Australian Broker Call *Extra* Edition – Sep 22, 2021

Daily Market Reports | Sep 22 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)

AD8   ALD   ARB   BRG   BRI   COE   CQR   CTD   ENN   EVN   EVT   FBU   FPH   GDI   GEM (2)   GNG   HPI   HUB   LBL   MAD   MLD (2)   MND   NHF   NWL   OML (2)   OZL   PRN   REH   RWC   SRG   UWL   XRF  

GDI    GDI PROPERTY GROUP

REITs - Overnight Price: $1.14

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

GDI Property Group's funds from operations of 5.37 cents per share was a slight miss on Moelis' forecast of 5.56 cents per share. 

Moelis notes the company has sold 50 Cavill Ave for $113.5m, initially acquired for $48.75m in 2016, expecting to net $109m after selling costs which implies an 8% premium to book value. 

It is Moelis' view that the company remains well positioned to execute on its strategic initiatives in Perth over the next year. 

The Buy rating and target price of $1.43 are retained.

This report was published on August 24, 2021.

Target price is $1.43 Current Price is $1.14 Difference: $0.29
If GDI meets the Moelis target it will return approximately 25% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 7.80 cents and EPS of 6.30 cents.
At the last closing share price the estimated dividend yield is 6.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.10.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 7.80 cents and EPS of 8.60 cents.
At the last closing share price the estimated dividend yield is 6.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.26.

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

GEM    G8 EDUCATION LIMITED

Childcare - Overnight Price: $1.00

Canaccord Genuity rates ((GEM)) as Hold (3) -

G8 Education's first half result was better than expected, according to Canaccord Genuity, with occupancy rates continuing to improve.

The broker highlights occupancy averaged 68% in the half, just 2.4 percentage points behind the first half of FY19, until July. 

Despite this, the broker notes uncertainty in the second half. Lack of government stimulus during current lockdowns and a wage increase in July are likely to impact on margins. 

The Hold rating is retained and the target price decreases to $1.07 from $1.13. 

The report was published on August 24, 2021.

Target price is $1.07 Current Price is $1.00 Difference: $0.07
If GEM meets the Canaccord Genuity target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $1.08, suggesting upside of 8.3%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 3.00 cents and EPS of 6.00 cents.
At the last closing share price the estimated dividend yield is 3.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 4.2, implying annual growth of N/A.
Current consensus DPS estimate is 2.3, implying a prospective dividend yield of 2.3%.
Current consensus EPS estimate suggests the PER is 23.8.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 5.00 cents and EPS of 8.00 cents.
At the last closing share price the estimated dividend yield is 5.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.7, implying annual growth of 83.3%.
Current consensus DPS estimate is 5.9, implying a prospective dividend yield of 5.9%.
Current consensus EPS estimate suggests the PER is 13.0.

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


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

G8 Education's first half results showed improved occupancy rate to 72.6%, implying a -1 percentage point miss on 2019 levels. Moelis notes given lockdown impact this has since widened to a -2.6 percentage point gap on 2019. 

The company reported earnings before tax of $39m and around $10m in net debt in July, which the broker noted was a strong balance sheet. 

Reflecting impacts of lockdowns, Moelis is forecasting earnings before tax of $69m for 2021, and looks to potential demand drivers impacting on FY22. 

The Hold rating is retained and the target price increases to $1.10. 

This report was released on August 24, 2021.

Target price is $1.10 Current Price is $1.00 Difference: $0.1
If GEM meets the Moelis target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $1.08, suggesting upside of 8.3%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 1.70 cents and EPS of 5.00 cents.
At the last closing share price the estimated dividend yield is 1.70%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 4.2, implying annual growth of N/A.
Current consensus DPS estimate is 2.3, implying a prospective dividend yield of 2.3%.
Current consensus EPS estimate suggests the PER is 23.8.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 4.70 cents and EPS of 6.80 cents.
At the last closing share price the estimated dividend yield is 4.70%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.7, implying annual growth of 83.3%.
Current consensus DPS estimate is 5.9, implying a prospective dividend yield of 5.9%.
Current consensus EPS estimate suggests the PER is 13.0.

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

GNG    GR ENGINEERING SERVICES LIMITED

Mining Sector Contracting - Overnight Price: $1.76

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

GR Engineering Services' FY21 profit of $23.2m exceeded the $20m expected by Euroz Hartleys. The 7cps dividend also exceeded the expectation for 5cps.

FY22 revenue guidance was for $440-460m, beating the broker's $400m estimate. The analyst has the target price under review and maintains the Buy rating.

In FY22 there will potentially be a significant shortage of engineering, procurement and construction (EPC) capability and urgency to get projects into production, notes the broker. As a result, there's considered potential for both strong revenue and margins.

This report was published on August 24, 2021.

Current Price is $1.76. Target price not assessed.

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

HPI    HOTEL PROPERTY INVESTMENTS LIMITED

Infra & Property Developers - Overnight Price: $3.44

Goldman Sachs rates ((HPI)) as Neutral (3) -

Hotel Property Investments' FY21 adjusted funds from operations of $32.6m were roughly in line with Goldman Sachs' forecast. The company benefited from an 8.6% rental income increase, as well as acquisitions, annual rental increases, and minor covid tenant relief. 

Goldman Sachs notes the company continues to reinvest in its properties, with a $30m capital refurbishment program enhancing performance of the underlying pub business. 

The broker highlights given the company's exposure to Queensland, impacts from recent lockdowns are likely to be minimal. 

The Neutral rating is retained and the target price increases to $3.28 from $3.18.

The report was published on August 24, 2021.

Target price is $3.28 Current Price is $3.44 Difference: minus $0.16 (current price is over target).
If HPI meets the Goldman Sachs target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 EPS of 21.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.38.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 EPS of 24.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.33.

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


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