Australian Broker Call *Extra* Edition – Aug 04, 2021

Daily Market Reports | Aug 04 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)

360   4DX   ABR   AIM   ALC   ALU (2)   APE   BCI (2)   BET   BML   BTH   CBR   CCX (3)   CLU   CRN (2)   CRW   DOC   DRR   DTC (2)   ECF   EML   EVN (2)   HUO   IEL   IFM   IGO (2)   ILU (2)   JHC   JRV   LIC   LPD   NCM   NIC   NST (2)   NTO (2)   NUC   NXS   NXT   OGC   OPY   OSL   OZL (2)   PBH   PDN   PEN   REA   RIO   RMY   SBM   SLH   SM1   SSM   STA   TPW (3)   TSI   UNI   VHT   YFZ   Z1P  

STA    STRANDLINE RESOURCES LIMITED

Mineral Sands - Overnight Price: $0.22

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

Shaw and Partners believe the June quarter was a transformational quarter for Strandline Resources with the final investment decision at Coburn and construction having already commenced.

Coburn is fully financed following the recent $122m equity raise and will produce approximately 230kt of Heavy Mineral Concentrate (HMC) per annum with a mine life of 22.5 years.

While all the focus is understandably on the Coburn project, the broker notes Strandline is continuing to progress its Tanzanian projects at Fungoni and Tajiri.

Given that the market is ascribing no value to Tanzania, the broker expects the market to be surprised as these projects progress.

Buy rating and the price target of $0.58 are both retained.

This report was issued July 28, 2021.

Target price is $0.58 Current Price is $0.22 Difference: $0.36
If STA meets the Shaw and Partners target it will return approximately 164% (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 1.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 14.67.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 1.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 16.92.

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

TPW    TEMPLE & WEBSTER GROUP LIMITED

Furniture & Renovation - Overnight Price: $12.57

Bell Potter rates ((TPW)) as Hold (3) -

After achieving third-quarter FY21 growth of 112%, Temple & Webster achieved growth of 26% in fourth-quarter FY21 against a tough previous period.

Bell Potter believes the group's flagged intention of putting the ‘foot down’ - to drive revenue growth and expand its market leadership - is evident in the fourth quarter result, with FY21 sales of $326.3m, up 85% on the previous period.

While Bell Potter maintains a positive long-term view, the broker is also cautious on the near-term domestic macro outlook for discretionary retail.

Hold rating unchanged, and the target price increases to $12.40 from $11.30.

This report was published on July 28, 2021.

Target price is $12.40 Current Price is $12.57 Difference: minus $0.17 (current price is over target).
If TPW meets the Bell Potter target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $14.41, suggesting upside of 14.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of 8.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 155.19.

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 N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 167.6.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of 12.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 99.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.0, implying annual growth of 46.7%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 114.3.

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


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

Temple and Webster's FY21 revenue of $326.3m was an 85% increase and a beat on Canaccord Genuity's forecast $323.8m, while underlying earnings of $24.5m were also up 162% and above the broker's expected $19.5m. 

According to Canaccord Genuity, FY21 has been a transformational year for Temple and Webster, with significant change in business scale and the beginning of a reinvestment cycle, that is setting the company up to be the most well known homewares and furniture brand in the domestic market.

The broker has increased revenue forecasts for FY21, FY22 and FY23 by 0.8%, 3.9% and 3.9% respectively.

The Buy rating is retained and the target price increases to $14.00 from $11.80.

This report was published on July 28, 2021.

Target price is $14.00 Current Price is $12.57 Difference: $1.43
If TPW meets the Canaccord Genuity target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $14.41, suggesting upside of 14.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of 9.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 139.67.

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 N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 167.6.

Forecast for FY23:

Current consensus EPS estimate is 11.0, implying annual growth of 46.7%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 114.3.

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


Jarden rates ((TPW)) as Buy (2) -

While a sluggish period may still materialise, Jarden sees signs in the recent update from Temple & Webster that the structural and cyclical factors underpinning the group's success are likely enduring, with the company's execution also reinforcing its advantage as a category leader.

While the group's fourth-quarter FY21 revenue growth was in line with estimates (at 26%), Jarden notes accelerating sales through the quarter.

Jarden forecasts a 12% contribution margin over FY22/23, as the broker assumes a large step-up in marketing/revenue in FY22 and FY23 to 14.5% and 14.3%, respectively. 

The net effect results in Jarden's FY22 and FY23 earnings estimates rising by 6% and 27%, respectively, with the margin at 3.0-3.7%, respectively, in the upper half of the company's target range.

Overweight rating retained, and the price target increases to $13.87 from $11.70.

This research update was released on July 27, 2021.

Target price is $13.87 Current Price is $12.57 Difference: $1.3
If TPW meets the Jarden target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $14.41, suggesting upside of 14.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 0.00 cents and EPS of 6.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 190.45.

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 N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 167.6.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 0.00 cents and EPS of 11.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 110.26.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.0, implying annual growth of 46.7%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 114.3.

