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Australian Broker Call *Extra* Edition – Jun 18, 2021

Daily Market Reports | Jun 18 2021

This story features AUSTRALIAN POTASH LIMITED, and other companies. For more info SHARE ANALYSIS: APC

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)

APC   APE   APX (2)   BHP   CL1   COH   CUV   ELD   ELO   EML   GEM   HLO   LTR   MTO   S32   SKO   SRG   UMG  

APC    AUSTRALIAN POTASH LIMITED

Agriculture – Overnight Price: $0.13

Shaw and Partners rates ((APC)) as Buy (1) –

Industry consensus points to demand for sulphate of potash to have mid-single digit growth over the coming decades as arable land per capita reduces. Australian Potash Ltd is strategically placed to provide for emerging Asian markets, according to Shaw and Partners, which are driving global growth. 

The company's 100%-owned Lake Wells project is intended to produce premium quality sulphate of potash with realised prices of US$380 per tonne. Shaw and Partners forecast this project could total post-tax net present value of $252m and an internal rate of return of 17%. 

According to the broker, the project represents 170,000 tonnes per annum with a 35 year lifespan, and total capital expenditure of -$292m. 

The Buy rating and target price of $0.32 are retained. 

This report was published on May 19, 2021. 

Target price is $0.32 Current Price is $0.13 Difference: $0.19
If APC meets the Shaw and Partners target it will return approximately 146% (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 0.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 26.00.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 0.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 18.57.

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

APE    EAGERS AUTOMOTIVE LIMITED

Automobiles & Components – Overnight Price: $15.42

Moelis rates ((APE)) as Buy (1) –

The company provided a strong trading update for April which bodes well for the first half, Moelis assesses, as May and June are the seasonally strongest months of the year. Demand continues to outstrip supply by around 25% and the order book is growing.

The broker highlights, having extracted $100m in cost savings during the pandemic, Eagers Automotive continues to identify ways to drive efficiencies.

The company is also reviewing multiple acquisitions across dealerships in underpenetrated regions. Moelis retains a Buy rating and $17.82 target.

This report was released on May 20, 2021.

Target price is $17.82 Current Price is $15.42 Difference: $2.4
If APE meets the Moelis target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $16.92, suggesting upside of 9.7%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 67.30 cents and EPS of 93.50 cents.
At the last closing share price the estimated dividend yield is 4.36%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.49.

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 3.5%.
Current consensus EPS estimate suggests the PER is 16.7.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 53.40 cents and EPS of 72.50 cents.
At the last closing share price the estimated dividend yield is 3.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.27.

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 3.2%.
Current consensus EPS estimate suggests the PER is 19.4.

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

APX    APPEN LIMITED

IT & Support – Overnight Price: $13.62

Bell Potter rates ((APX)) as Hold (3) –

Appen has guided to underlying EBITDA for 2021 of US$83-90m. The reporting currency will be changed to US dollars effective from the first half result.

The company has indicated a new organisational structure will be implemented while there will be a heavy weighting to earnings in the second half because of the return of key projects that are slated for delivery then.

Bell Potter makes no changes to earnings forecasts and for now continues to forecast in Australian dollars. The broker retains a Hold rating and raises the target to $14.25 from $13.25.

This report was released on May 19, 2021.

Target price is $14.25 Current Price is $13.62 Difference: $0.63
If APX meets the Bell Potter target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $21.97, suggesting upside of 61.3%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 10.00 cents and EPS of 46.90 cents.
At the last closing share price the estimated dividend yield is 0.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 49.4, implying annual growth of 18.9%.
Current consensus DPS estimate is 10.0, implying a prospective dividend yield of 0.7%.
Current consensus EPS estimate suggests the PER is 27.6.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 12.00 cents and EPS of 55.20 cents.
At the last closing share price the estimated dividend yield is 0.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 63.0, implying annual growth of 27.5%.
Current consensus DPS estimate is 13.5, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 21.6.

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


Wilsons rates ((APX)) as Overweight (1) –

Appen has reiterated 2021 EBITDA guidance of US$83-90m but provided no margin guidance, having previously indicated it would be in the high teens.

