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Australian Broker Call *Extra* Edition – Sep 28, 2021

Daily Market Reports | Sep 28 2021

This story features ACROW FORMWORK AND CONSTRUCTION SERVICES LIMITED, and other companies. For more info SHARE ANALYSIS: ACF

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)

ACF   BVS   DBI   FDV   IEL   IFM   JLG   LOV   MPL   NEC   PFP   PTM   RFF (2)   RIC   WTC  

ACF    ACROW FORMWORK AND CONSTRUCTION SERVICES LIMITED

Building Products & Services – Overnight Price: $0.42

Bell Potter rates ((ACF)) as Buy (1) –

FY21 underlying profit was slightly below Bell Potter's expectations and the bottom end of the guidance range. Revenue increased 22% year-on-year (YOY) and underlying earnings (EBITDA) – post-AASB16 – rose by 25% YOY.

The analyst points out the key driver of the result was 19% growth in the formwork division, which saw strong growth across all East Coast markets. The fully franked dividend of 1.15cps was ahead of Bell Potter's estimate for 1cps.

Management expects revenue and earnings growth to exceed FY21 by 20% and underlying profit by 40%. Bell Potter makes minor forecast earnings changes and increases its target price to $0.50 from $0.46 and retains its Buy rating.

This report was published on August 26, 2021.

Target price is $0.50 Current Price is $0.42 Difference: $0.08
If ACF meets the Bell Potter target it will return approximately 19% (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 2.10 cents and EPS of 5.30 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 7.92.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 2.70 cents and EPS of 5.40 cents.
At the last closing share price the estimated dividend yield is 6.43%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.78.

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

BVS    BRAVURA SOLUTIONS LIMITED

Wealth Management & Investments – Overnight Price: $3.32

Wilsons rates ((BVS)) as Downgrade to Underweight from Market Weight (5) –

Bravura Solutions' FY21 result was largely in-line with company guidance, but Wilsons notes a return to pre-covid metrics still appears to be some way off. Demand for the company's core offering remains low despite improvement in the UK market. 

The company is guiding to profit after tax growth in the mid-teens for FY22. Wilsons assumes at a 15% growth rate this implies profit after tax of $37m, around -10% below consensus expectations. 

The rating is downgraded to Underweight from Market Weight and the target price decreases to $2.62 from $3.08.

This report was published on August 26, 2021. 

Target price is $2.62 Current Price is $3.32 Difference: minus $0.7 (current price is over target).
If BVS meets the Wilsons target it will return approximately minus 21% (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 9.60 cents and EPS of 14.80 cents.
At the last closing share price the estimated dividend yield is 2.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.43.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 10.80 cents and EPS of 15.40 cents.
At the last closing share price the estimated dividend yield is 3.25%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.56.

Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

DBI    DALRYMPLE BAY INFRASTRUCTURE LIMITED

Infrastructure & Utilities – Overnight Price: $2.26

Bell Potter rates ((DBI)) as Hold (3) –

The underlying first half 2021 financial result was in-line with Dalrymple Bay Infrastructure's December 2020 prospectus forecasts. Bell Potter calculates underlying earnings (EBITDA) of $94m and funds from operations of $51m. 

Management expects to distribute 60-80% of its funds from operations (EBITDA less net interest and cash tax) and will target 1-2% DPS growth per annum. The Hold rating is unchanged and the target price falls to $2.31 from $2.32.

This report was published on August 26, 2021.

Target price is $2.31 Current Price is $2.26 Difference: $0.05
If DBI meets the Bell Potter target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $2.63, suggesting upside of 16.5%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 18.00 cents and EPS of 10.00 cents.
At the last closing share price the estimated dividend yield is 7.96%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.60.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.6, implying annual growth of N/A.
Current consensus DPS estimate is 18.5, implying a prospective dividend yield of 8.2%.
Current consensus EPS estimate suggests the PER is 23.5.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 16.00 cents and EPS of 12.00 cents.
At the last closing share price the estimated dividend yield is 7.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.83.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.4, implying annual growth of 18.8%.
Current consensus DPS estimate is 18.6, implying a prospective dividend yield of 8.2%.
Current consensus EPS estimate suggests the PER is 19.8.

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

FDV    FRONTIER DIGITAL VENTURES LIMITED

Online media & mobile platforms – Overnight Price: $1.58

Bell Potter rates ((FDV)) as Buy (1) –

Bell Potter assesses Frontier Digital Ventures reported a solid first half result, reflecting both a recovery from covid-19 lows in the first half of 2020, and the onboarding of three new businesses (Avito, Tyara and Fincaraiz). The Buy rating and $1.95 target are unchanged.

