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Australian Broker Call *Extra* Edition – Jun 23, 2021

Daily Market Reports | Jun 23 2021

This story features LIFE360, INC, and other companies. For more info SHARE ANALYSIS: 360

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)

360   AMN   API   APX   ASG   BLX   EML   EVN   GEM   HSN   ILU   JAN   NUF (3)   PWH   QAN   S32   SBM   UMG  

360    LIFE360, INC

Software & Services – Overnight Price: $6.30

Bell Potter rates ((360)) as Buy (1) –

Following Life360's proposed acquisition of Jobit earlier in the year, Bell Potter expects another acquisition in coming months to be likely, and points to a US-based digital insurance agent as the most logical acquisition for the company. 

The broker feels this is consistent with where the market is heading and could support growth in tech and online sales. Being US-based would also allow an acquisition to support Life360's very engaged US user base. 

Bell Potter has marginally increased revenue forecasts for FF21, FY22 and FY23 by around 1% each driven by subscription revenue forecast increases.

The Buy rating and target price of $7.00 are retained. 

This report was published on May 21, 2021.

Target price is $7.00 Current Price is $6.30 Difference: $0.7
If 360 meets the Bell Potter target it will return approximately 11% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 18.11 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 34.80.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 9.39 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 67.11.

This company reports in USD. 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

AMN    AGRIMIN LIMITED

Agriculture – Overnight Price: $0.48

Canaccord Genuity rates ((AMN)) as Buy (1) –

At 150ktpa for 10 years with Sinochem, Cannacord Genuity regards Agrimin Ltd's first offtake – by far the largest single binding offtake for any Australian Sulphate of Potash (SOP) project – as a watershed moment for the Lake Mackay SOP project.

In the broker's view, the project provides the momentum required to secure additional offtake agreements in the near/medium term.

Lake Mackay is the largest undeveloped potash-bearing lake in the world, and the 150ktpa agreement covers one third of Agrimin's planned SOP production of 450ktpa.

Cannacord values the project at $471m and expects it to generate earnings of $190m at plateau and have a 4.2-year payback.

Speculative Buy rating is maintained with a target price increasing to $1.57 from $1.37.

The report was first published on May 19, 2021.

Target price is $1.57 Current Price is $0.48 Difference: $1.09
If AMN meets the Canaccord Genuity target it will return approximately 227% (excluding dividends, fees and charges).

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

API    AUSTRALIAN PHARMACEUTICAL INDUSTRIES LIMITED

Health & Nutrition – Overnight Price: $1.11

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

Pfizer has announced its intention to return its distribution business back to main stream wholesalers, beginning with Australian Pharmaceutical Industries, following dissatisfaction with services delivered by DHL.

Australian Pharmaceutical estimates a $4.0m earnings tailwind from the Pfizer business, with Bell Potter assuming a more conservative $3.0m earnings impact, with an estimated revenue impact of around $60m. 

Bell Potter also notes that the Clearskin Clinics franchise continues to grow rapidly, with an additional 25 clinics expected in the next two to three years. Each clinic is capable of more than $1m in annual cash sales after reaching profitability. 

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

This report was published on May 20, 2021.

Target price is $1.50 Current Price is $1.11 Difference: $0.39
If API meets the Bell Potter target it will return approximately 35% (excluding dividends, fees and charges).
Current consensus price target is $1.35, suggesting upside of 21.6%(ex-dividends)
The company's fiscal year ends in August.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 4.30 cents and EPS of 8.50 cents.
At the last closing share price the estimated dividend yield is 3.87%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.06.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.5, implying annual growth of N/A.
Current consensus DPS estimate is 4.3, implying a prospective dividend yield of 3.9%.
Current consensus EPS estimate suggests the PER is 13.1.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 5.10 cents and EPS of 10.20 cents.
At the last closing share price the estimated dividend yield is 4.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.9, implying annual growth of 16.5%.
Current consensus DPS estimate is 7.3, implying a prospective dividend yield of 6.6%.
Current consensus EPS estimate suggests the PER is 11.2.

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

APX    APPEN LIMITED

IT & Support – Overnight Price: $13.71

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

Appen has announced three new products that support the company's transition to a product-led strategy, which it aims to use to capture and capitalise on growth.

Appen Intelligence is a proprietary machine learning model that improves automation, In-Platform Audit analyses and debugs data, and Appen Mobile allows the company's crowd workers to operate from mobile phones.

