Australian Broker Call *Extra* Edition – May 21, 2021

Daily Market Reports | May 21 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)

360   ALC   ARX   CKF   COL (2)   CRW   DOW   DXS   HPG   IGO (2)   JBH (2)   LNK   MAD   MGR   MZZ   NST   OPY   RDY   RMS   SFR (3)   SKF   WBC  

RMS    RAMELIUS RESOURCES LIMITED

Gold & Silver - Overnight Price: $1.94

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

Despite an outage at the Edna May SAG mill, Ramelius Resources has reported a solid quarter with total production of 66,000 ounces of gold at an all-in sustaining cost of $1,370 per ounce.

The Edna May mill produced just over 24,000 ounces at an all-in sustaining cost of $1,597 per ounce. Shaw and Partners estimates the mill’s outage increased the overall all-in sustaining costs by around $80 per ounce and expect this to reverse in the June quarter.

Sales of 65,420 ounces of gold at $2,242 an ounce generated quarterly revenue of $147m, leaving Ramelius with a cash and gold balance of $230.6m at the close of the quarter.

The company has also announced the resource at Eridanus has increased to 760,000 ounces, and declared a maiden resource of 220,000 ounces of gold at Orion-Franks.

The Buy rating and target price of $2.82 are retained. 

This report was published on April 29, 2021. 

Target price is $2.82 Current Price is $1.94 Difference: $0.88
If RMS meets the Shaw and Partners target it will return approximately 45% (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 6.00 cents and EPS of 18.90 cents.
At the last closing share price the estimated dividend yield is 3.09%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.26.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 12.00 cents and EPS of 29.00 cents.
At the last closing share price the estimated dividend yield is 6.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.69.

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

SFR    SANDFIRE RESOURCES NL

Copper - Overnight Price: $7.26

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

March quarter copper production was 3% higher quarter-on-quarter than expected though gold production was -6% lower. C1 cash costs of US$0.87/lb beat the US$0.93/lb estimate on higher gold credits. 

The broker highlights the quarter finished with cash of $464m versus a forecast for $411m, due to higher shipments after a build in copper concentrate over the first two quarters. It's believed the company is financed to deliver the Tshukudu project without debt.

The Buy rating and $8.50 target are retained.

This report was published on April 28, 2021.

Target price is $8.50 Current Price is $7.26 Difference: $1.24
If SFR meets the Canaccord Genuity target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $7.31, suggesting upside of 0.7%(ex-dividends)

Forecast for FY21:

Current consensus EPS estimate is 104.0, implying annual growth of 142.5%.
Current consensus DPS estimate is 35.1, implying a prospective dividend yield of 4.8%.
Current consensus EPS estimate suggests the PER is 7.0.

Forecast for FY22:

Current consensus EPS estimate is 94.3, implying annual growth of -9.3%.
Current consensus DPS estimate is 27.4, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 7.7.

Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


Goldman Sachs rates ((SFR)) as Buy (1) -

Sandfire Resources reported a 3% lift in copper production for the March quarter to 16.8kt on higher head grades from the Degrussa and Monty underground mines.

March quarter results also included 6% decline in gold production to 9.1kt on lower head grade, and a decline in cash costs to US87c/lb net credits.

FY21 guidance is unchanged but copper and gold production are expected to be at the top of the range and costs at the bottom.

Of note was the Botswana/T3 project which is progressing with initial clearing/groundwork ongoing, with the mining license expected in June quarter. First production remains for third quarter of 2023. Goldman Sachs had assumed mid 2023, but has pushed this back to the fourth quarter to take into account possible delays due to labour availability associated with covid.

The broker revises the FY21 EPS forecast up 41% on higher sales volumes, lower costs, and provisional pricing tailwinds in FY21. But FY22-23 EPS estimates are lower -2%, and -50% respectively after pushing back first production from T3-Motheo project by three months.

Buy rating is retained, target price increases to $7.90 from $7.60.

This report was published on April 28, 2021. 

