Australian Broker Call *Extra* Edition – Sep 23, 2021

Daily Market Reports | Sep 23 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   ADH   AMA   BST   CHC   COE (2)   COH   CYC   E33   EHE   GEM   HUB   JLG   KGN   MND   NAN   NHF   NTO   OSL   RDY   SCG (2)   SEK   SHL (2)   SKI   SOM   UWL (2)   VEA   WSA  

AD8    AUDINATE GROUP LIMITED

Hardware & Equipment - Overnight Price: $9.84

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

Given the prior July update, FY21 sales were as expected by Shaw and Partners while earnings (EBITDA) were a beat. The broker anticipates US dollar growth of 35% while traditionally conservative management reiterated a return to growth of 25% to 30% in FY22.

The analyst makes no material changes to forecasts and maintains the Buy rating and $12 target price. Dante adoption has increased to 19x from 17x the nearest competitor.

While supply chain issues slowed new product releases in the second half, the broker points out the number of OEM's shipping products actually increased to 371 from 328, just below the 377 expected.

This report was published on August 24, 2021.

Target price is $12.00 Current Price is $9.84 Difference: $2.16
If AD8 meets the Shaw and Partners target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $11.72, suggesting upside of 19.4%(ex-dividends)
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 minus 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 984.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -2.9, 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 N/A.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 2.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 364.44.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 3.5, 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 280.3.

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

ADH    ADAIRS LIMITED

Furniture & Renovation - Overnight Price: $3.96

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

FY21 earnings (EBIT) were ahead of guidance and consensus forecasts, with the underlying businesses (Stores, Online, Mocka) performing well, according to Wilsons. The Overweight rating is maintained.

The analyst downgrades FY22 earnings forecasts due to lockdown restrictions for stores and a more conservative growth profile for Adairs online and Mocka. The target price falls to $5.30 from $5.80.

The broker remains attracted longer-term to the omni-channel strategy and a number of other attractive growth options.

This report was published on August 23, 2021.

Target price is $5.30 Current Price is $3.96 Difference: $1.34
If ADH meets the Wilsons target it will return approximately 34% (excluding dividends, fees and charges).
Current consensus price target is $4.57, suggesting upside of 15.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 21.00 cents and EPS of 38.50 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 10.29.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 33.6, implying annual growth of -10.9%.
Current consensus DPS estimate is 21.5, implying a prospective dividend yield of 5.4%.
Current consensus EPS estimate suggests the PER is 11.8.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 24.00 cents and EPS of 50.10 cents.
At the last closing share price the estimated dividend yield is 6.06%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.90.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 38.5, implying annual growth of 14.6%.
Current consensus DPS estimate is 27.0, implying a prospective dividend yield of 6.8%.
Current consensus EPS estimate suggests the PER is 10.3.

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

AMA    AMA GROUP LIMITED

Automobiles & Components - Overnight Price: $0.50

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

Despite a challenging year, AMA Group reported underlying earnings of $116m, a 2% beat on Wilsons' expectations. First half volumes were affected by lockdowns, which Wilsons notes will continue to have near-term impact, and sustained cost inflation impacting margins.

Looking ahead, the broker feels AMA Group is well-placed to lead further consolidation in the panel repair industry, but notes acquisition activity in the near-term is constrained by the balance sheet. Wilsons expects full acquisition activity to recommence from FY23.

The broker forecasts a sales decrease of -16% in FY22 and FY23, largely on reduced acquisition activity, and an underlying earnings decrease of -20% in FY22 and -12% in FY23.

The Market Weight rating is retained and the target price decreases to $0.47 from $0.60.

This report was published on August 25, 2021.

Target price is $0.47 Current Price is $0.50 Difference: minus $0.03 (current price is over target).
If AMA meets the Wilsons target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of 0.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 100.00.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of 2.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.86.

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

BST    BEST & LESS GROUP HOLDINGS LIMITED

Apparel & Footwear - Overnight Price: $3.30

Bell Potter rates ((BST)) as Initiation of coverage with Buy (1) -

Bell Potter initiates coverage on Best & Less Group with a Buy rating and $3.30 target price. The company is an omni-channel value apparel retailer with 185 Best & Less stores in Australia and 61 Postie stores in New Zealand.