Earnings guidance of US$83-90m is heavily weighted to the second half of FY21 due to delays in key projects in late 2020.

The Overweight rating is retained and the target price decreases to $22.69 from $22.83.

This report was released on May 21, 2021.

Target price is $22.69 Current Price is $13.71 Difference: $8.98
If APX meets the Wilsons target it will return approximately 65% (excluding dividends, fees and charges).
Current consensus price target is $21.97, suggesting upside of 60.2%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 12.00 cents and EPS of 31.80 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 43.11.

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 27.8.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 14.00 cents and EPS of 37.50 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 36.56.

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 21.8.

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

ASG    AUTOSPORTS GROUP LIMITED

Automobiles & Components – Overnight Price: $2.45

Moelis rates ((ASG)) as Buy (1) –

Following a great April, which is typically a seasonally weakest month, in which new car sales were 22% ahead of April 19 levels, Moelis is optimistic that Autosports Group is on track to deliver a record second half FY21 result.

While supply continues to lag demand, the broker notes that April year-to-date vehicle deliveries are 3.5% ahead of April 2019 year-to-date levels.

Given the current visibility around the forward order book, Moelis expects the company to deliver an outstanding fourth quarter 2021 result, provided the company can obtain sufficient supply.

Moelis has upgraded FY21-23 earnings per share by 7-13% to reflect the continuation of current trading conditions until the end of calendar year 2021, and further structural cost outs from FY23 and beyond.

Moelis retains its Buy rating with a target price of $2.90.

This report was published on May 21, 2021.

Target price is $2.90 Current Price is $2.45 Difference: $0.45
If ASG meets the Moelis target it will return approximately 18% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 4.80 cents and EPS of 24.30 cents.
At the last closing share price the estimated dividend yield is 1.96%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.08.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 11.40 cents and EPS of 25.10 cents.
At the last closing share price the estimated dividend yield is 4.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.76.

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

BLX    BEACON LIGHTING GROUP LIMITED

Furniture & Renovation – Overnight Price: $1.90

Jarden rates ((BLX)) as Downgrade to Overweight from Buy (2) –

Jarden increases net profit after tax forecast for Beacon Lighting Group by around 4% to $36.7m. This is slightly above the midpoint of the company's guidance. Company guidance implies 32% year-on-year growth during the second half of FY21.

The broker also notes the forward pipeline in the coming 6-12  months is likely strong due to federal stimulus flow through.

The rating is downgraded to Overweight from Buy and the target price increases to $2.20.

This report was published on May 20, 2021.

Target price is $2.20 Current Price is $1.90 Difference: $0.3
If BLX meets the Jarden target it will return approximately 16% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Jarden forecasts a full year FY21 dividend of 8.20 cents and EPS of 16.50 cents.
At the last closing share price the estimated dividend yield is 4.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.52.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 7.00 cents and EPS of 11.60 cents.
At the last closing share price the estimated dividend yield is 3.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.38.

Market Sentiment: 0.5
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: $3.76

Canaccord Genuity rates ((EML)) as Downgrade to Hold from Buy (3) –

While EML Payments did not disclose what the concerns were or the potential financial/legal impact on the business, it stated that the directives from the Central Bank of Ireland (CBI) in relation to suspected money laundering breaches by recently acquired Prepaid Financial Services could restrict the company's European license/programs.

The company noted the operations/programs under this licence represent 27% of group revenues equating to 22% of group gross profit.

Canaccord Genuity believes the threat of the payment license being revoked by the CBI is likely to cause an overhang in the stock with the regulatory issue potentially persisting for a number of months.

Cannacord notes, adjusting for a full loss of licence/associated earnings (-$26m) sees the stock trade on a 13x EBITDA multiple.

Given the expected overhang in the stock and a large range of unexpected outcomes, the broker downgrades to a Hold recommendation from Buy, and lowers the target price to $3.50 from $6.25.

This report was first published May 19, 2021.

Target price is $3.50 Current Price is $3.76 Difference: minus $0.26 (current price is over target).
If EML meets the Canaccord Genuity target it will return approximately minus 7% (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 0.00 cents and EPS of 9.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 41.78.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of 13.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.92.

