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

Daily Market Reports | Jun 18 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)

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


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