Australian Broker Call *Extra* Edition – Jun 03, 2021

Daily Market Reports | Jun 03 2021

An additional news report on the recommendation, valuation, forecast and opinion changes for ASX-listedequities.

In addition to The Australian Broker Call Report, which is published and updated daily (Mon-Fri), FNArenahas now added The Australian Broker Call *Extra* Edition, featuring additional sources of research and insights on ASX-listedstocks, also enlarging the number of stocks that make up the FNArenauniverse.

One key difference is the *Extra* Edition will not be updated daily, but merely "regularly" depending on availabilityofsuitable 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 publicationmay not be up to date, or yet awaiting another update by FNArena'steam 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)

A2M(3) ADI ASX BRG BTH CXL EHL EYE FCL(2) FMG GMG GPR IMU IPL KZA LGL LGP LPI MMM MQG MTO OBL ORR PDL(2) RRL SCG SGR SLK(2) SM1 SUL SUN SVW TAH TPG VCX WOW WSP

A2M THE A2 MILK COMPANY LIMITED

Dairy - Overnight Price: $5.72

Bell Potter rates ((A2M)) as Buy (1) -

Followinga fourth downgrade to FY21earnings, whichsaw revenue guidancedowngraded from NZ$1.4bn to NZ$1.20-1.25bn and earnings margin guidance downgraded to 11-12% from 24-26%, Bell Potter hasdowngraded a2 Milk's forecast profitby -60% in FY21, -16% in FY22and -13% in FY23.

The broker does not view FY21revenue or earnings as reflective of where the business will operate once supply chains have stabilised and retains a Buy rating.

At its core Bell Pottersees a2 Milk as abusiness thatonce Mataura Valley Milk is consolidated, has baseline revenue of NZ$1.4-1.5bn and earnings of NZ$300m, with a pathway to being a NZ$1.7bn revenue business generating NZ$445m in earnings on its existing China offline distribution footprint.

The broker'starget price lowersto $8.50 from $9.50.

This report was published on May 11, 2021.

Target price is $8.50 Current Price is $5.72 Difference: $2.78
If A2M meets the Bell Potter target it will return approximately 49% (excluding dividends, fees and charges).
Current consensus price target is $6.32, suggesting upside of 10.4%(ex-dividends)
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 11.64 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 49.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.9, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 33.8.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of 26.91 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.26.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.7, implying annual growth of 63.9%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 20.6.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


Jarden rates ((A2M)) as Underweight (2) -

After a fourth downgrade to the FY21 outlook, The a2 Milk Co announced the resignation of CEO Asia Pacific Peter Nathan. The downgrade is due to a poor April and an inventory review, suggesting to Jarden higher excess inventory and aging.

The broker gleans a positive in that the company is accepting the inventory issues and is now taking more aggressive corrective actions to protect its future brand health. However, the magnitude of the downgrade is worse than expected.

Jarden lowers FY21-23EPS forecasts by-57%, -41% and -35% to incorporate ahigher stock provision and a tougher growth resetat lower margins. The target price decreasesto NZ$6.10 from NZ$7.90. TheUnderweight rating is retained on valuation grounds.

This report was published on May 10, 2021.

Current Price is $5.72. Target price not assessed.
Current consensus price target is $6.32, suggesting upside of 10.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Jarden forecasts a full year FY21 EPS of 12.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 47.26.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.9, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 33.8.

Forecast for FY22:

Jarden forecasts a full year FY22 EPS of 17.51 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.68.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.7, implying annual growth of 63.9%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 20.6.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


Wilsons rates ((A2M)) as Market Weight (3) -

With an expected improvement in fourth quarter 2021 trading not eventuating, a2 Milk has lowered its FY21 guidance.

Managementis now taking further action to re-establish sales momentum in its infant nutrition business, including further stock write-offs and increased marketing spend.

Commenting on recent developments, Wilsons believes thestructural changes in the China marketthat prompted managementto strategically review the company's growth strategy,presents significant uncertainty for the sales and margin outlook.

a2 Milk has lowered its FY21 guidance, and is now expecting sales of NZ$1,200- 1,250m (previously NZ$1,400m) and earnings margins of 11-12% on a reported basis or 21% normalised (previously 24-26%).

As a result, Wilsons has lowered earnings per share forecasts -60% in FY21 and -28% in FY22-23. Market Weight ratingand target price of $6.67 remain unchanged.