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

EVN    EVOLUTION MINING LIMITED

Gold & Silver – Overnight Price: $4.71

Goldman Sachs rates ((EVN)) as Neutral (3) –

Evolution Mining has successfully completed the acquisition of TSX-listed Battle North Gold for a total cash consideration of $355m funded from a new five-year syndicated term loan.

Goldman Sachs views the acquisition as slightly net asset value (NAV) accretive, adding $135m ($0.08/sh, +2%) to the broker's group net asset value (NAV).

Goldman Sachs forecasts production at Red Lake to grow to 400koz p.a. by FY26, and currently values Red Lake at $2.8bn, or $1.62/sh in the broker's $4.28/sh NAV.

The Neutral rating is retained and the target price increases to $4.50 from $4.40.

This report was published on May 20, 2021.

Target price is $4.50 Current Price is $4.71 Difference: minus $0.21 (current price is over target).
If EVN meets the Goldman Sachs target it will return approximately minus 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $4.56, suggesting downside of -3.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 12.00 cents and EPS of 24.00 cents.
At the last closing share price the estimated dividend yield is 2.55%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 23.3, implying annual growth of 31.6%.
Current consensus DPS estimate is 12.4, implying a prospective dividend yield of 2.6%.
Current consensus EPS estimate suggests the PER is 20.2.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 13.00 cents and EPS of 29.00 cents.
At the last closing share price the estimated dividend yield is 2.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.24.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 23.1, implying annual growth of -0.9%.
Current consensus DPS estimate is 10.6, implying a prospective dividend yield of 2.3%.
Current consensus EPS estimate suggests the PER is 20.4.

Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

GEM    G8 EDUCATION LIMITED

Childcare – Overnight Price: $1.02

Canaccord Genuity rates ((GEM)) as Hold (3) –

While G8 Education's occupancy gap is closing on 2019 levels, at -3.3% behind it is still not to a level that would cause Cannacord Genuity to turn positive on the company at this stage.

Despite the visible tailwinds headed for the sector in calendar year 2022, Cannacord notes that G8 Education still appears to be underperforming the sector on several metrics.

Until there is some evidence of meaningful occupancy improvement and/or cost out that indicate that earnings are turning around, the broker remains neutral on the company.

Key things Cannacord would be looking for in the near term are an interim result that produced earnings of $30m-plus, occupancy gap to 2019 levels closed, and support office costs ceasing to increase.

The broker would also like to see divestment of the impaired centres. Hold rating and target of $1.13 both retained.

The report was published on May 19, 2021.

Target price is $1.13 Current Price is $1.02 Difference: $0.11
If GEM meets the Canaccord Genuity target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $1.12, suggesting upside of 9.5%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 14.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 7.29.

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 3.2%.
Current consensus EPS estimate suggests the PER is 18.5.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 3.00 cents and EPS of 5.00 cents.
At the last closing share price the estimated dividend yield is 2.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.40.

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 5.8%.
Current consensus EPS estimate suggests the PER is 12.6.

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

HSN    HANSEN TECHNOLOGIES LIMITED

IT & Support – Overnight Price: $6.24

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

A virtual deep-dive presented by the Hansen Technologies management team highlighted the company's depth of managerial experience. Shaw and Partners noted in particular that the average management tenure for the company is more than 17 years.

The presentation also touched on the company's research and development program. The program is aligned with customer rate of movement through incremental innovation, and executed with a focus on solving client problems and achieving return on investment. 

Shaw also noted the success of the Sigma integration has increased management's confidence in its mergers and acquisitions playbook, and the company is ready to take on the next acquisition. 

The Buy rating is retained and the target price increases to $5.40 from $5.34. 

This report was published on May 19, 2021.

Target price is $5.40 Current Price is $6.24 Difference: minus $0.84 (current price is over target).
If HSN meets the Shaw and Partners target it will return approximately minus 13% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 10.00 cents and EPS of 35.60 cents.
At the last closing share price the estimated dividend yield is 1.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.53.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 10.00 cents and EPS of 25.90 cents.
At the last closing share price the estimated dividend yield is 1.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.09.

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

ILU    ILUKA RESOURCES LIMITED

Mineral Sands – Overnight Price: $8.10

Goldman Sachs rates ((ILU)) as Buy (1) –

Iluka Resources has provided the Government of Sierra Leone six months’ notice of its intention to possibly temporarily suspend operations at Sierra Rutile from mid-November, and has withdrawn its FY21 production guidance of 145kt.