A cash balance of $18.7m as at 30 June should support ongoing developments across the portfolio, believes the analyst. A record $10m was received in July, which includes contributions of $5m from Zameen, $1.2m from Infocasas, and $0.8m from Yapo.

Based on this, the company remains firmly on track to achieve Bell Potter's FY21 revenue (100% basis) estimate of $112m.

This report was published on August 26, 2021.

Target price is $1.95 Current Price is $1.58 Difference: $0.37
If FDV meets the Bell Potter target it will return approximately 23% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 3.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 50.97.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 0.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 175.56.

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

IEL    IDP EDUCATION LIMITED

Education & Tuition – Overnight Price: $33.34

Goldman Sachs rates ((IEL)) as Buy (1) –

Goldman Sachs notes demand in the Northern Hemisphere is expected to deliver strong growth in FY22 for IDP Education. Qualified student placement leads in the second half were above pre-covid levels.

Looking ahead, the broker notes the Australia/New Zealand region is likely to begin reopening to international students in late FY22, which should support FY23 growth for the company. 

It was also noted the company is reinvesting in digital capability that should provide a competitive advantage and strengthen client relationships. It is Goldman Sachs' view that IDP Education presents a compelling long term growth opportunity.

The Buy rating is retained and the target price decreases to $34.00 from $35.00.

This report was published on August 25, 2021.

Target price is $34.00 Current Price is $33.34 Difference: $0.66
If IEL meets the Goldman Sachs target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $33.16, suggesting downside of -0.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 21.00 cents and EPS of 34.00 cents.
At the last closing share price the estimated dividend yield is 0.63%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 98.06.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 38.7, implying annual growth of 171.2%.
Current consensus DPS estimate is 25.6, implying a prospective dividend yield of 0.8%.
Current consensus EPS estimate suggests the PER is 86.1.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 40.00 cents and EPS of 57.00 cents.
At the last closing share price the estimated dividend yield is 1.20%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 58.49.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 62.9, implying annual growth of 62.5%.
Current consensus DPS estimate is 44.5, implying a prospective dividend yield of 1.3%.
Current consensus EPS estimate suggests the PER is 53.0.

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

IFM    INFOMEDIA LIMITED

Automobiles & Components – Overnight Price: $1.75

Bell Potter rates ((IFM)) as Buy (1) –

FY21 cash earnings (EBITDA) of $20.4m were 4% above Bell Potter's forecast and also above the guidance range of $19-20m. The beat was driven by better-than-expected revenue while the cash earnings margin was also slightly better than forecast.

There was a 9% increase in the final dividend to 2.35cps, which compared to the analyst's forecast for a flat dividend of 2.15c. FY22 revenue guidance of $117-123m was comfortably ahead of the expected $113m. 

Management noted “opportunities emerging in data services & data analytics and e-commerce”. After upgrading FY22 and FY23 EPS forecasts by 9% and 3%, the broker lifts its target price to $2 from $1.75.

This report was published on August 26, 2021.

Target price is $2.00 Current Price is $1.75 Difference: $0.25
If IFM meets the Bell Potter target it will return approximately 14% (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 4.50 cents and EPS of 5.90 cents.
At the last closing share price the estimated dividend yield is 2.57%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.66.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 5.00 cents and EPS of 6.90 cents.
At the last closing share price the estimated dividend yield is 2.86%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.36.

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

JLG    JOHNS LYNG GROUP LIMITED

Building Products & Services – Overnight Price: $6.22

Bell Potter rates ((JLG)) as Hold (3) –

FY21 group operating earnings (EBITDA) of $52.6m were marginally ahead of Bell Potter's forecast. Underlying Business As Usual (BAU) revenue grew 18.7% year-on-year, driven by $15.9m of revenue from acquisitions and $59.8m of organic revenue growth.

The latter arose from job volume growth through new and extended contracts during the year, explains the analyst. Also, catastrophe activity from six events delivered incremental earnings of $9.9m during the year.

All business divisions contributed strongly to the underlying result, with the Commercial Building Services (CBS) and Commercial Construction (CC) divisions recovering well from a covid-19 impacted FY20.

The target price increases to $5.80 from $4.80 and the Hold rating is unchanged.

This report was published on August 26, 2021.

Target price is $5.80 Current Price is $6.22 Difference: minus $0.42 (current price is over target).
If JLG meets the Bell Potter target it will return approximately minus 7% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 5.50 cents and EPS of 11.70 cents.
At the last closing share price the estimated dividend yield is 0.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 53.16.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 5.10 cents and EPS of 12.00 cents.
At the last closing share price the estimated dividend yield is 0.82%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 51.83.

