Australian Broker Call *Extra* Edition – Jul 13, 2021

Daily Market Reports | Jul 13 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)

AD8   AMA   AMN   AVH   BOQ   BXB   CIM   CQR   DGL   DMP (2)   GEM   IMD   JLG   LIC   NHC   PBP   PMV (3)   PPM   RMD   SHV   SKC   SSG   SSM   SZL   UWL   Z1P  

SSG    SHAVER SHOP GROUP LIMITED

Household & Personal Products - Overnight Price: $1.00

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

Shaw and Partners has provided updated guidance on Shaver Shop Group, upgrading net profit estimates by 8% for FY21 in line with the company's guidance range of $16.75-17.50m. The broker has also reduced forecasts by -15% for FY22 as like-for-like sales moderate. 

Shaver Shop is guiding to total sales of $221-213m, implying 8-9% growth on FY20. 

Shaw highlights Shaver Shop as one of the best positioned retailers in Australia and in the best shape of its life. Online penetration is improving and six A-grade stores were acquired in the second half of FY21. 

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

This report was published on June 17, 2021.

Target price is $1.50 Current Price is $1.00 Difference: $0.5
If SSG meets the Shaw and Partners target it will return approximately 50% (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 6.20 cents and EPS of 13.40 cents.
At the last closing share price the estimated dividend yield is 6.20%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.46.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 7.00 cents and EPS of 12.60 cents.
At the last closing share price the estimated dividend yield is 7.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.94.

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

SSM    SERVICE STREAM LIMITED

Industrial Sector Contractors & Engineers - Overnight Price: $0.92

Bell Potter rates ((SSM)) as Buy (1) -

The confirmation of Service Stream's FY21 guidance, which is for second half FY21 earnings to be in-line with first half FY21, suggests to Bell Potter that the company may be managing costs better than the broker had previously forecast.

Service Stream noted in its business update that its Fixed Communications and Network Construction divisions were restructured into a single business unit, which will reduce the Telecommunications operating cost base.

Bell Potter expects the re-alignment of costs to new revenue levels to aid the company's future margin outlook.

The Buy is unchanged and the target price increases to $1.10 from $1.05.

This report was published on 16 June, 2021. 

Target price is $1.10 Current Price is $0.92 Difference: $0.18
If SSM meets the Bell Potter target it will return approximately 20% (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 5.00 cents and EPS of 9.80 cents.
At the last closing share price the estimated dividend yield is 5.43%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.39.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 4.00 cents and EPS of 6.60 cents.
At the last closing share price the estimated dividend yield is 4.35%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.94.

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

SZL    SEZZLE INC

Diversified Financials - Overnight Price: $8.68

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

Jarden initiates coverage on Sezzle Inc, a smaller buy now pay later company with a long-term strategy for emerging markets. 

Jarden notes the buy now pay later market is large, but largely fully penetrated in A&NZ, overly competitive in the US, and facing a strong competitor in Klarna. Many BNPL companies are exploring loyalty affiliate marketing programs and pay anywhere cards to expand their product offerings. 

Sezzle has the largest merchant penetration but lower transaction frequency and customer numbers. In a competitive market, Jarden notes the company may face challenges in materially penetrating enterprise merchants.

The broker also expects the company to have to raise equity to fund near-term growth. 

Jarden initiates coverage with a Sell rating and target price of $5.60. 

This report was published on June 11, 2021. 

Target price is $5.60 Current Price is $8.68 Difference: minus $3.08 (current price is over target).
If SZL meets the Jarden target it will return approximately minus 35% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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

UWL    UNITI GROUP LIMITED

Telecommunication - Overnight Price: $3.38

Goldman Sachs rates ((UWL)) as Buy (1) -

Commenting on a recent meeting with Uniti Group, Goldman Sachs notes the company's contracted development pipeline is building rapidly, and has line of sight to its 50%-plus residential greenfield target.

Other positives highlighted by the broker include revelations Uniti has an opportunity to work with Tier 1 developers in whole of business capacity, while recent pricing proposals from NBN Co were also viewed favorably, particularly the annual, above inflation price rise.

Goldman Sachs has increased FY22-25 earnings estimates to 6%, noting the long lead times on new contracted developments means the majority of earnings benefits from existing contract wins are long-dated in nature.

Buy rating is maintained, and target price increases 10% to $3.30.

This report was released on June 11, 2021.

Target price is $3.30 Current Price is $3.38 Difference: minus $0.08 (current price is over target).
If UWL meets the Goldman Sachs target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 0.00 cents and EPS of 8.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 42.25.

Forecast for FY22:

Goldman Sachs 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 33.80.

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

Z1P    ZIP CO LIMITED

Business & Consumer Credit - Overnight Price: $8.23

Jarden rates ((Z1P)) as Initiation of coverage with Overweight (2) -

Jarden initiates coverage on buy now pay later company Zip Co with an Overweight rating and target price of $8.40.

Jarden notes the BNPL market is large, but largely fully penetrated in A&NZ, overly competitive in the US, and facing a strong competitor in Klarna. Many BNPL companies are exploring loyalty affiliate marketing programs and pay anywhere cards to expand their product offerings. 

Zip Co is reporting increasing transaction frequency, and Jarden highlights key earnings drivers for the company are market share gain and increasing repeat customer transactions.

Afterpay ((APT)) is Jarden's value buy now pay later stock pick.

This report was published on June 11, 2021. 

Target price is $8.40 Current Price is $8.23 Difference: $0.17
If Z1P meets the Jarden target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $8.69, suggesting upside of 4.0%(ex-dividends)

Forecast for FY21:

Current consensus EPS estimate is -27.1, 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:

Current consensus EPS estimate is -4.9, 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.

Market Sentiment: 0.1
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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