Goldman Sachs is not surprised at the announcement given the continued financial and technical challenges that have faced the operation since the company acquired it in December 2016.

The broker notes, most challenges relate to ongoing equipment reliability issues, which subsequently led to the -US$290m asset write down in second half FY19 to just circa US$50m.

Iluka may look to continue operations past November if it can either strip sufficient costs out of the business or find a third party willing to invest in the current operations and possibly the Sembehun development project as well.

Goldman Sachs' estimates have assumed that Iluka does reduce the workforce and absolute costs by around -US$10m and continues to operate until the Gangama and Lanti reserves are depleted in 2024. 

But the broker does not take a view on a third party investment, and has removed the Sembehun growth project from its model, which could extend operations by a further 15-20 years if developed.

The Buy rating is retained and target price is lowered to $8.20 from $8.40.

This report was published on May 20, 2021. 

Target price is $8.20 Current Price is $8.10 Difference: $0.1
If ILU meets the Goldman Sachs target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $7.25, suggesting downside of -10.5%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 15.70 cents and EPS of 41.90 cents.
At the last closing share price the estimated dividend yield is 1.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 43.4, implying annual growth of -92.4%.
Current consensus DPS estimate is 26.0, implying a prospective dividend yield of 3.2%.
Current consensus EPS estimate suggests the PER is 18.7.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 9.40 cents and EPS of 41.70 cents.
At the last closing share price the estimated dividend yield is 1.16%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.42.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 52.8, implying annual growth of 21.7%.
Current consensus DPS estimate is 23.7, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 15.3.

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

JAN    JANISON EDUCATION GROUP LIMITED

Education & Tuition – Overnight Price: $0.89

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

Janison Education Group has been accredited to be the National Service Provider for the Programme for International Student Assessment (PISA) across all four countries in the UK. This expands Janison's National Service Provider coverage to six countries including Australia and China. 

This provides potential revenue of $7,000 per school for Janison, with a total potential market of around 7,200 secondary schools in the UK. This represents a potential $50m in revenue per annum. 

Based on 538 schools participating in the PISA test in 2018, Bell Potter forecasts short to medium term revenue impact of around $3.8m per year. Given the broker had already assumed significant growth for the company, earnings forecasts remain unchanged. 

The Hold rating is retained and the target price increases to $0.72 from $0.70. 

This report was published on May 20, 2021.

Target price is $0.72 Current Price is $0.89 Difference: minus $0.17 (current price is over target).
If JAN meets the Bell Potter target it will return approximately minus 19% (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 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 890.00.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of 1.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 80.91.

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

NUF    NUFARM LIMITED

Agriculture – Overnight Price: $4.52

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

Nufarm's reported first half underlying continuing operations EBITDA of $233.6m was well ahead of Bell Potter's expectations, and up 118% year-on-year. Continuing operations revenue of $1,625m was an 18% year-on-year increase. 

The broker noted results reflected stronger performances in Seeds and Europe. 

Despite EBITDA typically carrying modest first half bias, the broker notes EBITDA is expected to be materially weighted to the first half for FY21. Bell Potter has upgraded operating EBITDA forecasts for FY21, FY22 and FY23 by 12%, 7% and 5% respectively following the first half results. 

The Hold rating is retained and the target price increases to $5.30 from $4.35. 

This report was published on May 20, 2021.

Target price is $5.30 Current Price is $4.52 Difference: $0.78
If NUF meets the Bell Potter target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $5.68, suggesting upside of 25.6%(ex-dividends)
The company's fiscal year ends in July.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 1.00 cents and EPS of 13.60 cents.
At the last closing share price the estimated dividend yield is 0.22%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 33.24.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.3, implying annual growth of N/A.
Current consensus DPS estimate is 1.6, implying a prospective dividend yield of 0.4%.
Current consensus EPS estimate suggests the PER is 26.1.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 4.00 cents and EPS of 23.30 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 19.40.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 23.8, implying annual growth of 37.6%.
Current consensus DPS estimate is 6.8, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 19.0.

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


Goldman Sachs rates ((NUF)) as Buy (1) –

With strong underlying conditions amplified by demand pull-forward across the Australia and European segments, Nufarm reported first half earnings 46% above Goldman Sachs estimates.