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

TSI    TOP SHELF INTERNATIONAL HOLDINGS LIMITED

Food, Beverages & Tobacco - Overnight Price: $1.87

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

Top Shelf International Holdings has confirmed its whisky inventory at FY21 year-end at 1.6m litres had a net sales value of $111m, which is above the IPO Prospectus forecast of $107m.

The company's Agave farm currently has the equivalent of 1.9m litres currently planted with a net sales value of $160m.

Commenting on the announcement, Wilsons notes Agave requires considerable time and effort in establishing a significant asset base, remains a very attractive medium-to-long term opportunity, with the net sales value of inventory providing some perspective on the future market value.

Overweight and the target price of $2.83 are both retained.

This report was published on July 22, 2021.

Target price is $2.83 Current Price is $1.87 Difference: $0.96
If TSI meets the Wilsons target it will return approximately 51% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 14.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 12.90.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 11.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 16.12.

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

UNI    UNIVERSAL STORE HOLDINGS LIMITED

Apparel & Footwear - Overnight Price: $7.15

Wilsons rates ((UNI)) as Initiation of coverage with Overweight (1) -

Wilsons initiates coverage of youth-focused apparel retailer, Universal Store Holdings with an overweight rating and a target price of $8.60.

The broker believes Universal Store's next stage of growth will come from the continuation of its store rollout plans, private brand development, and expansion of its early-stage online channel. 

Wilsons expects this upside to reflect a multiple premium versus peers which currently trade on a PE of 18.3x compared with the company's FY22 PE 17.6x.

Due to continued strength in-store and online sales, increased private label penetration and earnings margin expansion of 550bps year-on-year, the broker is forecasting earnings of $47.2m and $50.1m in FY21 and FY22 respectively.

This report was issued July 23, 2021.

Target price is $8.60 Current Price is $7.15 Difference: $1.45
If UNI meets the Wilsons target it will return approximately 20% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 7.50 cents and EPS of 32.50 cents.
At the last closing share price the estimated dividend yield is 1.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.00.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 10.60 cents and EPS of 42.60 cents.
At the last closing share price the estimated dividend yield is 1.48%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.78.

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

VHT    VOLPARA HEALTH TECHNOLOGIES LIMITED

Medical Equipment & Devices - Overnight Price: $1.12

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

With its first-quarter FY22 cash flow summary Volpara Health Technology reported cash receipts of NZ$6.4m representing 30% growth over the previous period and a reduction in the operating cash burn to -NZ$2.5m from a cash burn of -NZ$3.7m in the previous period.

Bell Potter notes Volpara will grow its revenues organically from the asset base now in place and does not intend to further dilute shareholders by issuing new capital. 

Over the course of FY22, the broker expects record organic revenue growth as the company leverages is technology platform into an expanded base of customers.

The Buy rating is unchanged and the target price is lowered to NZ$1.60 from NZ$1.80.

This report was published on July 28, 2021.

Current Price is $1.12. Target price not assessed.
The company's fiscal year ends in March.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 4655.49 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 0.02.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 2.51 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 44.55.

This company reports in NZD. 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

YFZ    YOUFOODZ HOLDINGS LIMITED

Food, Beverages & Tobacco - Overnight Price: $0.92

Bell Potter rates ((YFZ)) as Hold (3) -

Bell Potter reports following solid sales in the fourth quarter, Youfoodz Holdings has closed out FY21 with unaudited revenue and underlying earnings in line with revised guidance.

Bell Potter is forecasting gross revenue of $203.8m, in line with guidance of $201-205m, and underlying earnings at the lower end of the $1-2m guidance. 

The broker highlights business-to-consumer growth drove fourth quarter revenue results and recorded 25.7% year-on-year gross revenue increase, while the business-to-business segment reported year-on-year growth of 7.2%. 

It is Bell Potter's view that recent renewed lockdowns may weigh on business-to-business near-term sales, but may work in favour of business-to-consumer sales. 

The Hold rating and target price of $0.93 are retained. 

This report was published on July 23, 2021.

Target price is $0.93 Current Price is $0.92 Difference: $0.01
If YFZ meets the Bell Potter target it will return approximately 1% (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 4.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 20.44.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 2.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 34.07.

Market Sentiment: 1.0
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: $7.78

Shaw and Partners rates ((Z1P)) as Buy (1) -

Zip Co put in a strong quarter across all growth engines of the business (A&NZ & domestic) ; it was broadly ahead of Shaw and consensus.

Fourth-quarter highlights saw international dominate over the net transaction margin, with Zip now annualising $7.1bn transaction value and revenue of $540m.

Shaw and Partners sees strategic interest as likely to emerge on Zip, which the broker notes has the widest product platform globally, the cheapest multiple, and leverage into substantial global growth/merchants.

The broker expects $330m in revenues for international in FY22 and over $600m revenues across the group, up 58% growth year-on-year.

The Buy rating is retained and the target price increases to $16.25 from $16.00.

This report was published on July 23, 2021.

Target price is $16.25 Current Price is $7.78 Difference: $8.47
If Z1P meets the Shaw and Partners target it will return approximately 109% (excluding dividends, fees and charges).
Current consensus price target is $7.94, suggesting upside of 2.1%(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 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 7780.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -41.0, 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 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 7780.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -5.2, 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 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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