Restructuring will take place through redundancies and this is expected to save -US$15m per annum. Appen will also convert to US dollar reporting to better align the business with its core market where 90% of revenue is derived.

Wilsons places its Overweight rating and $22.83 target under review.

This report was released on May 19, 2021.

Target price is $22.83 Current Price is $13.62 Difference: $9.21
If APX meets the Wilsons target it will return approximately 68% (excluding dividends, fees and charges).
Current consensus price target is $21.97, suggesting upside of 61.3%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY21:

Current consensus EPS estimate is 49.4, implying annual growth of 18.9%.
Current consensus DPS estimate is 10.0, implying a prospective dividend yield of 0.7%.
Current consensus EPS estimate suggests the PER is 27.6.

Forecast for FY22:

Current consensus EPS estimate is 63.0, implying annual growth of 27.5%.
Current consensus DPS estimate is 13.5, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 21.6.

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

BHP    BHP GROUP LIMITED

Bulks – Overnight Price: $47.69

Shaw and Partners rates ((BHP)) as Buy (1) –

BHP CEO Mike Henry delivered a strategy update highlighting the company's commitment to playing a role in meeting global decarbonisation targets and supporting economic growth sustainably. 

BHP expects government stimulus and pro-growth agendas to remain in place for an extended period and lead to robust growth and strong demand for mineral resources, oil and gas. Decline in exploration success means there are fewer high-quality projects in the industry pipeline to meet this demand. 

A recommitment to reducing operational emissions by at least -30% by 2034 was reiterated, and the company noted that a quarter of its portfolio was in future facing commodities of copper, nickel and potash. 

Shaw and Partners retains a Buy rating and its target price increases to $56.00 from $47.00.

This report was published on May 19, 2021.

Target price is $56.00 Current Price is $47.69 Difference: $8.31
If BHP meets the Shaw and Partners target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $49.16, suggesting upside of 3.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 452.28 cents and EPS of 420.86 cents.
At the last closing share price the estimated dividend yield is 9.48%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 441.9, implying annual growth of N/A.
Current consensus DPS estimate is 354.6, implying a prospective dividend yield of 7.4%.
Current consensus EPS estimate suggests the PER is 10.8.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 405.02 cents and EPS of 405.83 cents.
At the last closing share price the estimated dividend yield is 8.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 476.2, implying annual growth of 7.8%.
Current consensus DPS estimate is 366.0, implying a prospective dividend yield of 7.7%.
Current consensus EPS estimate suggests the PER is 10.0.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

CL1    CLASS LIMITED

Cloud services – Overnight Price: $1.71

Shaw and Partners rates ((CL1)) as Buy (1) –

Shaw and Partners has highlighted that Class Ltd shares have materially underperformed competitors since the company acquired ReckonDocs. The broker notes investors may not appreciate how Class will drive revenue synergies from recent acquisitions. 

Class has invested around $41m in acquiring NowInfinity, SmartCorp and ReckonDocs since January 2020. Combined, these have provided around 6,100 customers and $13m in revenue, and provided Class with a market leading product. 

Class management has noted that increasing average revenue per customer from a growing product suite is a key driver. 

The Buy rating and target price of $2.48 are retained. 

The report was issued on May 18, 2021.

Target price is $2.48 Current Price is $1.71 Difference: $0.77
If CL1 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 5.00 cents and EPS of 5.70 cents.
At the last closing share price the estimated dividend yield is 2.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.00.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 5.00 cents and EPS of 5.50 cents.
At the last closing share price the estimated dividend yield is 2.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.09.

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

COH    COCHLEAR LIMITED

Medical Equipment & Devices – Overnight Price: $243.37

Wilsons rates ((COH)) as Market Weight (3) –

Competitor Sonova has indicated the US and Asia Pacific will lead the global recovery in cochlear implant surgeries, Wilsons observes. The broker also notes that Cochlear took market share over the third quarter in developed markets.

