Australian Broker Call *Extra* Edition – Jun 28, 2021

Daily Market Reports | Jun 28 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)

ABB   AHX   ALQ   APA   APX   AWC   BET   CAT   CGC (4)   CIA   CL1   CMM   CNU   EBO   ERD   FBU   FMG   FPH (3)   GDC   IGL   ING (2)   IVC   JIN   LNK   MFG   MNY   MOZ   MSB   OBL   QIP   RED   RHC   SCP   SHV (2)   TLX   TNE   VHT   WHC   WZR   ZBT  

ABB    AUSSIE BROADBAND LIMITED

Telecommunication - Overnight Price: $2.83

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

Aussie Broadband upgraded FY21 normalised earnings (EBITDA) guidance, materially ahead of Shaw and Partners' estimate. This is the second upgrade in the first year of listing. The target rises to $3.41 from $3.33 and the Buy rating is maintained.

For growth context, the broker highlights that FY20 earnings were only $1.7m. Thus, nominal growth is around $17m, which is considered to cement the company as the fastest-organically-growing telco on the ASX.

The analyst remains bullish on growth alternatives including Fibre point of interconnect (POI), on-net connections,  private network connections, enterprise growth and acquisitions.

This report was published on May 31, 2021.

Target price is $3.41 Current Price is $2.83 Difference: $0.58
If ABB meets the Shaw and Partners target it will return approximately 20% (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 2.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 104.81.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of 10.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.30.

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

AHX    APIAM ANIMAL HEALTH LIMITED

Healthcare services - Overnight Price: $0.95

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

Apiam Animal Health has announced the strategic acquisition of three veterinary businesses and four clinics across Queensland that allow the expansion of a hub and spoke model being rolled out across companion and production animals.

Bell Potter believes the acquisitions are well timed and priced with $10m of annualised revenue at a total consideration of $6.7m, with likely $1.5m in annualised earnings across the group.

The broker expects this to equate to an increase in earnings of around 10% on second half FY21 annualised estimates. Bell Potter has increased earnings per share FY22-23 estimates by 6%.

The Buy recommendation is retained and the target price increases to $1.07 from $1.02.

This report was published on May 28, 2021.

Target price is $1.07 Current Price is $0.95 Difference: $0.12
If AHX meets the Shaw and Partners target it will return approximately 13% (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 2.10 cents and EPS of 4.60 cents.
At the last closing share price the estimated dividend yield is 2.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.65.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 2.10 cents and EPS of 6.00 cents.
At the last closing share price the estimated dividend yield is 2.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.83.

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

ALQ    ALS LIMITED

Industrial Sector Contractors & Engineers - Overnight Price: $12.93

Jarden rates ((ALQ)) as Downgrade to Overweight from Buy (2) -

In the wake of a fourth quarter update, Jarden still remains positive on the earnings outlook for ALS Ltd for the next two years though lowers its rating to Overweight from Buy after a share price rally. The target price increases to $13.15 from $11.90.

The company reported a strong uplift in Geochemistry volumes, which is expected to be sustained over the next 12-18 months. Research by the broker suggests we are still in the early stages of uplift in the commodities cycle.

This should provide ongoing support for the Commodities division, predicts the analyst. While Life Sciences has been slower to ramp up, it's thought cost discipline has ensured margins can be supported, despite the weaker revenue environment.

This report was published on 26 May, 2021.

Target price is $13.15 Current Price is $12.93 Difference: $0.22
If ALQ meets the Jarden target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $12.51, suggesting downside of -3.2%(ex-dividends)
The company's fiscal year ends in March.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 27.60 cents and EPS of 46.50 cents.
At the last closing share price the estimated dividend yield is 2.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.81.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 48.3, implying annual growth of 35.0%.
Current consensus DPS estimate is 27.9, implying a prospective dividend yield of 2.2%.
Current consensus EPS estimate suggests the PER is 26.8.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 32.30 cents and EPS of 55.10 cents.
At the last closing share price the estimated dividend yield is 2.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.47.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 52.1, implying annual growth of 7.9%.
Current consensus DPS estimate is 31.1, implying a prospective dividend yield of 2.4%.
Current consensus EPS estimate suggests the PER is 24.8.

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

APA    APA GROUP

Infrastructure & Utilities - Overnight Price: $9.27

Goldman Sachs rates ((APA)) as Neutral (3) -

After an investor briefing, Goldman Sachs notes the dividend payout range will now be 60-70% of free cashflow rather than operating cashflow. This is expected to drive greater funding flexibility as the business looks at increasing gearing to support new investment.

FY21 earnings (EBITDA) guidance remains $1,625-1,665m, with a dividend of 51cps. Neutral rating and $10.10 target retained. The broker prefers AusNet Services ((AST)) and Spark Infrastructure ((SKI)) for total projected shareholder returns of 28% and 14%, compared to 13% for APA Group.

This report was published on May 26, 2020.

Target price is $10.10 Current Price is $9.27 Difference: $0.83
If APA meets the Goldman Sachs target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $10.55, suggesting upside of 13.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 EPS of 14.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 66.21.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.6, implying annual growth of 9.9%.
Current consensus DPS estimate is 51.0, implying a prospective dividend yield of 5.5%.
Current consensus EPS estimate suggests the PER is 37.7.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 EPS of 15.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 61.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 31.8, implying annual growth of 29.3%.
Current consensus DPS estimate is 53.3, implying a prospective dividend yield of 5.7%.
Current consensus EPS estimate suggests the PER is 29.2.

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

APX    APPEN LIMITED

IT & Support - Overnight Price: $14.51

Canaccord Genuity rates ((APX)) as Hold (3) -

Appen has remodeled its business around new segments to be more customer and product centric. Canaccord Genuity believes the new reporting format will lead to easier communication with the market. 

Under the new segments, Global Services is focused largely on leading US tech businesses, while New Markets includes enterprise, government and Chinese customers using Appen data annotation tools. 

The broker notes the Global Services segment is running at mid- to high-single-digit percentage growth while New Markets is in line with growth of around 25%. Combined, Canaccord believes this a heathy growth rate that allows for some operating leverage in the business. 

The Hold rating is retained and the target price decreases to $13.70 from $18.00. 

The report was published on May 24, 2021.

Target price is $13.70 Current Price is $14.51 Difference: minus $0.81 (current price is over target).
If APX meets the Canaccord Genuity target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $20.97, suggesting upside of 44.5%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 12.07 cents and EPS of 63.69 cents.
At the last closing share price the estimated dividend yield is 0.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.78.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 49.2, implying annual growth of 18.4%.
Current consensus DPS estimate is 10.0, implying a prospective dividend yield of 0.7%.
Current consensus EPS estimate suggests the PER is 29.5.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 20.11 cents and EPS of 80.45 cents.
At the last closing share price the estimated dividend yield is 1.39%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 62.1, implying annual growth of 26.2%.
Current consensus DPS estimate is 13.3, implying a prospective dividend yield of 0.9%.
Current consensus EPS estimate suggests the PER is 23.4.

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


The full story is for FNArena subscribers only. To read the full story plus enjoy a free two-week trial to our service SIGN UP HERE

If you already had your free trial, why not join as a paying subscriber? CLICK HERE

MEMBER LOGIN