The target customer is a mum on a budget with children under the age of 17. There are around 1.5m loyalty members partly built on trust. A 2020 KPMG report pointed to a top-10 ranking regarding trustworthy brands in Australia.

Strength in the baby and kids category drives a sales opportunity to other categories, explains the analyst. Finally, research shows the value segment of the A&NZ clothing and footwear market is forecast to grow at a faster than mid/premium segments over FY20-FY24.

This report was published on August 24, 2021.

Target price is $3.30 Current Price is $3.30 Difference: $0
If BST meets the Bell Potter target it will return approximately 0% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 19.70 cents and EPS of 32.80 cents.
At the last closing share price the estimated dividend yield is 5.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.06.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 21.00 cents and EPS of 35.10 cents.
At the last closing share price the estimated dividend yield is 6.36%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.40.

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

CHC    CHARTER HALL GROUP

REITs - Overnight Price: $18.50

Jarden rates ((CHC)) as Buy (1) -

Having reported 11.3% earnings per share underlying growth in FY21, it is Jarden's view that 11-12% underlying growth is sustainable for Charter Hall Group for the next few years. 

The broker notes strong assets under management growth, increase in Property Investments, outperformance from many funds, and significant investment capacity should drive growth for the company, and notes further potential upside to upgraded forecasts.

The Buy rating is retained and the target price increases to $20.30 from $17.20. 

This report was published on August 23, 2021.

Target price is $20.30 Current Price is $18.50 Difference: $1.8
If CHC meets the Jarden target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $19.85, suggesting upside of 5.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 40.10 cents and EPS of 76.60 cents.
At the last closing share price the estimated dividend yield is 2.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 79.5, implying annual growth of -22.3%.
Current consensus DPS estimate is 40.1, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 23.7.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 42.50 cents and EPS of 81.40 cents.
At the last closing share price the estimated dividend yield is 2.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.73.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 81.1, implying annual growth of 2.0%.
Current consensus DPS estimate is 42.7, implying a prospective dividend yield of 2.3%.
Current consensus EPS estimate suggests the PER is 23.2.

Market Sentiment: 0.6
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: $0.23

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

While FY21 results were pre-reported, production guidance for 3-3.6MMboe and underlying earnings (EBITDAX) of $60-70m were well below Bell Potter's expectations. The broker lowers its target price to $0.38 from $0.45 and maintains its Buy rating.

The analyst materially downgrades FY22 EPS forecasts due to disruptions from work on the Orbost gas processing plant and the March 2022 quarter cutover and commissioning of the Athena Gas Plant.

According to Bell Potter, delays at Sole have also set back balance sheet de-leveraging, resulting in a weaker position to fund future growth. Against this, tightening SE coast gas markets and a portfolio of projects are thought to be set to deliver production growth.

This report was published on August 24, 2021.

Target price is $0.38 Current Price is $0.23 Difference: $0.15
If COE meets the Bell Potter target it will return approximately 65% (excluding dividends, fees and charges).
Current consensus price target is $0.26, suggesting upside of 14.8%(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 minus 0.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 115.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -0.8, 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:

Bell Potter forecasts a full year FY23 dividend of 1.40 cents and EPS of 2.70 cents.
At the last closing share price the estimated dividend yield is 6.09%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.52.

How do these forecasts compare to market consensus projections?

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


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

Cooper Energy pre-announced FY21 results, reporting a profit loss of -$30m and underlying earnings of $60m. It is Jarden's view that recent share price underperformance was impacted by uncertainty around Orbost's production outlook. 

Looking ahead, Cooper Energy is guiding to FY22 underlying earnings of $60-70m and capital expenditure of $25-30m, a -$15m miss on Jarden's previous forecast. Cooper Energy's accounts indicate $60m in principal debt repayments by the end of FY22.

Jarden remains confident in the value of the stock, with valuations underpinned by an assumption that Orbost production will lift to 50 terajoules per day after Phase 2B. 

The Overweight rating and target price of $0.29 are retained. 

This report was published on August 23, 2021.

Target price is $0.29 Current Price is $0.23 Difference: $0.06
If COE meets the Jarden target it will return approximately 26% (excluding dividends, fees and charges).
Current consensus price target is $0.26, suggesting upside of 14.8%(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 minus 0.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 38.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -0.8, 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:

Jarden forecasts a full year FY23 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 38.33.

How do these forecasts compare to market consensus projections?

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


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