Australian Broker Call *Extra* Edition – Jul 21, 2021

Daily Market Reports | Jul 21 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)

ABP   ACF   ADA   AIS   AMX   APC   APT   ARB   ARV   ARX   ATU   AVN (2)   CAI   CGC (4)   CMM   CQR   CSX   DEG   DGL   EHL   ENN   EYE   GLL   HDN   IRE   NAN (2)   NSR   NXS   OPY   PFP   PLL   PME   QAN   RZI   SLA   SND   ST1   SVW   TUL   UWL   WOW (2)  

ARV    ARTEMIS RESOURCES LIMITED

Mining - Overnight Price: $0.05

Taylor Collison rates ((ARV)) as Speculative Buy (1) -

Having just raised $7m at $0.06/share, Taylor Collison believes Artemis Resources is now well funded for the planned upcoming drilling at Carlow Castle and Paterson South projects, both of which are 100% Artemis owned.

Taylor Collison expects Artemis' active work program going forward to result in steady news flow. Although the Carlow Castle mineral resource estimate update was a setback, the broker believes this has led to a re-set and a base on which to build.

As such, the broker continues to rate Artemis as a Speculative Buy.

This report was published on June 24, 2021.

Current Price is $0.05. Target price not assessed.

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

ARX    AROA BIOSURGERY LIMITED

Pharmaceuticals & Biotech/Lifesciences - Overnight Price: $1.22

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

Aroa Biosurgery's FY21 annual report has provided further detail compared to the update delivered in May. Bell Potter has not made updates to revenue forecast on maintained guidance from the company. 

Of note to Bell Potter is detail around the company's dead space management program, which has been prioritised to accelerate for development and commercialisation. This follows reported positive pre-clinical outcomes for the device over the course of the year.

The Speculative Buy rating and target price of $2.00 are retained. 

This report was published on June 22, 2021.

Target price is $2.00 Current Price is $1.22 Difference: $0.78
If ARX meets the Bell Potter target it will return approximately 64% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY21:

Bell Potter 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 20.00.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 3.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 35.88.

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

ATU    ATRUM COAL LIMITED

Coal - Overnight Price: $0.06

Shaw and Partners rates ((ATU)) as Downgrade to Hold from Buy (3) -

Shaw and Partners had expected approval of the Grassy Mountain Coal Project to pave the way for Atrum Coal's Elan Coal Project. 

In a move the broker finds surprising, the Grassy Mountain project has been rejected by the Canadian Federal Minister of Environment and Climate Change and the Alberta Regulator.

A 680-page report claimed the benefits of the project do not outweigh potential environmental risks. 

Shaw notes while the rejection was project specific, this makes Atrum Coal's Elan Coal Project less likely to be developed. Atrum Coal will review the report to determine measures that could mitigate concerns. 

The rating is downgraded to Hold with a target price of $0.05.

This report was published on June 23, 2021.

Target price is $0.50 Current Price is $0.06 Difference: $0.44
If ATU meets the Shaw and Partners target it will return approximately 733% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 5.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 1.20.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 5.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 1.20.

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

AVN    AVENTUS GROUP

REITs - Overnight Price: $3.08

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

Largely due to a -64 basis point of cap rate compression, Aventus Group recently provided its portfolio valuation update, a 12% gain compared to December 31.

 Aventus also increased FY21 guidance of funds from operations to 19.4cps, ahead of Goldman Sachs estimate of 19.2cps, and equating to 7% earnings growth over FY20.

The update solidifies the broker's view that Aventus is relatively well-positioned in the current environment, given its large format retail portfolio derives 37% of income from everyday needs tenants.

Although the group has re-rated since late May 2020 - up over 62% and outperforming the REIT index by 28% - the broker believes it remains attractive in the current environment given the organic and external growth strengths

Buy Rating is maintained and the target price increases to $3.27.

This report was published on June 23, 2021.

Target price is $3.27 Current Price is $3.08 Difference: $0.19
If AVN meets the Goldman Sachs target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $3.06, suggesting downside of -1.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 17.00 cents and EPS of 19.00 cents.
At the last closing share price the estimated dividend yield is 5.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.21.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.0, implying annual growth of 85.0%.
Current consensus DPS estimate is 17.0, implying a prospective dividend yield of 5.5%.
Current consensus EPS estimate suggests the PER is 16.3.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 19.00 cents and EPS of 21.00 cents.
At the last closing share price the estimated dividend yield is 6.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.7, implying annual growth of 3.7%.
Current consensus DPS estimate is 17.8, implying a prospective dividend yield of 5.7%.
Current consensus EPS estimate suggests the PER is 15.7.

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


Moelis rates ((AVN)) as Sell (5) -

Aventus Group has released updated valuations resulting in a net uplift of $254m, with cap rates compressing 64bps to 6.01%.

Based on Moelis' estimates, the valuation uplift increases net tangible assets (NTA) to $2.70, with the gains also resulting in gearing reducing to 28%, which the broker expects to decrease further once the group settles on the sale of McGregor in July for $42m.

While the group's FY21 result is slightly elevated due to the one-off recoupment of rent deferred through covid, Moelis still expects 0.8% of earnings per share growth in FY22 given ongoing favourable trading conditions for tenants, and slightly lower interest rates.

Sell rating is maintained, and the target price increases to $2.90 from $2.77 on the basis of higher than expected cap rate compression.

This report was released on June 24, 2021.

Target price is $2.90 Current Price is $3.08 Difference: minus $0.18 (current price is over target).
If AVN meets the Moelis target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $3.06, suggesting downside of -1.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 17.50 cents and EPS of 19.40 cents.
At the last closing share price the estimated dividend yield is 5.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.0, implying annual growth of 85.0%.
Current consensus DPS estimate is 17.0, implying a prospective dividend yield of 5.5%.
Current consensus EPS estimate suggests the PER is 16.3.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 17.50 cents and EPS of 19.20 cents.
At the last closing share price the estimated dividend yield is 5.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.7, implying annual growth of 3.7%.
Current consensus DPS estimate is 17.8, implying a prospective dividend yield of 5.7%.
Current consensus EPS estimate suggests the PER is 15.7.

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

CAI    CALIDUS RESOURCES LIMITED

Gold & Silver - Overnight Price: $0.48

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

After a recent visit to Calidus Resources' Warrawoona Gold Project, Cannacord Genuity notes the company is around 40% of the way through the $125m build and is targeting first gold in June quarter FY22 with the ramp-up completing shortly after.

In the broker's view, the company has done a commendable job in consolidating the tenure, defining resource/reserves, and obtaining approvals to build the mine.

Canaccord believes Calidus continues to offer exposure to one of WA's next gold production stories. But the broker remains unsure whether there is enough of a working capital buffer to see the company through the ramp-up of Warrawoona on the broker's assumptions, and models further equity dilution in 2022.

Speculative Buy and price target of $0.60 are both unchanged.

This report was issued June 24, 2021.

Target price is $0.60 Current Price is $0.48 Difference: $0.12
If CAI meets the Canaccord Genuity target it will return approximately 25% (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 0.03 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 1600.00.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 480.00.

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