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

LOV    LOVISA HOLDINGS LIMITED

Retailing – Overnight Price: $19.94

Bell Potter rates ((LOV)) as Buy (1) –

FY21 earnings (EBIT) were in-line with Bell Potter's forecast. FY21 revenue was up 18.9% on the previous corresponding period. This reflected the Beeline contribution, cycling of second half store closures and like-for-like (LFL) sales growth of 8.1%, explains the analyst.

Because a strong start to the first half is being offset by lockdown uncertainties, the broker makes no material change to the FY22 EPS estimate. However, due to positive updates in Europe and the US, the broker raises long-term forecasts.

The Beeline acquisition completed in March-May 2021 and added 87 stores across seven markets in Europe. Bell Potter lifts its target price to $19.90 from $15.50 and retains its Buy rating.

This report was published on August 26, 2021.

Target price is $19.90 Current Price is $19.94 Difference: minus $0.04 (current price is over target).
If LOV meets the Bell Potter target it will return approximately minus 0% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $19.89, suggesting downside of -0.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 29.80 cents and EPS of 44.70 cents.
At the last closing share price the estimated dividend yield is 1.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 44.61.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 44.5, implying annual growth of 92.6%.
Current consensus DPS estimate is 33.6, implying a prospective dividend yield of 1.7%.
Current consensus EPS estimate suggests the PER is 44.8.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 34.10 cents and EPS of 53.70 cents.
At the last closing share price the estimated dividend yield is 1.71%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 37.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 59.9, implying annual growth of 34.6%.
Current consensus DPS estimate is 44.4, implying a prospective dividend yield of 2.2%.
Current consensus EPS estimate suggests the PER is 33.3.

Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

MPL    MEDIBANK PRIVATE LIMITED

Insurance – Overnight Price: $3.59

Goldman Sachs rates ((MPL)) as Neutral (3) –

Medibank Private's FY21 profit after tax of $441.2m was a -1% miss on Goldman Sachs' forecast. The company also announced a final dividend per share of 6.9 cents, slightly above the broker's forecast 6.8 cents. 

Results showed Medibank Private's net covid impact for FY21 was -3m following the recent $103m give-back, a much more neutral impact than reported by competitors.

The Neutral rating is retained and the target price increases to $3.40 from $3.34.

This report was published on August 25, 2021.

Target price is $3.40 Current Price is $3.59 Difference: minus $0.19 (current price is over target).
If MPL meets the Goldman Sachs target it will return approximately minus 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $3.50, suggesting downside of -2.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 13.00 cents and EPS of 15.00 cents.
At the last closing share price the estimated dividend yield is 3.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.93.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.7, implying annual growth of -2.0%.
Current consensus DPS estimate is 12.8, implying a prospective dividend yield of 3.6%.
Current consensus EPS estimate suggests the PER is 22.9.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 14.00 cents and EPS of 16.00 cents.
At the last closing share price the estimated dividend yield is 3.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.44.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.1, implying annual growth of 2.5%.
Current consensus DPS estimate is 14.7, implying a prospective dividend yield of 4.1%.
Current consensus EPS estimate suggests the PER is 22.3.

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

NEC    NINE ENTERTAINMENT CO. HOLDINGS LIMITED

Print, Radio & TV – Overnight Price: $2.65

Goldman Sachs rates ((NEC)) as Buy (1) –

Goldman Sachs highlights revenue weakness in publishing and higher operating expenditure investments in Stan have driven Nine Entertainment Co. Holdings' results.

The company was down -2% on the broker's sales forecast, -4% on the underlying earnings forecast and -3% on the profit after tax forecast. The company expects free-to-air television revenue growth in FY22.

The Buy rating is retained and the target price decreases to $3.30 from $3.40.

This report was published on August 25, 2021.

Target price is $3.30 Current Price is $2.65 Difference: $0.65
If NEC meets the Goldman Sachs target it will return approximately 25% (excluding dividends, fees and charges).
Current consensus price target is $3.29, suggesting upside of 24.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 11.00 cents and EPS of 15.00 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 17.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.4, implying annual growth of 54.9%.
Current consensus DPS estimate is 10.3, implying a prospective dividend yield of 3.9%.
Current consensus EPS estimate suggests the PER is 17.2.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 12.00 cents and EPS of 17.00 cents.
At the last closing share price the estimated dividend yield is 4.53%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.4, implying annual growth of 13.0%.
Current consensus DPS estimate is 12.0, implying a prospective dividend yield of 4.5%.
Current consensus EPS estimate suggests the PER is 15.2.

