Australian Broker Call *Extra* Edition – Sep 15, 2021

Daily Market Reports | Sep 15 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)

AIA   AMS   ARB   ASX   AVN (2)   AX1   BLX   BOT   BRG   BXB   CL1 (2)   COH   CQR   CSL   CTD   DMP (2)   DRR   EHL (3)   EML   EVS   FPH   HDN   INA (2)   ING   IPH (2)   IRI   LIC (2)   MMM   MNY   NCM   NEA   NWH (2)   NWL   OBL   OTW   OZL (2)   PME (2)   PPT   PSQ   SGF   SUL   SXL   SXY (2)   TAH   TLX   TPG   VCX   WPL  

AIA    AUCKLAND INTERNATIONAL AIRPORT LIMITED

Infrastructure & Utilities - Overnight Price: $7.16

Jarden rates ((AIA)) as Underweight (4) -

Auckland International Airport's reported underlying loss of -NZ$41.8m was in line with guidance and Jarden's forecast. The broker notes results reflect the tough operating environment, with international passengers declining -93% year-on-year and domestic volumes declining -17%.

While the company has not provided an outlook for FY22, it was noted that given current lockdowns total operating expenditure was likely to be at the lower end of the previously guided -NZ$160-175m. 

Jarden expects property business to remain the core earnings driver for the next year, with the company expecting to spend NZ$50.5-64.2m in property development in FY22.

The Underweight rating and target price of NZ$6.60 are retained.

This report was published on August 20, 2021.

Current Price is $7.16. Target price not assessed.
Current consensus price target is $6.90, suggesting downside of -3.6%(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 0.47 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 1529.91.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 0.6, implying annual growth of N/A.
Current consensus DPS estimate is 0.4, implying a prospective dividend yield of 0.1%.
Current consensus EPS estimate suggests the PER is 1193.3.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 0.00 cents and EPS of 7.96 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 90.01.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.5, implying annual growth of 1983.3%.
Current consensus DPS estimate is 13.8, implying a prospective dividend yield of 1.9%.
Current consensus EPS estimate suggests the PER is 57.3.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

AMS    ATOMOS LIMITED

Consumer Electronics - Overnight Price: $1.56

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

Atomos has delivered strong FY21 results, with Shaw and Partners noting record revenue of $78.6m, up 77% on the previous year, gross profit of $37.4m, up 133% on the previous year, and underlying earnings of $8.2m, a $15.4m increase on a negative result in FY21. 

The broker highlights results were well ahead of forecast. Further, with the company flagging underlying earnings margins trending towards 12-15%, Shaw upgrades underlying earnings estimates to $12.2m in FY22 (from $10.2m). 

The forecast is on the conservative side of Atomos' guidance, and Shaw sees upside risk on new product launches.

The Buy rating is retained and the target price increases to $2.00 from $1.58. 

This report was published on August 19, 2021.

Target price is $2.00 Current Price is $1.56 Difference: $0.44
If AMS meets the Shaw and Partners target it will return approximately 28% (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 0.00 cents and EPS of 6.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.38.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 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 17.33.

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

ARB    ARB CORPORATION LIMITED

Automobiles & Components - Overnight Price: $47.58

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

ARB Corp has confirmed a strong result for FY21, observes Wilsons, reporting profit before tax growth of 90% on the previous year, and management has confirmed momentum has continued into FY22 with strong global sales. 

Wilsons is confident in sustained sales growth driven by new vehicle model releases, continuation of the instant asset write-off scheme, and a broader product range. The broker has increased sales forecasts by 6-7%.

The Overweight rating is retained and the target price increases to $55.00 from $48.40. 

This report was published on August 18, 2021.

Target price is $55.00 Current Price is $47.58 Difference: $7.42
If ARB meets the Wilsons target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $46.93, suggesting downside of -2.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 69.00 cents and EPS of 135.40 cents.
At the last closing share price the estimated dividend yield is 1.45%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 35.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 138.9, implying annual growth of -0.8%.
Current consensus DPS estimate is 72.4, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 34.7.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 69.00 cents and EPS of 130.80 cents.
At the last closing share price the estimated dividend yield is 1.45%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 36.38.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 144.0, implying annual growth of 3.7%.
Current consensus DPS estimate is 74.8, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 33.4.

Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

ASX    ASX LIMITED

Wealth Management & Investments - Overnight Price: $83.34

Jarden rates ((ASX)) as Underweight (2) -

ASX's FY21 profit after tax of $481m was largely in line with estimates, and a 1% beat on Jarden's forecast, while underlying earnings were 2% ahead of expectations.

Looking ahead, Jarden notes its 4% earnings per share growth outlook for FY22 may fall to 1% given risk to Futures volume recovery. Jarden had previously forecast 10% recovery in Futures volumes, but current lockdowns present risk to this assumption. 

The broker updates earnings per share guidance by 1.5%, 0.1% and -1.2% through to FY24. The Underweight rating is retained and the target price increases to $76.50 from $74.95.

This report was published on August 19, 2021. 

Target price is $76.50 Current Price is $83.34 Difference: minus $6.84 (current price is over target).
If ASX meets the Jarden target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $77.41, suggesting downside of -8.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 233.70 cents and EPS of 259.70 cents.
At the last closing share price the estimated dividend yield is 2.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 256.8, implying annual growth of 3.4%.
Current consensus DPS estimate is 230.3, implying a prospective dividend yield of 2.7%.
Current consensus EPS estimate suggests the PER is 32.9.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 242.30 cents and EPS of 269.20 cents.
At the last closing share price the estimated dividend yield is 2.91%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.96.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 264.6, implying annual growth of 3.0%.
Current consensus DPS estimate is 237.4, implying a prospective dividend yield of 2.8%.
Current consensus EPS estimate suggests the PER is 31.9.

Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

AVN    AVENTUS GROUP

REITs - Overnight Price: $3.36

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

While Aventus Group has not provided FY22 earnings guidance due to covid uncertainty, Goldman Sachs' positive view remains based on development upside in the group's portfolio, the operating portfolio’s relative strength, and a solid balance sheet with gearing below the target 30-40% range.

Goldman Sachs continues to believe the group is relatively well-positioned in the current environment, given that its large format retail portfolio derives 37% of income from everyday needs tenants and the remainder from homewares, electrical, furniture, bedding, and hardware, all of which the broker expect to continue to perform relatively well.

Buy Rating is maintained and the target price increases to $3.40 from $3.26.

This report was published on August 18, 2021.

Target price is $3.40 Current Price is $3.36 Difference: $0.04
If AVN meets the Goldman Sachs target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $3.14, suggesting downside of -6.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 19.00 cents and EPS of 20.00 cents.
At the last closing share price the estimated dividend yield is 5.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.4, implying annual growth of -73.2%.
Current consensus DPS estimate is 17.6, implying a prospective dividend yield of 5.2%.
Current consensus EPS estimate suggests the PER is 17.4.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 EPS of 22.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.27.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.7, implying annual growth of 6.7%.
Current consensus DPS estimate is 18.6, implying a prospective dividend yield of 5.5%.
Current consensus EPS estimate suggests the PER is 16.3.

Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


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

Following Aventus Group's FY21 result, which was in line with revised guidance provided in June, Moelis estimates the group can deliver earnings per share (EPS) growth in FY22, despite pending covid risks, translating to an FY22 distribution per unit (DPU) yield of 5.3%.

Driven by a $297m net valuation uplift with the weighted average credit rating compressing -72bps in FY21, to 6.01%, net tangible assets increased to $2.69 from $2.24 in December 2020.

Moelis notes while ongoing sector tailwinds will remain supportive, and sector cap rates continue firming, the broker views these as being more than priced into the current share price.

Sell rating is maintained, and the target price increases to $2.97 from $2.90.

This report was released on August 19, 2021.

Target price is $2.97 Current Price is $3.36 Difference: minus $0.39 (current price is over target).
If AVN meets the Moelis target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $3.14, suggesting downside of -6.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 17.50 cents and EPS of 19.30 cents.
At the last closing share price the estimated dividend yield is 5.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.41.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.4, implying annual growth of -73.2%.
Current consensus DPS estimate is 17.6, implying a prospective dividend yield of 5.2%.
Current consensus EPS estimate suggests the PER is 17.4.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 17.80 cents and EPS of 20.10 cents.
At the last closing share price the estimated dividend yield is 5.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.72.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.7, implying annual growth of 6.7%.
Current consensus DPS estimate is 18.6, implying a prospective dividend yield of 5.5%.
Current consensus EPS estimate suggests the PER is 16.3.

Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

AX1    ACCENT GROUP LIMITED

Apparel & Footwear - Overnight Price: $2.05

Bell Potter rates ((AX1)) as Buy (1) -

While online is providing some cushioning,  Accent Group's trading update for the first 7 weeks of first-half FY22 showed like-for-like sales (including store closures) down -16%, observes Bell Potter.

Lockdowns are expected to slow the rebalance of stock levels, but at the same time, Bell Potter believes having excess inventory is a preferred position ahead of the key December quarter given the underlying global supply chain risks.

The company recently disclosed that it is in process of landlord negotiations to work out the appropriate rent terms during lockdowns, hence containing first half FY22 rent cash outlay to a fair level.

Having cut first-half FY22 estimates to reflect lockdown impacts, the broker's FY22 earnings estimates fall by -21%, yet there is no material change in FY23/FY24.

Buy rating is unchanged and the target price is lowered to $2.90 from $3.30.

This report was published on August 20, 2021.

Target price is $2.90 Current Price is $2.05 Difference: $0.85
If AX1 meets the Bell Potter target it will return approximately 41% (excluding dividends, fees and charges).
Current consensus price target is $2.50, suggesting upside of 8.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 9.30 cents and EPS of 11.50 cents.
At the last closing share price the estimated dividend yield is 4.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.83.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.0, implying annual growth of -22.6%.
Current consensus DPS estimate is 8.7, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 21.0.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 13.30 cents and EPS of 16.70 cents.
At the last closing share price the estimated dividend yield is 6.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.28.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.8, implying annual growth of 43.6%.
Current consensus DPS estimate is 12.2, implying a prospective dividend yield of 5.3%.
Current consensus EPS estimate suggests the PER is 14.6.

Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

BLX    BEACON LIGHTING GROUP LIMITED

Furniture & Renovation - Overnight Price: $2.05

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

Despite a tough fourth quarter, Beacon Lighting reported a 85% year-on-year profit after tax increase to $37.7m, which Jarden notes was a slight beat on guidance and the broker's forecast. Group sales also increased 13.3% on the previous year to around $289m. 

The broker highlights the strong result despite lockdowns demonstrates the model and management quality. Given ongoing lockdowns, Jarden has lowered FY22 earnings forecast by -6.2%, and expects sales to normalise to pre-covid levels by FY24.

The Overweight rating is retained and the target price decreases to $2.10 from $2.20.

This report was published on August 19, 2021.

Target price is $2.10 Current Price is $2.05 Difference: $0.05
If BLX meets the Jarden target it will return approximately 2% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 7.70 cents and EPS of 11.70 cents.
At the last closing share price the estimated dividend yield is 3.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.52.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 7.20 cents and EPS of 10.90 cents.
At the last closing share price the estimated dividend yield is 3.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.81.

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

BOT    BOTANIX PHARMACEUTICALS LIMITED

Pharmaceuticals & Biotech/Lifesciences - Overnight Price: $0.07

Euroz Hartleys rates ((BOT)) as Speculative Buy (2) -

Euroz Hartleys is initiating coverage of Botanix Pharmaceuticals Ltd with a Speculative Buy recommendation and a target price of $0.17.

Botanix Pharmaceuticals is a clinical stage synthetic cannabinoid pharmaceutical company which the broker believes is planning to make its mark in major global markets in dermatology and antimicrobials with four individual clinical programs.

Assuming the individual programs are ultimately clinically successful, the broker expects the potential upside for the company is huge.

While Euroz Hartleys suspects the market is pricing in unsuccessful outcomes, the broker's initial assessment into the company’s programs and clinical studies suggests otherwise.

With an enterprise value of $50m, the broker argues there is a very promising risk-to-reward case.

Target price is $0.17 Current Price is $0.07 Difference: $0.1
If BOT meets the Euroz Hartleys target it will return approximately 143% (excluding dividends, fees and charges).

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


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