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

Daily Market Reports | Jul 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)

AD8 (2)   AOF   API   ARX   AUT   BGL   BML   CEL   CGF   CSS   CSX (2)   DEG   DGL   DOC   EVS   FZO   HLS   IEL   IMM   JLG   LRK   MCR   MZZ   NAN   NTO   NWH   NWL   PNI   PNV   SLC   SRG   TIE   TOY   UWL   VEA   WSA   Z1P  

AD8    AUDINATE GROUP LIMITED

Hardware & Equipment - Overnight Price: $9.51

Canaccord Genuity rates ((AD8)) as Buy (1) -

Canaccord Genuity assesses Audinate Group provided its best trading update/upgrade since its IPO, with the company expecting to report FY21 revenues 5% above the broker's forecast.

The broker points out this represents 23% growth, despite covid headwinds, supplier shut-downs and broader industry chip shortages. The result was considered driven by strong demand from OEM partners, and a general uplift in industry/structural growth rates.

Management's FY22 guidance noted the company “is well placed to return to US$ revenue growth in the historical range”, representing a growth rate between 26% and 31%. This implies FY22 revenue between US$31m-US$32m, points out the analyst.

The Buy rating is unchanged and the target price is increased to $10.50 from $9.

This report was published on July 12, 2021.

Target price is $10.50 Current Price is $9.51 Difference: $0.99
If AD8 meets the Canaccord Genuity target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $10.33, suggesting upside of 8.9%(ex-dividends)
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 5.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 190.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -5.0, 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:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 237.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -1.6, 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: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


Shaw and Partners rates ((AD8)) as Buy (1) -

Shaw and Partners assesses Audinate Group's FY21 unaudited sales were ahead of expectations, and FY22 is shaping-up as even stronger, with greater than 30% growth. The broker lifts its price target to $12 from $10 and retains the Buy rating.

The analyst believes the earnings inflection point for the group has likely begun, due to improving sentiment and confidence in the global AV space, with a mooted recovery in 2022. The beginning of the turnaround in the Live sound/events arena is thought to have occurred.

This report was published on July 12, 2021.

Target price is $12.00 Current Price is $9.51 Difference: $2.49
If AD8 meets the Shaw and Partners target it will return approximately 26% (excluding dividends, fees and charges).
Current consensus price target is $10.33, suggesting upside of 8.9%(ex-dividends)
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 minus 3.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 279.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -5.0, 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:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 0.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 1585.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -1.6, 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: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

AOF    AUSTRALIAN UNITY OFFICE FUND

REITs - Overnight Price: $2.35

Moelis rates ((AOF)) as Hold (3) -

Australian Unity Office Fund recently announced that its external manager, Australian Unity, intends to pursue the potential merger with the Australian Unity Diversified Property Fund (DPF), currently unlisted.

While proposed merger ratios have yet to be tabled, pending due diligence, DPF unitholders were advised that reference will be made to the respective net tangible assets (NTA) of the two funds.

Moelis notes a combined entity would have a gearing ratio of 35%, which will likely increase given the funding requirements of DPF’s retail developments in Melbourne VIC, and Busselton WA.

The broker believes the proposed merger has the potential to somewhat de-risk Australian Unity Office Fund's medium-term expiry profile and gives the fund scale with potential for index inclusion.

Hold rating retained. Target price of $2.44.

This report was published on July 8, 2021.

Target price is $2.44 Current Price is $2.35 Difference: $0.09
If AOF meets the Moelis target it will return approximately 4% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 15.00 cents and EPS of 18.60 cents.
At the last closing share price the estimated dividend yield is 6.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.63.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 15.00 cents and EPS of 18.50 cents.
At the last closing share price the estimated dividend yield is 6.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.70.

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

API    AUSTRALIAN PHARMACEUTICAL INDUSTRIES LIMITED

Health & Nutrition - Overnight Price: $1.42

Bell Potter rates ((API)) as Downgrade to Hold from Buy (3) -

Wesfarmers ((WES)) has made an unsolicited bid to acquire 100% outstanding share capital of Australian Pharmaceutical Industries at an indicative price of $1.38 per share. 

According to Bell Potter, the offer is fair, representing a 20.5% premium to the company's closing share price as of July 9.  Australian Pharmaceutical Industries' largest shareholder, WH Soul Pattinson ((SOL)), intends to vote in favour of the offer. 

The rating is downgraded to Hold and the target price decreases to $1.38 from $1.50. 

This report was published on July 12, 2021.

Target price is $1.38 Current Price is $1.42 Difference: minus $0.04 (current price is over target).
If API meets the Bell Potter target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $1.38, suggesting downside of -3.1%(ex-dividends)
The company's fiscal year ends in August.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 3.40 cents and EPS of 6.70 cents.
At the last closing share price the estimated dividend yield is 2.39%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.19.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.5, implying annual growth of N/A.
Current consensus DPS estimate is 4.1, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 18.9.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 5.10 cents and EPS of 10.20 cents.
At the last closing share price the estimated dividend yield is 3.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.92.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.5, implying annual growth of 26.7%.
Current consensus DPS estimate is 7.1, implying a prospective dividend yield of 5.0%.
Current consensus EPS estimate suggests the PER is 14.9.

Market Sentiment: 0.0
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: $1.20

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

Bell Potter reports Aroa Biosurgery's recent investor update has reiterated the growing body of clinical evidence supporting the company's ECM platform. The broker notes this data will be responsible for driving physician adoption.

The company also provided detail on the Myriad commercial roll out, which remains the key focus. Bell Potter notes detail around a symbiotic relationship with the Tela salesforce and its existing customers is positive. 

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

This report was published on July 6, 2021.

Target price is $2.00 Current Price is $1.20 Difference: $0.8
If ARX meets the Bell Potter target it will return approximately 67% (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 19.67.

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 35.29.

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

AUT    AUTECO MINERALS LIMITED

Gold & Silver - Overnight Price: $0.12

Shaw and Partners rates ((AUT)) as Initiation of coverage with Buy (1) -

Shaw and Partners initiates coverage on Auteco Minerals, a gold exploration company with a focus on the high grade Pickle Crow project in Ontario.

Having already established a 1m ounce resource at 11.3 grams of gold per tonne, Auteco Minerals is one of the highest grade gold explorers on the ASX, the broker highlights.

The company owns 51% of the Pickle Crow gold project and is in the process of acquiring an 80% interest. Drilling results have reported multiple high grade intersections and a resource update is expected in July.

Shaw and Partners initiates with a Buy rating and a target price of $0.18. 

This report was published on July 7, 2021.

Target price is $0.18 Current Price is $0.12 Difference: $0.06
If AUT 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 0.00 cents and EPS of minus 0.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 24.00.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 0.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 17.14.

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