Goldman Sachs expects these benefits to drive a larger than normal first half earnings skew, leading to a more modest 5% revision to the broker's full-year earnings forecasts versus the large first half beat.

Overall, Goldman Sachs is encouraged by Nufarm's progress on alleviating headwinds that have weighed on the group over the past several years. These include cost-out program resulting in $10m of benefits in first half, and the company’s EU supply chain, and balance sheet/working capital.

While global ag conditions will clearly remain the key driver over the second half, the broker believes continued progress on these initiatives will be key to validating management’s turnaround efforts.

Goldman Sachs reiterates its Buy recommendation with its target price increasing to $6 from $5.80.

This report was published on May 20, 2021.

Target price is $6.00 Current Price is $4.52 Difference: $1.48
If NUF meets the Goldman Sachs target it will return approximately 33% (excluding dividends, fees and charges).
Current consensus price target is $5.68, suggesting upside of 25.6%(ex-dividends)
The company's fiscal year ends in July.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 4.00 cents and EPS of 13.00 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 34.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.3, implying annual growth of N/A.
Current consensus DPS estimate is 1.6, implying a prospective dividend yield of 0.4%.
Current consensus EPS estimate suggests the PER is 26.1.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 8.00 cents and EPS of 28.00 cents.
At the last closing share price the estimated dividend yield is 1.77%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 23.8, implying annual growth of 37.6%.
Current consensus DPS estimate is 6.8, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 19.0.

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


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

Nufarm's first half EBITDA was up 118% on the previous corresponding period, totaling $234m, and was 83% above Wilsons' forecast. Australia and New Zealand EBITDA earnings increased 183%, and Europe more than doubled, driving the total group increase. 

Company management expects total FY21 earnings to reflect a significant first half weighting, with Wilsons predicting the first half to account for 66% of full year earnings. 

Wilsons notes a combination of strong commodity prices driving underlying demand, favourable seasonal conditions and supply chain concerns contributed to a pull-forward in demand. 

The Market Weight rating is retained with a target price of $4.99. 

This report was published on May 21, 2021. 

Target price is $4.99 Current Price is $4.52 Difference: $0.47
If NUF meets the Wilsons target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $5.68, suggesting upside of 25.6%(ex-dividends)
The company's fiscal year ends in July.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of 9.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 49.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.3, implying annual growth of N/A.
Current consensus DPS estimate is 1.6, implying a prospective dividend yield of 0.4%.
Current consensus EPS estimate suggests the PER is 26.1.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 7.00 cents and EPS of 15.20 cents.
At the last closing share price the estimated dividend yield is 1.55%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 23.8, implying annual growth of 37.6%.
Current consensus DPS estimate is 6.8, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 19.0.

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

PWH    PWR HOLDINGS LIMITED

Automobiles & Components – Overnight Price: $6.74

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

Bell Potter has made modest adjustments to PWR Holdings' forecasts based on current market conditions.

The launch of the online platform in Australian, due this half, is expected to drive better revenue in the second half of FY21. 

The Hold rating is retained and the target price increases to $5.85 from $5.25. 

This report was published on May 20, 2021.

Target price is $5.85 Current Price is $6.74 Difference: minus $0.89 (current price is over target).
If PWH meets the Bell Potter target it will return approximately minus 13% (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 9.30 cents and EPS of 17.50 cents.
At the last closing share price the estimated dividend yield is 1.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 38.51.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 12.20 cents and EPS of 22.40 cents.
At the last closing share price the estimated dividend yield is 1.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.09.

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

QAN    QANTAS AIRWAYS LIMITED

Transportation & Logistics – Overnight Price: $4.73

Jarden rates ((QAN)) as Buy (1) –

Improving recovery in domestic conditions heading into FY22 has seen Qantas Airways guide to underlying earnings of $400-450m for FY21. 

Continued lockdowns around Australia are showing lessening impact on the company's earnings, which Jarden sees as demonstrating confidence in forward bookings. The broker feels Qantas Domestic and Jetstar Domestic should deliver on capacity targets of 107% and 120% of pre-covid levels during FY22. 

The company feels net debt has peaked at $6.4bn in February of this year, and Jarden forecasts net debt of $5.9bn at the end of FY21. 

The Buy rating is retained and the target price increases to $6.75 from $6.70. 

This report was published May 20, 2021.

