Australian Broker Call *Extra* Edition – Sep 09, 2021

Daily Market Reports | Sep 09 2021

FNArena will be updating Special Editions of this Report in September dedicated to the August Reporting Season.

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   ADA   AQR   AQZ   ARB   ARF   BEN   BHP (2)   BPT (4)   BRG   BSX   CAR   CBA   CL1 (3)   COE   CQE (3)   DHG (2)   DXS   EHL   EML   GDF   GMG   GPT (2)   IMD   JBH (3)   MFG (2)   MGR   MNY (2)   PPS (2)   QBE   RRL   SCP (2)   STO   SWM   TGR   UBI   VVA 

CAR    CARSALES.COM LIMITED

Automobiles & Components - Overnight Price: $25.88

Goldman Sachs rates ((CAR)) as No Rating (-1) -

Carsales.com's FY21 results were marginally ahead of provided guidance, and sales and profit after tax were both a 1% beat on Goldman Sachs' forecast.

In Australia, the company reported core domestic revenue growth of 8% and underlying earnings growth of 20%. Internationally, Trader Interactive saw 12% revenue growth in the second half.

Looking ahead, the company has announced the launch of Carsales Select and the introduction of dynamic pricing for private customers. 

The broker is not rated and no target price has been provided. 

This report was published on August 17, 2021. 

Current Price is $25.88. Target price not assessed.
Current consensus price target is $24.03, suggesting downside of -4.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 55.00 cents and EPS of 67.00 cents.
At the last closing share price the estimated dividend yield is 2.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 38.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 66.4, implying annual growth of 26.2%.
Current consensus DPS estimate is 52.3, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 37.7.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 61.00 cents and EPS of 74.00 cents.
At the last closing share price the estimated dividend yield is 2.36%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 34.97.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 74.0, implying annual growth of 11.4%.
Current consensus DPS estimate is 59.9, implying a prospective dividend yield of 2.4%.
Current consensus EPS estimate suggests the PER is 33.9.

Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

CBA    COMMONWEALTH BANK OF AUSTRALIA

Banks - Overnight Price: $102.92

Bell Potter rates ((CBA)) as Upgrade to Buy from Hold (1) -

Looking through the pandemic noise, Bell Potter notes Commonwealth Bank's FY21 had more positives, including strong core volume growth, overall net interest income, other income, asset quality, capital, funding, and liquidity; than negatives including net interest margin (NIM) and operating expenses, in the result.

The main changes to the broker's cash net profit (continuing) projections relate to higher non-interest income, mainly higher card fees, fee waivers, and removal of wealth contributions, plus a still lower LIE charge in FY22 and beyond. As a result, notes the broker, cash net profit estimates are now 2% higher in FY22, FY23, and FY24.

Bell Potter has also matched the statutory and cash dividend payout ratios of 75% in FY22-24.

Bell Potter has upgraded Commbank to Buy from Hold and the target price increases to $118 from $105.

This report was issued August 12, 2021

Target price is $118.00 Current Price is $102.92 Difference: $15.08
If CBA meets the Bell Potter target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $90.50, suggesting downside of -10.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 406.00 cents and EPS of 543.00 cents.
At the last closing share price the estimated dividend yield is 3.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 522.2, implying annual growth of -9.2%.
Current consensus DPS estimate is 392.8, implying a prospective dividend yield of 3.9%.
Current consensus EPS estimate suggests the PER is 19.4.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 427.00 cents and EPS of 567.00 cents.
At the last closing share price the estimated dividend yield is 4.15%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 552.5, implying annual growth of 5.8%.
Current consensus DPS estimate is 416.8, implying a prospective dividend yield of 4.1%.
Current consensus EPS estimate suggests the PER is 18.4.

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

CL1    CLASS LIMITED

Cloud services - Overnight Price: $1.87

Jarden rates ((CL1)) as Initiation of coverage with Buy (1) -

Jarden has initiated coverage of Class Ltd with a Buy recommendation and a target price of $2.58.

Class is a cloud-based SMSF, portfolio, trust, and document management (DM) software provider which the broker believes is at a positive inflection point in its multi-year growth strategy.

