDI) to build, own and operate four next-generation rotary-kiln-electric furnace (RKEF) lines within the Indonesia Weda Bay Industrial Park (IWIP).

The MoU outlines the terms under which Nickel Mines can acquire a 70% interest in PT Angel Nickel Industry (ANI), a new nickel development comprising four next-generation RKEF lines with a nameplate capacity of 36,000tpa Ni in nickel pig iron (NPI).

This implies to Bell Potter exposure to an additional 25,200tpa Ni in NPI for the company. Under the terms of the MoU, the company will acquire a 70% interest in ANI for -US$490m. Nickel Mines will require external funding to complete the acquisition, to be sourced from a combination of cash reserves, debt and equity. The ANI RKEF lines are scheduled to commence commissioning in the third quarter of 2022.

The analyst views the deal as a highly attractive growth option, given the low capital intensity of the existing RKEF lines and the value creation demonstrated since the company’s initial acquisitions in 2018.

The Buy rating is unchanged and the target price is increased to $1.52 from $1.04.

This report was published on October 20, 2020.

Target price is $1.52 Current Price is $0.97 Difference: $0.55
If NIC meets the Bell Potter target it will return approximately 57% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 2.93 cents and EPS of 12.76 cents.
At the last closing share price the estimated dividend yield is 3.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.60.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 2.93 cents and EPS of 22.59 cents.
At the last closing share price the estimated dividend yield is 3.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.29.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

OPT    OPTHEA LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $2.27

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

Wilsons revises the target price of Opthea to $4 from $4.85 to allow for equity dilution from the Nasdaq listing, and the company’s expenses relating to the transition into independent Phase III development for OPT-302.

The broker calculates the Nasdaq funding appears adequate to achieve definitive clinical trial results in the primary indication of neovascular macular degeneration (nAMD). It's considered the company may elect to initiate parallel studies to firm up its evidence base in diabetic macular oedema (DME).

The US IPO exposes the company to a broader investor audience, which could drag the ASX valuation higher over time, in the opinion of the analyst.

Overweight rating is maintained. 

This report was published on October 20, 2020.

Target price is $4.00 Current Price is $2.27 Difference: $1.73
If OPT meets the Wilsons target it will return approximately 76% (excluding dividends, fees and charges).
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 minus 14.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 15.66.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 28.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 7.99.

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

PME    PRO MEDICUS LIMITED

Medical Equipment & Devices – Overnight Price: $33.27

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

Pro Medicus' latest update shows the company signed a $10m contract with Ludwig-Maximilians University (LMU Klinikum), Germany. LMU Klinikum is funded by public money and is one of the largest teaching hospitals in Germany.

The contract entails Pro Medicus providing the PACS system to LMU Klinikum. The contract involves deploying the Visage technology in the hospital.

Bell Potter assesses in FY21, Pro Medicus will receive at least $5.6m collectively from contracts at Duke U, Ohio State, Northwestern, NY Langone and LMU Klinikum. These additional revenues are expected to contribute about half the expected 17% top-line revenue growth for FY21.

Despite all these positives, Bell Potter downgrades its rating to Sell from Hold with the price target rising to $28 from $26.50, still well below the share price.

This report was published on October 16, 2020.

Target price is $28.00 Current Price is $33.27 Difference: minus $5.27 (current price is over target).
If PME meets the Bell Potter target it will return approximately minus 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 14.10 cents and EPS of 28.00 cents.
At the last closing share price the estimated dividend yield is 0.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 118.82.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 17.40 cents and EPS of 34.90 cents.
At the last closing share price the estimated dividend yield is 0.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 95.33.

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

PSQ    PACIFIC SMILES GROUP LIMITED

Healthcare services – Overnight Price: $1.84

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

The Pacific Smiles Group PSQ has upgraded both patient fees growth and earnings (EBITDA) guidance for FY21.

The broker relays the guidance upgrade is driven by strong year-to-date same centre patient fee growth (SCPFG) performance, as well as the opening of a higher number of new centres than originally expected (12 vs 10).

Bell Potter upgrades FY21, FY22 and FY23 EPS forecasts by around 14%, 5% and 5%, respectively. 

The analyst believes the business is continuing to benefit from increased consumer spending on health, and is also taking market share from small private practices which were likely not as well prepared to navigate through covid-19 disruptions.

The rating is downgraded to Hold from Buy. The target price is increased to $2.05 from $1.95.

This report was published on October 21, 2020.

Target price is $2.05 Current Price is $1.84 Difference: $0.21
If PSQ 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 FY21:

Bell Potter forecasts a full year FY21 dividend of 5.80 cents and EPS of 6.80 cents.
At the last closing share price the estimated dividend yield is 3.15%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.06.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 6.00 cents and EPS of 6.70 cents.
At the last closing share price the estimated dividend yield is 3.26%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.46.

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


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

Pacific Smiles has provided a trading update and upgraded guidance for FY21 by 8%.

