Australian Broker Call *Extra* Edition – Mar 09, 2021

Daily Market Reports | Mar 09 2021

Dear Reader: As part of FNArena's coverage of the February reporting season in Australia, Editions of the Australian Broker Call *Extra* Report will be focusing on responses to released financial results during the month.

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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)

ABY   AD8   AMA   ANP   APE   APX   ASG   BGA   BIN (2)   BKG   CAT   CCX (3)   CGC   CNU   CXL   EHE (2)   GDI   GEM   HMC   HMY   HUB   IEL   IRE   JHC   JLG   MAH   MAQ   MCP   MHJ   MNF   MOZ   MPL   MYX (2)   NAN (2)   NHF   NTO   NXT   OSL   PNV   PRN   PTM   PWG   REG   RIC   SCG   SLK   SOM   SPK   SSG   ST1   WOW  

ABY    ADORE BEAUTY GROUP LIMITED

Household & Personal Products - Overnight Price: $4.60

Shaw and Partners rates ((ABY)) as Buy (1) -

Adore Beauty Group's inaugural first half result (as a listed company) was above guidance with a 7% rise in revenue and a very strong beat at the operating income line, observes Shaw and Partners.

The broker believes the market under-appreciates the group's peerless focus on key customer and revenue metrics, both of which provide significant operating leverage.

Revenue growth in FY21 is guided to be above pre-covid levels. The broker has already factored this in and is optimistic for a more than 50% growth forecast going into the result.

Adore is positioned well for long-term growth, believes the broker, with a very large yet fragmented addressable market, which provides an opportunity to the company to garner further market share and to drive scale.

Buy rating is retained with a target of $8.30.

This report was published on February 24, 2021.

Target price is $8.30 Current Price is $4.60 Difference: $3.7
If ABY meets the Shaw and Partners target it will return approximately 80% (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 6.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 68.66.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of 11.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 40.35.

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

ANP    ANTISENSE THERAPEUTICS LIMITED

Pharmaceuticals & Biotech/Lifesciences - Overnight Price: $0.17

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

In the wake of first half results, Wilsons notes the November capital raise has helped the balance sheet with $10m cash at the bank at the end of the half. This cash is considered necessary to support drug manufacture and trial preparations.

The broker forecasts total R&D costs of approximately -$27m for the upcoming EU Phase IIb twelve month trial, which will likely be completed in 2024. The completion and success of this trial is considered a key de-risking point for the stock.

The Overweight rating and $0.57 target are maintained.

This report was published on February 25, 2021.

Target price is $0.57 Current Price is $0.17 Difference: $0.4
If ANP meets the Wilsons target it will return approximately 235% (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 2.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 6.80.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 8.50.

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

BGA    BEGA CHEESE LIMITED

Dairy - Overnight Price: $6.10

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

Bega Cheese reported first-half revenue and operating income of $712.1m and $73.0m. While the revenue was -14% less than expected by Goldman Sachs, operating income rose by 16% versus the broker's forecast.

The operating income margin improved to 10.3% from 6.5% last year led by strong bulk margins. Management expects operating income to be lower in the second half owing to seasonality.

Bega Cheese stated that its contract with Reckitt Benckiser will cease in October 2021 and the company is considering the possible fallout of the termination. Neutral rating with the target rising to $6.05 from $5.45.

This report was published on February 24, 2021.

Target price is $6.05 Current Price is $6.10 Difference: minus $0.05 (current price is over target).
If BGA 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 $6.78, suggesting upside of 10.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 11.00 cents and EPS of 15.00 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 40.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.4, implying annual growth of 65.7%.
Current consensus DPS estimate is 9.7, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 37.3.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 13.00 cents and EPS of 29.00 cents.
At the last closing share price the estimated dividend yield is 2.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.03.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.8, implying annual growth of 81.7%.
Current consensus DPS estimate is 11.8, implying a prospective dividend yield of 1.9%.
Current consensus EPS estimate suggests the PER is 20.5.