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

PFP    PROPEL FUNERAL PARTNERS LIMITED

Consumer Products & Services – Overnight Price: $3.98

Bell Potter rates ((PFP)) as Buy (1) –

FY21 earnings (EBITDA) were up 11.9% on the previous corresponding period (pcp) and in-line with Bell Potter's estimate. FY21 revenue was up 8.7% on the pcp. Acquired growth was considered the primary driver, adding $9.1m in revenue versus the pcp.

There was a 3.7% increase in like-for-like average revenue per funeral (ARPF). July is revealing early signs of normalisation, supporting a return to year-on-year growth, points out the analyst. Management noted July volumes were ‘materially higher’ versus the pcp.

Bell Potter retains its Buy rating and $4.25 price target.

This report was published on August 26, 2021.

Target price is $4.25 Current Price is $3.98 Difference: $0.27
If PFP meets the Bell Potter target it will return approximately 7% (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 10.10 cents and EPS of 12.70 cents.
At the last closing share price the estimated dividend yield is 2.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.34.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 11.40 cents and EPS of 14.30 cents.
At the last closing share price the estimated dividend yield is 2.86%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.83.

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

PTM    PLATINUM ASSET MANAGEMENT LIMITED

Wealth Management & Investments – Overnight Price: $3.57

Goldman Sachs rates ((PTM)) as Neutral (3) –

While Platinum Asset Management's FY21 profit after tax of $163.3m was a -1.3% miss on Goldman Sachs' forecast, the broker notes it was a 4.9% increase on FY20. High employee expenses, 16% ahead of the broker's forecast, drove a -1% operating profit miss. 

It is Goldman Sachs' view that Platinum Asset Management continues to show strong performance, but that it is unfortunate that strongest performance is across its smaller products. 

The Neutral rating is retained and target price decreases to $4.36 from $4.39.

This report was published on August 25, 2021.

Target price is $4.36 Current Price is $3.57 Difference: $0.79
If PTM meets the Goldman Sachs target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $3.85, suggesting upside of 7.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 23.00 cents and EPS of 25.00 cents.
At the last closing share price the estimated dividend yield is 6.44%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.28.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 23.6, implying annual growth of -16.2%.
Current consensus DPS estimate is 22.8, implying a prospective dividend yield of 6.4%.
Current consensus EPS estimate suggests the PER is 15.1.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 25.00 cents and EPS of 26.00 cents.
At the last closing share price the estimated dividend yield is 7.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.73.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 23.9, implying annual growth of 1.3%.
Current consensus DPS estimate is 24.3, implying a prospective dividend yield of 6.8%.
Current consensus EPS estimate suggests the PER is 14.9.

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

RFF    RURAL FUNDS GROUP

REITs – Overnight Price: $2.74

Bell Potter rates ((RFF)) as Hold (3) –

FY21 adjusted funds from operations (AFFO) were broadly in-line with Bell Potter's expectations. The fact AFFO were down -11% year-on-year reflects the negative impact of the poultry asset in FY20 and the Mooral orchard sale in the first half of 2021.

Post 30 June, the group raised $100m to fund acquisitions in water, fund a macadamia development and to provide capacity to invest further in cattle and cropping assets, explains the analyst. FY22 AFFO guidance is unchanged at 11.6cps as is DPU guidance of 11.73cps.

Bell Potter makes minimal changes to forecasts and retains its Hold rating and $2.70 target price.

This report was published on August 26, 2021.

Target price is $2.70 Current Price is $2.74 Difference: minus $0.04 (current price is over target).
If RFF meets the Bell Potter target it will return approximately minus 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 11.70 cents and EPS of 11.60 cents.
At the last closing share price the estimated dividend yield is 4.27%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.62.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 12.20 cents and EPS of 12.90 cents.
At the last closing share price the estimated dividend yield is 4.45%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.24.

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


Wilsons rates ((RFF)) as Overweight (1) –

Rural Funds Group's FY21 result was slightly above guidance. Wilsons notes funds from operations was a 2% beat, driven by strong revenue from the cattle segment and lower interest expense. 

Asset divestments drove a -4% cash revenue decrease on FY20, while expenses were up 16%. Wilsons makes modest changes to funds from operations and earnings per share forecasts and retains confidence in sustained earnings and distribution growth.

The Overweight rating is retained and the target price increases to $2.79 from $2.55.

This report was published on August 26, 2021.