Key points for the broker include patient fee growth of around 20% (previously up 15%) and earnings (EBITDA) growth of 25% (previously up 15%).

Additionally, revised guidance assumes no further JobKeeper payments and no significant covid-19 impact in the second half, highlights the analyst.

The greenfield roll-out target was revised to 12 from 10. The Overweight rating and target price of $2 are unchanged (at this stage).

This report was published on October 19, 2020.

Target price is $2.00 Current Price is $1.84 Difference: $0.16
If PSQ meets the Wilsons target it will return approximately 9% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 3.90 cents and EPS of 6.00 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 30.67.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 5.10 cents and EPS of 6.30 cents.
At the last closing share price the estimated dividend yield is 2.77%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.21.

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

TRS    THE REJECT SHOP LIMITED

Household & Personal Products – Overnight Price: $6.67

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

The Reject Shop did not provide any trading update at the company's AGM, resulting in no change to Goldman Sachs's views.

Nonetheless, the company has indicated that of its current 355 stores, 87 will be renegotiated in FY21 (or closed if appropriate financial terms are not achievable) plus a further 130 in FY22.

Given that rent in FY20 was a -$123m expense (15% of sales in FY20), even modest improvements in outcomes could have material impacts on the company's profitability, notes the broker.

The Buy rating and $8.70 target price are unchanged.

This report was published on October 21, 2020.

Target price is $8.70 Current Price is $6.67 Difference: $2.03
If TRS meets the Goldman Sachs target it will return approximately 30% (excluding dividends, fees and charges).
Current consensus price target is $9.67, suggesting upside of 46.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 5.00 cents and EPS of 20.00 cents.
At the last closing share price the estimated dividend yield is 0.75%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 33.35.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.5, implying annual growth of 497.2%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 30.8.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 16.00 cents and EPS of 32.00 cents.
At the last closing share price the estimated dividend yield is 2.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 36.4, implying annual growth of 69.3%.
Current consensus DPS estimate is 7.0, implying a prospective dividend yield of 1.1%.
Current consensus EPS estimate suggests the PER is 18.2.

Market Sentiment: 1.0
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: $3.78

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

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

Tyro Payments' merchant acquiring alliance with Bendigo Bank ((BEN)) is considered a strategically strong move by Goldman Sachs. The deal, explains the broker, is synergistic, complementary for both parties and highly earnings accretive for Tyro Payments.

The deal will have Tyro deploying more than 26,000 of its terminals in 2021, taking the total number of its terminals to slightly above 89,000.

The broker finds scope for Tyro entering into more of such deals with other financial institutions who would otherwise continue losing share in the payments market.

Goldman Sachs reaffirms its Neutral rating with the target price increasing to $3.76 from $3.2.

This report was published on October 18, 2020.

Target price is $3.76 Current Price is $3.78 Difference: minus $0.02 (current price is over target).
If TYR 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 $4.20, suggesting upside of 10.5%(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 minus 3.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 126.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -3.6, 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 0.00 cents.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 0.5, 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 760.0.

Market Sentiment: 0.2
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

AMA APE ARX BEN BGA DTC ELD FDV GUD IEL IGL JLG LOV NIC OPT PME PSQ TRS TYR

For more info SHARE ANALYSIS: AMA - AMA GROUP LIMITED

For more info SHARE ANALYSIS: APE - EAGERS AUTOMOTIVE LIMITED

For more info SHARE ANALYSIS: ARX - AROA BIOSURGERY LIMITED

For more info SHARE ANALYSIS: BEN - BENDIGO & ADELAIDE BANK LIMITED

For more info SHARE ANALYSIS: BGA - BEGA CHEESE LIMITED

For more info SHARE ANALYSIS: DTC - DAMSTRA HOLDINGS LIMITED

For more info SHARE ANALYSIS: ELD - ELDERS LIMITED

For more info SHARE ANALYSIS: FDV - FRONTIER DIGITAL VENTURES LIMITED

For more info SHARE ANALYSIS: GUD - G.U.D. HOLDINGS LIMITED

For more info SHARE ANALYSIS: IEL - IDP EDUCATION LIMITED

For more info SHARE ANALYSIS: IGL - IVE GROUP LIMITED

For more info SHARE ANALYSIS: JLG - JOHNS LYNG GROUP LIMITED

For more info SHARE ANALYSIS: LOV - LOVISA HOLDINGS LIMITED

For more info SHARE ANALYSIS: NIC - NICKEL MINES LIMITED

For more info SHARE ANALYSIS: OPT - OPTHEA LIMITED

For more info SHARE ANALYSIS: PME - PRO MEDICUS LIMITED

For more info SHARE ANALYSIS: PSQ - PACIFIC SMILES GROUP LIMITED

For more info SHARE ANALYSIS: TRS - REJECT SHOP LIMITED

For more info SHARE ANALYSIS: TYR - TYRO PAYMENTS LIMITED