Target price is $7.90 Current Price is $7.26 Difference: $0.64
If SFR meets the Goldman Sachs target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $7.31, suggesting upside of 0.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 27.90 cents and EPS of 134.00 cents.
At the last closing share price the estimated dividend yield is 3.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.42.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 104.0, implying annual growth of 142.5%.
Current consensus DPS estimate is 35.1, implying a prospective dividend yield of 4.8%.
Current consensus EPS estimate suggests the PER is 7.0.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 31.10 cents and EPS of 156.00 cents.
At the last closing share price the estimated dividend yield is 4.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.65.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 94.3, implying annual growth of -9.3%.
Current consensus DPS estimate is 27.4, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 7.7.

Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


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

Sandfire Resources reported a softer March quarter, but this was in line with broker forecasts. The company confirmed production was on track to meet the higher end of FY21 guidance of 67-70,000 tonnes copper and 36-40,000 ounces gold. 

Total copper production of 16,803 tonnes was marginally up on the previous quarter, while total gold production of 9,100 ounces was down on the previous quarters 9,660 ounces.Cash on hand at the end of the quarter equaled $463.6m, equating a $130m cash build during the quarter. 

Sandfire is aiming for the Botswana project to begin copper production in the third quarter, with expectations of 30,000 tonnes per annum over 12.5 years. Maiden resource from the DeGrussa project is also expected to be delivered during the June quarter. 

Shaw and Partners give a rating of Buy and a target price of $8.40. 

This report was published April 29, 2021. 

Target price is $8.40 Current Price is $7.26 Difference: $1.14
If SFR meets the Shaw and Partners target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $7.31, suggesting upside of 0.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 17.20 cents and EPS of 85.80 cents.
At the last closing share price the estimated dividend yield is 2.37%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.46.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 104.0, implying annual growth of 142.5%.
Current consensus DPS estimate is 35.1, implying a prospective dividend yield of 4.8%.
Current consensus EPS estimate suggests the PER is 7.0.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 18.30 cents and EPS of 91.30 cents.
At the last closing share price the estimated dividend yield is 2.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 94.3, implying annual growth of -9.3%.
Current consensus DPS estimate is 27.4, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 7.7.

Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SKF    SKYFII LTD

Software & Services - Overnight Price: $0.13

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

Canaccord Genuity assesses a solid third quarter result, as pro-forma annual recurring revenue (ARR) was in-line with expectations. The company raised FY21 total revenue guidance to $15.5-16.5m from $15-16m. The Buy rating and $0.30 target are retained.

The broker lifts FY21 ARR and revenue forecasts to $11.5m and $16.0m respectively, reflecting a 12-week contribution from CrowdVision. There are no changes to underlying forecasts from FY22 and beyond.

The analyst feels FY21 and the acquisition of CrowdVision is setting the stage for a material pick-up in FY22 ARR. This is considered underpinned by 25% growth and an improved contribution from CrowdVision, as capital spend increases in airports globally.

This report was published on April 29, 2021.

Target price is $0.30 Current Price is $0.13 Difference: $0.17
If SKF meets the Canaccord Genuity target it will return approximately 131% (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 0.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 65.00.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 0.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 43.33.

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


Disclaimer:
The content of this information does in no way reflect the opinions of FNArena, or of its journalists. In fact we don't have any opinion about the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface. This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FNArena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.

As part of emerging new trends overseas, The Australian Broker Call *Extra* Edition also includes providers of sponsored research. Readers should bear in mind, sponsored research, while not necessarily of lower quality, has the embedded complication that the company that is the subject of the research has paid for this research. Providers of sponsored research that can potentially be included in this Report are Breakaway Research, Edison Investment Research, Independent Investment Research, NDF Research, Pitt Street Research, and TMT Analytics.

Decisions about inclusions in this Report are made independently of the providers of stock market research and at full discretion of the team of journalists responsible for content at FNArena. Inclusion does not equal endorsement, in any way, shape or form. This Report is provided for informational purposes only.


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