Early reviews of the Marvel processor from Advanced Bionics signal the company is still struggling in the aftermath of its corrective action in the field 15 months ago.

The launch of the Nucleus 8 for Cochlear thus represents a potential catalyst over the next 3-6 months, in the broker's view. Market Weight rating and $230 target maintained.

This report was released on May 19, 2021.

Target price is $230.00 Current Price is $243.37 Difference: minus $13.37 (current price is over target).
If COH meets the Wilsons target it will return approximately minus 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $214.16, suggesting downside of -12.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 275.00 cents and EPS of 363.80 cents.
At the last closing share price the estimated dividend yield is 1.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 66.90.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 373.4, implying annual growth of N/A.
Current consensus DPS estimate is 237.7, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 65.2.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 303.70 cents and EPS of 446.60 cents.
At the last closing share price the estimated dividend yield is 1.25%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 54.49.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 454.6, implying annual growth of 21.7%.
Current consensus DPS estimate is 326.4, implying a prospective dividend yield of 1.3%.
Current consensus EPS estimate suggests the PER is 53.5.

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

CUV    CLINUVEL PHARMACEUTICALS LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $27.19

Wilsons rates ((CUV)) as No Rating (-1) –

Incyte has confirmed phase III trials of topical vitiligo inhibitor, ruxoltinib, have met primary endpoints. The data support the submission of marketing applications for treatment of adolescents and adults with vitiligo.

Wilsons does not believe the potential approval of this drug will be significantly disruptive to Clinuvel Pharmaceutical's addressable market for its implant, SCENESSE, assessing it could be a potential second or third line therapy for vitiligo patients with extensive de-pigmentation.

The broker considers the systemic approach of a SCENESSE implant is favourable for those patients where topical formulations over large surface areas are less suitable.

Wilsons places its rating and target under review pending market reaction to the Incyte data.

This report was published on May 18, 2021. 

Current Price is $27.19. Target price not assessed.
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 2.50 cents and EPS of 34.00 cents.
At the last closing share price the estimated dividend yield is 0.09%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 79.97.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 2.70 cents and EPS of 52.20 cents.
At the last closing share price the estimated dividend yield is 0.10%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 52.09.

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

ELD    ELDERS LIMITED

Agriculture – Overnight Price: $11.78

Wilsons rates ((ELD)) as Underweight (5) –

Elders reported strong first half net profit growth of 41% stemming from improved summer crop activity and increased demand for animal health product and general merchandise.

Wilsons notes structural growth drivers are delivering incremental earnings although cyclical factors will present a headwind to growth through FY22 and FY23.

The broker believes the valuation is full, taking a 12-month view, and the risk/reward is biased to the downside. Underweight rating. Target is $9.95.

This report was released on May 18, 2021.

Target price is $9.95 Current Price is $11.78 Difference: minus $1.83 (current price is over target).
If ELD meets the Wilsons target it will return approximately minus 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $13.10, suggesting upside of 11.2%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 43.00 cents and EPS of 86.10 cents.
At the last closing share price the estimated dividend yield is 3.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.68.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 87.0, implying annual growth of 9.0%.
Current consensus DPS estimate is 41.1, implying a prospective dividend yield of 3.5%.
Current consensus EPS estimate suggests the PER is 13.5.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 35.00 cents and EPS of 59.40 cents.
At the last closing share price the estimated dividend yield is 2.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.83.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 92.1, implying annual growth of 5.9%.
Current consensus DPS estimate is 45.0, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 12.8.

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

ELO    ELMO SOFTWARE LIMITED

Jobs & Skilled Labour Services – Overnight Price: $4.80

Shaw and Partners rates ((ELO)) as Buy (1) –

Elmo Software has narrowed prior guidance ranges, forecasting FY21 annual recurring revenue of $83-85m. Shaw and Partners notes this confirms covid recovery is in progress. 

Second half organic revenue growth of around 20% year-on-year is up on first half growth of 16%, but still tracks below pre-covid growth of 27% achieved in the first half of FY20. Guidance for underlying earnings points to a loss of -$2.5-3.5m, slightly higher than recent forecasts. 

