Australian Broker Call *Extra* Edition – Feb 24, 2021

Daily Market Reports | Feb 24 2021

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)

ADH   ALU   AVH   CL1   CQE   CTD   ELO   EML   GMA   GUD (2)   NEA   RDY   RHP   SUL  

ADH    ADAIRS LIMITED

Furniture & Renovation - Overnight Price: $3.88

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

Adairs reported a first-half operating income of $60.2m, beating guidance and Wilsons' estimated $58.3m. Wilsons notes the businesses including online and Mocka are performing better than expected and have continued to grow despite achieving margin expansion.

No guidance was provided due to covid-induced volatility but the broker finds sales in the first seven weeks to be encouraging.

Looking at the market share gains via Adairs' omni-channel strategy and a loyal customer base and seeing significant valuation upside, Wilsons retains its Overweight rating with a target price of $4.50.

The report was published on February 17, 2021.

Target price is $4.50 Current Price is $3.88 Difference: $0.62
If ADH meets the Wilsons target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $4.47, suggesting upside of 15.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 20.00 cents and EPS of 36.90 cents.
At the last closing share price the estimated dividend yield is 5.15%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.51.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 42.6, implying annual growth of 102.9%.
Current consensus DPS estimate is 28.2, implying a prospective dividend yield of 7.3%.
Current consensus EPS estimate suggests the PER is 9.1.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 21.00 cents and EPS of 37.70 cents.
At the last closing share price the estimated dividend yield is 5.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.29.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 33.9, implying annual growth of -20.4%.
Current consensus DPS estimate is 25.0, implying a prospective dividend yield of 6.4%.
Current consensus EPS estimate suggests the PER is 11.4.

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

ALU    ALTIUM LIMITED

Hardware & Equipment - Overnight Price: $27.64

Bell Potter rates ((ALU)) as Hold (3) -

Altium's first-half operating income of US$30.6m was -11% below Bell Potter's forecast of US$34.5m and was driven by a much lower-than-expected margin. Operating income margin fell to 32.7% versus last year driven by continued investment in the cloud business.

The broker has changed its FY21 forecasts with TASKING now treated as a discontinued business, consistent with the company's reporting procedure.

Bell Potter is at the lower end of revenue and operating income guidance for FY21.

The target price has decreased to $28.50 from $31.25 with a Hold rating.

This report was published on February 16, 2021.

Target price is $28.50 Current Price is $27.64 Difference: $0.86
If ALU meets the Bell Potter target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $33.44, suggesting upside of 21.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 52.54 cents and EPS of 44.45 cents.
At the last closing share price the estimated dividend yield is 1.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 62.19.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 44.2, implying annual growth of N/A.
Current consensus DPS estimate is 46.3, implying a prospective dividend yield of 1.7%.
Current consensus EPS estimate suggests the PER is 62.5.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 56.80 cents and EPS of 52.54 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 52.61.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 53.0, implying annual growth of 19.9%.
Current consensus DPS estimate is 49.2, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 52.2.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.7
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: $6.15

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

Wilsons maintains its Overweight position on Avita Medical post the second-quarter results with a price target of $7.80. US RECELL sales were below the broker's forecast and net loss compared favourably with the broker's forecast. 

December quarter trading was subdued for Avita, observes Wilsons, which was the case across most of the US medtech sector. Wilsons broadly maintains the revenue forecasts but has increased opex estimates due to higher costs for certain R&D programs.

In the broker's view, the company is bringing a higher level of sales sophistication to a marketplace with the intention of disrupting and capturing it. The company’s vitiligo program is the largest source of valuation upside over the next year, adds Wilsons.

Overweight rating with a target price of $7.80.

This report was published on February 15, 2021.

Target price is $7.80 Current Price is $6.15 Difference: $1.65
If AVH meets the Wilsons target it will return approximately 27% (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 154.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 3.99.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 153.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.00.

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

CL1    CLASS LIMITED

Cloud services - Overnight Price: $1.83

Wilsons rates ((CL1)) as Market Weight (3) -

Class' announced a solid set of results, observes Wilsons, with in-line revenue and operating income.

The company has upgraded its FY21 revenue growth guidance increased to 22% from 20% which includes a 4-month contribution from the ReckonDocs acquisition.

The Class Trust offering appears to be gaining traction, notes a pleased Wilsons, with trust pilot programs up 50% to 2,571 versus June 2020. The company is looking to supplement its core super offering with acquisition aimed at gaining scale.

Market Weight rating with the target rising to $2.26 from $2.11.

This report was published on February 17, 2021.

Target price is $2.26 Current Price is $1.83 Difference: $0.43
If CL1 meets the Wilsons target it will return approximately 23% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 5.00 cents and EPS of 5.60 cents.
At the last closing share price the estimated dividend yield is 2.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.68.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 5.00 cents and EPS of 6.80 cents.
At the last closing share price the estimated dividend yield is 2.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.91.

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


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