Target price is $6.75 Current Price is $4.73 Difference: $2.02
If QAN meets the Jarden target it will return approximately 43% (excluding dividends, fees and charges).
Current consensus price target is $5.66, suggesting upside of 19.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Jarden forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 61.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 7.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -68.4, 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 N/A.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 0.00 cents and EPS of 2.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 175.19.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 22.2, implying annual growth of N/A.
Current consensus DPS estimate is 4.3, implying a prospective dividend yield of 0.9%.
Current consensus EPS estimate suggests the PER is 21.3.

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

S32    SOUTH32 LIMITED

Mining – Overnight Price: $2.85

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

Following the completion of the South African Energy Coal divestment, South32 has announced a $200m increase to the capital management buyback program. 

This is the second top-up the buyback program has received in the past four months, scaling the program up around 40%, the broker notes.

This leaves a remaining $316m to be returned to shareholders in dividends by September 3. Shaw and Partners notes this year's dividend may include a special component related to the buyback. 

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

This report was published on May 19, 2021.

Target price is $3.30 Current Price is $2.85 Difference: $0.45
If S32 meets the Shaw and Partners target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $3.37, suggesting upside of 18.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 6.84 cents and EPS of 12.74 cents.
At the last closing share price the estimated dividend yield is 2.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.37.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.5, implying annual growth of N/A.
Current consensus DPS estimate is 6.3, implying a prospective dividend yield of 2.2%.
Current consensus EPS estimate suggests the PER is 18.4.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 12.61 cents and EPS of 24.41 cents.
At the last closing share price the estimated dividend yield is 4.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.68.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.8, implying annual growth of 60.0%.
Current consensus DPS estimate is 9.7, 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: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SBM    ST. BARBARA LIMITED

Gold & Silver – Overnight Price: $1.78

Shaw and Partners rates ((SBM)) as No Rating (-1) –

St. Barbara has lowered FY21 guidance on its Gwalia and Simberi assets.

Gwalia production is now forecast at 150-160,000 ounces, down from 175,000 ounces, at an all-in sustaining cost of $1,815-1,650 per ounce. Simberi production is forecast at 80-90,000 ounces, down from 95,000 ounces, at an all-in sustaining cost of $1,790-2,030 per ounce. 

Guidance for Atlantic Operations is unchanged. Shaw and Partners is currently Not Rated on St.Barbara.

This report was published on May 19, 2021. 

Current Price is $1.78. Target price not assessed.
Current consensus price target is $2.32, suggesting upside of 30.3%(ex-dividends)

Forecast for FY21:

Current consensus EPS estimate is 10.3, implying annual growth of -43.8%.
Current consensus DPS estimate is 5.2, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 17.3.

Forecast for FY22:

Current consensus EPS estimate is 16.5, implying annual growth of 60.2%.
Current consensus DPS estimate is 4.3, implying a prospective dividend yield of 2.4%.
Current consensus EPS estimate suggests the PER is 10.8.

Market Sentiment: 0.4
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: $4.45

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

Exceeding expectations on slightly better volumes and stronger margins in the warehouse & distribution segment, United Malt Group delivered first half FY21 net profit of $18m, down -36% on the previous period, but 62% above Wilsons' forecast.

Management confirmed that volumes have sustained improvement since March and product mix has also improved.

Wilsons believes the announcement of a transformation program, expected to deliver $30m of earnings improvement by FY24, quantifies an opportunity investors have been anticipating since the demerger. 

Wilsons assumes United Malt achieves $20m net earnings improvement in FY24, which leaves potential for further upside to the broker's forecasts as management prove-up the implementation. 

The broker's earnings upgrades of 7-14%, consist of 4-7% underlying upgrades on processing volumes and warehouse & distribution margins, and incremental benefits from the transformation program.

Overweight rating with the target price increasing to $5.09 from $4.42.

This report was published on May 20, 2021.

Target price is $5.09 Current Price is $4.45 Difference: $0.64
If UMG meets the Wilsons target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $4.84, suggesting upside of 8.8%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 8.00 cents and EPS of 18.90 cents.
At the last closing share price the estimated dividend yield is 1.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.54.

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 1.8%.
Current consensus EPS estimate suggests the PER is 27.0.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 15.00 cents and EPS of 25.70 cents.
At the last closing share price the estimated dividend yield is 3.37%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.32.

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 3.5%.
Current consensus EPS estimate suggests the PER is 17.0.

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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