Australian Broker Call *Extra* Edition – May 28, 2021

Daily Market Reports | May 28 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)

ALG   ALU   ANZ   BLU   BVS   CCX (2)   CEL   CIA   COI   CPU   CRN   CTP   DHG   EHL   ELO   ENN   EVN   FDV   FLT   HAS   HLS   IEL   IFM   INA (2)   ING   JHC   MFG   MPL   NAB   NHF   OBL   PBH   PMV   PNI   QBE (2)   RHC   SEK   SLK   STA   SUL   WBC   WSA  

SEK    SEEK LIMITED

Jobs & Skilled Labour Services - Overnight Price: $30.79

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

Seek provided an upgrade to FY21 guidance, increasing revenue expectations by 2% to $1,740m and net profit after tax by 50% to $150m, driven by the strong Australian and New Zealand markets. 

Goldman Sachs also noted stronger revenues from the Asia market are positive after a soft first half result.

The Zhaopin sell-down also completed. Seek reduced its stake from 61.9% to 23.5% for a net proceed of $560m. 

The Neutral rating is retained and the target price increases to $30.40 from $27.40. 

This report was published on May 4, 2021. 

Target price is $30.40 Current Price is $30.79 Difference: minus $0.39 (current price is over target).
If SEK 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 $29.87, suggesting downside of -3.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 30.00 cents and EPS of 40.00 cents.
At the last closing share price the estimated dividend yield is 0.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 76.98.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 40.2, implying annual growth of N/A.
Current consensus DPS estimate is 28.6, implying a prospective dividend yield of 0.9%.
Current consensus EPS estimate suggests the PER is 77.3.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 23.00 cents and EPS of 50.00 cents.
At the last closing share price the estimated dividend yield is 0.75%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 61.58.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 52.9, implying annual growth of 31.6%.
Current consensus DPS estimate is 35.6, implying a prospective dividend yield of 1.1%.
Current consensus EPS estimate suggests the PER is 58.7.

Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SLK    SEALINK TRAVEL GROUP LIMITED

Travel, Leisure & Tourism - Overnight Price: $10.10

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

Coming on the back of Sealink Travel Group submitting tendering for key bus contracts in Melbourne and Sydney, the company has acquired Go West Tours, a specialist bus contractor to the WA resources sector at a purchase price of $84.7m.

Given pricing of 5.3x normalised last 12 months earnings, Cannacord Genuity thinks the deal looks to be around 7% accretive at first glance.

Management expects the acquisition to be high-single digit accretive in the first full year of ownership.

The broker notes, in contrast to Sealink's Government contracting business, assets will be owned and maintained by the company with compensation coming by way of much stronger operating margins.

The Buy rating and target price of $8.55 are maintained.

This report was published on May 5, 2021.

Target price is $8.55 Current Price is $10.10 Difference: minus $1.55 (current price is over target).
If SLK meets the Canaccord Genuity target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 14.00 cents and EPS of 31.00 cents.
At the last closing share price the estimated dividend yield is 1.39%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.58.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 16.00 cents and EPS of 37.00 cents.
At the last closing share price the estimated dividend yield is 1.58%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.30.

Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

STA    STRANDLINE RESOURCES LTD

Mineral Sands - Overnight Price: $0.21

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

Strandline Resources has raised $122m of equity capital at 20.5cps to complete the financing for the Coburn mineral sands project. Shaw and Partners views this as major event given the project is now fully financed, and the company is significantly de-risked.

The broker expects a final investment decision (FID) in the next few weeks. Meanwhile, mineral sands markets continue to strengthen, and the analyst increases realised pricing assumptions by around 10%. The price target increases to $0.58 from from $0.52. Buy retained.

This report was issued May 4, 2021.

Target price is $0.58 Current Price is $0.21 Difference: $0.37
If STA meets the Shaw and Partners target it will return approximately 176% (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 minus 1.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 14.00.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 1.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 16.15.

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

SUL    SUPER RETAIL GROUP LIMITED

Automobiles & Components - Overnight Price: $12.86

Bell Potter rates ((SUL)) as Hold (3) -

Bell Potter expects Super Retail Group's like-for-like sales which lifted 28% versus FY20 to materially slow as the company begins to cycle demanding comps from May onwards.

Divisional like-for-like sales highlights for the first 44 weeks of FY21 included Macpac (up 17%), BCF (up 59%), Sports (up 20%) and Auto (up 21%) versus full year 2020.

While Bell Potter sees an enduring tailwind from international travel restrictions for the balance of calendar year 2021, the broker believes this will be offset by: the demanding comps that need to be cycled; reduced Government stimulus; and the ongoing uncertainties surrounding covid and the impacts this may have on consumer confidence.

Hold rating is unchanged, with the target price increasing to $12.05 from $11.80.

This report was published on May 4, 2021.

Target price is $12.05 Current Price is $12.86 Difference: minus $0.81 (current price is over target).
If SUL meets the Bell Potter target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $13.35, suggesting upside of 5.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 67.40 cents and EPS of 127.20 cents.
At the last closing share price the estimated dividend yield is 5.24%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 128.2, implying annual growth of 129.9%.
Current consensus DPS estimate is 72.3, implying a prospective dividend yield of 5.7%.
Current consensus EPS estimate suggests the PER is 9.9.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 50.70 cents and EPS of 84.60 cents.
At the last closing share price the estimated dividend yield is 3.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 88.1, implying annual growth of -31.3%.
Current consensus DPS estimate is 56.6, implying a prospective dividend yield of 4.5%.
Current consensus EPS estimate suggests the PER is 14.4.

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


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