Australian Broker Call *Extra* Edition – May 26, 2021

Daily Market Reports | May 26 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)

5GN   ADH   AHX   AMS   ANZ   BCI   BET   BKG   BUB   CSL   CUV   DUB   FCL (2)   FMG (2)   GMA   GOZ   IEL   IMR (2)   JHG   MCP (2)   MGH   MMI   MMM   MSB   NCM (2)   NIC (2)   NTO (2)   ORG   PBH (2)   QBE   RHP (2)   RMD (2)   RRL   SBM   STG   WOW (2)   ZBT  

MGH    MAAS GROUP HOLDINGS LTD

Building Products & Services - Overnight Price: $4.86

Moelis rates ((MGH)) as Downgrade to Hold from Buy (3) -

To reflect the acquisition of a quarry, concrete and plant hire business in Central Queensland, and a quarry in the New England region, NSW, Moelis' FY21 earnings estimate for Maas Group  increases by 1% and FY22 earnings by 12%.

Moelis notes both businesses were acquired on a 3.5x enterprise value multiple. The broker believes the continued execution of Maas' strategy has contributed to its strong share price performance, up 103% since its IPO.

In the broker's view, the current valuation could be reflective of the strong growth outlook for Maas's Construction Materials division and thus higher weighting towards the sector average, or factoring in the potential for further acquisitions and/or better than expected organic growth.

The analyst moves to a Hold from a Buy rating with the target price increasing to $4.36 from $3.08.

This report was published on April 30, 2021. 

Target price is $4.36 Current Price is $4.86 Difference: minus $0.5 (current price is over target).
If MGH meets the Moelis target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 5.00 cents and EPS of 14.90 cents.
At the last closing share price the estimated dividend yield is 1.03%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.62.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 5.00 cents and EPS of 19.00 cents.
At the last closing share price the estimated dividend yield is 1.03%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.58.

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

MMI    METRO MINING LIMITED

Coal - Overnight Price: $0.03

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

Shaw and partners observes Metro Mining's March quarter update offered no new information about necessary additional offtake agreements, but the company commented negotiations were progressing well.

The company needs to secure additional contracts to increase FY21 volume to 4m tonnes and move towards Shaw and Partners' target price of $0.15 per share.

Operations at Bauxite Hills restarted on April 14th after closing in September 2020 following the failure to secure any contracts beyond the foundation 2.4m tonne Xinfa contract. 

The broker remains optimistic that positive news of an offtake agreement could see this stock double in price. The Buy rating and the target price of $0.15 are retained. 

This report was published on May 3, 2021.

Target price is $0.15 Current Price is $0.03 Difference: $0.12
If MMI meets the Shaw and Partners target it will return approximately 400% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 0.00 cents and EPS of 0.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.75.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 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 1.11.

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

MMM    MARLEY SPOON AG

Consumer Products & Services - Overnight Price: $2.52

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

Marley Spoon confirmed a strong first quarter, with revenue growing 81% over last year. Further, the company has upgraded 2021 revenue growth guidance to 30-35% from 25-30%.

The broker notes revenue retention for newer customer cohorts remains to track above earlier cohorts and has positive implications for longer-term unit economics.

The contribution margin declining by circa -150bps was a small blip but Wilsons believes the issues are largely transitory.

Overweight rating is retained with the target price rising to $3.85 from $3.48.

This report was published on April 30, 2021.

Target price is $3.85 Current Price is $2.52 Difference: $1.33
If MMM meets the Wilsons target it will return approximately 53% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 5.29 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 47.64.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 2.73 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 92.48.

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

MSB    MESOBLAST LIMITED

Pharmaceuticals & Biotech/Lifesciences - Overnight Price: $1.94

Bell Potter rates ((MSB)) as Buy (1) -

Mesoblast's trial investigating the use of remestemcel-L in the treatment of 222 covid patients with moderate to severe acute respiratory distress syndrome showed reduced mortality through 60 days for the under 65 years group.

Further, the benefit was increased when remestemcel-L was used in combination with the generic drug dexamethasone.

Bell Potter concludes the two drugs used in combination seem to have a highly synergistic effect in the reduction of inflammation associated with ARDS.

In the broker's view, the data provide a clear path forward for a registration study that will likely be funded by Novartis under the terms of the agreement struck between the two parties in November 2020.

Buy rating with the valuation lowered to $4.70 from $5.10.

This report was published on May 3, 2021.

Target price is $4.70 Current Price is $1.94 Difference: $2.76
If MSB meets the Bell Potter target it will return approximately 142% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 5.28 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 36.76.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 28.14 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 6.89.

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

NCM    NEWCREST MINING LIMITED

Gold & Silver - Overnight Price: $28.40

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

Newcrest Mining's reported total gold production during the March quarter of 512koz at an all-in sustaining cost of US$891 per ounce. 

Production was in line with Goldman Sachs' expectations and higher-than-expected all-in sustaining costs were attributed to increased costs at the Telfer project and a soft quarter from Red Chris. 

The broker notes key growth projects Havieron and Red Chris continue to make significant steps and expects updates on both projects later in 2021. 

The Buy rating is retained and the target price increases to $34.00. 

This report was published on April 29, 2021. 

Target price is $34.00 Current Price is $28.40 Difference: $5.6
If NCM meets the Goldman Sachs target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $31.56, suggesting upside of 8.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 51.41 cents and EPS of 197.54 cents.
At the last closing share price the estimated dividend yield is 1.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.38.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 180.0, implying annual growth of N/A.
Current consensus DPS estimate is 38.1, implying a prospective dividend yield of 1.3%.
Current consensus EPS estimate suggests the PER is 16.2.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 24.35 cents and EPS of 224.60 cents.
At the last closing share price the estimated dividend yield is 0.86%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.64.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 167.4, implying annual growth of -7.0%.
Current consensus DPS estimate is 39.4, implying a prospective dividend yield of 1.4%.
Current consensus EPS estimate suggests the PER is 17.4.

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


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