Australian Broker Call *Extra* Edition – Dec 01, 2020

Daily Market Reports | Dec 01 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)

AQR   ARX (2)   AVH   BRG   CPU   CQE   CSX   EGH   EHL   GNC (3)   IFM   IMR   LBL   NEC   PAL   SHJ   SHV   STG   UWL   VMT   XRO  

AQR    APN CONVENIENCE RETAIL REIT

REITs - Overnight Price: $3.69

Moelis rates ((AQR)) as Upgrade to Buy from Hold (1) -

APN Convenience Retail REIT reaffirmed its funds from operations and dividend guidance. The addition of two accretive acquisitions since the REIT's August results makes Moelis expect the outcome will be more towards the top-end of the REIT's FFO guidance.

The broker also believes a handful of similar acquisitions in the near-term could result in an upward revision to this range.

Moelis has upgraded its rating to Buy from Hold with the target price rising slightly to $4.07 from $4.06.

This report was published on November 13, 2020.

Target price is $4.07 Current Price is $3.69 Difference: $0.38
If AQR meets the Moelis target it will return approximately 10% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 22.00 cents and EPS of 22.00 cents.
At the last closing share price the estimated dividend yield is 5.96%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.77.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 22.60 cents and EPS of 22.90 cents.
At the last closing share price the estimated dividend yield is 6.12%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.11.

Market Sentiment: 0.8
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: $1.26

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

Bell Potter maintains its Buy rating with a valuation of $2.

Aroa Biosurgery announced positive results from a study assessing Myriad’s clinical utility and safety. Also, Tela Bio announced a positive third-quarter result with revenue up 51% versus the second quarter.

Bell Potter believes these two pieces of positive newsflow would drive interest in the stock.

A strong sales strategy of the OviTex product line by Tela Bio continues to impress the broker. In the near-term, Bell Potter expects upward pressure on the stock.

This report was published on November 13, 2020.

Target price is $2.00 Current Price is $1.26 Difference: $0.74
If ARX meets the Bell Potter target it will return approximately 59% (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 2.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 46.67.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 1.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 78.75.

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


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

Wilsons suggests Aroa Biosurgery’s marketing partner for OviTex -TELA Bio - made good progress in the third quarter and signed up at least 25 new health trust-affiliated hospitals. Due to this, OviTex sales were 17% ahead of Wilsons' model.

The broker is pleasantly surprised at TELA’s success in hernia repair and expects TELA’s ordering patterns to rebalance towards higher ASP devices in the second half. 

Overweight rating is maintained with a target price of $2.

This report was published on November 13, 2020.

Target price is $2.00 Current Price is $1.26 Difference: $0.74
If ARX meets the Wilsons target it will return approximately 59% (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 3.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 37.06.

Forecast for FY22:

Wilsons forecasts a full year FY22 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 70.00.

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

AVH    AVITA THERAPEUTICS, INC

Pharmaceuticals & Biotech/Lifesciences - Overnight Price: $5.81

Bell Potter rates ((AVH)) as Buy (1) -

The first quarter results released by Avita Therapeutics showed revenue from product sales were 23% ahead of Bell Potter’s forecast.

The earnings (EBIT) loss was consistent with the broker’s forecast.

It’s apparent to the analyst more hospitals and a greater spread of surgeons are adopting the Recell procedure.

The broker highlights a key pending decision on the transitional pass through payment from the US Centers for Medicare & Medicaid Services (CMS). 

This would allow hospitals to obtain reimbursement for treatment of patients in outpatient clinics. The potential approval is due in mid-December.

Bell Potter increases the FY21 EPS forecast by 25%, with similar increases for FY22 and FY23.

The Buy rating and $15 target are unchanged.

This report was published on November 12, 2020.

Target price is $15.00 Current Price is $5.81 Difference: $9.19
If AVH meets the Bell Potter target it will return approximately 158% (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 182.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 3.18.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 124.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.66.

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: $24.08

Wilsons rates ((BRG)) as Underweight (5) -

Breville Group updated its FY21 operating income guidance to between $128-$132m, in line with consensus estimates. While region-specific updates were not provided, Wilsons expects challenges from North America and Europe with Australia and New Zealand doing well.

The group's expansion in Europe is expected to continue in the second half with the addition of Italy and Portugal. Also, the broker thinks the group's proprietary internet of things (IoT) platform may offer market share growth upside in the medium-term.

Rating is maintained at Underweight with the target price rising to $18 from $16.90.

This report was published on November 13, 2020.

Target price is $18.00 Current Price is $24.08 Difference: minus $6.08 (current price is over target).
If BRG meets the Wilsons target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $27.63, suggesting upside of 14.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 42.50 cents and EPS of 65.40 cents.
At the last closing share price the estimated dividend yield is 1.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 36.82.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 63.9, implying annual growth of 26.5%.
Current consensus DPS estimate is 43.9, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 37.7.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 42.50 cents and EPS of 70.70 cents.
At the last closing share price the estimated dividend yield is 1.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 34.06.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 72.1, implying annual growth of 12.8%.
Current consensus DPS estimate is 49.3, implying a prospective dividend yield of 2.0%.
Current consensus EPS estimate suggests the PER is 33.4.

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


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