Australian Broker Call *Extra* Edition – Jul 19, 2021

Daily Market Reports | Jul 19 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)

AIZ   ALU (2)   APC   AQR   ARF   ASB   AVH   BET   BGA   BOE   BOQ   BPT   BTH   BXB   CBA   CLU   CNI   COE   COL   CQE   DDH   EHL   IGO   IPH   IRI   MAH   MNY   NWH   OPY   OSH   PBH   PWR   STO   SXY   SYD   TRJ   UWL   VCX   WGX   WPL  

BGA    BEGA CHEESE LIMITED

Dairy - Overnight Price: $5.37

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

Having reviewed movements in commodity returns and opening farmgate prices for the 2021-22 season, there are no material changes to Bell Potter's forecasts, with the Buy rating and target price of $7.35 for Bega Cheese both remaining unchanged. 

The broker expects the acquisition of Lion Dairy & Drinks and the targeted synergy base to drive a material step change in returns for Bega over the next three years.

In addition, Bell Potter sees Bega benefiting from an improved competitive position at the farmgate in FY22 as indicated by the company opening its 2021-22 Southern farmgate milk price at the upper end of the industry at $6.80KgMS.

This report was published on June 222, 2021.

Target price is $7.35 Current Price is $5.37 Difference: $1.98
If BGA meets the Bell Potter target it will return approximately 37% (excluding dividends, fees and charges).
Current consensus price target is $6.63, suggesting upside of 23.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 11.00 cents and EPS of 13.50 cents.
At the last closing share price the estimated dividend yield is 2.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 39.78.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.4, implying annual growth of 67.9%.
Current consensus DPS estimate is 10.0, implying a prospective dividend yield of 1.9%.
Current consensus EPS estimate suggests the PER is 32.7.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 18.00 cents and EPS of 30.40 cents.
At the last closing share price the estimated dividend yield is 3.35%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.66.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.4, implying annual growth of 73.2%.
Current consensus DPS estimate is 11.8, implying a prospective dividend yield of 2.2%.
Current consensus EPS estimate suggests the PER is 18.9.

Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

BOE    BOSS ENERGY LIMITED

Uranium - Overnight Price: $0.15

Canaccord Genuity rates ((BOE)) as Buy (1) -

Having assessed Boss Energy's enhanced restart study for its fully permitted Honeymoon Uranium project in South Australia, Canaccord Genuity concludes the study has met or exceeded the broker's estimates at every level.

With a 12-month lead time to first production, bottom quartile capital intensity and low AISC of US$26/lb, the broker remains confident Honeymoon will be one of the first projects to restart as the market tightens.

Canaccord now models a breakeven price of less than US$35/lb for Honeymoon. Canaccord rates Boss Energy as a Buy with the target price rising to $0.23 from $0.21.

This report was published on June 22, 2021.

Target price is $0.23 Current Price is $0.15 Difference: $0.08
If BOE meets the Canaccord Genuity target it will return approximately 53% (excluding dividends, fees and charges).
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 minus 0.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 75.00.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 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 150.00.

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

BOQ    BANK OF QUEENSLAND LIMITED

Banks - Overnight Price: $8.85

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

Bank of Queensland has announced that the Federal Treasurer has approved its acquisition of Members Equity Bank Limited (ME Bank). The acquisition was funded by a $1.35bn equity raise.

Having incorporated ME Bank’s earnings into the broker's Bank of Queensland forecasts, Goldman Sachs' FY21, FY22, and FY23 earnings per share estimates move up by 5%, 38%, and 41% respectively.

Goldman Sachs's retained Buy rating reflects continued improvements in volume momentum, particularly in housing, and the group's funding mix, which will be positively leveraged to the current funding environment.

The broker also notes the growth and synergy opportunity that the ME Bank acquisition provides the group. The target price moves to $9.90 from $9.85.

This report was published on June 21, 2021.

Target price is $9.90 Current Price is $8.85 Difference: $1.05
If BOQ meets the Goldman Sachs target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $9.84, suggesting upside of 11.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 37.00 cents and EPS of 70.00 cents.
At the last closing share price the estimated dividend yield is 4.18%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.64.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 69.4, implying annual growth of 174.1%.
Current consensus DPS estimate is 39.3, implying a prospective dividend yield of 4.4%.
Current consensus EPS estimate suggests the PER is 12.8.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 41.00 cents and EPS of 68.00 cents.
At the last closing share price the estimated dividend yield is 4.63%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.01.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 70.8, implying annual growth of 2.0%.
Current consensus DPS estimate is 45.8, implying a prospective dividend yield of 5.2%.
Current consensus EPS estimate suggests the PER is 12.5.

Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

BPT    BEACH ENERGY LIMITED

Crude Oil - Overnight Price: $1.29

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

Jarden has initiated on the oil and gas sector and provided detail on a number of companies as they address rising investor concerns about the role of fossil fuels as a future energy.

According to Jarden, market confidence in Beach Energy will take some time to rebuild following the company's surprise -38% downgrade to the company's Western Flank reserves.

For investors willing to wait, Jarden believes there is upside to the Otway drilling, Waitsia LNG marketing and Trefoil development. 

The broker expects investors will likely be waiting until FY24 for higher dividends, as significant investment will impact free cash flow ahead. 

Beach Energy currently reports only its gross emissions, but has outlined a reduction target based on this. Jarden notes a reduction of -25% by FY25 is likely to be achieved through activities in the Western Flank coupled with lower output at BassGas. 

Jarden sees value in Beach Energy as a smaller cap stock pick for the sector. Jarden initiates with an Overweight rating and a target price of $1.50.

This report was published on June 17, 2021.

Target price is $1.50 Current Price is $1.29 Difference: $0.21
If BPT meets the Jarden target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $1.76, suggesting upside of 36.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Jarden forecasts a full year FY21 dividend of 2.00 cents and EPS of 14.20 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 9.08.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.6, implying annual growth of -33.5%.
Current consensus DPS estimate is 2.2, implying a prospective dividend yield of 1.7%.
Current consensus EPS estimate suggests the PER is 8.8.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 2.00 cents and EPS of 17.30 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 7.46.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.8, implying annual growth of 28.8%.
Current consensus DPS estimate is 2.2, implying a prospective dividend yield of 1.7%.
Current consensus EPS estimate suggests the PER is 6.9.

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


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