Shaw and Partners increases its forecast revenue by 1% and operating expenditure by 2% for FY21. 

The Buy rating is retained and the target price decreases to $8.85 from $9.00. 

This report was issue on May 19, 2021.

Target price is $8.85 Current Price is $4.80 Difference: $4.05
If ELO meets the Shaw and Partners target it will return approximately 84% (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 36.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 13.08.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 33.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 14.50.

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

EML    EML PAYMENTS LIMITED

Business & Consumer Credit – Overnight Price: $3.65

Wilsons rates ((EML)) as Overweight (1) –

EML Payments has indicated the Central Bank of Ireland has found significant regulatory concerns relating to its Prepaid Financial Services business which was acquired in March 2020.

The company is unable to estimate the potential direct and consequential costs of the investigation but any directions, if made, could materially affect the European operations of PFS.

Excluding this, the company has stated it remains on track to achieve underlying guidance for FY21. As a result, Wilsons is placing its Overweight rating and $6.51 target under review.

This report was released on May 19, 2021.

Target price is $6.51 Current Price is $3.65 Difference: $2.86
If EML meets the Wilsons target it will return approximately 78% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

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

GEM    G8 EDUCATION LIMITED

Childcare – Overnight Price: $1.00

Moelis rates ((GEM)) as Hold (3) –

Moelis observes occupancy is recovering slowly and, as of May 2021, still -3.3 percentage points below 2019 levels. Demand drivers appear more favourable for 2022 while supply/demand is neutral over the short term.

The broker expects the company will begin to see benefits from the divestment of underperforming centres and steadily rising occupancy across a smaller but higher-quality network. Hold maintained. Target is $1.03.

This report was released on May 20, 2021.

Target price is $1.03 Current Price is $1.00 Difference: $0.03
If GEM meets the Moelis target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $1.12, suggesting upside of 11.7%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 3.70 cents and EPS of 5.30 cents.
At the last closing share price the estimated dividend yield is 3.70%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.87.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 5.5, implying annual growth of N/A.
Current consensus DPS estimate is 3.3, implying a prospective dividend yield of 3.3%.
Current consensus EPS estimate suggests the PER is 18.2.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 4.40 cents and EPS of 6.30 cents.
At the last closing share price the estimated dividend yield is 4.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.87.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.1, implying annual growth of 47.3%.
Current consensus DPS estimate is 5.9, implying a prospective dividend yield of 5.9%.
Current consensus EPS estimate suggests the PER is 12.3.

Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

HLO    HELLOWORLD TRAVEL LIMITED

Travel, Leisure & Tourism – Overnight Price: $1.77

Bell Potter rates ((HLO)) as Hold (3) –

Helloworld Travel's corporate subsidiary, QBT, has extended its agreement for the provision of services with the Australian government for an additional 12 months to June 30, 2022.

Bell Potter considers this a positive development albeit not surprising considering the long-standing relationship. The broker adjusts volume and margin assumptions in line with the company's expectations of $1bn in transaction value and an EBITDA loss of -$15m in FY21.

Hold rating unchanged and the target falls to $1.95 from $2.60.

This report was released on May 19, 2021.

Target price is $1.95 Current Price is $1.77 Difference: $0.18
If HLO meets the Bell Potter target it will return approximately 10% (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 27.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 6.48.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of 0.00 cents.

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

LTR    LIONTOWN RESOURCES LIMITED

New Battery Elements – Overnight Price: $0.65

Bell Potter rates ((LTR)) as Buy (1) –

Liontown Resources expects to complete a definitive feasibility study by the December quarter for the Kathleen Valley lithium-tantalum project.

Bell Potter highlights the company's leverage to improving lithium fundamentals through this world-class project which will add to exploration success at Moora.

Kathleen Valley is significant globally in that it is the only large hard-rock lithium project with uncommitted offtake in a tier-1 mining jurisdiction, the broker explains.

Bell Potter retains a Speculative Buy rating and raises the target to 61c from 55c.

This report was released on May 19, 2021.

