Australian Broker Call *Extra* Edition – Jun 24, 2021

Daily Market Reports | Jun 24 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)

AAC   ABB   AFP   AIS   ALL   ALQ   ARX (2)   CTP   GMA   KGN (2)   MND   PLT (2)   QUB   RIC   RMD   SM1 (2)   SSM   STG   SYD   TNE (2)   VVA   WSP (2)   YOJ  

SYD    SYDNEY AIRPORT

Infrastructure & Utilities - Overnight Price: $5.79

Jarden rates ((SYD)) as Initiation of coverage with Sell (5) -

Having concluded that the delay in reopening Australia's international border and a likely gradual recovery scenario will hold back recovery in earnings and distributions, Jarden has initiated coverage on Sydney Airport with a Sell, and target price of $4.90.

Jarden's forecast dividend yield of 1.7% in FY22 and 3.9% in FY23 would be tracking below the historical bond spread.

The broker thinks four potential catalysts could mark a turning point in the airport's outlook, including a clear border reopening schedule from the Australian Government, improvement in Australia/China relations, more details on unlocking the value from development land, and a strategy to minimise the potential diversion impact from Western Sydney Airport.

But given all the macro headwinds Jarden's sees facing Sydney Airport, the broker has below-consensus earnings forecasts between FY21 and FY23.

This report was issued 24 May, 2021.

Target price is $4.90 Current Price is $5.79 Difference: minus $0.89 (current price is over target).
If SYD meets the Jarden target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $6.19, suggesting upside of 6.9%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY21:

Jarden forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 3.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 148.46.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -3.2, implying annual growth of N/A.
Current consensus DPS estimate is 2.3, implying a prospective dividend yield of 0.4%.
Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 9.70 cents and EPS of 2.30 cents.
At the last closing share price the estimated dividend yield is 1.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 251.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.2, implying annual growth of N/A.
Current consensus DPS estimate is 18.7, implying a prospective dividend yield of 3.2%.
Current consensus EPS estimate suggests the PER is 62.9.

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

TNE    TECHNOLOGY ONE LIMITED

IT & Support - Overnight Price: $9.08

Bell Potter rates ((TNE)) as Hold (3) -

TechnologyOne's first half profit (PBT) was 8% above Bell Potter's forecast, driven by a higher-than-estimated profit margin, which more than offset a miss on revenue.

The broker highlights strong growth in SaaS annual recurring revenue (ARR) of 41%, with a negative being weak operating cash flow (though this is not unusual in the first half).

The interim dividend was up 10% to 3.82c, in-line with the analyst's forecast though the franking of 60% was higher than the expected 50%. Hold rating unchanged and the target increases to $9.75 from $9.50, after negligible changes to Bell Potter's EPS forecasts.

This report was published on May 26, 2021.

Target price is $9.75 Current Price is $9.08 Difference: $0.67
If TNE meets the Bell Potter target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $9.46, suggesting upside of 4.2%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 14.20 cents and EPS of 22.90 cents.
At the last closing share price the estimated dividend yield is 1.56%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 39.65.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 22.1, implying annual growth of 11.9%.
Current consensus DPS estimate is 13.7, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 41.1.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 16.30 cents and EPS of 25.80 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 35.19.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.2, implying annual growth of 9.5%.
Current consensus DPS estimate is 15.9, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 37.5.

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


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

Wilsons believes TechnologyOne's first half FY21 result continues to highlight strong progression in transitioning the company's on-premise customers to SaaS, with annual recurring revenue increasing 41% on the previous period to $156m and SaaS revenue of $69m up 35% on the previous period, now accounting for 48% of the total mix.

While profit before tax mid-point guidance of $96.5m was -6% lower than Wilsons had expected, the broker suspects this was driven by a more rapid “flip” of on-premise clients to SaaS and increased amortisation from R&D investments. On account of these considerations, the broker's revenue forecasts decline -3%, and profit forecasts by -4%.

Wilsons reiterates a Marketweight recommendation and the target price increases by 5% to $9.89.

This report was issued May 26, 2021.

Target price is $9.89 Current Price is $9.08 Difference: $0.81
If TNE meets the Wilsons target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $9.46, suggesting upside of 4.2%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 14.10 cents and EPS of 23.30 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 38.97.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 22.1, implying annual growth of 11.9%.
Current consensus DPS estimate is 13.7, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 41.1.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 17.10 cents and EPS of 28.30 cents.
At the last closing share price the estimated dividend yield is 1.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.08.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.2, implying annual growth of 9.5%.
Current consensus DPS estimate is 15.9, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 37.5.

