Australian Broker Call *Extra* Edition – May 17, 2021

Daily Market Reports | May 17 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)

ABB   ALG   ALU   AND   GNX   ILU   JRV   KGN (2)   LME   MND   NHF (2)   NXS   PPT   PRN   YFZ  

ABB    AUSSIE BROADBAND LIMITED

Telecommunication - Overnight Price: $2.80

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

Aussie Broadband continues strong third quarter growth, notes Shaw and Partners, with results showing total group connections of 373.100, an 80% year-on-year increase and up 30.400 quarter-on-quarter as the on-net network build continues. 

Residential subscribers for the quarter were below the broker's forecast, likely due to high speed connection competition from NBN. 

The company also announced the successful signing of a large energy retail customer involving the bulk transfer of 25000 existing broadband and VOIP services to Aussie Broadband. The company noted that the agreement could increase net adds by as much as 2000 per month, or around 20% per quarter.

According to the broker, Aussie Broadband have emerged as the fastest organically growing telco in Australia and is continuing to take market share from the majors. The company is expecting further progress on other white-label agreements and expects end of year results in the upper end of previous guidance. 

The Buy rating is retained and target price increases to $3.33 from $2.98. 

This report was published on April 27, 2021.

Target price is $3.33 Current Price is $2.80 Difference: $0.53
If ABB meets the Shaw and Partners target it will return approximately 19% (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 2.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 103.70.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of 10.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.00.

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

ALG    ARDENT LEISURE GROUP

Travel, Leisure & Tourism - Overnight Price: $0.83

Canaccord Genuity rates ((ALG)) as Initiation of coverage with Buy (1) -

Ardent Leisure could be looking forwards to a strong two-year recovery period, according to Canaccord. According to the broker, economic recovery in the US is key to the company's value creation through it's Main Event asset. 

Ardent Leisure received a US$80m investment from RedBird in Main Event in June 2020 for a 24.2% stake. The broker considers this a strong partnership that is likely to lead to further investment in two to three years, which could see Ardent cede Main Event control for equity investment. 

Following expansion setbacks through 2020 there is an expectation that four new Main Event locations will open in 2022 according to Canaccord. 

While heavily dependent on covid-19 risks, the broker also feels there is scope for the company's Theme Park asset to begin generating financial returns following early signs of recovery in the first half of 2020. 

$50m in capital expenditure has been invested into a refurbishment and a new ride program, with a new centerpiece ride expected to open before the end of the 2021 financial year, 

Based on 2014-2016 earnings, prior to the Dreamworld accident, the company's Australian-based Theme Park asset may break even for the 2023 financial year and have a worth of around $200m by 2025, predicts Canaccord. 

Canaccord Genuity initiates with a Buy rating and a target price of $1.22. 

This report was published on April 26, 2021. 

Target price is $1.22 Current Price is $0.83 Difference: $0.39
If ALG meets the Canaccord Genuity target it will return approximately 47% (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 0.00 cents and EPS of minus 33.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 2.52.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 15.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 5.53.

Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

ALU    ALTIUM LIMITED

Hardware & Equipment - Overnight Price: $24.16

Shaw and Partners rates ((ALU)) as Upgrade to Buy from Hold (1) -

Shaw and Partners forecasts a cyclical recovery for Altium in 2022 and 2023, based on the company's historical two-year post-global financial crisis recovery.

According to the broker, demand for Altium's electronic design software is leveraged to economic growth. Shaw is optimistic about the company's recovery based on its revenue growth following the 2008 financial crisis. The broker predicts two years of revenue decline before recovery.

Although the broker predicts Altium to slightly miss its 2021 target, Shaw predicts strong acceleration through the second half, with revenue expected to grow by 17-18% in 2023. 

Rating is upgraded to Buy from Hold and target price increases to $34.00 from $33.26. 

This report was published on April 26, 2021. 

Target price is $34.00 Current Price is $24.16 Difference: $9.84
If ALU meets the Shaw and Partners target it will return approximately 41% (excluding dividends, fees and charges).
Current consensus price target is $33.90, suggesting upside of 40.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 75.17 cents and EPS of 47.17 cents.
At the last closing share price the estimated dividend yield is 3.11%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 51.22.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 43.7, implying annual growth of N/A.
Current consensus DPS estimate is 45.0, implying a prospective dividend yield of 1.9%.
Current consensus EPS estimate suggests the PER is 55.3.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 79.11 cents and EPS of 53.42 cents.
At the last closing share price the estimated dividend yield is 3.27%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 45.23.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 52.6, implying annual growth of 20.4%.
Current consensus DPS estimate is 47.3, implying a prospective dividend yield of 2.0%.
Current consensus EPS estimate suggests the PER is 45.9.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

AND    ANSARADA GROUP LIMITED

Software & Services - Overnight Price: $1.11

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

Ansarada Group's third quarter update revealed record customer growth for the company. A 6% increase in new net customer adds on the previous quarter was reported, equating to 190 customer adds for the period and totaling 3,190 customers. 

Revenue was also up 7% on the second quarter to the tune of $9m and a positive free cash flow was reached. 

Moelis has increased 2021 revenue forecast by 3% to $34m, and increased revenue forecast for 2022 and 2023 by 2% and 1% respectively. The broker notes that continued growth of new net customers was expected in the historically stronger fourth quarter. 

The Buy rating is maintained and the target price increases to $1.94 from $1.90. 

This report was published on April 28, 2021.

Target price is $1.94 Current Price is $1.11 Difference: $0.83
If AND meets the Moelis target it will return approximately 75% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 4.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 26.43.

Forecast for FY22:

Moelis forecasts a full year FY22 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 79.29.

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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