Target price is $0.61 Current Price is $0.65 Difference: minus $0.04 (current price is over target).
If LTR meets the Bell Potter target it will return approximately minus 6% (excluding dividends, fees and charges – negative figures indicate an expected loss).
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 0.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 130.00.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 0.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 162.50.

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

MTO    MOTORCYCLE HOLDINGS LIMITED

Automobiles & Components – Overnight Price: $2.79

Moelis rates ((MTO)) as Buy (1) –

Motorcycle Holdings has provided an update to its underlying earnings, forecasting $42-45m for FY21. This is a 0.5-0.7% increase on Moelis' previous forecast. 

Guidance does include $5.8m in JobKeeper payments that the company received in the first half of FY21. Excluding these payments, the updated guidance implies 71-86% growth on the previous corresponding period. 

Across the industry, motorcycle sales in the March quarter were up 51% on the previous corresponding period and demand continues to outstrip supply. High sales of entry level bikes points to a future sales pipeline, Moelis explains.

Dividends will resume this year given the company's strong profit result and balance sheet position. 

The Buy rating is retained and the target price increases to $3.63 from $2.97. 

This report was published on May 18, 2021.

Target price is $3.63 Current Price is $2.79 Difference: $0.84
If MTO meets the Moelis target it will return approximately 30% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 20.30 cents and EPS of 45.00 cents.
At the last closing share price the estimated dividend yield is 7.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.20.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 18.60 cents and EPS of 31.00 cents.
At the last closing share price the estimated dividend yield is 6.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.00.

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

S32    SOUTH32 LIMITED

Mining – Overnight Price: $2.80

Shaw and Partners rates ((S32)) as Buy (1) –

South32's divestment of South African Energy Coal to Seriti is expected to complete in June 2021, after initially reaching a formal sale agreement in November 2019. 

South32 will transfer 100% of its South Africa Coal shareholding to Sereti, as well as two trusts for the benefit of employees and communities. Management noted South Africa Coal accounted for around 40% of employees and contractors and close to a quarter of capital expenditure in the last five years. 

Shaw and Partners notes the divestment will improve South32's financials, removing around $800m in rehabilitation liabilities and reducing capital expenditure by -25% next year. 

The Buy rating and target price of $3.30 are retained. 

This report was published on May 18, 2021.

Target price is $3.30 Current Price is $2.80 Difference: $0.5
If S32 meets the Shaw and Partners target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $3.30, suggesting upside of 17.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 6.85 cents and EPS of 12.75 cents.
At the last closing share price the estimated dividend yield is 2.45%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.96.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.2, implying annual growth of N/A.
Current consensus DPS estimate is 6.3, implying a prospective dividend yield of 2.3%.
Current consensus EPS estimate suggests the PER is 18.4.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 12.62 cents and EPS of 24.43 cents.
At the last closing share price the estimated dividend yield is 4.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.46.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.4, implying annual growth of 60.5%.
Current consensus DPS estimate is 9.5, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 11.5.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SKO    SERKO LIMITED

Software & Services – Overnight Price: $6.86

Jarden rates ((SKO)) as Neutral (3) –

Jarden observes the FY21 results reflected the severe downturn in travel activity over the last 12 months, yet there are two main metrics to focus on.

The first is the average monthly cash burn, which is at the lower end of guidance, and the second is the ongoing recovery in volumes. Bookings reached 73% of pre-pandemic levels in March, above guidance.

The broker considers the long-term opportunities compelling and retains a Neutral rating. Target is raised to NZ$6.14 from NZ$5.44.

This report was released on May 19, 2021.

Current Price is $6.86. Target price not assessed.
The company's fiscal year ends in March.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 9.87 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 69.52.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 0.00 cents and EPS of 3.35 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 204.72.

This company reports in NZD. 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

SRG    SRG GLOBAL LIMITED

Mining Sector Contracting – Overnight Price: $0.49

Shaw and Partners rates ((SRG)) as Buy (1) –

Despite a focus shift to the Mining and Asset Service divisions, Shaw and Partners notes SRG Global's Construction division is more focused than previously. Some wins in FY21 have left  the Construction division with work-in-hand close to $400m. 