Target price is $2.79 Current Price is $2.74 Difference: $0.05
If RFF meets the Wilsons target it will return approximately 2% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 11.70 cents and EPS of 19.30 cents.
At the last closing share price the estimated dividend yield is 4.27%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.20.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 12.20 cents and EPS of 22.50 cents.
At the last closing share price the estimated dividend yield is 4.45%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.18.

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

RIC    RIDLEY CORPORATION LIMITED

Agriculture – Overnight Price: $1.35

Wilsons rates ((RIC)) as Overweight (1) –

Ridley Corp's FY21 results were strong, beating Wilsons' profit after tax forecast by 12% and allowing the company to resume dividend payments. The broker notes second half earnings growth in Bulk Stockfeeds was a driver of the full-year result.

Given evidence of sustained volume growth in key segments, Wilsons upgrades underlying earnings forecasts by 8-11%, and profit after tax forecasts by 26-27%. It is Wilsons' view that Ridley's FY21 results highlights the company's core business potential. 

The Overweight rating is retained and the target price increases to $1.62 from $1.29.

This report was published on August 26, 2021.

Target price is $1.62 Current Price is $1.35 Difference: $0.27
If RIC meets the Wilsons target it will return approximately 20% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 6.00 cents and EPS of 10.10 cents.
At the last closing share price the estimated dividend yield is 4.44%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.37.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 7.00 cents and EPS of 11.80 cents.
At the last closing share price the estimated dividend yield is 5.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.44.

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

WTC    WISETECH GLOBAL LIMITED

Cloud services – Overnight Price: $53.60

Bell Potter rates ((WTC)) as Hold (3) –

FY21 earnings (EBITDA) of $192.8m were above the guidance range of $165-190m and 7% above the Bell Potter forecast. The beat was caused by a huge jump in margin to 40.7% from 29.5% in FY20. The final dividend rose to 3.85cps, ahead of the 2.85cps forecast.

FY22 guidance for revenue of $600-635m and earnings of $260-285m are to be compared to the broker's forecast for $596m and $239m, respectively. The analyst lifts FY22 and FY23 earnings forecasts by 23% and 26%, and lifts the target price to $47.50 from $31.50.

This results from changes to earnings estimates, and also increases to the premium applied in the relative valuations to 30% from 20%, explains the analyst. Also, a reduced weighted average cost of capital arose from the strong result.

This report was published on August 26, 2021.

Target price is $47.50 Current Price is $53.60 Difference: minus $6.1 (current price is over target).
If WTC meets the Bell Potter target it will return approximately minus 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $39.13, suggesting downside of -27.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 9.10 cents and EPS of 49.00 cents.
At the last closing share price the estimated dividend yield is 0.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 109.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 46.9, implying annual growth of 41.0%.
Current consensus DPS estimate is 7.3, implying a prospective dividend yield of 0.1%.
Current consensus EPS estimate suggests the PER is 114.3.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 11.60 cents and EPS of 61.30 cents.
At the last closing share price the estimated dividend yield is 0.22%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 87.44.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 66.4, implying annual growth of 41.6%.
Current consensus DPS estimate is 12.3, implying a prospective dividend yield of 0.2%.
Current consensus EPS estimate suggests the PER is 80.7.

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


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CHARTS

ACF BVS DBI FDV IEL IFM JLG LOV MPL NEC PFP PTM RFF RIC WTC

For more info SHARE ANALYSIS: BVS - BRAVURA SOLUTIONS LIMITED

For more info SHARE ANALYSIS: DBI - DALRYMPLE BAY INFRASTRUCTURE LIMITED

For more info SHARE ANALYSIS: FDV - FRONTIER DIGITAL VENTURES LIMITED

For more info SHARE ANALYSIS: IEL - IDP EDUCATION LIMITED

For more info SHARE ANALYSIS: IFM - INFOMEDIA LIMITED

For more info SHARE ANALYSIS: JLG - JOHNS LYNG GROUP LIMITED

For more info SHARE ANALYSIS: LOV - LOVISA HOLDINGS LIMITED

For more info SHARE ANALYSIS: MPL - MEDIBANK PRIVATE LIMITED

For more info SHARE ANALYSIS: NEC - NINE ENTERTAINMENT CO. HOLDINGS LIMITED

For more info SHARE ANALYSIS: PFP - PROPEL FUNERAL PARTNERS LIMITED

For more info SHARE ANALYSIS: PTM - PLATINUM ASSET MANAGEMENT LIMITED

For more info SHARE ANALYSIS: RFF - RURAL FUNDS GROUP

For more info SHARE ANALYSIS: RIC - RIDLEY CORPORATION LIMITED

For more info SHARE ANALYSIS: WTC - WISETECH GLOBAL LIMITED