This report was published on May 10, 2021.

Target price is $6.67 Current Price is $5.72 Difference: $0.95
If A2M meets the Wilsons target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $6.32, suggesting upside of 10.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of 11.64 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 49.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.9, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 33.8.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of 23.93 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.90.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.7, implying annual growth of 63.9%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 20.6.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

ADI APN INDUSTRIA REIT

REITs - Overnight Price: $3.20

Moelis rates ((ADI)) as Hold (3) -

Followingstrong transactional evidence in industrial markets, APN Industria REIT'svaluations for 30 June 2021 resultin an 11.9% uplift on valuations for 17 of 23 industrial properties.

In isolation,Moelis notesthe valuation uplift(which drives NTA to $3.18) is marginally dilutive. However, with incremental gearing capacity,the brokerbelieves APN Industria is well positioned to continue adding industrial assets to the portfolio.

Moelis has also updatedestimates to include the recent acquisitions of an industrial asset at Coriofor $36m.

With gearing at 30% the broker believes there's room on the balance sheet to bolster the medium-term earnings profile through acquisitions.

However, with the income growth profile possibly at risk near term, given the 1% of income expiring at Rhodes Business Park, the broker remains cautious noting resolution of the expiry at Rhodes would provide a meaningful catalyst.

Hold rating maintained with the target rising to $3.12 from $3.04.

This report was published on May 10, 2021.

Target price is $3.12 Current Price is $3.20 Difference: minus $0.08 (current price is over target).
If ADI meets the Moelis target it will return approximately minus 3% (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 17.30 cents and EPS of 19.90 cents.
At the last closing share price the estimated dividend yield is 5.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.08.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 17.30 cents and EPS of 18.40 cents.
At the last closing share price the estimated dividend yield is 5.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.39.

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

ASX ASX LIMITED

Wealth Management & Investments - Overnight Price: $75.60

Goldman Sachs rates ((ASX)) as Sell (5) -

Into the final quarter for FY21, Goldman Sachs continues to see earnings risks skewed to the downside, particularly in futures.

The broker notescontraction in contracts on the previous period at -21% - roughly twice the decline versus Goldman Sachs' current second half 2021 forecasts - while velocity is also softening through the broker's normalised assumption.

The broker retains a Sell rating and a $67.46 target price.

This report was published on May6, 2021.

Target price is $67.46 Current Price is $75.60 Difference: minus $8.14 (current price is over target).
If ASX meets the Goldman Sachs target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $70.47
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 EPS of 249.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.36.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 247.2, implying annual growth of -4.0%.
Current consensus DPS estimate is 222.1, implying a prospective dividend yield of N/A.
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

BRG BREVILLE GROUP LIMITED

Household & Personal Products - Overnight Price: $27.58

Wilsons rates ((BRG)) as Market Weight (3) -

Breville Group has provided a trading update.Highlights include expected earnings before interest and tax of $136m for FY21 indicating a 19.6% year-on-year increase.

Newell Brands, Electrolux and Whirlpool all reported year-on-year sales revenue growth of more than 20%.

The company also advised $9.7bn in revenue opportunities, although Wilsons suggests this is closer to $6.1bn. The broker expects the majority of this upside to come from Europe, the Middle East and Africa.

The Market Weight rating is retained and the target price decreases -21.3% to $25.18.

Thisreport was published on May 7, 2021.

Target price is $25.18 Current Price is $27.58 Difference: minus $2.4 (current price is over target).
If BRG meets the Wilsons target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $32.93, suggesting upside of 19.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 28.00 cents and EPS of 68.20 cents.
At the last closing share price the estimated dividend yield is 1.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 40.44.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 67.1, implying annual growth of 32.9%.
Current consensus DPS estimate is 26.3, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 41.1.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 31.50 cents and EPS of 77.80 cents.
At the last closing share price the estimated dividend yield is 1.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 35.45.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 77.5, implying annual growth of 15.5%.
Current consensus DPS estimate is 31.8, implying a prospective dividend yield of 1.2%.
Current consensus EPS estimate suggests the PER is 35.6.

Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

BTH BIGTINCAN HOLDINGS LIMITED

Cloud services - Overnight Price: $1.01

Sequoia rates ((BTH)) as Buy (1) -

Due largely toa -17% adverse AUDUSD FX movement, Bigtincan Holdings' third quarter receipts from customers ($12.2m) were up 16% on the second quarterbut down -18% on the previous period.