Contract wins highlight the specialist work and blue chip clients SRG is focused on, and represent potential for lower risk and higher margin projects. The broker notes SRG is tendering on projects in which it has a competitive advantage. 

The broker is confident a large pipeline of high quality identified work underpins revenue for FY21 and FY22. 

The Buy recommendation and the target price of $0.70 are retained. 

This report was published on May 18, 2021.

Target price is $0.70 Current Price is $0.49 Difference: $0.21
If SRG meets the Shaw and Partners target it will return approximately 43% (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 2.00 cents and EPS of 3.10 cents.
At the last closing share price the estimated dividend yield is 4.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.81.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 2.50 cents and EPS of 4.00 cents.
At the last closing share price the estimated dividend yield is 5.10%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.25.

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

UMG    UNITED MALT GROUP LIMITED

Agriculture – Overnight Price: $4.41

Bell Potter rates ((UMG)) as Hold (3) –

First half underlying net profit of $18.2m was modestly ahead of Bell Potter's expectations. Volumes through the initial months of the second half have been running at around 95% of pre-pandemic levels, which is an improvement on the prior corresponding period.

The broker expects the second half will benefit from a favourable lift in mix and volume amidst headwinds from a stronger Australian dollar and the non-recurrence of temporary covid-19 support.

Hold rating maintained. Target rises to $4.60 from $4.05.

This report was released on May 19, 2021.

Target price is $4.60 Current Price is $4.41 Difference: $0.19
If UMG meets the Bell Potter target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $4.84, suggesting upside of 9.8%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 7.00 cents and EPS of 13.90 cents.
At the last closing share price the estimated dividend yield is 1.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.73.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.5, implying annual growth of -2.1%.
Current consensus DPS estimate is 8.2, implying a prospective dividend yield of 1.9%.
Current consensus EPS estimate suggests the PER is 26.7.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 12.00 cents and EPS of 21.50 cents.
At the last closing share price the estimated dividend yield is 2.72%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.51.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 26.1, implying annual growth of 58.2%.
Current consensus DPS estimate is 15.7, implying a prospective dividend yield of 3.6%.
Current consensus EPS estimate suggests the PER is 16.9.

Market Sentiment: 0.5
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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CHARTS

APC APE APX BHP CL1 COH CUV ELD ELO EML GEM HLO LTR MTO S32 SKO SRG UMG

For more info SHARE ANALYSIS: APC - AUSTRALIAN POTASH LIMITED

For more info SHARE ANALYSIS: APE - EAGERS AUTOMOTIVE LIMITED

For more info SHARE ANALYSIS: APX - APPEN LIMITED

For more info SHARE ANALYSIS: BHP - BHP GROUP LIMITED

For more info SHARE ANALYSIS: CL1 - CLASS LIMITED

For more info SHARE ANALYSIS: COH - COCHLEAR LIMITED

For more info SHARE ANALYSIS: CUV - CLINUVEL PHARMACEUTICALS LIMITED

For more info SHARE ANALYSIS: ELD - ELDERS LIMITED

For more info SHARE ANALYSIS: ELO - ELMO SOFTWARE LIMITED

For more info SHARE ANALYSIS: EML - EML PAYMENTS LIMITED

For more info SHARE ANALYSIS: GEM - G8 EDUCATION LIMITED

For more info SHARE ANALYSIS: HLO - HELLOWORLD TRAVEL LIMITED

For more info SHARE ANALYSIS: LTR - LIONTOWN RESOURCES LIMITED

For more info SHARE ANALYSIS: MTO - MOTORCYCLE HOLDINGS LIMITED

For more info SHARE ANALYSIS: S32 - SOUTH32 LIMITED

For more info SHARE ANALYSIS: SKO - SERKO LIMITED

For more info SHARE ANALYSIS: SRG - SRG GLOBAL LIMITED

For more info SHARE ANALYSIS: UMG - UNITED MALT GROUP LIMITED