The broker forecasts consistent above-market growth driven by the company's increasing share of the DM and trust segments, leading to a 9% revenue compound annual growth rate (CAGR) to the broker's terminal year (FY31).

The broker expects the company to maintain SMSF market share while expanding share of DM and trust segments, and estimates 12.2% revenue and 11.5% earnings CAGR over FY21-23, driven by 37% revenue contribution CAGR across the DM and Trust businesses.

This report was issued August 13, 2021.

Target price is $2.58 Current Price is $1.87 Difference: $0.71
If CL1 meets the Jarden target it will return approximately 38% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 5.00 cents and EPS of 6.40 cents.
At the last closing share price the estimated dividend yield is 2.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.22.

Forecast for FY23:

Jarden forecasts a full year FY23 EPS of 6.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.50.

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 ((CL1)) as Buy (1) -

Following the surprise acquisition of Top Docs for $13m, Shaw and Partners have upgraded Class's FY22-23 revenue by 7-9% and earnings by 4-6%.

FY22 guidance includes revenue of $65m and earnings of $25m.

In the broker's view, Trust remains the key share price catalyst for Class and notes the company will be reviewing its capital management strategy in first half FY22, including its dividend payout policy.

The Buy rating is retained and the target price increases to $2.55 from $2.48.

The report was issued on August 18, 2021.

Target price is $2.55 Current Price is $1.87 Difference: $0.68
If CL1 meets the Shaw and Partners target it will return approximately 36% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 5.00 cents and EPS of 6.40 cents.
At the last closing share price the estimated dividend yield is 2.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.22.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 5.00 cents and EPS of 6.20 cents.
At the last closing share price the estimated dividend yield is 2.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.16.

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


Wilsons rates ((CL1)) as Market Weight (3) -

Driven by continued strong contributions from recent M&A, Class ended FY21 with total revenue exceeding pre-disclosed guidance of 1%.

In the “core” business, Wilsons notes the muted, although not unexpected, SMSF account growth, while average revenue per user (ARPU) grew 2% on the previous period to $221 following the recent price rise.

The broker continues to expect Class Trust contribution to remain muted until FY23.

Looking ahead, Wilsons suspects top-line growth is likely to primarily arise from the documents business, recently bolstered by the acquisition of TopDocs for $13m. The broker notes guidance of $65m and earnings of $25m appears broadly in line with consensus.

Marketweight unchanged: Target $2.26 under review.

This report was published on February 17, 2021.

Target price is $2.26 Current Price is $1.87 Difference: $0.39
If CL1 meets the Wilsons target it will return approximately 21% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 5.00 cents and EPS of 6.80 cents.
At the last closing share price the estimated dividend yield is 2.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.50.

Forecast for FY23:

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

COE    COOPER ENERGY LIMITED

Crude Oil - Overnight Price: $0.24

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

Subject to finalisation of its year-end audit, Cooper Energy is expected to report FY21 underlying earnings (EBITDAX) of $30m, which was below consensus of $45m, and Canaccord Genuity's at $47m.

Canaccord Genuity notes the company expects to report an underlying net loss after tax of approximately $26m, including depreciation and amortisation of $43m, and net finance costs of ~$13m.

From Canaccord Genuity perspective three main drivers of this miss were operating costs of $64m were $6m higher than forecast,  third-party gas purchases were $4m higher than anticipated, and other expenditure was $6m higher than forecast.

For FY22 the broker is forecasting production guidance of 3.5mnboe and earnings (EBITDAX) of $67m.

Canaccord Genuity maintains its Buy rating. The target price is lowered to $0.40 from $0.45.

This research update was released on August 18, 2021.

Target price is $0.40 Current Price is $0.24 Difference: $0.16
If COE meets the Canaccord Genuity target it will return approximately 67% (excluding dividends, fees and charges).
Current consensus price target is $0.26, suggesting upside of 12.2%(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 0.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -0.7, 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 FY23:

Current consensus EPS estimate is 0.9, 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 25.6.

Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


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