Australian Broker Call *Extra* Edition – May 07, 2021

Daily Market Reports | May 07 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)

AMX   AVN   BHP   BKL   BWP   CIP (2)   CLU   CNI   COF (2)   CQE   CRN   DGH   GPT   HUB   ILU   LRK   MAD   NST   OZL   PNR   RIO   SGP   SMP   STO   TIE   WPL   WSA  

AMX    AEROMETREX LIMITED

Software & Services - Overnight Price: $0.85

Taylor Collison rates ((AMX)) as Outperform (2) -

Due to a -15% decline in revenue (resulting from a lack of government projects and delays by major corporates), and an increase in marketing and employee costs totaling $2.5m on an annualised basis, Aerometrex Ltd’s first half 2021 trading earnings (EBITDA) was down -69% to $0.7m.

Pleasingly Taylor Collison observes, indecision on projects going ahead from governments and corporates – which caused much of the decline - has reversed through the early part of the second half with project spending lifting meaningfully.

The broker expects FY22 to be a more representative view of Aerometrex’s current state of business with earnings (EBITDA) to better reflect corresponding revenues in line with the recent step-up in employee and marketing costs.

While Taylor Collison believes a significant discount is justified given Nearmap ((NEA)) holds the incumbent market position, the broker maintains the current -78% discount is too deep, particularly as Aerometrex is expected to take market share in the subscription space via MetroMap.

Until now, Taylor Collison believed future “blue-sky” opportunities were somewhat built into the share price. But at 8.3x FY22 enterprise value to earnings, the broker believes investors are now only paying for the current business operations.

Taylor Collison has an Outperform on Aerometrex and a target price of $1.76.

This report was released on April 14, 2021.

Target price is $1.76 Current Price is $0.85 Difference: $0.91
If AMX meets the Taylor Collison target it will return approximately 107% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Taylor Collison forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 0.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 425.00.

Forecast for FY22:

Taylor Collison forecasts a full year FY22 dividend of 0.00 cents and EPS of 2.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 35.42.

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

AVN    AVENTUS GROUP

REITs - Overnight Price: $2.96

Jarden rates ((AVN)) as Initiation of coverage with Underweight (4) -

Jarden likes passive yield REIT’s for attractive valuations, total shareholder returns and support from demand for real Australian assets. Also, there’s considered capacity to fund investment and growth. 

Some REIT’s are trading at a discount to valuation which may drive potential M&A activity, explains the broker. Overall, Jarden prefers exposure to non-discretionary Retail for the ability to boost growth with developments and acquisitions.

Jarden initiates coverage of Aventus Group with an Underweight rating and a $2.25 price target. The broker likes the large format retail (LFR) category and expects a ramp-up in growth profile in the coming 12 months through the development pipeline.

However, the analyst notes the shares are trading at a substantial premium to net tangible assets and with a lower growth profile than many of its passive REIT peers.

This report was published on April 14, 2021.

Target price is $2.25 Current Price is $2.96 Difference: minus $0.71 (current price is over target).
If AVN meets the Jarden target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $2.92, suggesting downside of -0.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Jarden forecasts a full year FY21 dividend of 17.00 cents and EPS of 19.70 cents.
At the last closing share price the estimated dividend yield is 5.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.03.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.9, implying annual growth of 84.0%.
Current consensus DPS estimate is 16.9, implying a prospective dividend yield of 5.8%.
Current consensus EPS estimate suggests the PER is 15.5.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 18.20 cents and EPS of 20.20 cents.
At the last closing share price the estimated dividend yield is 6.15%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.65.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.7, implying annual growth of 4.2%.
Current consensus DPS estimate is 17.8, implying a prospective dividend yield of 6.1%.
Current consensus EPS estimate suggests the PER is 14.9.

Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

BHP    BHP GROUP

Bulks - Overnight Price: $49.80

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

All BHP Group units exceeded or met Shaw & Partners expectations for the March quarter 2021, with guidance having been tightened/move higher in key areas – copper, oil and iron ore - as the miner heads into the last three months of FY21.

While petroleum guidance for the FY21 remains unchanged at between 95 and 102 MMboe, iron ore volumes are expected to be in the upper half of the guidance range as a result of strong performance at WAIO.

Copper guidance for the 2021 financial year increased to between 1,535kt and 1,660kt from between 1,510kt and 1,645kt.

Buy rating and target price of $47.00.

This report was published on April 22, 2021.

Target price is $47.00 Current Price is $49.80 Difference: minus $2.8 (current price is over target).
If BHP meets the Shaw and Partners target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $47.71, suggesting downside of -4.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 409.04 cents and EPS of 379.01 cents.
At the last closing share price the estimated dividend yield is 8.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 417.2, implying annual growth of N/A.
Current consensus DPS estimate is 324.1, implying a prospective dividend yield of 6.5%.
Current consensus EPS estimate suggests the PER is 12.0.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 281.29 cents and EPS of 281.97 cents.
At the last closing share price the estimated dividend yield is 5.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.66.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 419.7, implying annual growth of 0.6%.
Current consensus DPS estimate is 321.0, implying a prospective dividend yield of 6.4%.
Current consensus EPS estimate suggests the PER is 11.9.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

BKL    BLACKMORES LIMITED

Health & Nutrition - Overnight Price: $68.53

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

Blackmores faces ongoing discounting pressure in the market according to Goldman Sachs, but the company plans to refrain from deep discounting, noting that excess cold and flu products from last season make competition irrational. 

The broker predicts this increased competitive pressure, as well as delays in international travel, student return and lagging recovery in Daigou channels, will reflect in a slower recovery for the company and have updated earnings forecasts by -8.6% and -5.1% for the 2022 and 2023 financial years. 

Blackmores' expansion into India is proceeding well according to Goldman Sachs, despite the region's current covid-19 issues. 

Further, following completed integration of the manufacturing to supply chain the company expects to increase production to 3bn doses next year, up from 2.5bn. 

The Neutral rating is retained with the target decreasing to $74.80 from $78.40. 

This report was published on April 23, 2021.

Target price is $74.80 Current Price is $68.53 Difference: $6.27
If BKL meets the Goldman Sachs target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $73.83, suggesting upside of 6.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 72.00 cents and EPS of 179.00 cents.
At the last closing share price the estimated dividend yield is 1.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 38.28.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 169.2, implying annual growth of 63.4%.
Current consensus DPS estimate is 76.3, implying a prospective dividend yield of 1.1%.
Current consensus EPS estimate suggests the PER is 41.1.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 111.00 cents and EPS of 221.00 cents.
At the last closing share price the estimated dividend yield is 1.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.01.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 239.2, implying annual growth of 41.4%.
Current consensus DPS estimate is 125.1, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 29.1.

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


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