Market Sentiment: 0.8
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: $3.16

Jarden rates ((BIN)) as Neutral (3) -

Jarden expects any confirmation around a binding bid to become clearer in the coming months. In the meantime, the broker assesses a strong 1H result versus expectations. While revenue growth was weaker, the Post Collections earnings proved resilient.

The analyst highlights the Collections earnings (EBITDA) margin contraction of -473 basis points, driven by lower building and demolition (B&D) volumes, price competition and commercial and industrial (C&I) impacts from weaker activity in NSW and Victoria.

Neutral rating. The target is set at $3.50 on the implicit assumption by Jarden the current consortium offer price drives Bingo's share price.

This report was published on February 23, 2021.

Target price is $3.50 Current Price is $3.16 Difference: $0.34
If BIN meets the Jarden target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $3.15, suggesting downside of -1.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Jarden forecasts a full year FY21 dividend of 3.80 cents and EPS of 6.20 cents.
At the last closing share price the estimated dividend yield is 1.20%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 50.97.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 5.6, implying annual growth of -44.6%.
Current consensus DPS estimate is 2.7, implying a prospective dividend yield of 0.8%.
Current consensus EPS estimate suggests the PER is 57.0.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 3.80 cents and EPS of 10.30 cents.
At the last closing share price the estimated dividend yield is 1.20%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.68.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.9, implying annual growth of 76.8%.
Current consensus DPS estimate is 4.5, implying a prospective dividend yield of 1.4%.
Current consensus EPS estimate suggests the PER is 32.2.

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

CAT    CATAPULT GROUP INTERNATIONAL LTD

Medical Equipment & Devices - Overnight Price: $1.70

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

In light of the toughest ever trading environment, Canaccord Genuity regards Catapult Group International’s 1H21 result, which included 8% annual contract value growth (CVG) US$44.5, churn less than 5%, and free cash flow up US$8.5m as not at all bad.

Catapult is currently undertaking a large realignment by, A) shifting its reporting date to a March year-end, B) changing its reporting currency to USD (circa 70% ACV USD), C) providing more transparency on divisional drivers, and D) undertaking a “revenue flip” in its Elite Wearable segment as it seeks to reduce one-off capital sales in favour of recurring subscription products.

Despite the last nine months being the most difficult for the sports industry, Catapult reported an increase in its annual contract value (ACV) of 8% to US$44.5m, while reporting a historic low ACV churn of just 4.5%, which the broker suggests illustrates the resilience/defensiveness of the company’s products.

Canaccord Genuity expects Catapult to report 10% ACV growth in FY21 (March year end), accelerating into FY22 (up 15%), FY23 (up 12%) in line with a resumption of sports-tech spend and the company’s increasing focus on subscription sales.

Buy rating with a target price of $2.45 remain unchanged.

This report was published on February 25, 2021.

Target price is $2.45 Current Price is $1.70 Difference: $0.75
If CAT meets the Canaccord Genuity target it will return approximately 44% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 2.94 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 57.82.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 3.61 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 47.09.

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

GDI    GDI PROPERTY GROUP

REITs - Overnight Price: $1.04

Moelis rates ((GDI)) as Buy (1) -

GDI Property Group delivered funds from operations of $14.2m, down circa -40% versus last year, impacted by a -$9.6m reduction in FFO at Westralia Square and the transition of Western Australian police force (WAPOL) from the upper levels to the lower levels.

The group reaffirmed its dividend guidance of 7.75c, expected to exceed FFO with the balance supported by capital.

While well flagged, Moelis finds the result underwhelming. What makes the broker optimistic is the opportunity presented by the strength of the Perth recovery. 

Moelis retains its Buy rating with the target price falling to $1.44 from $1.48.

This report was published on February 23, 2021.

Target price is $1.44 Current Price is $1.04 Difference: $0.4
If GDI meets the Moelis target it will return approximately 38% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 7.80 cents and EPS of 5.50 cents.
At the last closing share price the estimated dividend yield is 7.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.91.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 7.80 cents and EPS of 7.40 cents.
At the last closing share price the estimated dividend yield is 7.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.05.

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


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