Australian Broker Call *Extra* Edition – Jun 11, 2021

Daily Market Reports | Jun 11 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)

AIM   AIZ   AMA   APD   APE   AQR   AST   AVA   CAR   CBA   CQE   CRN   DXS   ENN   EOS   GDF   GNC (3)   HMY   HPG   HRL   MAD   MMM (2)   MTO   MTS (2)   NAN   ORI   PPH   PRN   PWG   RDC   SHV   SUN (2)   TIE   TWE (2)   XRO (3)   YOJ  

APE    EAGERS AUTOMOTIVE LIMITED

Automobiles & Components - Overnight Price: $15.99

Bell Potter rates ((APE)) as Upgrade to Buy from Hold (1) -

Bell Potter upgrades EPS forecasts for 2021-23 by 16%, 7% and 7%, respectively, after an investor presentation and another strong month for new vehicle sales in April.

The forecasts were driven by increases in margin forecasts and modest increases in revenue estimates. The rating is upgraded to Buy from Hold and the target to $17.50 from $16.50.

This report was published on May 13, 2021.

Target price is $17.50 Current Price is $15.99 Difference: $1.51
If APE meets the Bell Potter target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $16.92, suggesting upside of 5.8%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 42.50 cents and EPS of 108.40 cents.
At the last closing share price the estimated dividend yield is 2.66%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 92.6, implying annual growth of 60.8%.
Current consensus DPS estimate is 54.0, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 17.3.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 44.50 cents and EPS of 79.60 cents.
At the last closing share price the estimated dividend yield is 2.78%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 79.6, implying annual growth of -14.0%.
Current consensus DPS estimate is 49.2, implying a prospective dividend yield of 3.1%.
Current consensus EPS estimate suggests the PER is 20.1.

Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

AQR    APN CONVENIENCE RETAIL REIT

REITs - Overnight Price: $3.74

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

APN Convenience Retail has announced the acquisition of six service station and convenience retail assets in Queensland for $59m, expected to settle in September. The majority of all six sites are let to 7-Eleven, with the remainder made up of convenience retail sites.

Moelis forecasts these acquisitions will take total service station assets to over 100 with a total valuation of more than $700m by the end of FY21. 

The company also recently announced the completion of 10-year lease extensions to 13 sites let to EG Group and released revaluations of these sites. Valuation of these sites increased 25.9%, driven by the lease renewals and strong transactional evidence.

This equates to a 4% increase in the company's net tangible assets. The Buy rating and target price of $4.11 are retained. 

This report was published on May 12, 2021.

Target price is $4.11 Current Price is $3.74 Difference: $0.37
If AQR meets the Moelis target it will return approximately 10% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 22.00 cents and EPS of 22.00 cents.
At the last closing share price the estimated dividend yield is 5.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.00.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 23.60 cents and EPS of 23.50 cents.
At the last closing share price the estimated dividend yield is 6.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.91.

Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

AST    AUSNET SERVICES

Infrastructure & Utilities - Overnight Price: $1.75

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

AusNet Services' underlying earnings for FY21 of $1,155m proved -7% below Goldman Sachs' forecast. The announcement of FY21 results saw the company's share price decrease -7.7%. 

The provided dividend per share forecast for FY22 of 9.5 cents suggested no growth on FY21, and was also below the brokers expectation. 

Despite this, Goldman Sachs considers the company well-positioned for underlying asset base growth in the medium-term as it leverages continued acceleration of Australian renewable generation investment.

The Buy rating are target price of $2.15 are retained. 

This report was published on May 12, 2021. 

Target price is $2.15 Current Price is $1.75 Difference: $0.4
If AST meets the Goldman Sachs target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $1.85
The company's fiscal year ends in March.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 9.50 cents and EPS of 7.39 cents.
At the last closing share price the estimated dividend yield is 5.43%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.68.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.5, implying annual growth of -6.7%.
Current consensus DPS estimate is 9.7, implying a prospective dividend yield of N/A.
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

AVA    AVA RISK GROUP LIMITED

Overnight Price: $0.41

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

AVA Risk Group issued a trading update guiding to much lower second half earnings (EBITDA) than Canaccord Genuity expected. The miss was due to delays caused by covid-19, and the consequent inability to win new contracts and implement existing contracts.

The broker lowers FY21 and FY22 earnings (EBITDA) estimates by -32% and -25%. The target price falls to $0.58 from $0.95 and the Buy rating is maintained.

A delay in the implementation of the balance of the Indian Ministry of Defence contract highlights to the broker the importance of this contract to AVA's profitability. It also shows the need to replace it with new recurring revenue based contracts.

This report was published on May 13, 2021.

Target price is $0.58 Current Price is $0.41 Difference: $0.17
If AVA meets the Canaccord Genuity target it will return approximately 41% (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 2.00 cents and EPS of 5.00 cents.
At the last closing share price the estimated dividend yield is 4.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.20.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 2.00 cents and EPS of 5.00 cents.
At the last closing share price the estimated dividend yield is 4.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.20.

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


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