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

VVA    VIVA LEISURE LIMITED

Travel, Leisure & Tourism - Overnight Price: $1.59

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

Within its first bi-monthly trading update Viva Leisure provided revenue guidance for FY21 of $81.0m - $83.0m, and earnings guidance of $13.0m, - $13.5m.

The monthly revenue run-rate was $8m-plus for 2 consecutive months, with April 2021 representing a 58% increase versus March 2020 - being the last pre-covid month.

The implied FY21 earnings margin is 16.5%-17.5% as the business recovers from industry impacts due to covid forced shutdowns.

Moelis has moderately adjusted FY21 full year revenue to $82.1m (-1.4%) and earnings to $13.3m (-4.3%).

Regardless of the covid related impacts to the health and fitness industry via forced temporary site closures across the FY21 year, the broker expects these to normalise across the medium-term, improving return on invested capital for the business.

Moelis notes Viva Leisure's significant expansion opportunity, as arguably the only market consolidator, which is targeting 400 corporate owned sites by FY25.

Buy rating is retained, and target price is lowered to $3.05 from $3.28.

This report was published on May 26, 2021.

Target price is $3.05 Current Price is $1.59 Difference: $1.46
If VVA meets the Moelis target it will return approximately 92% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 0.00 cents and EPS of 3.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 53.00.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 0.00 cents and EPS of 7.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.78.

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

WSP    WHISPIR LIMITED

Cloud services - Overnight Price: $2.64

Shaw and Partners rates ((WSP)) as Buy (1) -

Three important takeaways Shaw and Partners gleaned from Whispir's recent investor day update were the depth of management expertise, the relatively nascent stage of North American development, and the differentiated, engagement driven, product roadmap that directly challenges the industry’s acceptance of low engagement rates.

Without giving away specifics, it was noted that the volume of opportunities in the North American pipeline has seen “phenomenal” growth, suggesting the personas that Whispir is targeting - like local government, utilities etc - are both responsive and underserved. 

Shaw believes the conversion rates from demo to sale, which are “upwards of 50%” are encouraging and highlights the opportunity as the business is scaled.

With the right team, strategy and now capital to fast track growth in North America, the broker's confidence is building that Whispir can deliver on its target of 25-30% of annualised recurring revenue coming from this region by FY23. 

The Buy rating and target price of $5.20 are retained. 

This report was published on May 25, 2021.

Target price is $5.20 Current Price is $2.64 Difference: $2.56
If WSP meets the Shaw and Partners target it will return approximately 97% (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 6.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 43.28.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 5.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 48.00.

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


Wilsons rates ((WSP)) as Overweight (1) -

During its recently held Annual Technology Day, Whispir disclosed that with 80% of revenue generated in Australia/NZ, the region remains the driver of revenue and profit in the short term, followed by Asia which accounts for 20% of revenue.

While the Americas are only generating less than 5% of group revenue, management noted the region has the potential to outgrow all other regions over time. The company's new Colorado office opens in June and is focusing first on the local government, insurance, safety & compliance and marketing sectors.

The Overweight rating and the target of $5.16 both remain unchanged.

This report was published on May 25, 2021.

Target price is $5.16 Current Price is $2.64 Difference: $2.52
If WSP meets the Wilsons target it will return approximately 95% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 5.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 45.52.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 6.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 43.28.

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

YOJ    YOJEE LIMITED

Software & Services - Overnight Price: $0.14

Euroz Hartleys rates ((YOJ)) as Speculative Buy (2) -

Yojee Ltd has announced it's received an expansion order from an existing enterprise client that will add a further 3 countries in APAC, including Vietnam, Cambodia and Laos.

Euroz Hartleys believes these new regions offer growing opportunities for Yojee with the Vietnam market alone accounting for 13.7m twenty-foot equivalent unit movements per year, around 50% greater than Australia.

Euroz Hartleys notes the recent expansion order outlines the solid progress being made towards the previously outlined growth roll-out opportunity into 126 hubs towards circa $49m in annual revenues within 3 years’ time.

The broker maintains a Speculative Buy recommendation and $0.50 price target.

This report was published on May 25, 2021.

Target price is $0.50 Current Price is $0.14 Difference: $0.36
If YOJ meets the Euroz Hartleys target it will return approximately 257% (excluding dividends, fees and charges).

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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