Following aFY21 revenue guidance increase to $43-44m, Sequoiaupgradedrevenue forecasts by 7%, 8%, and 8% for FY21, FY22, and FY23 respectively.

Sequoiathinks the outlook is strong and that covid and FX headwinds will eventually abate. Buy rating is retained, and the target price increases to $1.39 from $1.27.

This report was published on May4, 2021.

Target price is $1.39 Current Price is $1.01 Difference: $0.38
If BTH meets the Sequoia target it will return approximately 38% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Sequoia forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 3.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 30.61.

Forecast for FY22:

Sequoia forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 2.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 45.91.

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

CXL CALIX LIMITED

Mining Sector Contracting - Overnight Price: $2.81

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

Calix Limited has entered into a memorandum of understanding with Pilbara Minerals ((PLS)) to co-develop a new refining process using Calix's technology. The process will allow for the production of a concentrated lithium saltfor lithium batteries.

The agreement follows initial testing of spodumene processing that resulted in over 95% conversion of spodumene ore extractable lithium. The memorandum of understandingcommits both parties to a scoping study at Pilgangoora.

Canaccord expects scoping and development to run for 2-3 years, with potential for a commercial agreement from early FY23.

According to the broker, Calix's agreement assists the company in de-risking its business profile bycontinuing to broaden the potential end-industry applications of its software.

The Buy rating is retained and the target price increases to $2.95 from $2.60.

This report was published on May 12, 2021.

Target price is $2.95 Current Price is $2.81 Difference: $0.14
If CXL meets the Canaccord Genuity target it will return approximately 5% (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 0.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 936.67.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 2.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 133.81.

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

EHL EMECO HOLDINGS LTD

Mining Sector Contracting - Overnight Price: $0.90

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

Emeco Holdings has announced an intended allocation of 25-40% of operating net profit after tax to dividends and buybacks each year, taking effect on the upcoming FY21results.

Only the second half results will be taken into account for FY21, which Bell Potter predicts to amount to between $7.5-12mallocated to dividends and buybacks. This would suggest a second half dividend of1.4-2.2 cents per share, or a buyback of 8.1-12.9m shares.

Bell Potter estimates Emecowill generate $98.7m of free cash flow in FY22, benefiting from an additional $18.3m in operating earnings from the redeployment of off-hired equipment. This equates to $69.1-80.2m excess cash flow following the 25-40% payout.

The Buy rating and target price of $1.50 are retained.

This report was published on May 6, 2021.

Target price is $1.50 Current Price is $0.90 Difference: $0.6
If EHL meets the Bell Potter target it will return approximately 67% (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 1.80 cents and EPS of 12.00 cents.
At the last closing share price the estimated dividend yield is 2.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.50.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 4.40 cents and EPS of 13.60 cents.
At the last closing share price the estimated dividend yield is 4.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.62.

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

EYE NOVA EYE MEDICAL LIMITED

Medical Equipment & Devices - Overnight Price: $0.31

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

Nova Eye Medical has enrolled the first patient in the MAGIC randomised trial that directly compares iTrack to the OMNI device from Sight Sciences, its main competitor in standalone minimally invasive glaucoma surgery (MIGS) procedures.

If successful, Taylor Collison expects the MAGIC trial, together with the next generation iTrack device with improved ease of use, to position the company to drive iTrack sales and market share growth post-covid.

Another key milestone Taylor Collison expects in the current quarter is the final design of a new pivotal trial of 2RT in intermediate AMD and submission of an Investigational Device Exemption (IDE) with the US FDA.

The broker expects this to provide clarity as Nova Eye Medical seeks a partner to fund further development of 2RT which is the company's proprietary nano-pulse ophthalmic laser therapy for the treatment of intermediate age-related macular degeneration (AMD).

With a strategy in place to support iTrack sales growth, Taylor Collison retains Outperformrating and target of $0.42.

This report was issued May 4, 2021.

Target price is $0.42 Current Price is $0.31 Difference: $0.11
If EYE meets the Taylor Collison target it will return approximately 35% (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 13.50 cents and EPS of minus 1.60 cents.
At the last closing share price the estimated dividend yield is 43.55%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 19.38.

Forecast for FY22:

Taylor Collison forecasts a full year FY22 EPS of minus 1.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 28.18.

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


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