Australian Broker Call *Extra* Edition – Jul 27, 2021

Daily Market Reports | Jul 27 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)

A2M   A4N   AIS   ARX   ASG   CAT   CYM   EDV   FFX   GSS   IGO   JLG (2)   JRV   MZZ   NAN   NTO   NWS   OTW   PDN   RMS   RRL   SRG  

A2M    A2 MILK COMPANY LIMITED

Dairy - Overnight Price: $6.40

Bell Potter rates ((A2M)) as Buy (1) -

Infant formula export volumes to China from Australia have demonstrated their first year-on-year increase since May 2019, up 56%.

Bell Potter welcomes the increase believing it to be indicative of overall market dynamics. Sequentially, volumes appear to have formed a bottom in recent months. Bell Potter retains a Buy rating and $8.50 target.

This report was published on July 2, 2021.

Target price is $8.50 Current Price is $6.40 Difference: $2.1
If A2M meets the Bell Potter target it will return approximately 33% (excluding dividends, fees and charges).
Current consensus price target is $6.43, suggesting upside of 0.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of 11.63 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 55.01.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.2, 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 37.2.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of 26.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.1, implying annual growth of 63.4%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 22.8.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

A4N    ALPHA HPA LIMITED

Aluminium, Bauxite & Alumina - Overnight Price: $0.52

Bell Potter rates ((A4N)) as Buy (1) -

Following a $50m equity placement, Alpha HPA is now funded to commence first stage development at its Precursor Production Facility. The facility will fast track commercial volume production of the company's aluminum precursors.

The company expects the facility to generate annual free cash flow of $8-11m from late 2022. 

Bell Potter notes the new facility will accelerate commercial sales by around 12 months, and that bringing forward production will allow Alpha HPA to be a participant in the lithium ion battery supply chain.

The Speculative Buy rating is maintained and the target price increases to $0.83 from $0.81. 

This report was published on June 30, 2021.

Target price is $0.83 Current Price is $0.52 Difference: $0.31
If A4N meets the Bell Potter target it will return approximately 60% (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 0.00 cents and EPS of minus 0.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 173.33.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 0.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 173.33.

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

AIS    AERIS RESOURCES LIMITED

Copper - Overnight Price: $0.21

Euroz Hartleys rates ((AIS)) as Buy (1) -

Although early days, Euroz Hartleys sees potential for the supergene zone at Constellation to generate early cashflows through open-pit operation, before moving underground.

Based on the broker's numbers, the company will finish the June quarter with a net cash position of $62m, post the capital raise, including cashflow from the June quarter.

The broker believes the all-in cost remains ‘cheap’ at a current value of $377m, with two processing facilities that remain leveraged to exploration success.

This report was issued July 6, 2021.

Target price is $0.30 Current Price is $0.21 Difference: $0.09
If AIS meets the Euroz Hartleys target it will return approximately 43% (excluding dividends, fees and charges).

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: $1.19

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

After attending Aroa Biosurgery's virtual Investor Day, Wilsons notes the company remains the broker's preferred exposure to this year’s expected recovery in US surgical volumes.

While Aroa did not give any specific update on TELA Bio’s business, the broker believes there may be upside to guidance this year given both PRS and minimally invasive OVITEX sales are exceeding TELA’s internal expectations.

Wilsons also expects surgical clearance rates for the backlog of deferred open ventral procedures to increase as US hospitals continue to open up in 2021.

Overweight and $2 price target retained.

This report was published on July 5, 2021.

Target price is $2.00 Current Price is $1.19 Difference: $0.81
If ARX meets the Wilsons target it will return approximately 68% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 5.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 23.33.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 2.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 45.77.

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

ASG    AUTOSPORTS GROUP LIMITED

Automobiles & Components - Overnight Price: $2.28

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

Due to exceptional trading conditions, Autosports Group is expecting revenue of $1.92-1.96bn and underlying profit before tax of $68-70m, up 199-203% on the previous period.

Moelis attributes the stronger than anticipated result to better than expected demand supporting gross profit margins, combined with an improved second-half contribution from Victoria as covid restrictions were largely relaxed.

Autosports also announced the acquisition of John Newell Mazda, a prominent Mazda dealership in Alexandria – strategically located opposite the company's existing dealerships.

Moelis notes John Newell Mazda is expected to earn $88.9m revenue in FY22 and the broker estimates in a normal environment delivers $3.5-4m in profit before tax.

Moelis retains its Buy rating with the target price increasing to $3.10 from $2.90.

This report was published on July 6, 2021.

Target price is $3.10 Current Price is $2.28 Difference: $0.82
If ASG meets the Moelis target it will return approximately 36% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 5.00 cents and EPS of 24.30 cents.
At the last closing share price the estimated dividend yield is 2.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.38.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 12.40 cents and EPS of 25.10 cents.
At the last closing share price the estimated dividend yield is 5.44%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.08.

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

CAT    CATAPULT GROUP INTERNATIONAL LIMITED

Medical Equipment & Devices - Overnight Price: $1.77

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

Catapult Group has announced the acquisition of UK-based SBG Sports Software for up to US$45m and has completed a US$35m equity raise at $1.90ps as funding for the acquisition, coupled with providing further flexibility for future organic growth opportunities and working capital.

Canaccord increases FY22, FY23, and FY24 annual contract value forecasts by 16%, 21%, and 23%, respectively. The broker has also adjusted the cost base in line with management's guidance.

Buy rating unchanged with the target price increasing to $3.00 from $2.45.

This report was published on July 5, 2021.

Target price is $3.00 Current Price is $1.77 Difference: $1.23
If CAT meets the Canaccord Genuity target it will return approximately 69% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 8.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 22.13.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 7.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 25.29.

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


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